Do you think that Ken’s self-esteem had anything to do with his leaving the firm?2. What do you think Ken’s satisfaction and commitment were to the job and firm he is leaving? How does this relate to the research on the determinants and outcomes of satisfaction and commitment? 3. What lesson can this company learn from the case of Ken? What can and should it now do?
Question 1: Ken Leaves the Company Good people—valuable employees—quit their jobs every day. Usually, they leave for better positions elsewhere. Take Ken, an experienced underwriter in a northeastern insurance company, who scribbled the following remarks on his exit interview questionnaire: This job isn’t right for me. I like to have more input on decisions that affect me—more of a chance to show what I can do. I don’t get enough feedback to tell if I’m doing a good job or not, and the company keeps people in the dark about where it’s headed. Basically, I feel like an interchangeable part most of the time. In answer to the question about whether the company could have done anything to keep him, Ken replied simply, “Probably not.” Why do so many promising employees leave their jobs? And why do so many others stay on but perform at minimal levels for lack of better alternatives? One of the main reasons—Ken’s reason—can be all but invisible, because it’s so common in so many organizations: a system wide failure to keep good people. Corporations should be concerned about employees like Ken. By investing in human capital, they may actually help reduce turnover, protect training investments, increase productivity, improve quality, and reap the benefits of innovative thinking and teamwork. Human resource professionals and managers can contribute to corporate success by encouraging employees’ empowerment, security, identity, “connectedness,” and competence. How? By recognizing the essential components of keeping their best people and by understanding what enhances and diminishes those components. Ken doubts that his company will ever change, but other organizations are taking positive steps to focus on and enhance employee retention. As a result, they’re reducing turnover, improving quality, increasing productivity, and protecting their training investments. 1. Do you think that Ken’s self-esteem had anything to do with his leaving the firm? __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 2. What do you think were Ken’s satisfaction with and commitment to the job and firm he is leaving? How does this relate to the research on the determinants and outcomes of satisfaction and commitment? __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ ___________________________________________________________________ 3. What lesson can this company learn from the case of Ken? What can and should it now do? __________________________________________________________________________
Question 2: The Schoolboy Rookie Kent Sikes is a junior at State University. He has taken a summer job in the biggest factory in his hometown. He was told to report to the warehouse supervisor the first day at work. The supervisor assigned him to a small group of workers who were responsible for loading and unloading the boxcars that supplied the materials and carried away the finished goods of the factory. After two weeks on the job, Kent was amazed at how little the workers in his crew had accomplished. It seemed that they were forever standing around and talking or, in some cases, even going off to hide when there was work to be done. Kent often found himself alone unloading a boxcar while the other members of the crew were off messing around someplace else. When Kent complained to his coworkers, they made it very plain that if he did not like it, he could quit, but if he complained to the supervisor, he would be sorry. Although Kent has been deliberately excluded from any of the crew’s activities, such as taking breaks together or having a Friday afternoon beer after work at the tavern across the street, yesterday he went up to one of the older members of the crew and said, “What gives with you guys, anyway? I am just trying to do my job. The money is good, and I just don’t give a hang about this place. I will be leaving to go back to school in a few weeks, and I wish I could have gotten to know you all better, but frankly I am sure glad I’m not like you guys.” The older worker replied, “Son, if you’d been here as long as I have, you would be just like us.” 1. Using some of the theories, explain the possible reasons for the group formation of this work crew. What types of groups exist in this case? __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ ________________________________________________________________ 2. What role does the supervisor play in the performance of this group? __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ _________________________________________________________________________ 3. What are the major informal roles of the crew members and Kent? What status position does Kent have with the group? Why? __________________________________________________________________________ _____________________________________________________________________
4. Why hasn’t Kent been accepted by the group? Do you agree with the older worker’s last statement in the case? Why or why not? _________________________________
Question 3: Siemens’ simple structure -Not There is perhaps no tougher task for an executive than to restructure a European organization. Ask former Siemens CEO Klaus Kleinfeld. Siemens—with €76 billion in revenue in financial year 2009/2010, some 405,000 employees, and branches in 190 countries—is one of the largest electronics companies in the world. Although the company has long been respected for its engineering prowess, it’s also derided for its sluggishness and mechanistic structure. So when Kleinfeld took over as CEO, he sought to restructure the company, making the structure less bureaucratic so decisions are made more quickly. He spun off underperforming businesses and simplified the company’s structure. One of the challenges of transforming European organizations is the customary participation of employees in executive decisions. Half the seats on the Seimens board of directors are allocated to labor representatives. Not surprisingly, labor did not react positively to Kleinfeld’s restructuring efforts, and picket lines became a constant presence outside his corporate offices. In his efforts to speed the restructuring, labor groups alleged, Kleinfeld secretly bankrolled a business-friendly workers’ group to try to undermine Germany’s main industrial union. Due to this and other allegations, Kleinfeld was forced out in June 2007 and replaced by Peter Löscher. Löscher has found the same tensions between inertia and the need for restructuring. Only a month after becoming CEO, he faced the decision whether to spin off the firm’s underperforming €10 billion auto parts unit, VDO. He had to weigh the forces for stability, which want to protect worker interests, against U.S.-style pressures for financial performance. One of VDO’s possible buyers was a U.S. company, TRW, the controlling interest of which is held by Blackstone, a U.S. private equity firm. German labor representatives scorn such firms as “locusts.” When Löscher decided to sell VDO to German tire giant Continental Corporation, Continental promptly began to downsize and restructure the unit’s operations. Löscher has continued to restructure Siemens. In mid2008, he announced elimination of nearly 17,000 jobs worldwide. He also announced plans to consolidate more business units and reorganize the company’s operations geographically. “The speed at which business is changing worldwide has increased considerably, and we’re orienting Siemens accordingly,” Löscher said. Under Löscher, Siemens has experienced its ups and downs. In 2008, its stock price fell 26 percent on the European stock exchange and 31 percent on the New York Stock Exchange. In 2009, however, Siemens’ earnings were up 32 percent, despite an ongoing global recession, and most indicators suggested 2011 would be an equally profitable year.
Though Löscher’s restructuring efforts have generated far less controversy than Kleinfeld’s, that doesn’t mean they went over well with all constituents. Of the 2008 job cuts, Werner Neugebauer, regional director for a union representing many Siemens employees, said, “The planned job cuts are incomprehensible nor acceptable for these reasons, and in this extent, completely exaggerated.” Questions 1. What do Kleinfeld’s efforts at Siemens tell you about the difficulties of restructuring organizations? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ _________________________________________________________ 2. Why do you think Löscher’s restructuring decisions have generated less controversy than did Kleinfeld’s? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3. Assume a colleague read this case and concluded, “This case proves restructuring efforts do not necessarily improve a company’s financial performance.” How would you respond? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ __________________________________________________________________ 4. Do you think a CEO who decides to restructure or downsize a company takes the wellbeing of employees into account? Should he or she do so? Why or why not?