THE CASE IN BRIEF

Johannes Linden is the Director of the Washer and Dryer division of Fluss, a large Swiss appliance manufacturer. Post deciding the revenue projections and bonus targets for the upcoming year, Linden shares some good news with his leadership team, the Global Executive Committee (GEC): an internal R&D effort to develop cheaper steel for the company's products has finished a year ahead of schedule.

This will translate into a significant (10-15%) reduction in costs across the division for 2011.

When Linden proposes readjusting revenue expectations and sales targets accordingly, he is surprised to find that the GEC does not agree with him. Among other issues, employee bonuses are involved. Linden, with a reputation for being open and knowledgeable yet sometimes intimidating, tries to convince the committee to come around to his way of thinking.

LINDEN- THE PROTAGONIST

Belief: Complacency is a hurdle to the great opportunities and plentiful challenges of a business environment in an unprecedented flux of Economic and Cultural states.
Too impatient and wanted to infuse aggressiveness in decision making. Open and Collaborative Planner and Executor. Polite, yet firm : One-more-chance-guy. Highly participative. Benevolent - Autocratic

TWO TOUGH DECISIONS

Decide

whether or not to change the business plan for each country to reflect these changes. if they should change the bonus targets for FWDs Regional Directors and Country Managers as well.
If

Decide

Targets were to be changed, what would be the New Bonus percentages. [whether based on old targets or new targets]

OUR PEDAGOGY OF ANALYSIS

Define the symptoms of the problem being faced. Cause Effect Analysis Solutions

Recommendations [How to Implement ?]

SYMPTOMS OF THE PROBLEM

People are only buoyant because of FWDs profitable position. Management was targeted at just being self- satisfied. Slow decision making. Decentralized structure and Individual Accountability- Missing team work.
Each SBU responsible for its particular market segment. Each Region had separate projections in terms of Profits, Revenues and Market Share.

Spreading rather than consolidating. Need for an Agile Organization

CAUSES

GEC members began to adapt different roles in the group.

Individual ambitions Difference between Linden and GEC.
Ambivalence about the value of GEC GEC members not seeing the idea of changing Targets and Bonuses with the same glasses as Linden.

No need based working by GEC members. No Common Goal among the GEC members. Diverse & Non-overlapping goals of RDs and CMs.

EFFECTS

Passive co-operation among the GEC members.

Security and the benefits are the drivers of their ambitions.

Different Perceptions about the change.

Lack of Motivation Lack of Common goal Team and Team-work both missing Difficulties trying to get everyone on the same page when making decisions.

SOLUTION & ALTERNATIVES

As far as the Organizational Behaviour model is concerned, FWD needs to adopt a Systems Approach along with Collegial model.
Currently, the partial Custodial and partial Supportive model needs to facilitate this change for better outcomes. Adopt a centralize structure, along with consolidation of business activities.

Motivation:
Redefine the growth needs of the GEC members. Money is an external reward, so it cant stimulate internal motivation. Provide them with a sense of Achievement.

ALTERNATIVES (CONTD./-)

Being the Leader, Linden should define a Common Goal for the GEC.
Self-efficacy of members will increase. Each will contribute depending on his skills. A Team culture would develop. Pschological ownership, passion and organizational goals.

commitment

to

Bonus policies can be integrated with incentives: monetary and non monetary, which would boost up the motivation level of the employees. This would enhance the over all performance of the company.

HOW TO IMPLEMENT

Flexibility is the only strategy for survival and growth for FWD and Lindens team.

Linden being the Leader should Centralize decision making and hold the 9 RDs and CMs as part of a Core Group.
This will instill in them Team Spirit and ignite their inherent passions to make Trade-offs for the Organizational goal. Time frame: 6-8 months. Monitoring: Weekly. Appraisal: 3 months.