Saturday, February 28, 2009

Nordstrom (HBS 0-191-002)

Well, Nordstrom’s has raised several generations of sales forces. Just because you have a generation of employees that just don’t know any better, or maybe they know better, but the pay is just too good to risk to saying anything because the gravy train may not come anymore. This is a modern day example of the benefits of Unions, and why they still may be needed in some cases. I am not surprised at all, that the employees ousted the Union. The Union, in trying to protect their rights, was endangering their higher than industry average pay, at least that’s what the employees believed. What is more likely, is that the employees made more because they worked more hours than any other retailers in the country, they just didn’t clock in for the hours. Its companies like Nordstrom that blemish capitalism and make people champion the misguided ideas of socialism. The system that the Nordstrom family has created to increase incentive for their workforce to sale more retail than any other retailer in the country, no long with hold water in the 21st Century. Not only that, but its dangerous for the company to continue to do business like old granddad did in 1901. The system could be easily changed in several small ways to #1 - be more humane, #2 - be more legal, and #3 - less suppressive to their employees.

SAS Institute (SGS Case: HR-6A)

Perspective: Reading this case, I had to remind myself that the employees that Goodnight is employing, are highly educated, very well compensated individuals. Their production is also very high, and throwing $25,000+ in annual benefits is a drop in the bucket for the amount of annual production and revenue they produce for the company. When the average salary of an employee is $25,000 or less, it becomes much more cost prohibitive to provide employee benefits as extensive as SAS is providing.

Private vs. Public Companies: Dr. Goodnight is exactly right with his business philosophy of long term profitability vs. short term profitability. SAS Institute has been able to effectively make the long term capital investments necessary to maintain its competitiveness over other companies due to it being a privately held company with no public stockholders demanding steadily increasing quarterly earnings.

Having a Plan: Or should I say the lack of having a plan. Dr. Goodnight’s plan reminds me of the “Invisible Hand.” I would have to say its more of being in the right place at the right time.

I would conclude, that based on the period of time, and the type of industry, SAS Institute hit the “Perfect Storm.”

Wednesday, February 25, 2009

Specialty Medical Chemicals (Case: HBS-9-399-094)

Dr. Winthrop received over 200 patents in his lifetime. The company was basically built off of his innovations and the day to day management of the company was done by professional business people. He was the creative researcher that built the company. A corporate system of keep to the old seems to have been built into the fabric of the company. Barry Tompkins was just the type of CEO that could build that type of corporate system, and keep it maintainable. Very little creativity seemed to ever be encouraged at SMC.

When looking for a replacement for Tompkins, the board decided to look for a person that would not undo “a lot of what Barry had accomplished.” Not really possible, as Tompkins had built a company that was systematic and steady, not innovative and growth oriented.

The job search landed a biology major with New Product Marketing experience. The problem being that there is little new product development at SMC and Carl has little experience in the other area’s of a pharmaceutical company.

SMC has a corporate system that does not encourage its management to work together. In fact, the system encourages them to be self interested, and greedy with information in order to protect their own needs. The annual “evaluations” continued to mark the VP’s with high marks and top salaries, even when the overall performance of the company was sub par.

Carl needs to step up and communicate with his VP’s on what he wants from them. He is waiting for them to “get it”, but they are all longtime employees of SMC, and are not familiar with the group give-and-take that his previous CEO from Merck had built into his management team. That system needs to be developed, through trust and open communication with the team members, in groups and individually.

The consultant Wells, basically told Carl everything he wanted to hear. He had already know most of what the final evaluations told him. If anything, the whole exercise was a waste of resources and time.

I think all of the management VP’s are motivated to achieve success in their own departments. Carl needs to change the system (carefully) within SMC to redirect the VP’s motivations to be the overall success of the company, and not just the individual departments. I liked his idea of changing the departments to Pharmaceuticals, Biotech, and Generics, as this will require his VP’s to start thinking about all the departments instead of just their own.

Monday, February 23, 2009

Chapter 5 - Extra Readings

Two Football Coaches Have a Lot to Teach Screaming Managers

Tony Dungy and Lovie Smith are great motivators. Both understand what each motivates each of their players. I would think that they are both surround themselves with Theory Y people. I don’t think that they would be very successful coaching players that were Theory X people. As for coaches and CEO's and bosses that still think yelling at and belittling employees is the way to maintain control and show their own power over others, are dinosaurs. They are a dying breed, that have become a liability to company's, no matter how good they are at the other aspects of their job.

Get Healthy - Or Else

This is an interesting article to me because I currently working on alternatives for my companies health insurance. Over the last 5 years, annual increases of +20% have basically made supplying insurance for my 150 employee unaffordable for most of them to even pay the 25% pro rata share of the month premiums, and for the few people that do purchases it, the costs are increasing 51% this year. We are at a loss for what to do about it. We are exploring several options, but the fact of the matter is, its going to be so costly, that we expect several more employees to decline coverage this year.

As for Scott Miracle-Gro and their CEO Jim Hagedorn, there wellness program has a ton of holes in it. The intrusion and heavy handedness of the program is what would concern me. If I was to try to introduce this program into my company, I think I would base it on an exclusively award system, versus an punishment for not quitting smoking. In stead of insurance costing people 40 or 60 or even 100 more if you don’t participate in the wellness program, it should be that your insurance premium would be reduced by 40-100 for participating in the program.

Jesica's Story

I think the culture of Duke University Medical Center and the other hospitals an other organ harvester companies are more of time is of the up most importance in these time of operations, where they need to get the organs harvested, and then transported, and then placed in the transplant patient. Corners were being cut due to the implied urgency of the operates, and that falls on the surgeons and the management of the hospitals and harvesters. The liabilities on that this type of behavior promotes, is huge, and risk analysts, managers, and surgeons should of be more in touch with the dangers. I don’t think all the blame falls on the Jagger, but the whole system set up needs to be changed in order minor over sights turning into major problems.

Wednesday, February 18, 2009

Southwest Case Study

Ann Rhoades' pondering the implied problems of competitive pressures, over confidence on the part of management and employees, and the future succession of the CEO position from Kellsher are not the real points of issues that she should be concerned with. I think all these issues will always be handled seamlessly as long as Southwest maintains the corporate culture that Kellsher has woven with his fellow employees. The real trick for Southwest is not to concern themselves with Continental, United, Reno Air, Jet Blue, etc. . . These airlines didn't start with the same hurdles that Southwest did. Kellsher and Southwest started with the US government passing laws in order to keep the company from successfully starting up. When a group of people start something together and have to ban together and trust one another because its them against the rest of the world, the team comes first, and everyone helps out. That is what I think Kelleher meant when he said, "We have to be the world's first company to refute the old law that companies die from excessive prosperity."

Southwest needs to realize that some other airline will always be out there trying to take their customers away from them, but these companies are not going to change there corporate cultures to do it. They look at the smiling flight attendants and the happy pilots and the unions of Southwest and think that its just a "gimmick." They think that it must be something else, just tell the employees to fake it, and smile. Just work as hard and fast as Southwest's people do. United isn't going to start 2-day workgroup classes to build employee moral and build a better working relationship between the pilots and mechanics. Continental and United should of concentrated on what they do best and worked on doing it better. No one every became successful by pointing at someone else and saying, "I don’t want them to be successful anymore, lets try to hurt them by meditating their business model that we don’t know anything about."

Southwest needs to continue reinventing ways to keep their corporate culture a happy and positive, team oriented place to work. Additionally, I believe that their hiring practices, if applied to a CEO search, would result in good candidate to succeed Kelleher. I believe that all of the companies future hurdles will be easily over come if they are able to continue their successful HR / Customer Relations programs.

Monday, February 9, 2009

Chapter 4 - Extra Readings

To a United Pilot, The Friendly Skies Are a Point of Pride:

Cat. Flanagan is an example of the perfect employee for United. From his strong organizational commitment, which is easily identified as affective commitment. I would have to question his "belief in the goals and values of the organization." I believe his actions are more closely related to his ethical beliefs and values that this is the way he should act as a pilot, over United's corporate culture of its ok to have poor customer service. United has serious problems with employee moral and customer service, and having one person as the "great ambassador for the company," doesn't cut it. A company as large as United can not just point at one person, and say, "be more like him."

I wonder if Capt. Flanagan has any cognitive dissonance over United and its employees acting in a way completely opposite from his own attitudes and behavior. He obviously has strong ethics, values, and internal locus of control. He is a great example of someone who has a high level of organizational citizenship behavior, and has a level III cognitive moral development.

Rules of Engagement:

This article champions the new trend of removing the "rigid, controlling workplaces of the past" and creating more positive work environments, by reducing cognitive dissonance through modeling the work force with participative management. Additionally, it states that companies can increase job satisfaction and organizational citizenship behavior, and affective commitment to the organization though flex time and "work-family balance." There is strong evidence that companies with positive work environments and high empl0yee engagement cultures, have higher corporate profits and less employee turnovers and absences.

Companies with positive work environments and employee engagement cultures, are companies that most likely have very capable and experienced management team. They most likely have a high level of performance in all of the companies departments, from finance, marketing, research development, operations, etc . . . I believe that if a company's CEO was an innovator of change in all areas of the corporate structure, that he would allow for a better workplace for the employees. Without changing the workplace in some way to increase organizational commitment of the workforce, major changes can not be successfully implemented into the company. If a new CEO wants to save a failing company, or take a new direction that will lead to great success in the future, attitudes and behaviors of the workforce must be change to increase job satisfaction and organizational citizenship behavior.

Monday, February 2, 2009

Chapter 3 - Extra Readings

Bob Sutton's Blog - MindSet & Can Personality Be Changed?

Dweck research on learning and intelligence states that if you can convince an individual to believe that intelligence is malleable, that they will learn faster, easier, and continue getting smarter as it relates to IQ. I would think that a persons personality would have to be modified as well, if for instance they had characteristics that caused barriers to them believing that intelligence is malleable, how would you convince them that they can increase their IQ. I believe that both intelligence and personalities are malleable, but I think its not as easy as just deciding on day that you can believe in malleable intelligence or personalities. People have different levels of adaptive functioning, from high to low abilities, or fast to slow adaptive personalities. Dweek's paper states that "modest interventions have brought about important real-world changes." I believe we can modify personalities by changing social perceptions. Identifying barriers to social perception and understanding the characteristics of the situation are key to convincing an individual to believe in malleable intelligence and personality.