Reference no: EM133019926

CASE STUDY ON INITECH

INTECH is a leading medium-sized cosmetic device company based in southwest England. The company had a standard functional structure for most of its 20-year history, with each area (manufacturing, engineering, finance, sales, marketing, and so on) reporting directly to the CEO, Daniel Fisher, and the two senior executives Vera Martin and Robin Blake. For several years, the company had been growing steadily, but with rapid advances in information technology, Daniel was becoming increasingly concerned about the company's long-term viability and competitiveness.

Over the following five years, his principal business goals were to make INITECH a more agile, responsive, and inventive organisation with faster decision-making and implementation. This was reflected in the company's mission statement. Daniel also intended to make INITECH a more exciting and empowering workplace to boost organisational commitment and happiness among employees, given the higher-than-average staff turnover in previous years. As a result, Daniel expected the company's growth to accelerate.

With these goals in mind, Daniel sent Vera and Robin to a management seminar 18 months ago that focused on the concept and practice of teamwork. Vera returned to persuade Daniel that changing the organisation's structure from its current functional orientation to one based on a network of product line teams would be the most excellent plan for INITECH's future success. The new team-based design, according to Vera, will form seven multi-functional teams, one for each of the company's primary product lines. Each product line team would have a representation from each of the existing functional groups. She also talked about how product line teams may define their own goals, control their work processes, create and develop new goods, and be fully responsible for their product line's profit. While Robin had some misgivings about these ideas at first, Daniel was enthusiastic about them, knowing that Vera was convinced that a structural shift would be the most significant step for the company. Vera worked closely with Daniel over the next two weeks to turn the thoughts into concrete designs. The plans were approved in March 2009, and staff were notified of the new strategy.

Vera had been very open, flexible, and upfront in discussions with Daniel and the staff about how this could work for them from the outset. She had deep passionate confidence in the possibilities of team-based working for the business. However, as the adjustment was gradually implemented over the next few months, Robin highlighted several concerns he had not previously mentioned. Robin grew sceptical, fearing that the new team-based structure would erode managers' authority over staff, owing to his risk-averse and detail-oriented personality. Robin cherished the authority that came with his position in the company and did not want it jeopardised in any way. As a result, during one of their weekly after-work golf games (which Vera had no interest in and hence never attended), Robin began to try to sway Daniel by expressing concern about the organisational changes and asking him to reconsider the team-based design. Robin had a fantastic resume and was a well-known expert in the field of electronics production. He wielded some power and influence on Daniel, who depended mainly on Robin's knowledge and experience. Indeed, Daniel was concerned by Robin's remarks. It was too late to go back now, and restoring to the old structure would have been prohibitively expensive. As a result, despite Robin's apparent scepticism, the plans went ahead.

Despite high hopes for what product line teams could accomplish, sales and profit plateaued and then began to decline after the first six months of deployment. All attempts to reverse the trend had failed, including putting pressure on the teams to improve and threatening team members with being replaced by others. Robin was privately chuffed with himself because he had warned Daniel about similar issues for months. On the other hand, Vera stayed upbeat and encouraged employees to make open ideas, which helped improve things.

Employees believed what they were taught when the team-based structure was initially adopted, and they ran the teams with a strong sense of ownership and excitement. They soon discovered, however, that they did not have the autonomy they had been promised. Robin retained ultimate budget responsibility, allocated all resources across the company, and insisted on approving all new product-line ideas proposed by the teams based on his knowledge. He frequently neglected to keep Vera informed about choices, resulting in teams receiving contradictory messages from management. This caused dissatisfaction and tension among the teams, with some members prepared to submit to Robin's authority while others were vehement about questioning his contradicting behaviour.

One of the audio device teams, for example, had spent weeks meticulously developing a new product design, producing prototypes, performing market research, and researching new production materials for the product. This needed coordination and resulted in many heated debates among team members over how the product should work. Despite the tensions, the team was delighted with its final plan and was looking forward to pitching it to the rest of the company and reaping its labour benefits. Vera was also quite cheerful about their work and frequently complimented Daniel on his efforts. Indeed, Vera had given the team the authority to build the new product in the first place, and she had supported them throughout the process.

On the other hand, Robin hammered the team with difficult questions and found holes in their proposal when they presented it to management, meticulously describing all the severe aspects they had overlooked. Daniel could agree with Robin's decision because Robin was an expert in the field. Vera also found it difficult to question Robin's authority, and in the end, the plan was decided to be rejected. The team members were devastated after all of their hard work and Vera's support. Not only were business decisions taking longer than they had in the past, but it turned out that the team had no control over new product design.

Despite the considerable acceptance of the concept of team-based design at the start of the implementation, there was often a mismatch between words and actions. Vera, for example, frequently stressed the need to implement 'team time,' in which each team could hold a monthly meeting to reflect on their performance and come up with new project ideas based on employee feedback. Although Daniel was initially supportive of the proposal, it became evident that scheduling time for such team meetings was impeding Robin's productivity. Instead, Robin requested that each product line team provide a formal monthly presentation to the senior executives, including their previous month's results and their budget and goals for the months ahead. Rather than seeing this as a way to help the teams, many regarded it as an opportunity for management to figure out what went wrong, keep track of their plans, and threaten them if they didn't better their performance in the next month. This seemed in contrast with the company's vision, which emphasised empowerment and creativity.

To make things work, numerous teams lately complained that certain team members weren't carrying their weight and weren't putting enough effort into team decisions, relying on others to do the work and showing little interest in their team's success. Morale was at an all-time low, and some staff had already opted to go. Daniel was at a loss for what to do next.

Analyse the INITECH case study using the theory and evidence of People and World Organizations by addressing each of the three issues:

1.1 Is the deployment of team-based working an appropriate method for supporting INITECH's intended organisational development?

1.2 Why did the introduction of team-based working fail to meet expectations?

1.3 How would you advise INITECH to deal with their current problems?