In 1990, Samuel McNeil was appointed Marketing Manager at ATC, a large Australian-owned organisation with an office in Wellington. The company was engaged in a wide range of diversified activities and had more than 600 employees throughout New Zealand. McNeil felt confident that he would be able to greatly improve the company’s marketing. He was also hoping to change the company’s orientation away from products and towards customer service.
McNeil’s first assignment was the development of a local and overseas marketing program. His two assistants, David McQueen and Steve Harrison, who were experienced in production and sales but had little experience in marketing. McNeil experienced some resentment from managers in other departments and their staffs. However, he believed that his background and position had nothing to do with it and that any newcomer to the company would be similarly resented.
McNeil soon realised that there was no organised training for the marketing department. Although most staff had qualifications in marketing, none were fully marketing oriented. All the emphasis was placed on production and sales. He believed that the training was central to any effort to improve the standard of marketing, so he brought the matter to the attention of the general manager, John Holmes.
Holmes did not fully support McNeil’s ideas about training, expressing the view that most of the staff were very capable and had offered good service to the company for many years. However, after much discussion, Holmes agreed to McNeil’s suggestion. News of the training program spread widely to other departments. The news met with mixed responses: some felt that it would be a waste of time, others felt that it would improve the marketing department.
Tony Manning, the production manager, and Gary Shackelford, the sales manager, had been working together for years. Most of the division managers had worked for ATC for more than 10 years. Usually they worked their way up through various positions in the organisation, in Australia and at home. It was not surprising when Manning and Shackelford voiced their opinion that the program was simply “unnecessary rubbish”. McNeil knew their opinion, but pretended not to. Manning and Shackelford avoided conversations with McNeil and confined discussions solely to business matters. McNeil found this hard, as his job required that they work closely together.
McNeil then asked the training officer, Thomas Green, to assist in the training program. Once the lectures and seminars got under way, Manning and Shackelford were invited to attend the seminars and give lectures or present working papers. The training proved to be successful in helping staff to become well acquainted with the company’s marketing goals. Holmes more than once praised McNeil’s effort in front of the staff and other managers.
Later, McNeil was invited to participate in the development of a new product in Australia. He made frequent trips to Australia to attend meetings. During his absence, McQueen and Harrison took charge of the marketing department in rotation. In July 1991, while NcNeil was in Sydney, Manning ordered McQueen and Harrison to undertake some of his tasks, explaining that it was impossible for him to bear the burden alone, as they were part of the marketing functions. McQueen and Harrison argued that they had nothing to do with Manning’s job and felt that Manning was only in an advisory position to them. Shackelford supported Manning and ordered McNeil’s assistants to do as they were told. Shackelford said: “McNeil’s permission is unnecessary in this situation”. He argued that the meetings and development plans for the new product had interfered with production and sales of existing products. Both managers felt that the two assistants should help them, to speed up production and sales.
McNeil came to know of this on his return and brought the matter to Holmes immediately. Holmes called on Manning and Shackelford for explanations. Manning said production was not progressing, leading to sales interruptions. Shackelford felt that McNeil’s involvement in Australia contributed to these problems. McNeil disagreed, saying that his job was taken care of by his competent staff under McQueen and Harrison. He then argued that Manning’s and Shackelford’s orders had made work in the marketing department unpleasant.
Holmes terminated the meeting and ordered the three managers to sort out their differences.
During their private meeting, McNeil told Manning and Shackelford not to give orders to his assistants. He then told them about the meeting in Australia in detail. Manning and Shackelford agreed to participate in their own capacities in the development of the new product. The product was to be developed in New Zealand as well as in Australia. At the initial stage 60% of the production would be transferred to Australia where a greater share of the market was expected. It was hoped that production in ATC would be much increased as the market share grew.
McNeil found mounting difficulties in his relationships with other managers, Manning and Shackelford in particular. He also thought that he was not being informed of developments in related departments. Most of the managers made decisions on their own without general consultation. There was too much delay in getting their new product running. However, after conscientious attempts by the marketing department and by McNeil in particular, the new product was eventually launched. During the launching, McNeil caught Manning whispering to Casey Roy, a person McNeil had contact with during the course of his work, “I hope he has not made a terrible mistake”. McNeil did not discuss the organisation problems with anyone after this incident.
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In the first year the new product floundered. After a few successful installations, increased advertising, and promotional efforts, sales increased. The profit, however, was negligible. Sales continued to increase in 1994, but overheads were high. Holmes immediately called in the public accountants to make a special audit of the company�s books. After much investigation, the audit found that the cost-accounting system was unreliable and it was not feasible to make a proper check against the physical inventory. The internal auditors had also drawn attention to the system’s defects. Through all this, McNeil kept a low profile while other departments blamed one another.
Holmes was ordered to report on the matter to Australia. In due course a new manager replaced Holmes. Clark Brandon had 15 years experience in personnel and other administrative matters in the United States. Brandon respected McNeil’s knowledge of the company and his opinions on organisational matters. McNeil informed him of the situation in the company. Brandon recognised the lack of communication and felt that problems and differences needed immediate “ironing out”.
All the heads of departments were invited to a special meeting and each was asked to report on his department. At the meeting, Brandon specifically asked them whether they had any comments relevant to improving the company situation. These he gathered and published in the ATC Circular. All the managers were to report periodically to Brandon with details of each department’s operation.
The new system seemed to work well enough. The marketing department in particular was doing very well. Frictions between departments still existed, but these were kept to a minimum. Differences were resolved intelligently, sometimes even on the spot. McNeil was now spending a lot of time marketing the company’s products. Although he was offered substantial salary increases, McNeil was not satisfied. Brandon sought advice from the personnel department and offered McNeil a free holiday for him and his family to Hawaii.
In 1997, McNeil was appointed branch manager in Christchurch, reporting directly to Wellington. There were rumors that McQueen or Harrison would take over his position in the marketing department. Sydney had yet to inform Brandon of McNeil’s replacement.
Suggest ways of solving or reducing the problems you have identified. Take into account what will happen if Manning and Shackelford continue to frustrate the marketing manager who replaces McNeil.
Thanks to Stanley Petzall of the School of Management at Deakin University for permission to use this case study which comes from his publication on management case studies.
Proposed solution #1
Brian White is managing director of Brian White & Associates, an organisation and management consulting firm in Canberra. He has been working on scenario-based planning, search conferences and issues related to change since 1991
This story demonstrates the key role of human relations for effective management and the importance of strategies for dealing with them. McNeil focused narrowly on his task and problems directly related to it, such as a need for training, and took steps to solve the problems. He expended much energy, including talks with the general manager. However, as the unsatisfactory launching of the new product shows, focusing on the task alone is often not enough.
When McNeil took up his role with the company it quickly became clear that he was faced with an environment of resentment and mistrust, and the “pairing” of two key managers. They were long-serving staff who had worked their way up and who might be expected to resist innovation and new ideas, most managers preferring to make decisions on their own and to have little contact with others. There was also a general manager lacking in leadership.
No system can survive and flourish unless it is in open and adaptive relationship with its environment. McNeil needed strategies to develop that kind of relationship and deal with problems so that he could apply himself to his main tasks.
The first problem was resentment from managers and staff. He needed to give early attention to overcoming this, instead of dismissing it. He needed to open lines of communication with other managers, discuss ideas with them, value their experience and listen to their ideas as a way of promoting their acceptance of him and his ideas. Similarly, openness with staff would help to develop a supportive team. This would also help to test his ideas and perhaps suggest other approaches.
A more serious problem was that the general manager lacked leadership. McNeil needed to exert leadership from below (a difficult task) by building a common vision and enhancing communication. He needed to seek agreement for his initiatives before approval to implement them.
In any case it is not clear that a training initiative would be the best or first step towards solving his problems. His staff are, after all, qualified in marketing. Implementing a training program to “improve the standard of marketing” would be likely to be taken as a vote of no confidence in his staff. Giving leadership, direction and encouragement to staff, valuing their knowledge and experience, and refocusing their attention on marketing objectives would be more likely to bring better results. He could follow this up later with training, which could be presented positively as honing their professional skills.
The next problem was the “pairing” of the production and sales managers. Pairing can be disruptive, as the members of the pair close ranks against outsiders, reinforce their own prejudices, passively or actively resist change, and sabotage the efforts of others. The general manager should have broken the pair up by job rotations, shifts in responsibility or changed organisational arrangements, or by bringing others into the equation.
But what could McNeil do? A strategy of least resistance would not work because of the pair’s key roles. He needed to break up the pairing by engaging each separately and drawing on their expertise and experience to build support for his ideas. He could take every opportunity to bring other managers in, thereby breaking down their own isolationism and reducing the opportunities for pairing.
When Manning started giving directions to McNeil’s staff, it would have been better if McNeil had taken it up directly with Manning and Shackelford separately instead of going first to the general manager. Had McNeil adopted such inclusive strategies with the whole organisation it is likely that the launching of the product would have succeeded and the problems identified by the internal and external auditors would have been noticed earlier and rectified before they became disruptive.
Proposed solution #2
Peter Robinson is the manufacturing manager of Buderim Ginger Limited, Yandina, Queensland. He has more than 20 years of management experience in the food-manufacturing and brewing industries
The key problems all involve people interacting. In this case, key personnel are either unskilled in relationship or management techniques or ignore suitable strategies and follow their own agendas.
The first problem is a lack of management cohesion as shown by McNeil’s difficulties with other managers when he was trying to change the company through new-product development. Manning and Shackelford were set in their ways and comfortable with the status quo. They were not supportive of change and rubbished McNeil’s attempt at improving the marketing department.
Holmes, the general manager, also seemed comfortable with the way things had operated before McNeil’s appointment and was reluctant to get involved in personnel issues. This is borne out by his resistance to the proposed training program, where he considered most of the staff were capable, and further by not tackling the issue of Manning and Shackelford’s undermining of McNeil’s authority with the marketing staff. Holmes needed to let the three managers air their differences and work out a mutually acceptable arrangement to produce better relationships with each other. Instead he abrogated his responsibility when he merely ordered the three to sort out their differences themselves.
McNeil, Manning and Shackelford never resolved their relationship problems, and the problem repeated itself throughout the company with most managers making decisions in isolation, rarely conferring with others. Holmes tolerated this management style, which will only hinder progressive and changing companies. The lack of cohesion between managers and departments would certainly have hindered the successful introduction of the new product and ensured a lack of accountability in the financial area.
From the time of McNeil’s arrival, Holmes should have been aware of potential major management differences. He should have backed his senior manager in his effort to improve the marketing expertise and should have been positive about the training (he at least praised McNeil in front of other staff). Seeing that training in McNeil’s department was successful, Holmes should have introduced some training in team skills for his managers.
Communication was sadly lacking at ATC. From McNeil’s arrival, there was a need to communicate his role and how it affected the future direction of the company. The lack of communication also contributed to a generalised insecurity about McNeil’s project, which had a deleterious effect on the launching of the new product, as no one was in control. Holmes might easily have resolved many of the communication and relationship issues by chairing regular meetings between the departmental managers in which they discussed relevant issues and problems in a positive atmosphere. Holmes’s lack of leadership ultimately led to his being replaced by Brandon, a leader who could see the communication problems and immediately tackled them.
The financial failure of the new product could have been avoided by appointing McNeil champion of the product. He could have ensured that the project was fully co-ordinated through all departments. This would have forced the issue of communication and Holmes would have been in a better position to deal with the internal divisions.
The parent company also needed to improve its communication and teamwork, because there was still the unresolved appointment of McNeil’s successor. In this situation, the new appointee might well repeat the mistakes made by McNeil with Manning and Shackelford.
Communication may improve through Brandon, however the combined efforts of Manning and Shackelford would probably “white ant” Brandon’s authority. The solution for Brandon would be to transfer Manning elsewhere: as long as he remains where he is, he will always consider himself as a “winner” over the protagonists that were transferred, even with promotions.