Archive for the ‘Management and Organizational Science’ Category

WSJ: For Lt. Withers, Act of Mercy has Unexpected Sequel

This is a fascinating article based on the decisions of Lt. Withers whether to keep two holocaust survivors and the search of two old-time friends by John Withers II, Lt. Withers son. The article is authored by Bryan Gruley and appeared on Wall Street Journal on November 25, 2003. It starts with picturing the horror experienced by the Jews under Nazi regime. It also touches the plight of blacks in the USA during the segregation era. Two young Jew men, Salomon and Peewee, escaped from the massacre of Nazis and end up with the Lt. Withers quartermaster unit. This article takes us through the life of Peewee and Lt. Withers. Lt. Withers was a black army officer of a quartermaster unit.

Quartermaster units had orders not to contact with the Jew prisoners. The US army worried that the supply conveys would pick up diseases and spread them to other army units. Lt. Withers, after seeing Peewee and Salomon, decided keep them with the unit and took care of those refugees. This is a decision Lt. Withers took against his superior’s order. Also he may end up abandoning his dream of doing PhD if he gets caught. The black soldiers kept these two Jewish men until they stand on their own. After a couple of years Lt. Withers returned to home from Europe. Peewee and Salomon presented a photo album with picture post cards.

A post card ends up with Lt. Withers son, john Wither II after 5 decades. He was already familiar with the names of Salomon and Peewee from his father’s war time stories. He started searching Salomon and Peewee. During the search he found out that Salomon had passed away in 1993. After several efforts Lt. Withers and Peewee met at Hartford, Connecticut Airport after 6 decades.

About two years after Lt. Withers went to Hartford for Peewee’s funeral. It was an emotional moment for Lt. Withers. Lt. Withers first got to know Peewee when he was 14. Peewee died at the age of 75.

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WSJ: How a Marine Lost His Command in Race to Baghdad

I had an opportunity to read an article by Christopher Cooper appeared on Wall Street journal on April 5, 2004. It is a fascinating inside of the front line battle decisions and how commanders work at the face of enemies under the order of the top command stationed away from the front line. The issue was that Col. Joe D. Dowdy took a bypass of a city to avoid loss of his men knowing it will take more hours to reach the target. Top commanders argue both ways that there is no effect of speed in the war and speed is an essential matter to the collapse of enemies. This article does not provide any account on the implications of the Col Dowdy’s decision whether it derailed the battle or not.

I understand that the battlefield decisions are balance of men and mission not either of them. But I am all for Col. dowdy’s decision of his men first. In this case Major Gen. James Mattis over through one of the cardinal rules of maneuver warfare that stipulates Generals should allow commanders in the field to make decisions. Second, Gen. Mattis try to benchmark Col. Dowdy’s regiment with other regiments. Col. Dowdy’s group rolled up in a two lane highway that ran through dozens of villages while other regiments headed on a four lane highway. It reflected in the performance review of Col Dowdy that he did not employ the regiment to its full combat potential. Unfortunately, it is marines’ policy that they don’t comment on performance evaluation.  The performance evaluation is employed as a one way communication tool instead of serving as a tool for effective two way communications.

One last frustrating note-When Col. Dowdy called his wife, Pricilla, to inform her about his job situation, she already knows it from CNN. Doesn’t this need to be kept secret like other military decisions from the media until dust settled? Or do the media have their hand everywhere in the military ranks?

Academy of Management Learning and Education: The dean’s Disease-How the Darker Side of Power Manifests Itself in the Office of Dean

This is an interesting article authored by Arthur G. Bedeian appeared on the Academy of Management Learning and Education Journal in 2002. I have some reservation on the contents of this article. This article paints a picture that deans are superpowers in the universities. The other party in this article is the faculties. Can a dean exercise coercive and reward power unfairly against faculties? Faculties are a creamy layer of a society who is highly qualified in education and research. Also good, talented, and well-known (in the academia) faculties are a rare species and can move to another institute if they are under suppression. I have heard that the faculties in the engineering field with excellent research and teaching records and who do a lot of consultancy work don’t even try to go up in the administrative positions like Dean. My perception may be wrong as I am not much aware of politics in the universities and the faculties in the other colleges.

Having said that, I understand, the deans are the front face of the college for the higher administration of the university, politics, and the media. That may be the reason that they feel superiority over the faculties. They feel they are exempted from the moral standards that apply to others and justify their self-serving and self-interested actions. It is not clear to me who are the inner circle “doppergangers” of a dean. Are they a fraction of faculty, or other deans, or the outside influential people like donors and CEOs etc… or a combination of all of them? It is quite common any many organizations that the administrators believe their inner circle. The others are usually not given any opportunity to disagree with the administrators. If somebody tried to speak up against what the administrator conveyed, they will be labeled as “out spoken” and will be kept out in the future meetings. Greater the dependence on the inner circle members stronger the deans misinformed the reality.

The prevention strategies for the dean’s disease are interesting. One strategy is that search committee goes to the candidate’s home base and gather background information about his/her administrative skills. I heard similar actions when people are selected for critical intelligent operations in the military or CIA.

One other cure for this disease is to make the position of the dean as a rotating one. In this case, the dean knows that he/she will become a faculty again and some other faculty will become dean after a certain period. In Sri Lanka, where I grew up, a dean occupies the position for 4 years (one term) and one person can be a dean only for a maximum of two terms.

HBS: Harrah’s Entertainment, Inc- Rewarding Our People

This article is a case study of hiring policies and reward system at Harrah’s Entertainment. Harrah’s want to install an incentive pay plan that instill competitive spirit in the employees and competing against rival casinos as well as their own past records. I think it is an excellent benchmark to start the project. Also, I am impressed with the efforts of Harrah’s in converting the product based company to marketing based company. They brought new experts in database marketing from other industries; they introduced Total Rewards program that helps to understand customer preferences.

It is not surprising to know that the long-term managers and employees felt entitled to be employed in Harrah’s regardless of their performance. This was the big challenge to Phil Satre when he took over the company as the president. He wanted to replace the institutional priorities of long-term tenure and employee happiness with ideals of excellence and customer satisfaction. This does not mean that Satre threw the employees under the bus. He brought a new human resources manager, Winn, who is familiar with field operations.  He hired Gary Loveman, who is very familiar with Harrah’s operation, as a new Chief Operating Officer. New hiring philosophies were introduced. Instead of hiring a person who meet the job requirement, Harrah’s want to hire the best person for that particular position. I am pretty sure that can be accomplished only with higher pay and rewards.

I understand that it is not easy to satisfy casino customers who, in most of the cases, lose money. It is the establishment’s responsibility to make the customers happy by providing valuable experience so that they will come back again. Loveman and Winn worked hard to train their employees to provide such an experience. Loveman introduced gain sharing program where employees were rewarded for improving customer service regardless of the improvement of operating income. Managers used to be awarded solely based on the improvement in the operating income. Loveman changed that structure. Now, Customer satisfaction determines 25 % of the bonuses.

It is interesting to know the regulations in the casino industry. If an employee handshake a customer, that employee has to raise his/her hand, pull the sleeves and show the hands to the cameras installed at the ceilings. This procedure is followed to make sure that the employee did not get any bribe. But the negative part is that employees were hesitant to hand shake with the customers.

HBR: Diamonds in the Data Mine

Diamonds in the data mine is an interesting article by Gary Loveman, Chief Operating Officer of Harrah’s Entertainment. Loveman emphasizes the importance of data mining. Big credit should be given to Phil Satre, the Chairman of Harrah’s. From the beginning he did not go along with the competitors instead focused on a different marking strategy. While the competitors build big fancy buildings and shows, Satre  focused on data capturing and mining and invested in technology that allow Harrah’s Entertainment to slice and dice the customer preferences.

Another interesting aspect is that Harrah’s marketing focused on the customers’ worth instead of their spending. It is not an easy task. The electronic tracking system that is installed in Harrah’s enabled the strategists to capture the customers’ activities and throughout the property. I am not sure how the raw data is saved in the system or whether others can retrieve the data, but I have a concern on the privacy of a customer. We, the Department of Transportation Engineers, are trying to implement a vehicle miles user fee for using the roads instead of gas tax. This new fee system will calculate a fee based on the miles drives, type of toad, and whether the vehicle in driven during the peak hours. All these parameters are tracked using a GPS unit installed in the vehicle. There is a huge opposition from the road users. They believe that the user fee system violates their privacy (I just want to clarify that this system is in feasibility study level). It seems it is legal at Harrah’s to track the customers’ activities.

It is amazing to know the cordial relationship among the general managers of different properties. If one property scored lower scores, the manager of that property visits a high scoring property and find out what his/her colleague did differently. I am pretty sure that this evidenced based management system is followed with careful attention on the uniqueness of different properties.

The last thing that bothers me is the extrinsic reward system that is implemented in Harrah’s. The better the experience a guest has and the more attentive the employee is to him, the more money he/she will make. I am not sure this if-then type of reward system will keep the employees enthusiastic in the long run.

HBR: Evidence Based Management

This is an interesting comparison of the decisions of doctors and managers. First of all, I am shocked to know that only about 15% of the doctors make their decisions evidence based. No wonder why the health care cost is skyrocketing. Pharmaceutical companies claim that a significant part of health care costs are attributed to the research and new products. It is frustrating to know that doctors believe the information from the hordes of vendors of products and services and not independently study the cause and effect.

Casual bench marking is commonly practiced in many organizations. We all look to perceived high performers in our field and try to follow their activities. As mentioned in this case, it is cost effective tool and managers often want to find cheap ways to attain something. In our personal life also we attempt to do similar things. A few years back, I was interested in investing stocks and I had no idea where to start. I was advised to sign up for Fortune and Forbes magazines and start reading the articles of big guns like Warren Buffet. I don’t feel bad about the advice. It is a good starting point. We should learn to understand the underlying theory and dismiss the irrelevance.

I fully agree that the most important reason for successful management is communication, mutual understanding, and respect, and the ability to work together as a team. Also the performance suffers when there is a big disparity in the rewards of the team players and the management and employees. A report (http://www.groundreport.com/Business/Gap-Between-Executives-and-Worker/2863448) shows that the gap between the top executive and the average worker is getting wider and wider over the years. Does this mean the top executives purposefully drain performance of the organization for their own benefit?

I understand the barriers of implementing evidence based management. Even though the leaders know the right strategy, sometimes it is difficult to put in practice. New and intelligent decisions usually look suspicious to many especially who resist changing. Also continue the organization like an unfinished prototype and encouraging trial programs, pilot studies and experimentation will cause panic to managers. Most of the people are scared to death of failures.

Academy of Management Perspectives: Good to Great, or Just Good

This is an opinion article about the book Good to Great authored by Jim Collins.  In this book Collins listed five common practices employed in the eleven companies. Two University of Wisconsin, Oshkosh, Associate Professors Bruce Niendorf and Kristine Beck contends Collins findings and wrote this article on the Academy of management Perspective Journal in 2008. It is interesting to note that one of the great firms listed by Collins is Circuit City. It disappeared from the world at the end of 2008 unable to bear with the current economic slowdown. In a nutshell, this article proves that evidenced based management should not be employed blindly without further analysis of circumstances.

The authors pointed out the flaws in Collins methodology and the statistical analysis. Collins did not provide any absolute evidence that the good to great principles can lead other companies from good to great in time periods other than the time period of his analysis. Also Collins sample size in only 28 companies. While contending Collins findings the authors applaud Collins efforts to think outside the box. Collins did not begin the project with a theory to test. He built a theory from the ground up.

The authors used the same performance parameter used in Collins book to provide their opinion, but used different time period. They found that the eleven firms did not outperform the other S&P 500 companies. The authors of this article conclude that the five commonalities mentioned in the book do not lead to great performances than average. They did not claim the Collins findings are incorrect, but he provided no evidence that the five Good to Great principles are anything other than random patterns.