A.

Welcome Aboard but don’t change a thing

Lakeland Wonders is a 94-year old manufacturer of high-quality wooden toys with three plants in
Minnesota and almost 5,000 employees. Cheryl Hailstorm, CEO, is approaching her 6th month with
the company. The Company has new external investors with high expectations about the company’s
growth potential and a management team that is resistant to the significant changes needed to hit the
aggressive targets. In the past, the products of Lakeland Wonders were manufactured in the US.
However, the cost to produce in the US is too high to achieve growth targets set by the board. To
achieve targets, Cheryl needs to land the Bulls-eye contract which would require the company to
outsource some of its production process.

Elements Activities Interventions Strategies Outcome

Team mission, Cheryl has She planned to Cheryl exercised INEFFECTIVE. Cheryl
planning and developed a outsource leading by example to feels most of her
goal setting vision to launch a manufacturing to implement her vision managers are
lower-priced line China in order to and planned change, agreeable, but are
catered to the meet the board’s by scheduling to visit deliberately moving
mid-market aggressive growth customers, setting slowly behind her back
target aggressive deadlines in the implementation
for new projects, and of the vision
proposing a bonus
scheme to the union
for improving cycle
times

Team roles Getting people Cheryl gathered the Cheryl developed her INEFFECTIVE. The
involved with the management team own vision and only team member
plan to proceed in the conference expected the who supports Cheryl’s
immediately to room to discuss the management team plan is the CFO, and
offshore outsourcing plans and everyone in the he’s looking at it
manufacturing to and how it will company to agree and strictly from a
ship in time for proceed implement it numbers perspective.
the holidays

Team Finding the right Cheryl is Due to opposition INEFFECTIVE. The

operating person to handle considering hiring from majority of the previous CEO warned
processes and implement new people to Cheryl’s colleagues, her that her aggressive
the manufacturing implement her she is planning to hire plans and style might
outsourcing plan vision and plan of Cecil and Pat who hurt the company in
outsourcing shared her same style the long-run since
and speed there are capable
people within the
company to implement
the change

Team Communicating Risk assessment on The CEO raised this INEFFECTIVE.The

interpersonal the need for the impact of union issue during the CEO did not involve
relationships outsourcing and workers’ slowdown management team the people concerned
its impact on the and strike meeting. Based on when developing the
company’s US their meeting, Jerry vision and does not
production s cited that the possible acknowledge the
strike or slowdown significant issues
will be a disaster for raised during the
the company. management meeting
Inter-team Gathering Management The CEO insisted that INEFFECTIVE. Mark,
relations approval from the presentation to get she and the CFO will the head of
board members of the board’s present to the board, manufacturing has
the outsourcing approval for the and expects everyone spoken with the Wally,
manufacturing offshore to get behind previous CEO, to voice
plans outsourcing whatever decision is out their concerns with
manufacturing ultimately made Cheryl’s plans and he
plans despite their strong warned her to slow
opposition down with her
aggressive expansion
plans

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 B. The Medical City Case

1996 marked the inception year of transformation for the Medical City, a hospital complex, as it
underwent a radical overhaul from its physical edifices to its business processes and organizational
culture.

The physical state of the old Medical City was unimaginable for individuals seeking immediate
healing and wellness. The original hospital was situated at an area plagued by traffic congestion, as
well as characterized by limited bed capacities, parking slots, and commercial spaces. Treatment and
payment areas were distantly located from each other, causing inconvenience to patients and visitors
alike. In the advent of the dramatic revamp, major changes resulted to an improved overall hospital
experience – capacious spaces for commercial and dining use; increased number of consulting suites,
parking slots, patient accommodation, treatment, and diagnosis areas; and widened circulation areas
to accommodate foot traffic. The ground floor, for instance, accommodates several banks, flower,
food, and coffee shops, a beauty salon, and a gym. This brought The Medical City akin to a world-
class hotel.

However, Dr. Alran R. A. Bengzon of The Medical City emphasized that change shall not only be
physical but also organizational. Change warrants setting up a similar structure that would match the
physical transformation work, such as introducing process changes to optimize the day-to-day work
of running the hospital, and rebuilding the company culture without moving away from its roots. The
renewed Medical City instituted new mission and vision statements built on the old slogan “Patient
on Center Stage, Service of Greater Worth”, which express the company’s four core values: excellent
and compassionate service, client partnership, primacy of the human resource, and integrity. This
paved way for aligning the range of services offered with the organization’s goals and aspirations.
Participatory change was likewise introduced, whereby employees from various units and
departments had a direct involvement in coming up with services they wish to offer and the
corresponding requirements needed. The same employees similarly underwent a culture scan in
order to unearth the beliefs, attitudes, and values underlying the relationships among each other.

The following table provides for the specific activities, interventions, and strategies performed by the
Medical City to bring about the desired organizational change, and an assessment whether or not
they are effectively or ineffectively carried out:

Elements Activities Interventions Strategies Outcome

Team Formulation of All managers and Organized a EFFECTIVE. The entire

mission, vision and employees were consulting team, not hospital was asked to give
planning and mission asked to participate affiliated with the input in designing the new
goal setting statements of in a series of TMC to be Medical City and
the new workshops to responsible for connected with an external
Medical City reflect on what they designing and design team to fine tune it.
believed were the implementing OD&T As a result, the needs of the
core values of the program employees were duly
new Medical City considered. This brought
(unit goal setting) not just the physical but
also organizational change
to TMC

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Team roles Implementation Enlistment of Leaders and “change EFFECTIVE. These people
of the change cooperation of agents” of the served as the coach to their
program to all leaders, “movers”, program were subordinates. They
levels of the and “shakers” selected to act as key reviewed business process
organizations implementers and improvements, cascaded
role models the OD&T agenda down to
their colleagues in their
department, trained and
received feedback from
them and communicated it
to the management

Team Corporate Use of balanced Benchmarked and EFFECTIVE. The re-

operating restructuring scorecard as a reviewed nearly 400 engineering efforts resulted
processes and planning tool. business processes. to significant
development improvements.
Gathered market Turnaround times were
intelligence to greatly reduced, and the
establish rooms are strategically
performance located next to each other
standards that brought about
convenience to the patients.
Streamlined processes
enable task
accomplishment smoother
and faster

Team Organizational OD&T divided Formed two units – EFFECTIVE. By dividing

interpersonal changes in tasks into specific Finance and units into specific groups
relationships Finance, groups with related Administrative performing related tasks,
Administration functions to achieve Group and Strategic inconvenience is reduced
and overall effectiveness Services Group, in and there is an open data
Management order to strengthen flow and synergy within
Support the strategic focus of the teams when working
Services Group top management. towards the
accomplishment of a
certain job

Inter-team Identification of Focus group Doctors and non- EFFECTIVE. The team
relations beliefs, discussions were doctors were brought came up with a list of
attitudes, and conducted with together in cross- idealized attitudes, values,
values separate surveys for functional teams and behaviors that served
underlying doctors and non- were the two groups as a basis for designing OD
TMC doctors to get a worked closely programs and human
organization sense of the together in resource management
organization’s brainstorming ideas systems.
culture. to address specific
process
improvements.

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 C. Venus Marketing

Venus Marketing Corporation is a family corporation that sells cosmetic and health products with an
estimated 300,000 active accounts. When Daniel Ledesma became the company’s Executive Vice
President and Chief Operations Officer, he faced two problems: the company’s financial losses and
poor employee management.

The financial losses are partly due to a lack of accounting or evaluation system to determine which
branches were making money or not. Also, the company’s support departments such as HR,
Accounting, IT and Data Management did not have systems efficient enough to manage an
overstaffed organization ready for a makeover.

In terms of culture, the company has a patriarchal culture. As a result, employees are dominated by
relatives and friends, some of whom were hired or even continuously promoted though they were
not qualified for the positions. Other promotions were rewarded because of an employee’s length of
service and loyalty, which resulted to positions being occupied by unqualified employees.

The company also do not have a formal assessment of employee performance and no regular
performance evaluations. Employee evaluations were only made to justify salary increases, but
without clear standards or reliable benchmarks to measure employee performance. Finally, the HR
Department was not strong in monitoring or implementing training needs or organizational
developments.

Elements Activities Interventions Strategies Outcome

Team mission, Closing down of “Rationalization Planning meetings EFFECTIVE. They

planning and branches and Process” with Ledesma, were able to determine
goal setting employee Hontiveros, the that not all branches
reduction regional vice are able to meet the
presidents and the new revenue goals or
territory managers, even break even. Some
with participation of branches simply had
internal and external to be closed down.
legal counsels. New
revenue goals were
set. Alternative field
branches were
discussed, including
how to make them
profitable or at least
break-even.

Team roles Formalize goal Upgrade system by Goals and objectives EFFECTIVE. Non-
setting as part of starting partial were documented and performing managers
performance computerization and monitored. HR and employees were
evaluation initiated introduced training easily identified
improvements in the programs in through the new
procedures. Tasks preparing financial performance
and responsibilities statements. evaluations.
per position were
being clearly
delineated.

Team Reduce financial Implement a system Accounting and EFFECTIVE. Closing

operating losses by closing of accounting for profitability reports of down non-profitable
processes down branches every branch to all branches were branches considerably
with minimal determine its evaluated. Branches cut down costs and

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 income or below capacity for self- in question were reduced the
profit level liquidation given a chance to turn company’s financial
business around. losses.

Team Communicating Adopting a per Head office verbally EFFECTIVE. Approach

interpersonal the need for region approach in issued a standard was adopted based on
relationships “rationalization” communicating the announcement to local customs and
and the corporate plans regional officers. temperament.
processes (“Kanya-kanyang Retrenchments would INEFFECTIVE.
involved diskarte”) be communicated to Company’s own
including legal branch employees by officers moved their
procedures territory managers friends and relatives
who knew their own around when they
people and how to found out which
personalize approach. branches were closing
down. Panic was also
widespread across the
organization due to
text brigades.

Inter-team Adopting a Establishing the Restructuring of the INEFFECTIVE. Head

relations leaner and more newer agency and sales organization, office employees
agile network structure in including began to worry about
organizational lieu of the traditional retrenchment of 414 retrenchment. Tenured
structure branch set-up employees. employees started
Retrenched computing their
employees were given retirement payouts
the option to join the while newer
agency and network employees found the
groups were higher offer for retrenched
commissions were branch employees
offered. more attractive.
EFFECTIVE. The loyal
and competent people
remained with the
company.

In the end, all these changes resulted to reduction in the company’s operational costs. In the territory
branches, retrenched employees found their new work as collectors and supervisors working on a
commission basis as more flexible where they earn even more. Employees who stayed with the
company continued to express their support for management. Overall, there has been an improved
work efficiency at the head office and field operations. The whole organization is now singularly
motivated and committed to achieving the company’s mission-vision and values.

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