Builders Centre Case Study - Organizational Behaviour Assignment Help

Assignment Task:

BUILDERS CENTRE

Builders Centre is a large Australian company in the building and construction industry. It has an international presence, with a predominantly commercial client base and a small retail customer base. The company has seven divisions based along product lines, with some duplication of product/service offerings across divisions. In 2010 the company underwent a major restructure.

Pre-restructure

This case is based in Builders Centre’s Construction Materials Division where Conrad Banks was credit manager at one of the operating sites in New South Wales. He had an assistant manager, a team leader and nine credit controllers reporting to him. His department’s primary responsibility was to manage debtors and actively pursue outstanding debts.

Conrad was a popular leader. Over the many years that he had been manager he had successfully ensured that staff developed a very good understanding of the business and its goals and the required work practices and ethics to achieve those goals. He encouraged open communication and the development of trust, professionalism, transparency and accountability. One of the key aspects of work that Conrad impressed upon staff was that there were to be no ‘surprise’ bad accounts; this meant that each member of the team had to manage his or her portfolio accounts proactively and in a timely fashion. Any account that gave early signs of potential trouble was to be brought to the attention of the team leader and/or manager(s) in advance. Staff described Conrad as a mature professional.

Conrad also believed in and allowed flexible working hours. In the words of his workers, such a ‘give and take’ attitude provided them with opportunities to balance their work and family/life responsibilities and commitments. While official working hours were from 8.30 am to 4.30 pm, employees were not shackled to this timeframe and could work, if needed, outside of these times. Workers understood that work was the priority and had to be completed, and so they would come in to work earlier or leave later, or even come in on Saturdays to complete work (with no expectation of overtime payments). Staff also took over each other’s urgent client portfolios as and when needed. Morale was high and there was a general sense of employee satisfaction and want to help fulfil Conrad’s expectations of departmental productivity. Workers described themselves as ‘one happy family’, and this resulted in their department routinely outperforming all others in Builders Centre Australia-wide. The bottom-line effect was that there were satisfied customers, workers, managers and team leaders.

While Conrad could be argued to be doing the right thing by his division, department and clients, all was not well at the corporate level. One pressing issue was the divisional structure. In a climate of increased globalisation and robust competition, aspects of the structure were both ineffective and inefficient. In some instances there was unhealthy internal competition—different divisions were competing among themselves to sell the same product to the one customer. There was also large-scale duplication of work and services, including the use of different accounting and other software systems across divisions.

Such an organisational structure also often meant that customers potentially dealt with more than one division and/or department for their total building and construction needs. Such relations between customer and supplier created challenges, as customers dealt with different entities for their queries and purchase contracts.

To the small end-user customers this may not have been too much of a problem, as such customers are potentially purchasing items on a one-off basis only. However, this business design is not ideal for the larger commercial clients who are in the business of building and constructing and have a long-term procurement/purchasing relationship with Builders Centre. In an era of global competition, a more streamlined operational design was needed, and a restructure was therefore inevitable.

Restructure

Towards the end of 2009, a new CEO was appointed and a number of changes were initiated. Among the major changes was the reduction in the number of divisions and the streamlining of the products and services offered by the company. Each division now had one central accounts department with internal links to its various product departments. The idea was that anyone customer would have to deal with only one account personnel for all of his or her purchasing needs. The buzzword that employees heard was ‘lean management’. A number of managerial staff were to lose their jobs while others were redeployed. Some work was to be outsourced, which would also impact on non-managerial staff and lead to redundancies. A downsizing of the organisation was inevitable as a result of the efforts to reduce divisions, remove duplication and streamline the operations—and this no doubt would mean more work for the remaining workers. Fear took over and everyone began to worry about their jobs and what the change would mean for them personally.

Conrad’s job and his department were affected by this restructure. Conrad was offered and took a redundancy package. A new manager, Maxwell Keen, took over the now-centralised accounts department and was allocated only seven (instead of the previous nine) credit controllers. On the surface, each controller appeared to have a slightly smaller client portfolio; however, in reality, their work increased. As Natasha Williams, a credit controller, explained:

We are now dealing with each client’s full range of product needs. Ordinarily, such a task would not be too difficult. However, we are talking about each controller dealing with different operating systems, procedures and work cultures of other divisions and their product lines. Sure, we were provided training, but these were short, half-day programs and we were expected to transition into these systems and continue to perform at our ‘normal’ (pre-restructure) capacity.

To make matters worse, in the midst of all of these changes, management introduced a new system—the Queue Master—to track, monitor and report on workers’ performance. This system was initiated to ensure productivity but, mind you, we had no problems in this area previously. Micro-management became the work culture and all our previous exemplary records of high performance and self-managed productivity were simply forgotten. We had to log in every aspect of our day at work—we had to be in by 8.30 in the morning—and log out when and how long we went to the toilet, took our lunch break etc. It was unbearable—the flexible practices under Conrad and the work-family/life balance were gone.

What happened next was a lot of bickering within the department as staff complained about one another—for example, that so and so was doing too many outbound calls ignoring inbound calls. Staff began to mistrust each other and there was overt surveillance—staff were constantly watched and monitored by their team leader. People were stressed; many took sick leave and nobody stayed back after 4.30 pm or came in on Saturdays to finish off any outstanding work. Years of happily working together and wanting to perform as a team were lost—nobody felt happy coming into work.

The once happy and high-performing department was breaking apart and fracturing. Natasha and another credit controller tried putting the past behind them and working to the new system, and they managed to continue to their previous high-performance levels. However, this was not the case for the remaining five controllers. As a whole, the department’s productivity fell. Maxwell knew that something needed to be done.

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