Organisation behaviour – GradSchoolPapers.com

Organisation behaviour
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Pornthip Sompong was confused. Sitting in her office at the plant, she pondered the same questions she had been facing for months: how to get her company’s employees to work harder and produce
more. No matter what she did, it didn’t seem to help much.
Pornthip had inherited the business three years ago when her father, Somkid Sompong, died unexpectedly. Sompong Machine Parts, Inc., was founded four decades ago by Somkid and has grown into a
moderate-size corporation. Sompong Machine Parts makes replacement parts for large-scale manufacturing machines such as lathes and mills. The firm is headquartered in Bangkok and has a plant on the
Eastern Seaboard. Although Pornthip grew up in the family business, she never understood her father’s approach. Somkid had treated his employees like part of his family. In Pornthip’s view,
however, he paid them more than he had to, asked their advice far more often than he should have, and spent too much time listening to their ideas and complaints. When Pornthip took over, she vowed
to change how things were done and bring the firm into the twentieth century. In particular, she resolved to stop handling employees with kid gloves and to treat them like what they were: the hired
help.
In addition to changing the way employees were treated, Pornthip had another goal for Sompong Machine Parts. She wanted to meet the challenge of international competition. Japanese firms had moved
aggressively into the market for heavy industrial equipment. She saw this as both a threat and an opportunity. On the one hand, if she could get a toehold as a parts supplier to these firms,
Sompong Machine Parts could grow rapidly. On the other, the lucrative parts market was also sure to attract more Japanese competitors. Pornthip had to make sure that Sompong Machine Parts could
compete effectively with highly productive and profitable Japanese firms.
From the day Pornthip took over, she practiced a philosophy altogether different from her father’s to achieve her goals. For one thing, she increased production quotas by 20 percent. She instructed
her first-line supervisors to crack down on employees and eliminate all idle time. She also decided to shut down the company football field her father had built. She thought the employees really
didn’t use it much, and she wanted the space for future expansion.
Pornthip also announced that future contributions to the firm’s profit-sharing plan would be phased out. Employees were paid enough, she believed, and all profits were the rightful property of the
owner-her. She had private plans to cut future pay increases to bring average wages down to where she thought they belonged. Finally, Pornthip also changed a number of operational procedures. In
particular, she stopped asking other people for their advice. She reasoned that she was the boss and knew what was best. If she asked for advice and then didn’t take it, it would only stir up
resentment.
All in all, Pornthip thought, things should be going much better. Output should be up, and costs should be way down. This combination therefore should be resulting in much higher levels of
productivity and profits.
But that’s not what was happening. Whenever Pornthip walked through one of the plants, she sensed that people weren’t doing their best. Performance reports indicated that output was only marginally
higher than before but scrap rates had soared. Payroll costs indeed were lower, but other personnel costs were up. It seemed that turnover had increased substantially and training costs had gone up
as a result.
In desperation, Pornthip finally hired a consultant. After carefully researching the history of the organization and Pornthip’s recent changes, the consultant made some remarkable suggestions. The
bottom line, Pornthip felt, was that the consultant thought she should go back to that “humanistic nonsense” her father had used. No matter how she turned it, though, she just couldn’t see the
wisdom in this. People worked for money and didn’t want all that participation stuff.
Suddenly, Pornthip knew just what to do: she would announce that all employees who failed to increase their productivity by 10 percent would suffer an equal pay cut. She sighed in relief, feeling
confident that she had finally figured out the answer.
Questions
Using the case study as a basis, discuss why knowledge of Organizational Behavior is essential to managers today.
It is clear from the case study that Pornthip’s values differ from those of her father. How do you think that a change in values at Sompong Machine Parts will affect the attitudes and behavior of
the workforce. Relate your answer to the dependent variables: job satisfaction, productivity, absenteeism and staff turnover.
When Pornthip took over her father’s business she made a number of decisions. Do you consider that these decisions were good or bad? Discuss. What factors do you consider differentiate good
decision makers from poor ones?
You have been appointed as the consultant to Sompong Machine Parts. Choose one motivation theory and use it as a basis for a memo to Pornthip advising her on how she should improve motivation in
the company.
“Communication is the life-blood of organizations.” Discuss this in relation to the case study.
Pornthip called a meeting of her senior managers to tell them to implement her “final solution,” i.e. to increase productivity by 10 percent or workers would suffer an equal pay cut. At the meeting
all the managers agreed to do as she said. In fact, the marketing manager told her that it was about time someone took a firm stand against what he called “lazy workers.”
After implementing the new policy productivity fell drastically. Not only that, the quality of the parts that were being produced was poor. Customers began to cancel orders and refused to pay for
existing orders. Cash flow became critical and within six months Sompong Machine Parts was on the edge of bankruptcy. Looking back to that meeting with her managers, Pornthip was surprised and
angry that all of them had agreed to her plan so quickly. Why had they not told her that her idea was not going to work? Surely they were equally to blame for the problems.
7. Using the groupthink model discuss the interactions of the managers in the meeting with Pornthip six months previously. How would you advise Pornthip to overcome groupthink in future meetings.

 
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