Assignment
Dave Barker is the owner of ViPack, a small packaging plant in Boston. Barker had no desire to carry all his company's burdens by himself, so he decided to share the responsibilities and rewards with his workers. But the workforce said no thanks. They wanted nothing to do with so-called democratic power and self-government even if it really did mean profit-sharing on a generous scale, which they very much doubted was the case.
Barker had purchased the company with a partner, and at first his relations with employees had been hostile. He had openly implied that they were not particularly intelligent, and he had declared their jobs to be so easy that even a child could do them. Even worse, he had refused them their annual wage increment, promised by the previous owner of the firm. The workers went out on strike but eventually gave in when Barker threatened to close the factory permanently. Barker wouldn't take any of the workers back until each one had accepted an individual work contract with reduced vacation time and an annual pay cut of 12.5 percent. Beaten and humiliated, the workers hated him. He'd won a labour victory, but his prize was a factory full of sullen, angry workers determined to file complaints on every tiny deviation from the contract he had made them sign.
Barker himself soon realised that his manner had been arrogant, heavy-handed, and rather short-sighted. The strike had taught him that his disrespectful treatment of his workers had been a case of extremely poor judgement. The work they did was far from easy, as he'd discovered first-hand when he'd tried to do it himself, and he desperately needed their knowledge of equipment, products, and customers. He never admitted this openly though.
Regardless of his mistakes in the past, Barker was determined to win the confidence and involvement of his workforce. He began consulting them and tapping into their expertise, and he started holding monthly state-of-the-business meetings to let them know exactly where the company stood financially. He also began to study profit-sharing plans. By the end of the new work contract's first year, the business was again making a profit, and Barker restored a big piece of the pay cut that he had imposed. Toward the end of the work contract's second year, Barker announced that he would restore the remainder of the pay cut, and would immediately begin a profit-sharing plan that would distribute 30 percent of pre-tax profits to employees; half of this would go to the hourly workers. To give the plan substance, Barker declared that he would open the company's books to union inspection and audit. The union officials quickly embraced this invitation and increased their presence at the plant.
Many, perhaps most, of the hourly workers resisted these suggested changes. They simply didn't want more responsibility, and they didn't want change-Barker could keep his profits. They wanted higher wages all right, but they wanted guarantees, not risks. Barker was relentlessly straightforward. He gave new responsibilities to his best people, with merit pay raises to match. He also found a factory manager who was good at persuading people to study maths and such techniques as statistical process control. Barker announced that learning new skills would entitle people to pay raises. But he firmly refused to increase wages across the board beyond restoring the pay cut that had helped get the company back on its feet.
Barker was sure that he and his workforce would continue to be adversaries until they all shared a common interest in the company's success. To that end, he wanted them to understand where wages came from and to grasp the trade-offs between benefits and profits. Workers would have to share a portion of the risk and shoulder more responsibility.
Accordingly, Barker made two public announcements: "I do not choose to own a company that has an adversarial relationship with its employees" and "Employee participation will play an essential role in the management of this company". He began losing his temper every time someone refused to participate in decision making or said, "It's not my job". He started using the monthly meetings to share more and more complex information, look at profit projections, and examine numbers such as scrap rates and productivity-areas over which factory workers had direct control. Sometimes his explanations were just too complex though, and many of the workers simply couldn't understand them.
Barker met with union leaders, told them exactly what he was trying to accomplish, and swore he was not out to break their union influence within the organisation. He ignored resentment, absorbed a great deal of criticism, delegated relentlessly and even did his best to listen and treat people with visible respect. Several of his workers began to see his intentions as genuine. Some of them even liked his enthusiasm, and wished they could understand his financial presentations better. Others were wary of his temper and couldn't forget his initial highly dogmatic management style. The union delegates were still very suspicious of Barker and continued to tell the workers in no uncertain terms to absolutely resist Barker's initiatives because these changes were ultimately designed to create a two-tiered workforce, with the first tier earning much higher wages at the expense of the second tier whose wages would progressively be eroded.
Task
1. Identify three important issues or problems related to the study of organizational behavior and design in this case. Provide a clear justification for each one, along with relevant evidence for your answer.
2. Outline four relevant theories from the field of organizational behavior and design which can be applied to each of the issues or problems identified in (1). Explain how each theory helps us understand the identified problems or issues in this case.
3. Outline your preferred solution to two most critical problems in this case. Provide a brief justification of your choice and an implementation plan to explain how your preferred solution could be executed.