Organizational Behavior

02 Jul

CASE – 1

Raj Thapar, Karan Singhania and Aditya Mehta were bucking the trend during the 2001 recession.  While their counterparts were aggressively laying off workers, these CEOs were holding the line against layoffs.

Raj Thapar is CEO at Airbus.  His company, along with Boeing, dominate the market for commercial aircraft.  But while Boeing announced layoffs of upto 30,000 workers following the terror attacks of September 11, 2001, Thapar said he won’t be firing anybody.  Said an Airbus executive, “This is a bet that life will resume.  There’s more uncertainty now, but we decided to be optimistic.  This thing will turn around and you can’t risk losing skilled people when the upturn comes.”

Karan Singhania is CEO at North-Western Mutual, the largest seller of individual life insurance in the United States.  Singhania is no “Mr Nice Guy”.  Every year his firm fires the lowest four percent of its 4,100 employees — those with the poorest performance.  But it is very loyal to its good ones.  Singhania is committed to a no-layoff policy.  Why?  Employee loyalty says Singhania?  He believes employee loyalty helps in customer loyalty.  And he may be right since Northwestern loses only about half as many customers as the industry average.  Singhania argues that his Firm’s higher customer retention rate allows Northwestern to have more money to invest longer, while spending less to replace defectors.  The company can then pass the savings back to customers by lowering prices on policies.

Our final CEO, Aditya Mehta, heads up Enterprise Rent-a-Car.  Mehta proudly says that his company has never had a layoff.  This may be one reason why Enterprise is now America’s largest rental car company.

In a down economy, these CEOs were running against the tide when the economy began to slow, most corporate leaders’ first reaction was to cut the size of their workforce.  In 2001, alone companies let more than one million workers go. Why?  It immediately cuts operating expenses.  For public companies, it sends a message to stock investors and analysts that management is serious about maintaining profits and reducing losses.  A week after Boeing announced that it was laying off 20 per cent of its workforce, its stock jumped 10 per cent.


1) What are the arguments for and against layoffs in hard times?

2) How have the three executives in this case shown leadership?

3) Explain the difference between management and leadership.   Discuss why conceptual leadership skills become more important, and technical skills less important, at higher level organizational levels.


CASE –  2

The engineering division of Shah & Co, consists of four departments, with the Supervisor of each reporting to the division general manager (GM).  The four departments range in size from four employees in the smallest (industrial engineering) to twenty in the largest (sales engineering).  The other two departments (design engineering and process engineering) each have eight employees.

There occurs frequent rivalry among various departments over the allocation of resources.  This problem has worsened by the favouritism that the GM purposely shows towards the industrial and design engineering units and his reliance on majority-rule decision making (among his four supervisors and himself) at staff meetings.  The Supervisors of the sales and process engineering complain that this practice often leads to leaders of the industrial and design engineering departments forming a group with the GM – to make a decision, eventhough they represent  a small number of the total employees.  In response, the industrial and design engineering supervisors charge the supervisors of the sales and process engineering units with empire building, power plays, and a narrow view of the mission of the division.


1) Is the GM’s approach wrong?  If yes, then why if no then why not?  Give reasons for your answer.

2) What would you recommend to the G.M.

3) Team leaders and team members need skills to develop effective teams.  Is this statement correct or wrong. If there are any skills needed by the team leaders and team members to develop effective teams then discuss them.


CASE – 3

The new general manager (GM) of a Malaysian Carpet company was faced with the challenge of turning around the firm, which was rapidly going downhill.  He had to influence his own head office, senior executives, workers, bankers, dealers and others to support the change till the Firm turned the corner.  But the workers were in no mood to wait and decided to go on strike demanding higher wages and bonus.  A senior executive, who wanted to cut the new GM to size, was provoking them surreptitiously (secretly).

One day, as the workers were planning to leave for the day, the GM decided at the spur of the moment to talk to them.  He said, “I understand that you are planning to go on strike and hold demonstrations.  When you will sit outside the factory gate tomorrow, there will be people from the press who will come and photograph you.  Your pictures will appear in the newspapers.  They will ask you questions and blow up the issue.  But our bankers will also read our problems.  They already think that ours is a dying company and when you go on a strike, they will reject our proposal for funds.  If that happens, the company will close down.  Of course, you will continue to hold demonstrations, but now no press people will come to take your photographs and write what you say.  I have another job at the head office and so I will lose very little, but I am not sure if all of you can find another job when the company closes down.

The response of the workers to the GM’s impromptu address was electric, the GM had established contact with the group.  The GM looked directly into the eyes of a worker who was listening intently and asked him, “Tell me, do you want to go on strike tomorrow?”

The worker avoided his eyes but the GM persisted, “You cannot avoid my question.  It is far too important for the company’s future and yours.  Do you want to go on strike?  For a while, there was silence.  Then, slowly the worker said, `No’.  The GM moved to another person and repeated his question.  Again the answer was no.

The third person, fourth person and soon ripples of a new sentiment were being generated.  Towards the end of the addresses, the crisis had been avoided.  The GM quickly followed up with initiatives to strengthen employee communication and involvement to build on the positive sentiment that had come about.

The GM followed a different approach with the bankers.  He met them regularly and frequently, each time with some good news about the company.  He used his contacts to get certain purchase orders released, even if the deliveries were required later.  Every time there was a big order, he told the bankers that it was only the tip of the iceberg, and there was more to follow.  In the GM’s words, “No accounts are presented to the bankers unless we put lipstick and mascara and make them look as pretty and healthy as possible.”  Finally, the banks relented and accepted the financial restructuring package we had proposed.  That helped the company turn around in a remarkably short time.


1) How did the GM distinguish between the two target groups to make his communication effective?

2) What is the main advantage of direct face-to-face communication, as against communication through circulars or memos?

3) What makes technical communication different from general communication?

4) How important is it to be able to communicate?


CASE – 4

1)         Interviews – How are you?

Vikas — Nice.

2)         Interviewer — Tell us something about your background and academic credentials.

Vikas – (tensed and nervous).  I … I am a very qualified manager.  I am from Mumbai.  I
studied at Top institutions of Mumbai.  I am very famous.  I believe in hard work and honesty.
Currently, I am not working with anyone.

3)         Interviewer – What kind of a position are you looking for ?

Vikas – (in a rigid tone) I want the post of a Senior Manager only.

4)         Interviewer –  Tell us something about your work experience.

Vikas –  I have a lot of experience.  I have marketing experience as Manager (Sales and
Marketing).  Before this job, I worked with K K & Company.  I have always proved myself as
an outstanding sales professional.

5)         Interviewer –  Can you tell us about your responsibilities at your last job ?

Vikas –  As I told you, I am a very hard working professional.  My last job with K K &
Company as Manager (Sales & Marketing) kept me very busy.  My colleagues were very lazy.
So I had to perform extra responsibilities on their behalf.  My main job was to do the marketing of K. K water purifiers.

6)         Interviewer – What are your career objectives?

Vikas – I want to acquire a challenging position in a large companym where I should be able to
use my specialized qualification, understanding and experience in marketing and sales.

7)         Interviewer – What are your strengths ?

Vikas – I have good communication and interpersonal skills.  I am good at getting along with
others.  I have always achieved company targets.  Last year, my company wanted me to sell
2,00,000 water purifiers, I did it.

8)         Interviewer – What is your greatest weakness?

Vikas –  I think that I do not possess any weakness.

9)         Interviewer – Are you a leader or a follower?

Vikas –  I am a leader.  I have successfully completed several projects as a leader.

10)       Interviewer –Why do you want to work with our company?

Vikas –  There is no specific reason for this question.  Your company pays more than other
companies.  As I told you earlier, I am currently jobless, I need money so I have to work.


1) Read the above conversation carefully if you were Vikas, how would you answer all the questions asked by the interviewer.  Rewrite the answers, making them more appropriate by changing the language, style, tone, and attitude of the answer.”

2) Describe the significance of job interviews today.

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