Cases

THE DIRECTOR’S DILEMMA

Arlene Maxwell is proud to be a middle manager. She has earned her promotions with hard work and has proved her ability
to master the technical problems in her specialty area, data processing. After receiving her bachelor’s degree in data
processing at the state university, she went to work programming in the field of financial and investment problems. Within
two years she became the recognized “genius” of her specialty and was promoted to supervisor of her section. Three years
later, when data and word processing functions were merged, she became her company’s director of information and data
services. That was three months ago.
Arlene has stayed current in her field through regular reading of journals and trade papers, through memberships in
professional organizations and regular participation in their seminars, and by being directly involved in data and word
processing. Arlene puts it this way:
I like to write programs as often as I can. Each new problem our department gets is really a test of our problem-
solving abilities. Tackling a problem by myself now and then helps to keep the old skills from getting rusty. I can
still teach the younger programmers a thing or two. Nothing matches hands-on experience.
Arlene prides herself on her open-door policy and her eagerness to help her people perform their tasks. But lately she has
become concerned. Her people don’t come around as much as they used to, and her department is falling behind in its ability
to deliver work on time.

1. Which of the three management skills does Arlene seem to possess?

2. Which skills does she lack?
3. As a middle manager, which basic skills does Arlene need most?
4. Of the management roles discussed in the class, which does Arlene seem to favor?

KIM TANUMI
Kim Tanumi is about to celebrate her first year as an entrepreneur in the printing business. Her Ms. Print Shop is a franchise
that operates throughout two midwestern states. Until recently, she has been operating with herself as the sole voice of
authority and has relied on two part-time employees from two local schools as her chief assistants. Though she has trained
them to operate the offset press and the other pieces of equipment, Kim has done everything else on her own. All decisions
on pricing jobs, scheduling work, judging quality, and purchasing supplies are made by her.
Lately, however, her business has grown so much that Kim has found this arrangement unsatisfactory. Instead of using her
part-timers interchangeably on the equipment, Kim is planning to let Roger concentrate on offset and duplicating and to let
Kyle handle the other machines. They would have their jobs expanded to include performing maintenance, ordering needed
supplies, and delivering finished work to neighborhood business customers. When she proposed these changes to her
employees, they resisted them. Kyle felt that if their jobs were to grow their pay should, too. Kim responded that their pay
was fixed by the going rate for part-timers in the community. Roger wanted to learn more about the ways in which the
business’s other operations were handled, not just the machines. Kim resisted his demand also. The result was that both
employees were very unhappy.
Within two weeks following Kim’s rearrangement of the workload, Kyle quit. Roger stayed on, but his attitude changed
from cheerful to surly. After interviewing several people, Kim hired a retired man who had worked all of his life in printing
and just wanted to keep his skills sharp and his days full. Ben worked out just fine, and after a few weeks, Kim took him on
full-time and made him shift manager in charge of all printing operations and Roger. All reporting was then done by Roger
through Ben and Kim. Kim reserved the right to go directly to Roger when emergencies arose. This was a source of irritation
to both Roger and Ben on more than one occasion during the next few weeks.

1. Identify the principles of management that Kim is using. Provide examples from the case to support your
decisions.
2. Identify the principles of management that Kim is violating. Provide examples from the case to support your
decisions.
LI & FUNG’S GLOBAL SUPPLY CHAIN MANAGEMENT
Brothers Victor and William Fung operate Li & Fung, a brokerage that has helped hundreds of global companies locate
suitable foreign suppliers, especially suppliers in mainland China. To reduce costs, foreign suppliers have become very
specialized. In the past a company such as Target might have negotiated with a single foreign supplier to produce 1 million
units of a particular shirt at a specific cost per unit. But with specialization, Target might find that it can further reduce
costs by splitting the production process into its component parts (yarn manufacturing, weaving, sewing, etc.) and
contracting different foreign suppliers, often in different countries, to perform each task.
Global companies are happy to outsource their supply chain management to Li & Fung because they realize significant cost
savings, and the Fung brothers have capitalized upon this opportunity.

1. What factors in its general environment might encourage a company such as Target to use the services the Li &
Fung?

2. What changes in the global environment have contributed to the success of companies such as Li & Fung?

Answers

Case 1
Which of the three management skills does Arlene seem to possess?
The three skills referred to are technical, conceptual, and human. Of these, Arlene Maxwell seems to be strongest in the
technical area, being the recognized genius of her specialty. Her technical expertise has led to her promotions.
Arlene probably possesses an adequate degree of conceptual skill (for her middle-management positions), because she sits
in a job in which she must oversee the execution of work for the entire organization—work executed by word processors
and data processors. This fact alone will force Arlene to become familiar with the entire organization’s many parts as she
executes work to support each of them. Through time, Arlene will (if she has not already) increase her conceptual and
technical skills through on-the-job experiences and the daily interactions with managers from all parts of the company.
Which skills does she lack?
If Arlene lacks sufficiency in management skills, it is probably in the category of human skills. Until her promotion, Arlene
did not need a high degree of human skills. She has demonstrated technical expertise that has accounted for high
performance appraisals and her promotions. Arlene fails to realize that her duties have changed. Her tasks now will rely
increasingly on her ability to get the best from her subordinate managers. She must foster in them the same high degree of
skill that she possesses. Her attention to details needs to be focused on the details of getting people to work together and to
do the best that they can. She will be a resource person, not a doer of data or word processing tasks. She needs to let her
people perform on their own, demonstrating their abilities and enjoying a sense of competence so important to skilled
workers and supervisors.
2. As a middle manager, which basic skills does Arlene need most?
All three skills are needed but the emphasis will be on the human skills—the ability to interact with other persons
successfully. She must be able to work with and relate to others individually and in groups in order to build teamwork.
With regard to the five functions of a manager, leading becomes the most important from the point of view of time spent.
Leading involves both human and technical skills. More time will now be spent on planning, organizing, and staffing.
3. Of the management roles discussed in the chapter, which does Arlene seem to favor?
Arlene seems to favor the leadership, monitor, and entrepreneur roles. While she likes to continue in the role of programmer
that accounted for her past reputation and promotions, she can show her subordinates a thing or two and, by staying current,
she can pass along the new techniques. But by doing so to an extreme, she may rob her subordinate managers of initiative
and enthusiasm. She may be neglecting the word processing part of their job at the expense of her many company clients.
Her overconcern with hands-on tasks for herself undercuts her supervisors’ authority to manage. By working directly with
their subordinates, Arlene is acting in their stead. Her involvement in day-to-day data processing may also be at the expense
of her management activities such as planning for the future.
Middle managers must develop implementation strategies for the broad concepts determined by their superiors. While
staying abreast of the new, middle managers decide what needs doing and how to do it. The details must be worked out by
subordinate managers. Middle managers must be able to provide leadership and support for lower management, not usurp
their day-to-day management duties. Arlene should work with and through her subordinate managers, not around them.
Case 2
1. Identify the principles of management that Kim is using. Provide examples from the case to support your decisions.
Kim is using the following principles:
• Division of work. Before her reorganization, Kim allowed for part-timers to specialize by running various machines. She
kept all non-machine functions for herself. After the reorganization, Kim planned to let Kyle and Roger restrict their duties
to specific machines and to allow them to expand into performing maintenance, ordering supplies, and making deliveries.
Kim further practiced this principle with the addition of Ben, who would run the shop’s entire printing operations and
supervise Roger.
• Authority. Kim initially kept all supervisory authority for herself. She gave authority for running specific pieces of
equipment to her subordinates. In her reorganization, Kim decentralized her control by giving Kyle and Roger expanded
duties. Kyle reacted to a change in his authority base by leaving. Authority to supervise Roger and the shop was partially
given to Ben.
• Subordination of the individual to the general interest. Kim did not grant all the wishes of Kyle and Roger, subordinating
their interest to what she perceived to be the best methods for her organization. While her changes had and may have
negative consequences, it is her business and her decision to run it her way.
2. Identify the principles of management that Kim is violating. Provide examples from the case to support your decisions.
Kim is violating the following principles:
• Unity of command. After her reorganization, Kim set up a reporting relationship with Roger that could compromise this
principle by undercutting Ben’s authority to give Roger orders, instructions, and evaluations.
• Unity of direction. By asking Roger to accept orders and instructions from both Kim and Ben, Kim violates this principle.
• Remuneration of personnel. Kim claims that regardless of a person’s duties and in light of her expansion of her employees’
duties, the wage she should pay is that of the prevailing minimum wage in her community. She should consider additional
factors such as the types of skills her people will need to exercise, the cost of living, and the availability of people with the
know-how she needs to operate sophisticated equipment.
• Scalar chain. Again, Kim may undercut this principle by placing Ben in charge of Roger but allowing herself to go directly
to Roger in cases where emergencies, in her eyes, exist. Links should be skipped only when superiors approve and when a
real need to do so exists.
• Equity. Kim decided to expand the job descriptions of her part-timers but held fast to the wage level she was willing to
pay them. Kyle did not see equity and responded by quitting. Roger responded to Kim’s changes by becoming a surly
worker.
• Stability of tenure. The violation of the equity principle seems to have led to employee turnover. Whether inefficiencies
and additional expenses will result remains to be seen.
• Esprit de corps. The spirit of the group at the shop has been damaged by Roger’s change in attitude and may be further
damaged as Kim tries to circumvent Ben when dealing with Roger.
Case 3

1. What factors in its general environment might encourage a company such as Target to use the services the Li &
Fung?

Competition is intense among retailers in the U.S. A high level of rivalry often results in price competition, and falling
prices can lead to falling profits. Therefore, Target must make every effort to keep its costs as low as possible. Also,
technological advances have increased the reliability and ease of international communication, thereby reducing the risk
associated with global business transactions.

2. What changes in the global environment have contributed to the success of companies such as Li & Fung?

Most managers recognize that their organizations compete in a global market. Trade barriers have fallen and free trade is
on the rise. Major advances in communication and transportation technology have eased the process of conducting business
globally. In addition, although differences in national culture still exist, many managers now realize the benefit of working
through such differences in order to build strong global partnerships. Each of the above serves as an encouraging factor to
managers anywhere in the world wanting to engage in global outsourcing in order to reduce costs.