Case Study 1:The merger of Snyergis and Abacus (40 Marks)
Bill Jones, team leader and support coach at Synergis, an outstanding medium-sized management-consulting firm, walked into the managing director’s office filled with apprehension.
Alan Smith had called a meeting with him at short notice, with a cryptic message from his executive assistant about the nature of that meeting. It was unlike Alan not to provide Bill with details about meetings. Alan was a passionate believer in transparent communication and decision making. He had gained a lot of respect from his employees because of his ‘up-front’ management style. As one long-time staff member commented: ‘We may not like some of his decisions, but we
know where we stand with Alan.’ Alan believed that in order for a knowledge-intensive firm such as Synergis to remain competitive and dynamic, open and collaborative communication and leadership styles were crucial to the continuing success of the firm.
Bill tried to dismiss a nagging feeling he’d had all day that something wasn’t quite right. But when he examined his feelings closely, he realised he had regularly felt uneasy during the past few months. He had felt this way since the announcement of the merger between Synergis and Abacus. Initially, Synergis staff found it difficult to understand why there needed to be a merger between the two firms. Not only did they have very divergent organisational cultures, they were also at different stages of their organisational life cycles. Abacus was a mature, conservative business-consulting firm that had experienced slow growth in recent years. The owner of Abacus, Elliott West, was keen to form a productive alliance with a younger, more productive firm, and began to search for one that might fit the criteria.
Elliott was a self-made and uneducated entrepreneur. Although he had grown a very successful business, he had always been in awe of the professional MBA-educated managers he hired to run his company. Elliott’s feeling of inadequacy about his lack of education often led him to accept advice from his managers without questioning whether or not is was appropriate. The idea of merger was ‘sold’ to him by the very ambitious and charismatic marketing manager, Nick Brown, who had been with Abacus for about a year. Elliott left all the negotiations with Synergis about the merger to his management team, and trusted them implicitly. He had met the Synergis team twice and was impressed by what he saw. There were times he thought that the outcomes of such a union would be almost too good to be true, but he dismissed the idea as negative thinking.
Elliott also had doubts about the effect such a merger would have upon the staff of both companies. His management team were adamant that although there would be pain for current employees of Synergis, the Abacus way of doing things would have to prevail. Synergis had a lot to offer, but Elliott’s managers warned of letting the younger employees of Synergis ‘loose’. They explained to Elliott that individual employees had too much power and that Synergis wasn’t centralised enough. If Elliott were to gain control of the merged entity, the Synergists would need to be ‘brought into the line’.
The Abacus management team, in particular Nick Brown, developed a secret ‘containment’ plan that would be rolled out once the merger was official. They convinced Elliott that sufficient consultation had occurred with Synergist staff and that the executive staff were supportive of the plan. Despite having reservations about aspects of the plan, Elliott agreed for the plan to be implemented.
So, as Bill walked into the office and sat down in front of Alan, he realised why he had been feeling nervous. Alan looked as though he was about the deliver bad news. Alan told Bill that he had been informed by a disgruntled Abacus employee that senior management had a ‘containment’ plan ready to roll out once the merger was official. This plan would involve downsizing Bill’s area, which conducted most of the research and development work central to maintaining Synergis’s competitiveness. He also told Bill that the plan included moves to replace senior Synergis staff with middle managers from Abacus in order to reduce the costs of the merger. Bill was shocked at the news. He had met recently with his counterpart in Abacus and had no inkling that this would be a likely outcome of the merger. If anything, Abacus management seemed more than willing to cooperate with Synergis, particularly in relation to the merger of IT and HRM systems and procedures.
Alan and Bill arranged a meeting with Elliott later that week. When confronted with what Alan and Bill told him, Elliott first denied that such a plan existed. He then realised that the quality of some of the information he was receiving from his senior managers may be problematic. Instead of confronting them, particularly Nick, Elliott decided to do some investigations of his own. What he found startled him. Not only was Nick feeding him false information, but he had successfully convinced many of the Abacus staff members that he was the driving force behind Abacus, and that when the merger occurred he was the natural heir to the newly merged entity. He also presented an image of Elliott as ‘past his prime’ and needing ‘looking after’.
Although angry and upset, Elliott decided not he retaliate. Instead, he worked with Alan and Bill over the next few weeks to develop an alternative ‘containment’ plan, as well as a proactive merger plan that concentrated on aligning the two distinct cultures. Elliott developed a sound working relationship with the two Synergis executives, and came to appreciate the level of expertise and culture of excellence that the Synergists would contribute to the newly formed organisation.
At the same time, Elliott continued to work with Nick Brown on planning the rollout. Nick had no knowledge of Elliott’s secret meetings with Synergis, and assumed that Elliott would be making the announcement about the new CEO soon. He thought it strange that Elliott hadn’t formally discussed it with him, but was confident that Elliott wouldn’t consider anyone else for the position.
A month before the merger, Nick met with Elliott in his office. Elliott was quiet but firm when he informed Nick that it would be Alan, not himself, who would be the CEO of the new organisation, which would be called Synabis. Elliott also told Nick that he wouldn’t be renewing his contract, which was due to expire in three months. Nick Brown’s payout was considerably larger that was stipulated in his contract, but Elliott West was relieved he was now free of Nick’s influence.
Assignment Questions: Case Study 1 (40 Marks)
- What are the main kinds of power bases Elliott used to solve the problem of Nick Brown
undermining his position?
- What were the main power tactics used in this scenario? Which ones were the most successful? Why?
- How were both legitimate and illegitimate political behaviour used together in this instance. Discuss in detail.
- Describe how a power coalition formed in this case. Provide reasons for why it worked.
- Discuss Alan’s leadership style. Choose one leadership theory and apply it to Alan, how could he use this theory to help him manage the new organisation; Synabis.
Case Study 2: (25 Marks)
Now that senior management has shown its faith in her abilities by promoting her to lead the front-of-house team at the theatre, Jocelyn is determined to be the best line manager that she can be. She knows her mentor from the personnel department, Sue, must have a lot to do with her promotion. Sue recruited her to the theatre complex three years ago and seems to have taken a personal interest in her since then.
Sue is always friendly, never failing to take a few minutes to chat about the goings-on in the theatre, plans for upcoming events, personnel moves between departments, and so on. Several times she requested that Jocelyn be put on working committees looking into various aspects of client service and productivity,. This gave Jocelyn a broad understanding of the workings of the theatre and exposed her to people from every department at all levels. Sue also arranged for her to undertake a few project assignments in different areas of the theatre, and nominated her to be on the high-profile enterprise bargaining working group.
Jocelyn makes the most of these opportunities, learning everything she can and contributing as fully as she feels able to. She tries to ‘dress the part’ when she is on these special committees and teams; in fact, she takes her cues from the way Sue dresses. She is friendly and cheerful with everyone and makes a conscious effort to keep up her contacts with people once the committees disband.
In this way, Jocelyn has gradually become known throughout the theatre complex as a dedicated, hard-working, cheerful and effective employee. Her manager appreciates her efforts too. She always presents information in writing, with plenty of details and statistics, as she senses he wants this type of report. She also makes an effort to suggest good ideas and tries hard to help motivate and energise the rest of the team.
So when it came time for her manager to move on from supervising the front of house, there were ringing endorsements all round of Sue’s recommendation that Jocelyn take on the role.
Source: Cole 2005, Management, 3rd Ed, Pearson Education Australia
Assignment Questions: Case Study 2
According to Harmers Workplace Lawyers, recent cases of complaints of sexual discrimination and harassment show a significant rise in the level of compensation payouts, prompting a tightening of companies’ Equal Employment Opportunity (EEO) policies and training to ensure that their reach is extended to the company’s most senior executives. This is because sexual harassment is worst at the executive level in organisations, both public and private. Tony Vernier, a partner at Thomson Playford Cutlers, said that sexual harassment issues are the number-one risk factor employers should have on their radar.
Australia’s second-largest award for sexual harassment indicates the significance of the issue of sexual harassment and the abuse of power in the workplace. In 2009 the Federal Court ruled that Malgorzata Poniatowska, a female employee of South Australian housing developer Hickinbotham Group, was sexually abused and then unfairly sacked when she made multiple complaints about the abuse. The Hickinbotham Group was ordered to pay $466 000 in damages and her legal expenses, which at the time of the court resolution were expected to amount to more than $1 million.
Poniatowska had made a number of complaints to her manager about lurid emails and text messages from male colleagues. Following these complaints, she was sacked on the grounds that her job performance was not up to standard. Justice John Mansfield did not accept performance as a justifiable reason for the dismissal, and instead he observed that ‘Ms Poniatowska was not treated as the victim of sexual harassment, but as a problem to be dealt with’.
Tony Vernier also expressed his concern that attendance by employees at a work Christmas party or function is considered to be ‘in the course of employment’, and consequently employers have legal obligations to their employees. He also points out that employers should be aware that those obligations may extend beyond the period of the Christmas party itself, that is, the party after the Christmas party. He pointed to the high-profile case of Carlie Streeter v. Telstra Corporation  AIRC 679, which captures media headlines with its themes of drunken sex romps. While not the key finding, it was significant that the case proceeded on the basis that conduct involving Telstra employees that took place in a privately paid-for hotel room, well after the work Christmas party had concluded, occurred ‘in connection’ with their employment.
Sources: Sarah O’Carroll, ‘Sexual harassment worst at executive level’, Human Resources Leader, 11 November 2008; Anonymous, ‘Unaddressed sexual harassment costly’, Human Resources Leader, 7 July 2009, p. 6; and Zoe Lyon, ‘How to avoid Christmas party pandemonium’, Human Resources Leader, 11 November 2009.found in Robbins et al 2011, Organisational behaviour, 6th edn, Pearson Education Australia
Assignment Questions: Case Study 2 (20 marks)
- Fully define the terms Sexual Harassment and Bullying and discuss how they relate to power.
- Research and explain the consequences of sexual harassment and bullying in the workplace
- Research and discuss an example of what organisations are doing to deal with power abuse. What are they doing to prevent and deal with sexual harassment and bullying in the workplace?
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