Posted by: itm2011 | May 16, 2011

The importance of teamwork: The case of Brinkerhoff International, Inc.

IN434- INTERNATIONAL MANAGEMENT
FINAL WRITING ASSIGNMENT- CASE STUDY
Date: May 15, 2011
Name: Sangyul Park

Learning Objective

 To show the importance of teamwork at the lower levels of a high-skill, dangerous business.

Setting

 Alberta; Petroleum extraction; $27 million revenues; 1993-1993

Fact Analysis

 The point of this case is the president of BII was concerned about how to expand company efforts and revenues. Face to the economic booming in oil and gas industry, in order to cover customer increased demand, BII decided to put rig 22 back in operation and assigned Mannheim to rig #22. But Mannheim and Rick Kopulos who are key managers of BII, had little regard for each other. Mannheim accused Kopulos of allowing alcohol in the 1-E crew’s base camp. Kopulos thought Mannheim keeps sticking his nose into things and being so blasted cheap when it comes to fixing things up. Actually oil and gas drilling involves rough, dirty, and dangerous work with high risks and high uncertainties. Of course, a good rig should be depended upon how well crew members worked with each other, with the other crews on the rig and with the rig manager. The problem is that the difference between managers’ viewpoints. Kurt Mannheim admits he is a dictator and believes that his insistence upon honesty posted a threat for some people, in order not to have a problem people need to be able to discuss issues. He emphasized unless people act according to the manual, there will not be any promotions. On the contrast, Kopulos and Vander Heide emphasized building relationship, effective teamwork and making good image in crew’s mind. Another problem is the top manager Brinkerhoff hesitates when making some decisions. He knew that Mannheim was ultimate company man when it came to company loyalty and saving money, but at the same time, he was worried that BII’s quality and maintenance programs would suffer if Mannheim remained in charge of them. Brinkerhoff wanted to give Mannheim chance to be changed and he also had a thought that hard to believe Mannheim’s report. The top management doesn’t know the real situation and the lower level manager regardless each other. It is hard to smooth the situation.

Problem & Cause Identification

 Problem: The poor company operations caused by internal and external environment.

The company has a difficult in meeting increasing customer demand and solving company’s safety issue. Bring rig #22 to production is a good decision making but the staff assignment seems going wrong. The top managements ignore potential problem among lower level managers and deep-seated situation for the industry. The top management just focused on information readily at hand and the analyzed situation in stereotyped way. For example, Brinkerhoff had been considering about promoting Kopulos to a new job of field manager, it seems like there are some errors in decision making which caused by caused by availability bias and representative bias. Because of it there cannot be cohesiveness in the rig and in the company and the overall operation is also going wrong. According to Simon’s normative model, organization should seeking satisfactory and acceptable solution, optimizing, decision making is not perfectly rational. As I can see there is potential problem exist in the organization.

 Cause 1: Interpersonal value conflict between Manheim & Kopulos because of role difference.

In Brinkerhoff Company, there is a value conflict especially between Manheim who has the title of Safety Supervisors and 1-E’s rig manager, Kopulos.

First, applying McClelland’s need theory, they have different needs. In case of Mannheim, he has a high need for power. The need for power reflects an individual’s desire to influence, coach, teach, or encourage others to achieve. People with a high need for power like to work. And they are concerned with discipline and self-respect. On the other hand, Kopulos is a manager with high need for affiliation who prefers to spend more time maintaining social relationships, joining groups, and wanting to be loved. Individuals who are high need in this need have desire for approval reassurance from others and value friendship. This difference leads the two people are assigned at different positions in the company. Kurt Mannheim is a corporate safety manager, who should have a responsibility and conscience. Rick Kopulos is a 1-E rig manager, who should understand rig crews and maintain close relationship. To conclude, different needs cause different positions and different positions cause different value-based approach to safety issue: One is task-oriented; the other is people-oriented.

 Cause 2: Problems of organizational structure

An organization chart reveals four basic dimensions of organizational structure: (1) hierarchy of authority (who report to whom), (2) division of labor, (3) spans of control, and (4) line and staff positions (But Exhibit 1 doesn’t cover 4th dimensions, line and staff positions. So I’ll analyze the chart using three dimensions).

Exhibit 1   Organization Chart-Brinkerhoff International, Inc.

As Exhibit 1 illustrates, four staffs and seven rig managers report to Tom Brinkerhoff who is the president and general manager. The chart shows unity of command up and down line. This formal command of chain can cause a miscommunication or misunderstanding between managers who are in the same level like Mannheim and Kopulos’ case.

In addition to showing the chain of command, the organization chart indicates extensive division of labor. According to the material, oil industry is a very tough and specialized area. So in case of Brinkerhoff, many staffs and rig crews are very specialized. But there are some downsides of too much specialization such as boredom, fatigue, stress, low productivity & quality, high absenteeism and high turnover. Also mental range becomes limited. In case of Brinkerhoff, because of much specialization, crews suffered from stress and fatigue and to solve these mental illnesses they drank alcohol which is illegal. 

Overall span of control is narrow but Brinkerhoff has a wide span of control of eleven (Contracts representative, Controller, Marketing manager, Corporate Safety Supervisor and eleven rig managers). Ideal span of control has not been decided. But in this case, Brinkerhoff has too much span of control to supervise staffs and lack of coordination. So, Brinkerhoff was perplexed when handling conflict between Mannheim and Kopulos.

Cause 3: Negative Inequity in Rig 1

Defined generally, equity theory is a model of motivation that explains how people strive for fairness and justice in social exchanges or give-and-take relationships. As a process theory of motivation, equity theory explains how an individual’s motivation to behave in a certain way is fueled by feelings of inequity or a lack of justice.

 Table 1   Average Time on Rig-Rig Managers and Drillers

 

Rig Number

Total Contribution

Operating Days

Contribution / Operating Day

Maintenance Cost/Day

Worker Compensation Benefits Paid

Rig 1-E

$ 714,739

259

$2,760

$961

$6,361

Rig 14-E

434,324

159

2,732

1,144

29,892

Rig 20

403,646

217

1,660

1,353

16,746

Rig 21

171,788

79

2,175

722

1,504

Rig 22

(91,883)

40

(2,297)

5,253

0

Rig 27

233,814

153

1,528

880

58

Rig 28

248,843

183

1,360

1,645

4,132

Miscellaneous jobs

47,567

 

0

 

0

Total

$2,162,828

1,090

 

 

$58,693

Equity theory points out that two primary components are involved in the employee-employer exchange, inputs and outcomes. People will be motivated to the extent their perceived inputs to outcomes are in balance. An employee’s inputs include education/training skills, creativity, seniority and effort expended. On the outcome side of the exchange, the organization provides such things as pay, bonuses, fringe benefits, promotions and status symbols. Negative inequity occurs when another person or group receive greater outcomes for similar inputs. Comparing to another rig in this company, Rig 1-E is experiencing negative inequity. As the Table 1 shows that Rig 1-E’s operating days (Input) are the highest among 7 rigs. But worker compensation benefits paid (Output) is relatively low. The ratio of these two factors (referring to Table 2) clearly indicates that crews in Rig 1-E are experiencing negative inequity.

Table 2   Worker Compensation Benefits Paid / Operating Days

Rig Number

Worker Compensation Benefits

Paid / Operating Days

Rig 1-E

$24.56

Rig 14-E

188

Rig 20

77.17

Rig 21

19.04

Rig 22

0

Rig 27

0.38

Rig 28

22.58

 Considering external situation, it makes negative equity more serious. According to the material, the external environment is very poor. Oil and drilling typically involved rough, dirty and dangerous work with high risks and high uncertainties. Furthermore, government and customers had imposed extremely tough environmental and safety standards. In this bad situation, crews in rig 1-E feel unfairness more deep.

 

 

 

 

Alternatives Assessment

Alternative 1: Fire Kurt Mannheim.

This method will make no conflict between Mannheim and Kopulos. That is because the two managers have no chance to meet each other. So it is the fastest method that can eliminate the cause of the problem. Also, this method can save the cost. When a group attempts to change their working environment and group culture, it costs a lot of money and efforts. But when the top manager decides to fire the middle manager, it occur only immediate HR cost. For the economic aspect, to change the manager is much benefit than other methods.

The alternative can be refuted some reasons. When Brinkerhoff fire Mannheim, the rig 22 operation can be delayed until the new manager will come. Although a new manager is substitute for Mannheim immediately, it takes time to learn the whole work.

This alternative is interpreted as a problem avoiding solution. As Brinkerhoff fire Mannheim and decide to change the manager, the company doesn’t have to adopt or change the system. They have only to pick a new manager. This can be the cheapest and fastest solution but it can’t be a radical solution. After president doing this method, it still contains the possibility to be repeated similar conflict situation. So it can’t be an essential solution.

Alternative 2: Change the group structure from mechanistic model into organic model and change the compensation system.

I think it is possible to change the group structure from mechanistic model to decentralized organic model. In the case, Brinkerhoff International, Inc’s organization is too centralized power to the top manager. So Brinkerhoff have the decisive power to control the whole company and it makes the group stiff and formality. By changing the organization style, it is expected to decentralize the top manager’s power and delegate power to the middle managers in the same horizontal line. It is much easier to communicate with each manager who is in the same level. And company also has to supplement a compensation system. Considering external situation, negative equity is to make the matters worse. So the company has to make a fair and appropriate compensation system for each rig’s employee.

Although the alternative has advantages, it is hard to change the organization structure and the top manager usually doesn’t want to delegate his power. It usually cost lots of money to make better compensation system and also take time to whole group members become familiar to new organizational structure.

Alternative 3: Adopt the communication method, especially “conference” and “feedback”, to facilitate group cohesiveness.

Conference will make the group more open to each group member and change the group mood. And various feedback methods can be adopted to improve communication within group. Many groups including BII mainly use downward feedback method. So adopting nontraditional feedback makes it easier to change the group mood and communication. Nontraditional feedback like upward feedback will help Brinkerhoff to know each manager. It is done by the subordinates to evaluate their boss. The top manager can know the employee’s thinking, and get the information about which manager is to appropriate to deal with their workers. And another effective feedback method, 360-Degree Feedback can be used. It contains comparison of anonymous feedback from one’s superior, subordinates, and peers with self-perceptions.

According to the Fielder’s Contingency Theory, the person’s trait is fixed and never be changed. Although managers do not change their leadership or trait, they can understand other’s trait and thought to some extent by communicate with other manager. It makes managers to have a chance to compare their managerial method to other’s method. And they can find the appropriate managerial method.

But these alternatives have a problem to practice. To adopt the methods such as conference, feedback techniques cost lots of money and also take much time. Also, when group adopt a new systematical method, there are many misunderstandings and noise can happen. It can be expected to bring many trial and errors.

Action Plans for Selected Alternative

Therefore, I concluded that it is absolutely necessary to develop the third alternative, which I  finally selected as an optimal solution; communication. To cut to the point, enhancing communication level throughout the entire organization will be helpful in resolving various kinds of conflicts, and even in preventing some possible misunderstandings among the group members. The ultimate goal of this option is not only to increase the quantity of interactions among members in the organization, but also to improve the quality of cross-functional relationships inside the company.

First of all, I suggest that the corporate should hold regular “conferences”. The concept of those conferences will be just as similar as that of “agora”, in ancient Greek era. In Athens, people had held some kind of public discussion gatherings called agora. Anyone who wanted to voice his or her opinion or participate in decision making, it was free to join in. According to Local and Regional Information Society, which members are from the congress of local and regional authorities of Europe, “the ease of communication and access to information now and in the near future has led some observers to predict that a new public arena or “agora” will emerge to aid collective decision-making”(1998). I also agree that to enhance group cohesiveness and decision making process in BII, a new kind of communication approach is certainly needed. Every member in this conference will have the same right, and also, duty, to conduct a full participation. I suggest that BII currently needs at least four conferences of this kind. (See Exhibit 2)

The conference #1 and #2 are related to the “inner-area” communication. BII is differentiated by two large area of business, the office area and the field area, and I assume that there is no adequate organizational instrument to facilitate communication activities inside those areas. Although each area consists of several functions such as contracts, controls, and marketing; in field area, and rig 1E, 14E, and 20; in office area, it is astonishing that there still is not any kind of opinion gathering device in the company.

 In a field area conference (#1), workers from different rigs will have their chance to share the sufferings, feelings, and form a sympathy. Also, this conference will help the members in the field area to feel ‘we-ness’, as they have some time to get along together regularly, including the rig managers as well. Moreover, this meeting would provide places to share the different ideas and opinions among the rigs, managers, and other employees from motormen to roughnecks. It would be possible to operate a committee that represents the conference #1, and deliver some unified opinion to the top level, or even to the office area.

Likewise, conference #2, which is an office area gathering, will be kept just as conference #1 does. There will be regular conferences to exchange opinions and conduct decision making about several current issues. I admit, that each communication process will be more time consuming than before. However, I concluded that traditional decision making model in BII was too centralized and exclusive, that the right information was unable to reach even to the horizontal level of group hierarchy.

 Conference #3 and #4 are devised as solutions for the problems which are derived by BII’s structural division. Given that the organization is divided by two big areas, this structurally divided situation has have made employees block themselves from connecting to other area in the organization. Conference #3 is rather a special one because all of the members of the meeting are the ones in manager’s position. I argue that conference #4 is actually the most corresponding model to “agora” because it perfectly meets the purpose of my entire suggestion; communicating with everyone in one place. However, this kind of company-wide interaction model, in a realistic manner, is a little difficult to hold frequently. But only if this company-wide relationship-facilitation event is possible to be held at least annually, it would be very effective to build a strong bond among the organization.

 Compared to “conference” theory as the first option, the second thing that I suggest is the “feedback”. It is now widely known that feedback process is essential in performance-oriented organizations like BII, to enhance learning procedure and motivate employees. The directing function, which is one of the consequences that feedback provides, makes employees to clarify their roles in organizations, and guides them to conduct specific behaviors of those roles. Moreover, the motivational function of a feedback increases individual’s motivation level by promising of better contingency rewards and future. Feedback also can be a powerful incentive factor to improve performance (Ilgen & Fisher & Taylor, 1979). I expect that especially the 360 degree feedback would also enhance individual satisfactory level. This is because 360 degree feedback empowers subordinate employees to evaluate their supervisors. As a result, supervisors will do care about their followers, and the subordinates would be happy that they also become members of decision making process, not just tools that being exploited.

 The communication approach includes both horizontal and vertical correlations among the participants. Therefore, if adopted thoroughly with caution, in the long term stronger group cohesiveness as well as a higher level of performance inside BII is definitely expected. In other words, the two communication methods, which are “conference” and “feedback”, will improve overall group cohesiveness, which lowers inner-conflict level inside the organization. This will eventually cause better performance. (See Exhibit 3) This kind of integrative negotiation eventually will trigger productive conflicts inside the group and prevent organization rottenness inside out. More importantly, this method will be critical because of its win-win strategy.

 

 

 

 

 

 

 

 

Bibliography

 Harvard Business Review Case Studies, Brinkerhoff International, Inc. by Louis B. Barnes

Publication date: Feb 18, 1994. Prod. #: 494110-PDF-ENG 

  http://hbr.org/

Decision-making & Managing Conflict (Simon’s normative model)  

http://toolkit.smallbiz.nsw.gov.au/part/8/42/200

 Fiedler’s Contingency Theory

 http://www.envisionsoftware.com/articles/Fiedlers_Contingency_Theory.html

 Local and regional information society – CG (6) 7 Part II

 https://wcd.coe.int/wcd/ViewDoc.jsp?id=902373&Site=COE

 Equity Theory of Motivation

 http://www.buzzle.com/articles/equity-theory-of-motivation.html

 http://www.managementstudyguide.com/equity-theory-motivation.htm

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