ASSIGNMENT CASE STUDY PORTFOLIO

Case 1: Leadership Development Issues at NovaTek
When Charles Turner was told, on his fortieth birthday, that he was to be promoted to manager of the Electrical Insulation Materials Sales Department of the big NovaTek Fibre and Textile Company Limited, his happiness was mixed with doubts about his own capability for the job.

NovaTek had only started to market its ‘High-Ohm’ range of electrical insulation materials two years ago. TheHigh-Ohm products were not easy to sell – their definite technical advantages over competing products were, more or less, cancelled out by higher prices, but their entry in to the market had been very successful. Existing production capacity was already almost fully sold and a big new plant, which would more than double capacity, was under construction and expected to start up in six to nine month’s time. Turner was left in no doubt by his sales director that, as manager, he would be expected to lead his small sales force to ensure that sales of High-Ohm products continued to increase. His targets were set so that he was expected to sell most of the extra capacity of the new plant within no more than a year of production commencing.

In addition, he was expected to personally service the “house accounts”. Five very large customers who between them accounted for over 25 per cent of all High-Ohm purchases. The biggest of them, Bucks Electrical Cables, was alleged to be extremely awkward to deal with, and Turner’s immediate worry was that he would lose this account and 10 per cent of his sales if this customer wasn’t happy.

This was not his only worry. He wondered how Jim Fisher, who managed the Northern and Scottish Area would react to his appointment. Turner did not know Fisher very well, though his predecessor as sales manager, Frank Watson, had often spoken of him in glowing terms. Fisher was a self confident man in his late twenties, reputedly very dynamic, highly intelligent and brilliant at selling industrial products. He had achieved remarkable success in running the Northern and Scottish area. 44 per cent of all High-Ohm sales were made there, as against only 28 per cent from the South and Midlands area, which Turner had managed before his promotion. (Remaining sales came from the house accounts and from exports).

Turner, in fact, wondered why he, and not Fisher, had been promoted.

A further worry for Turner was the new manufacturing plant. He had always felt that it was going to be too big and he was extremely doubtful that more than a small part of the extra capacity it provided could be rapidly cleared in increased sales.

Most of all, Turner doubted his own abilities. He knew that he was thorough, methodical, painstaking and cautious, but these were hardly the qualities essential for leading and managing a sales operation. His caution tended to make him slow and hesitant. He rarely produced new ideas and he disliked making a decision unless he had all the facts and had gone over them several times. He thought he was by nature better suited to keeping an existing successful operation going, and seriously doubted his ability to lead a dynamic pioneering effort.

Turner had hoped that he would have a long period of hand over working alongside his predecessor, Watson. In fact, Watson was urgently wanted in the new post to which he had been promoted, and Turner, within a few days of being told of his new appointment, found himself in sole command. The organisational structure he inherited was as follows:

NovaTek Electrical Insulation Textiles Sales Organisation Structure 1

One of his immediate problems was to fill the South and Midlands area manager vacancy. There were others, however; the old plant had developed an intermittent fault that slowed production and meant that many deliveries were late. Several customers, notably Bucks Electrical Cables, were complaining strongly. Furthermore, the sales director wanted two major reports. Turner thought each report would take at least a week of his time and severely test his ability to produce new ideas and constructive proposals as well as his ability to write a clear and businesslike document. Yet he could not delay their production, or make anything less than a first rate job of them, for fear of beginning his new appointment by disappointing the sales director.

Turner decided that he would ask Fisher to come to London for a few days. Apart from enabling him to obtain Fisher’s views on the problems he faced, it would give him the opportunity to try to smooth out any resentment at his promotion.

Much to Turner’s gratification, Fisher was extremely helpful. He made short work of Turner’s reports. He was an abundant producer of ideas, and soon sketched out what seemed to Turner as eminently satisfactory set of proposals for both reports. He then offered to draft the reports for Turner, and dictated both during one afternoon. Turner, who normally made several laborious pencil drafts before attempting to finalise a report, was astonished at Fisher’s abilities The drafts seemed excellent to him and he signed them and sent them to the sales director.

Fisher next offered to go to ‘pacify’ Bucks Electrical Cables. Turner demurred saying it was his duty to deal personally with this problem, but Fisher insisted that Turner was too busy with managerial problems to spare the time. Turner was secretly relieved at not having to deal with these awkward customers. Fisher later telephoned to say that he had just taken three Bucks Electrical directors to lunch and they had all parted the best of friends.

Finally Fisher put forward an idea about the area manager vacancy. He, Fisher, would take over the South and Midlands area and his senior representative in the north, Palmer, could be promoted Northern and Scottish area manager. Turner was strongly attracted by the prospect of having Fisher’s services ‘on tap’ in London, and readily agreed to this proposal.

Fisher tackled his new job as South and Midland’s area manager with characteristic vigour and sales were soon moving upwards – indeed, the production people had to make extraordinary efforts to produce the additional product needed to cope with the increased orders. He found time, however, to give substantial personal help to Turner, and Turner came increasingly to rely on him. Whenever he had a problem to solve, a decision to make, or a report to write, he consulted Fisher. Normally it was Fisher who supplied the solution, suggested the decision to be adopted, or wrote the report.

Turner often felt guilty about the extent to which he relied on Fisher and sometimes apologised to him for ‘leaning’ so much on him. Fisher, however, had a soothing answer. This, he explained, was the normal process of delegation. It would be quite wrong for Turner to be continually involved in detailed problems; his function was to formulate the problems and leave his subordinates to solve them. Gradually, Turner came to accept the idea that his relationship with Fisher was no more than sound management, he even began to boast to his manger friends about the ‘delegation’ that he practised and the trouble free life he led.

The new plant and the reorganisation

Thus, as the start up of the new plant became imminent, Turner had a plan ready; Fisher’s plan. Several new representatives had been recruited and Britain was to be divided into four sales areas – South, Midlands, North and Scotland. Fisher would continue to look after the South and Angela Palmer the North, a nominee of Fisher, William Murdoch, would manage Scotland; the Midlands area was to be managed by Colin Blackham, who was an older, senior representative recently transferred to Electrical Insulation Sales from another department. A new two person technical service section was to be formed at the London office to service customers throughout Britain; and an additional export representative was to be engaged to participate in a drive for more overseas sales.

Fisher took on a wide range of new responsibilities through the reorganisation. Apart from managing the southern area and continuing to give personal assistance to Turner, he had persuaded Turner that he should in future service the ‘house accounts’. He would also ‘keep an eye on exports’ and would accompany the export representatives on flying visits overseas when agents needed galvanising. It had been Fisher’s idea that a technical service section should be formed and it was natural that he should direct its work. To free him from too much detailed work in managing the southern area, he was given an extra senior representative. The new organisation was therefore in practice as follows:

NovaTek Electrical Insulation Textiles Sales Organisation Structure 2

This organisation was not shown on the published charts, since both Turner and Fisher agreed that it would look better if exports and technical service were shown as formally responsible to Turner.

The first few months for the new organisation were difficult. The new plant came into production, but sales hardly rose at all. Fisher visited all the areas to coach representatives and accompany them on calls to major potential customers. He sent the technical service representatives out to scour the country, making contact with the development teams of possible users of High-Ohm materials. He made numerous trips to European and Commonwealth countries to encourage the overseas agents to work harder.

Finally, sales began to increase – at first slowly, but then a steep curve that took the new plant up to 80 per cent of capacity: Exports were responsible for the biggest part of the increase, but all the UK areas showed good growth, with the Midlands slightly ahead of the others. Turner, who had only been saved from utter despondency during the months of difficulty by Fisher’s unvarying confidence and optimism, now began to regain his composure. He was congratulated by the board on the achievement of his department in selling the output of the new plant, and was given a substantial increase in salary. He became rather more self confident, though he would still take no decision of importance without reference to Fisher.

Strains in the organisation

The area managers soon realised the extent to which Turner depended on Fisher. Palmer and Murdoch who were both protégés of Fisher, regarded it as natural. Blackham, the Midlands area manager, however, began to make it clear that he strongly disapproved of what he called the imbalance of power’ in the department. He pressed for more responsibility to be delegated to him. In particular he asked to take over the two ‘house accounts’ in the Midlands area. He also asked that all area managers be consulted before important decisions were taken.

On Fisher’s advice, Turner told Blackham that he had enough to do already in developing sales in the Midlands without taking over the ‘house accounts’. In any case, these important customers were best served by someone they knew and trusted. However, Turner and Fisher agreed that more consultation with the area managers was desirable and monthly ‘area manager meetings’ were introduced.

These did little to decrease Blackham’s dissatisfaction. Though Turner nominally took the chair, Fisher really conducted the meetings. Blackham resented this, but what irritated him most was that it was usually obvious that Turner was going to make his decision according to whatever advice Fisher gave him, irrespective of what the other managers said. Often it was clear that Turner and Fisher had already discussed and decided issues before the meeting.

Blackham showed his dissatisfaction with the meetings by taunting Fisher and Turner with ironic asides and frequent sarcastic laughter. This did not appear to worry Fisher, but it upset Turner.

Therefore, while Fisher was away on a trip abroad, Turner sent for Blackham and appealed to him to co-operate with himself and Fisher. Blackham bitterly attacked Fisher, saying that he had deliberately taken advantage of Turner’s good nature to build up his own personal ‘empire’ within the department. Turner protested that this was not the case; it was just that he believed in delegation and since Fisher was exceptionally able, experienced, dynamic and willing to accept responsibility it was natural that considerable responsibility should be delegated to him.

Blackham laughed mockingly, Turner did not delegate responsibility, he said, he abdicated it. Fisher did not just accept responsibility; he had made a series of take-over bids for it. Turner defended the system. At least it worked, he said. The department had achieved some great successes.

Blackham insisted that he was just as able and willing to accept responsibility as Fisher was. It was unfair of Turner to delegate only to Fisher. The other area managers should be given the chance to show what they could do.

The meeting ended inconclusively, but Turner, who prided himself on being fair-minded, was half persuaded that Blackham and other area managers should be given more responsibility. As soon as Fisher returned, he consulted him on what changes in the structure of the department might be made.

Fisher strongly opposed giving any further responsibility to the other area managers, especially to Blackham whose recent behaviour he said must make his judgement and temperament strongly suspect. What was wrong in the department was that the particular responsibilities he himself carried were not accompanied by appropriate formal authority. Fisher therefore proposed that he should be appointed deputy manager of the department. He was not seeking extra salary and would be quite content with only a status promotion, but he felt the time had come for it to be made clear that he was senior to Blackham and the other area managers.

This idea appealed to Turner. He felt it was only right that Fisher should be given some form of promotion and that this might silence some of Blackham’s criticisms.

He therefore went to ask the sales director for permission to create the new position of deputy manager and for Fisher to be promoted to it. The sales director disagreed. He said he felt that Turner’s department was too small to warrant the appointment of a full time deputy manager and in any case, Fisher was rather young to be promoted to such a post over the heads of older men such as Blackham. Turner added to his case by outlining the range of duties undertaken by Fisher. The sales director questioned him closely on this, and Turner was forced to reveal a great deal about the organisation of the department and his working relationship with Fisher. He also mentioned his troubles with Blackham.

The sales director was obviously not at all pleased with what he had discovered. He said, ‘I have always assumed that since your department has produced good results, its organisation, staffing and personal relationships have been satisfactory. The sales director has now contacted you as the Human Resources Director for help.

ASSIGNMENT TASK

You will have 3 cases in your portfolio, these may be presented and discussed in any order that you feel is logical and relevant. Critically review and evaluate how and why these case studies are different/ similar. Which specific leadership and development strategies are transferable and can be applied universally and which are unique to the contextual circumstances. Use theoretical underpinning to debate these issues.

You are required to draft a Leadership & Management Development Strategy to move NovaTek forward. In the light of the problems in the sales team, you realise the staff from that department need to be your key priority before the policy can be rolled out through the rest of the company.

1. Provide details of proposed Individual action plans for the staff identified in the case for discussion when you meet with them 1 to 1.
2. Draft a Strategy for NovaTek for overall Leadership and Management Development.
3. Provide academic underpinning to justify your proposals and action plans for NovaTek.

You are also required to add two more cases to your portfolio

4. Research (or write from your own experience) two successful case studies of companies that have operated successful Leadership and Management Development Programmes.
a. One operating in a NOT FOR PROFIT market and also
b. one from an INTERNATIONAL context.

The word limit for your work is 3,500 words.

CIPD Advanced Level Requirements

"Please note that in order to meet the CIPD's advanced level requirements for this module students must achieve a pass mark of 50% or above. If you do not achieve this you will be allowed to retake the assessment in an attempt to achieve the required 50%. However, please note that in relation to gaining the MSC HRM, if the student's first attempt falls below 40%, the University's pass mark, then any successful retake will be capped at 40% in compliance with the rules and regulations of the University in relation to the degree programme. In line with this any mark which falls between 40% and 49% will remain at that percentage for the purposes of
awarding the University's degree, and will be shown at this level on the transcript."