Reference no: EM133590136

Problem: The Bathtub Period

The award of the Scott Corporation contract on January 3, 2020, left Park Industries elated. The Scott Project, if managed correctly, offered tremendous opportunities for follow-on work over the next several years. Park's management considered the Scott Project as strategic in nature. The Scott Project was a ten-month endeavour to develop a new product for Scott Corporation. Scott informed Park Industries that sole-source production contracts would follow, for at least five years, assuming that the initial R&D effort proved satisfactory. All follow-on contracts were to be negotiated on a year-to-year basis.

Jerry Dunlap was selected as project manager. Although he was young and eager, he understood the importance of the effort for future growth of the company. Dunlap was given some of the best employees to fill out his project office as part of Park's matrix organization. The employees needed to understand how to convey information correctly, work together as a team and manage a positive relationship with the customer.

The Scott Project maintained a project office of seven full-time people, but this number could increase to 15 as the project expanded. It was important that new employees were inducted and trained and supported to that they could complete their work on time. However, no one specific was selected to deliver that training or to follow up with staff. Everybody was busy and this affected their morale and the desire to help one another. New employees sometimes felt lost. In addition, eight people from the functional department of the customer were selected for representation as functional project team members, four full-time and four half-time. These people also sat in the project office along with the company's staff (the 7 full time and the 15 added staff). The total number of people in the office was 7 + 15 + 8 = 30. The office had a capacity of 25 which meant that some staff did not have a desk and some staff had to rotate access to a desk.

Although the workload fluctuated, the manpower level for the project office and team members was constant for the duration of the project at 2,080 hours per month. However, the casual staff were not given regular hours. Some weeks, they would have 30 hours of work; other weeks they would only have 10 and this made the job unstable. The nature of the work also differed. Casual staff got jobs that the permanent staff did not want or that were harder to do. Over time, the relationship between the permanent staff and the casual staff deteriorated.

At the end of June, with four months remaining on the project, Scott Corporation informed Park Industries that, owing to a projected cash flow problem, follow-on work would not be awarded until the first week in March (2023). This posed a tremendous problem for Jerry Dunlap because he did not wish to break up the project office. If he permitted his key people to be assigned to other projects, there would be no guarantee that he could get them back at the beginning of the follow-on work. Good project office personnel are always in demand. This meant that there was now also a financial problem with the project. This may lead to some of the permanent staff being moved to casual contracts. With this in mind, the permanent staff started to take on some of the work that the casual staff had done. This left casual staff with far less work. The relationship between permanent staff, casual staff and management became strained.

The project started to suffer from delays and the customer relationship started to worsen. Staff morale started to drop and absenteeism increased. It appeared that the manager was doing his job and the organisation was failing.

Question A. How can the relationship between casual and full-time staff be improved?

Question B. What is the best way to repair the damage done to the relationship between the organisation and the customer?