Karen Barton, Zendal Pharmaceuticals (senior vice president of HR), was annoyed when COO Palmer scorched her executive education budget by 75%. The first thought that came to Barton mind that it was a mistake, but it wasn’t a fault as Palmer patiently told Barton, sales were down by 26% and there were $300 million debts Zendal took on when it acquired Premier Pharmaceuticals, as a result, Barton’s budget wasn’t the only one being cut. Palmer added that it wasn't clear what would be the return on investment of her proposed program or any of her current ones for that event. Barton's analysis had been extremely short on Quantitative benefits. Barton complained to a friend Carlo Freitas, head of the medical devices division about this, but Freitas disagreed: "If you want dollars, you have to show how you fit in with management's plans. You must be deliberate to fight for the resources with rest of us”. Barton bristled: "Don't you see that my department is connected to all the others? Every division benefits from the HR budget. " But she noticed that Freitas was correct. She needed to make the case that qualifies her budget was a clever act even in tenacious times. Q1. Analyze the problem with the case using OB theories and concepts.
Analyzing the case we find the following concepts:
Conflict concept: “It is a disagreement between two people or group over some major issues”. In the case, there is a disagreement between Palmer and Barton regarding the importance of executive education due to which Barton’s executive education budget was cut by more than 75%.
Understanding concept: “It relates to showing/exchanging of one’s thought with that of others”. Here Barton takes helps of her friend Frietas in order to make some decisions regarding executive education.
Now regarding this decision, Freitas tells her that she should provide justification for how will executive education somewhere leads to the profit of the company.
Communication concept: “Communication is a process by which information is transmitted between individuals and/or organization so that an understanding of response results”. Barton knew about the interests of the executive towards a particular program communication with them and also encouraged the executives for enrolling in the respective program they liked.
Organization development concept: “It is a long term strategy which focuses on the whole culture of the organization in order to bring about planned changes” In this case, Barton took a step ahead for the executives’ education for executives in the company. Barton as the manager of the HR department was wondering how executives can be provided with the training (organizational department).
For this she took two steps:
(a) Initiatives for two types of employees: *New Hires – who had to be bought up in a quick and speedy way. First-level supervisors – these are high potential performers. An average enrolment was between 25 and 30 employees.
(b) Low key approach: Barton’s team adopted an initiative to collect information on various programs at different B schools. Barton has encouraged executives to speak to the attendees first and look over the course materials those people had brought back. According to her this was a good way to determine whether the executives need fits with the programs theme.
Motivation concept: it is one of the most important concepts that best fit in the matter. Motivation Motive Motivating Engagement in work behavior. Activating needs and providing needs satisfaction on environment Needs in individuals In this case all the executives under Barton were being motivated by her for enrolling in the best-suited programs and also she asked them to enroll in the programs which discouraged they felt were poor or below average.
1. Vroom’s theory of expectancy: “Theory deals with the variables of motivation and their interrelation”. Employee Effort Performance Reward According to the block line diagram of VTOE we can correlate the case as:
(a) Employee : executives
b) Effort : that are made by Barton
(c) Performance: all the performance criteria can be given to Barton and her team members.
(d) Reward: enrolment of executives as managers and some increment of position.
2. Leadership theory: “it is the process of influencing others towards the accomplishment of goals. It is the ability of a manager to induce subordinates to work with confidence and zeal” Behavioural theory of leadership: “This is related to the behavior of the leader that it is somewhere related to what the leader does instead of hi traits”. According to the above theories of leadership we can relate to our case study as follows: Barton instead of acting as a manager acted as a leader thinking of the welfare of various executives who could be projected by executive thinking. Q2. How should Barton make her case for executive education? Ans. Barton should have focused on creating a quantitative ROI that the other executives buy into or should have revised her training program so that it does have measurable outcomes for a quantitative ROI.
In order to make her case for executive education to palmer she should have explained or shown the turnover and ROI calculation as shown below.. Turnover ROI calculation: Total number of employees = 5,000 Turnover rate per year = 5% Turnover cost per employee = $20. 000 (termination,staffing,training etc) 5,000*. 05*20,000 = 5,000,000 Therefore, estimated cost of turnover per year = $ 5,000,000 Number of executive = 50 5,000,000/50 = 100,000 i. e estimated cost of turnover per executive = $ 100,000. Total number of employees = 5,000. Reduced Turnover rate per year = 4% Turnover cost per employee = $20. 000 . 5,000*. 04*20,000 = 4,000,000 Therefore, estimated cost of reduced turnover per year = $ 4,000,000 Number of executive = 50 4,000,000/50 = 80,000 i. e estimated cost of reduced turnover per executive = $ 80,000. Saving per executive = $ 20,000 (100,000 - 80,000) Cost of training per executive = $ 12,000 Financial benefit per executive = $ 8,000 ROI = 20000/12000*100 = 167% Return for each dollar invested. Productivity ROI calculation : Number of sales specialists= 250
Annual sales contribution each specialist = $ 50,000 Increase in productivity = 6% 250*50,000*. 06 = 750,000 Number of executives = 50 750,000/50 = 15,000 Estimated benefit of increased productivity per executive = $15,000 Sales increase per executive = $ 15,000 Cost of training per executive = $ 12,000 Financial Benefit per executive = $ 3,000 ROI = 15,000/12,000*100 = 125 % Return for each dollar invested Therefore total ROI according to her revised executive program is as follows .. Turnover: Savings per executive = $ 20,000 Cost of training per executive = $12,000
Financial benefit per executive = $ 8,000 ROI = 167% Productivity: Added impact on contribution per executive = $ 15,000 Cost of training per executive = $ 12,000 Financial benefit per executive = $ 3,000 ROI = 125% ROI = 35,000/12,000*100=292% Return for each dollar invested Therefore by showing this calculation Barton should have explained how her program can provide financial benefit per executive with less cost of training per executive and with greater ROI for each dollar invested.. Reflection upon our experience of working in a group. Ans.
For us working in a group was very beneficial as it gave us the chance to work together with a new charm and refreshing ideas. Although in the beginning it was very challenging for all of us but despite that we worked together which at last helped us in increasing our viewpoints towards the case study and resulted in Better research work with thoughtful solutions for the case. Each member of our group was very motivated and gave his or her 100 percent in completing our work. Like all typical groups, in our group also there were good and bad events and moments. i. sometimes we had conflict among us over different views , but Whatever the scenario was, we learned a lot from each other and at last were very comfortable working with each other.
Leadership has been a major topic in management and business literature over the last few years. The rapid changes in business, technology, political, and social factors have required the development of effective leadership skills. As a result leadership development programs have become an increasing priority for business and government organizations. Therefore Barton should have done a more thorough evaluation in order to identify the strengths and weakness of her executive development programs, Identify the trainees which benefited the most from her program. She should have determined the costs of the program and its financial benefits to the organization. Moreover, she should have compared the costs and benefits of her training versus non-training investments, the costs and benefits of different training programs to choose the best program out of it and then should have presented her case to Dave Palmer mentioning all the benefits of her executive development program and should have tried to convince palmer not to cut that major chunk from her program as it would be a fruitful investment for the organization in the long run and would surely help its organization perform well in the future.
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Managing conflict, stress, and negotiation. In: Shalini Negi, Sneha kumari Organisational Behaviour. new Delhi: tata McGraw-hill education private limited. 307. Margie Parikh, Rajen Gupta. (2011).