Leadership Case Study with answers

Angelica A. Bernardo

4-AOM

Dec. 17, 2013

Case Study: Leadership Style Located at opposite ends of the country, Northwest Center for Families (NCF) and Southeast Social Services (SSS) are local government agencies specializing in family, child, and school social work in rural areas. After attending a conference on performing social work in small communities, the directors of both organizations return with plans to address the issue of dual relationships, relationships in which social workers maintain both social and professional ties with clients. Each director takes a different approach to the issue. NCF‘s director sends out a memo to employees stressing that dual relationships are a conflict of interest prohibited by the organization. In the memo, she states that a dual relationship could be grounds for employee termination and encourages employees to report any non-sanctioned interaction between social workers and their clients. The NCF director‘s plan also includes the construction of a new employee lounge, with the understanding that employees will eat their lunches in the office, rather than off campus. The director of SSS holds a meeting with his staff to discuss the organization‘s role and purpose in the community. He shares what he has learned at the conference: The potential to improve people‘s lives outweighs any other social or professional interaction that could derail the organization‘s purpose. The SSS director explains that he will make it his personal mission to solve the problem of dual relationships and asks employees for their input and participation in overcoming this obstacle. The leader explains that all employees must work together to reform the organization in order to better serve the community. Questions 1. What type of leadership is practiced at NCF, transactional or transformational? How do you know? 2. What type of leadership is practiced at SSS, transactional or transformational? How do you know? 3. Which style of leadership would you recommend for a human service organization? Explain your answer.

Reference: Manning, S. S. (2003). Ethical leadership in human services. Boston: Allyn and Bacon

Answer: 1. The leadership style that is practiced at NCF is transactional leadership because in the situation given there is a reward and punishment as well as a clear chain of demand. Transactional leadership style rely on standard forms of inducement, reward, punishment and sanction to control followers; motivates followers by setting goals and promising rewards for desired performance; and leadership depends on the leader‘s power to reinforce subordinates for their successful completion of the bargain. 2. The leadership style that is practiced at SSS is transformational leadership because in the given situation the manager inspires them by showing his vision and passion. Transformational leader seeks to infect and re-infect their followers with a high level of commitment to the vision; are distinguished by their capacity to inspire and provide individualized consideration, intellectual stimulation and idealized influence to their followers; creates learning opportunities for their followers and stimulate followers to solve problems; possess good visioning, rhetorical and management skills, to develop strong emotional bonds with followers; and motivates followers to work for goals that go beyond self-interest. 3. I would recommend situational leadership style because human service organization is a nonprofit organizations whose purpose is to enhance the capacity of communities to plan, manage and deliver quality human services and they provide sensitive services to the communities that will require flexibility, adaptability, sensitivity, timeliness and situations based. The best action of the leader depends on a range of situational factors. When a decision is needed, an effective leader does not just fall into a single preferred style, such as using transactional or transformational methods.

Case Study: The Fall of Quest

1997 was a banner year for Quest Computer Corporation, a leading manufacturer of personal computers. The company surpassed $15 billion in sales, nearly seven times its revenues in 1992, and the year John Clarke took over as CEO. Clarke is a hard-driving, no-nonsense leader. His vision was to create a $30 billion enterprise by the year 2000, but things were slowly started to crumble around him. What once had been an

open and productive atmosphere that cultured teamwork, was now deteriorating under the strains of political infighting, cronyism, and allegations of sexual harassment. In the eye of the storm was Samuel Anderson, vice president of human resources. Anderson and Clarke worked together in the eighties at another corporation before Clarke came to Quest in 1992. Three years later Anderson followed. Anderson immediately started using his relationship with Clarke to influence business decisions. Anderson also leveraged his ties to discreetly resolve two allegations of sexual harassment against him. Although the majority of senior executives and managers believed Clarke was an extremely tenacious and good executive, they also believed he was getting bad advice and accepting it. Clarke, when asked about the sexual harassment complaints against Anderson, replied, ―People make things up. There is no way of knowing. People spread rumors.‖ This and other incidents further strained relations between Clarke and the rest of the senior executive team. Busy with the task of running one of the world's leading PC manufacturing organizations, Clarke began relying heavily on three senior executives — Anderson, Senior Vice President Tim Hunt, and Chief Financial Officer Barry Lynn. The rest of the team felt increasingly alienated. Over a three-year period, starting in 1996, 10 top executives left the company and following them were several essential managers and supervisors. At the center of this exodus was the bizarre dynamics between Clarke and Anderson. Many believed that Clarke empowered Anderson to do things way beyond his role in human resources. For example, Anderson had significant influence on changing the organizational structure of the company, determining what divisions ought to sell into what markets, and which products should be sold through various departments. He also took steps to drive a wedge between senior executives, strengthening his position with Clarke while inducing a communications breakdown throughout the organization. Anderson had a list of people whom he would constantly campaign against by advocating organizational changes to lower their profile. Once he lowered their profile, he would start a process of easing them out of the door. As one executive put it, ―Anderson was instrumental in deciding which people to bring in and which were no longer acceptable in the company.‖ Clarke's reliance on Anderson baffled, and angered, other executives. Anderson was very close to Clarke, and he had a huge impact on the business. Human resource professionals usually do not play that kind of a role, as they are supposed to try to bring the team together, but all anyone saw Anderson doing was creating divisiveness. Instead of working together to fine-tune a coherent growth strategy, Quest's senior executive team became disjointed and increasingly detached from the rest of the company. Their inability to lead soon had an effect on the morale of almost every employee within the company.

Two of Anderson's initiatives drove home the point of an executive team that was out of touch with its workers. The first initiative was the building of a multimillion-dollar on-campus cafeteria that included reserved underground parking for senior executives. Prior to that, executives shared parking space with the rest of the company's employees. The second initiative was the increased security on the eighth floor of the corporate building. Here the executives and several key managers had their offices; even though every other executive objected to the idea by arguing that it created a hierarchical environment not conducive to a free exchange of ideas with subordinates. Anderson was at the center of almost every bit of chaos that existed within the company. Clarke denied that Anderson had undue influence. ―Every executive has the same access to me,‖ Clarke said. He continued, ―I have always had an across-the-board relationship with everybody. I always maintained a high degree of equality. There was no favoritism.‖ Clarke also maintains that Anderson had ―very good relations with just about everybody.‖ Anyone who says otherwise, Clarke added, must ―have an ax to grind.‖ Many former executives said they were reluctant to complain to Clarke about Anderson because Clarke took personal offense, as if he were being criticized, and because they feared winding up on Anderson's list. The erosion of the executive team came at a very bad time. Its main competitor was starting to grab big chunks of PC market share by proving the viability of the direct-sales model. When Clarke replaced the former CEO in 1992, his aggressive price-cutting initiatives reversed Quest's direction and led the company to the top of the PC market. But now, Clarke was much less decisive. As one former executive noted, ―He was paralyzed by the speed with which the market was changing, and he couldn't make the difficult decisions.‖ Clarke failed to see the opportunity of the web. Its main rival was now selling over $2 million worth of products per day over the Web. In 1998, its rival surpassed Quest in desktop PC sales to U.S. businesses for the first time. The high turnover in the sales divisions led to instability that caused several high-profile corporate accounts to take their business elsewhere. As people left, the performance of the company started to degrade. Quest attempted to construct its own build-to-order strategy by purchasing a rival company. This failed as it had no vision to guide its direction. Finally, things came to a head. Quest could not significantly reduce distribution and manufacturing costs or boost PC revenues. Huge oversupplies of inventory adversely affected Quest. While its main competitors grew at about 55 percent from the first quarter of last year to the first quarter of this year, Quest's business fell by 11 percent over the same period. By the end of this year's first quarter, Quest's stock lost almost half its value, and the company's first-quarter earnings fell far short of analysts' estimates. Then came the kicker, the forced resignations of both Clarke and Anderson. The new CEO, Paula White, now has the massive job of turning a lot of infighting rank and file into a cohesive

organization. The leadership structure was severely damaged due to the large number of people leaving Quest. Although a large number of replacements were found, it is extremely hard to replace the collective experience of that many people leaving in such a short time. To help rebuild the leadership structure, Paula White has charged the interim human resource vice president, Samuel Wines, with rebuilding the leadership structure. Samuel created a special leadership task force team by hiring several new human resource specialists. You were brought on as a training analyst to be a part of that team.

Retrieved from, http://www.nwlink.com/~donclark/hrd/case/caseqest.html Questions: 1. 2. 3. 4.

What are competencies and how are they related to performance? How do Skills, Knowledge, and Attitudes (SKA) fit into competencies? What is leadership and how do competencies fit in with it? What are the differences between jobs based performance models and competency based performance models? 5. How can implementing a competency based performance model help Quest? 6. If a competency based performance model was implemented years earlier at Quest, do you think it would have prevented its present troubles? Why? 7. What are the three key leadership competencies that you believe are most important for Quest's leaders to have in order to ensure its survival? Answers: 1. Having the required competencies means that a person is qualified to perform a task or job. This in turn means that it will be performed to the best interest of the organization. That is, the person will help the organization to excel by his or her performance. It does not necessarily mean it will be performed to set standards as the standards might have been arbitrarily built by someone with less knowledge of what the job requires. 2. In order to have a competency, you must first have the skill and/or knowledge that allows you to perform. Having the proper attitude or desire will then allow you to excel at that task performance. 3. Although there are many definitions of leadership, almost all of them have two things in common: 1) having a vision to aspire to 2) having a certain charismatic (or traits) that inspires others to follow that leader. The leader must also have a set of competencies, which are different for each organization and position that helps to build trust among the leader‘s followers and other leaders.

4. In job based performance models, the standards are built and then the jobholder must meet these standards. In a competency driven organization, the standards are based on jobholders who have been identified as good performers. 5. By first identify the great leaders, and then building a model based on them for the other leaders to follow. In areas where they fall short, development and training programs should be built to help them achieve the model's required competencies. 6. In my opinion is that no, it would not of helped. Normally, leaders who are this high up on the hierarchy would not be held as accountable for a competency based performance system as they would have already been deemed to have the necessary competencies. But, by implementing one now will help to build the future leaders and inspire trust back into the system. 7. The three key leadership competencies that I believe are most important for Quest's leaders to ensure its survival are building visions and trust — inspiring others to follow them; fostering conflict resolutions — building win/win resolutions; and decision making — being able to make the hard choices.

Case Study: Transformational Leadership A real life case where one Senior Divisional Manager could convert every adversity into opportunity and transform a low performing and notorious Division into a well disciplined and high performing Division achieving high growth in all key result areas consistently for three consecutive years – that too despite his serious physical ailments. Shri B.K. was posted as Senior Divisional Manager of Tanjore Division of LIC, South Zone. The Division was biggest in the Zone in geographical area and in terms of number of branches. A rural division in Central Tamilnadu‘s predominantly agricultural belt it was considered to be a ―backward‖ Division in terms of productivity of sales personnel and in terms of new business. But the Division was ‗well known‘ for various other reasons. There was a strong and militant trade union who had a strong hold over the staff, a ‗strong‘ and militant agents union who regularly threatened the management and enforced their will on the Branch Managers and Divisional Management. Development Officers were mostly ill-equipped for their task but had become nonchalant under the influence of a strong trade union. There were inter-group rivalries in many branches between a caste based association and majority staff union affecting the customer service area also. The situation was considered to be very serious and the previous two Sr. DMs opted out within a short time-immediate predecessor in just one year and the previous one in two years. This was the situation when Shri B.K. was posted to the Division. The Zonal Manager had sounded B.K. that he would be sent as SDM, BK had agreed for the change from his post of Regional Manager (P&GS), South Zone and wanted a posting outside the Zone but the ZM who

closely knew BK got him posted to Tanjore Division as the situation there was becoming worse by the day. BK was a person of amiable disposition, unassuming and simple with a frail physic being afflicted by rheumatoid arthritis for well over 10 years. But he was considered to be straight forward and uncompromising on issues. In fact the previous Zonal Manager had told him that he had to choose a career in Zonal Office and Central Office as he would not be preferred for the post of Senior Divisional Manager as he was ‗too straight forward‘. On posting to the Division Shri B.K. was cautioned by his Zonal Office colleagues about the tough task ahead in handling the situation there. When BK landed in the new station in the first week of May 2003 the incumbent SDM also briefed him about the alarming situation created by the ‗treacherous‘ people around. The incumbent SDM was a veteran and a man of brilliant ideas and varied experience. He was very ‗friendly‘ with the trade union functionaries of all denominations, always doing his best, even out of the way, to keep them in good humor. BK took stock of the situation through consultation with the Marketing Manager and other colleagues. In the first Branch Managers Conference it was revealed that the morale of the BMs was very low as they were repeatedly let down at the instance of one union or the other. BMs were told by the ex-SDM not to create problem for the Divisional Office and were often forced to concede to illegitimate demands of one group or the other. Shri BK met the leaders of various unions who raised pending issues and demanded early solution. BK agreed to look into their problems and promised to solve all genuine problems within his jurisdiction expeditiously. In August 2003 a new software platform was being installed in all branches of the Zone. But the majority trade union would not allow its implementation in one of the branches as the BM there had ‗insulted‘ the Divisional Secretary of the Union and an apology was due from the ‗delinquent‘ BM. Several rounds of discussion took place to make the union leaders see reason and not to stand on petty ego problems when larger organizational interest was at stake. But it was not fruitful. At this stage BK decided that softer options would not work and he had to enforce implementation. Accordingly, the new software platform was implemented in the ‗problem‘ branch also without the ‗consent‘ of the majority trade union. The union felt challenged and declared ‗non-cooperation‘ against Divisional Management. Staff meeting arranged during SDMs visit to two branches was boycotted by majority of the staff despite giving prior notice, under instruction from Divisional Union. Memos were issued individually to all the staff who boycotted the meeting for disobedience and dereliction of duty. Divisional union started propaganda against SDM though posters and hand bills. BK decided to make best use of the opportunity to show the union their proper place.62 q

Individual Memos were issued to the President and General Secretary of the Divisional Union for instigating unlawful activities against the management proposing disciplinary action. Meanwhile their members from the branches where memos were issued became extremely restive as it was their first experience in their career life and pressurized divisional leaders to solve the issue. Divisional Union took up the issue with the Zonal Union. Zonal Manager advised BK to exercise discretion and cautioned that the issue might escalate into Zonal problem. He wanted the issue settled without delay. BK assured the ZM that the issue would be settled at the appropriate time. Union was expecting a call from BK under pressure from Zonal office. But BK was sure not to do anything under pressure lest the union got upper hand. Message was given through Manager (P&IR) that the SDM would be available for discussion if the ‗union wanted‘ and on prior appointment. For tactical reasons he stayed away from headquarters for 5 days, on official tour. The Union became desperate as pressure was mounting from their members and their Divisional President was to retire that month. Under Zonal Union‘s pressure Secretary (IR) and RM (P&IR) contacted SDM repeatedly seeking early solution. They were assured that the issue would be settled at the appropriate time. Union was at its wits end and sought appointment with BK. Appointment was granted the next day afternoon. At the appointed time the Zonal President, Vice President and a few other senior functionaries met the SDM along with the Divisional Secretary and urged for reconciliation. BK agreed to their view that in the competitive external scenario management and union had to work together for the organizational cause. The request for withdrawal of the memos was turned down but it was agreed that no further action would be taken if such instances were not repeated. This incident was an eye-opener for other pressure groups. Immediately, after this the Agents‘ union was also brought to their senses. The first move was to cut their source of funds. Under an arrangement with the previous dispensation lumpsum deductions were made from agents commission bills towards group insurance premium on the group policy through agents union. The amount collected was far in excess of the premium required and the balance was refunded to the union. This practice was stopped and exact premium amount required alone was recovered from the agents. While the leaders were unhappy other agents felt relieved. In one of the branches there was attempt to disrupt agents meeting and in another there was personal vilification campaign against one of the tough Branch Managers. The leaders involved were proceeded against. After due processes the local secretary‘s agency was terminated. His attempts to get relief through courts including High Court did not succeed as records were systematically created at every stage. Concurrently the Branch Managers were fully empowered

and full backing was assured for their legitimate legally and morally sustainable action. Through various meetings inputs were given to BMs to build their confidence. They were told to work with pleasure and leave all pressure to the SDM. A semblance of peace having realized BMs were told to concentrate on key result areas, especially new business. Development Officers were put on notice that they have to perform their expected duties and BMs were advised to create record against non-performing DOs. In consultation with the DOs union the annual gala meeting of all DOs with momentous was stopped and a training for skill development was arranged using the same budget. Agents training also was made a regular affair. By October 2003 there was tangible difference in new business performance and the Division rose to 5th rank on premium growth among 12 Divisions of the Zone. Yet achievement of target for the year was a difficult task as the required growth rate was highest for the Division among all Divisions. External competition was catching up and Corporation had decided to concentrate on premium growth including ULIP business. Performance of the Division in Unit Linked business was poor since neither the field marketers nor the Branch Managers were competent to explain the nifty gritty of ULIP products. BK personally took up the challenge and through a series of training classes and meetings a group of agents were trained to do this line of business. By December 2003 there was good improvement and the Division reached 3rd rank in the Zone on new premium growth. The Zonal Manager was happy with BK after the initial displeasure and openly acknowledged the transformation taking place in Tanjore Division. Nevertheless he cautioned that reaching the target was a tough task as budgeted growth rate was highest for the Division. Undaunted by the challenge BK took up the matter seriously. Through a series of campaigns morale of all functionaries was boosted and a call was given to make the Division All India No. 1 in premium growth rate. Staff meetings were addressed by BK in all branches during all branch visits. Organizational imperatives were explained and their cooperation sought for making the Division a high performing Division. There was perceptible enthusiasm all round and energies were channelized for productive purposes. When the financial year closed the Division achieved highest rank in new business premium growth in the Zone and 2nd highest All India. In Unit Linked business No. 3 rank in volume of premium All India and 2nd in the Zone. Total new business premium income touched Rs. 90 Crores against a target of Rs. 88 Crores. Next year i.e. 2004-2005 also the Division achieved splendid results as per the corporate objective of premium growth. The Division was ranked 5th All India on premium growth 2nd highest in the Zone. Another remarkable achievement during the period was the handling of a Development Officers agitation against their new incentive scheme. In August 2004 the agitation was announced and DOs decided to make efforts to reduce the business. There was a concerted effort to malign the ULIP product to scuttle the premium growth. Without waiting for any direction from above BK decided to take the issue head on lest it affected the morale of the agents. Notices were distributed exposing the nefarious designs of the DOs in maligning their own company‘s product. In October a general notice was issued to all Dos advising them to restore normalcy within 3 days and were warned of serious action including

wage cut and withdrawal of business credit. DOs were asked to maintain daily work record. Branch Managers were advised to keep a close watch on the activities and create record against non-performers. Slowly the impact of the agitation started whittling down and open methods like dharma and demonstration was completely stopped. Initially Zonal Manager felt that BK was exceeding the brief and taking action without consulting higher authorities. But when the agitation was continuing strongly in other Divisions Zonal Manager acknowledged in Zonal Management Committee meeting that ―in retrospect I admit that BK‘s strategy was the best.‖ Disciplinary action was initiated against DOs in 24 cases for malpractices in new business resulting in early claim, disobedience, non-performance and indiscipline. By the end of the financial year 2004-05 BK hinted to ZM his desire to move out on a lighter assignment mainly for reasons of health. But the ZM felt that BK should continue to complete the task undertaken by him and successfully implemented thus far. BK agreed to ZMs suggestion inspite of his serious health problem. By end of April 2005 a new Zonal Manager took charge of the Zone. He knew BK and had earlier acquaintance but was not very familiar with the previous history of the Division. By August 2005 more than 30 agents were also terminated for new business malpractices or for activities detrimental to the organizational interest. By September 2005 four more show because notices were issued to DOs for removal from service. The new ZM felt that such drastic action was uncalled for. In his opinion malpractices have a long history and therefore should be eliminated through slow process only. He was worried that drastic action in one division would escalate into a Zonal problem and affect the performance of the Zone. In October 2005 BK had serious health problem due to inguinal hernia. As a naturopath he had reluctance to go for surgery and therefore tried other methods after 15 days rest. In February 2006 BK realized that surgery was needed and took leave for 2 weeks. Due to effect of the medicines and on account of pre-existing problem of arthritis BK became weak and had to take rest for a week more. In the meanwhile a new leadership took charge of the DOs union and they were in militant mood to challenge the SDM against his ‗arbitrary‘ action against DOs. They also made serious attempts to discourage better performers with an intention to stall business growth to teach the SDM a ‗lesson‘. They were also emboldened by the favorable attitude of the Zonal Management. The Marketing Manager also played a role in instigating the new D.O. union leaders to revolt against the SDM. When BK returned after leave in February the position of the Division was not so rosy. February results showed that there was deceleration of new business growth and for the month of February it was just break even. On 10th March Zonal Manager visited the Division and openly criticized the ‗unhealthy‘ trend in the Division and expressed his

opinion that the Division would not reach the target. For this year the emphasis was on reaching number of policies target as the Division and Zone were in comfortable position to surpass the premium target. But in number of policies the achievement was only 62% of the annual budget of 3,80,000 policies. Questions: 1. Whether the Division would have reached the number of policies target and if so how? 2. Whether the strategies and actions of Shri B.K., the SDM were correct and how the situation could have been handled differently. 3. Whether role of the Zonal Manager was appropriate in this case and if so why? If not what he should have actually done. 4. Why the Marketing Manager behaved the way he did and how the SDM would have handled the situation to minimize the negative impact. Reference: Bimaquest Vol. VII Issue II, July http://www.niapune.com/pdfs/Bimaquest/MR_Balakrishnan.pdf

2007

Retrieved

from,

Answers: 1. He explained to them the opportunity available in the form of the Golden Jubilee product and the huge market potential and how they would lose if they did not encase the opportunity. He also narrated why he started the whirlwind tour when he should have actually taken rest. This gesture moved a large part of the audience and became a morale booster. He also kept the disciplinary proceedings in abeyance for strategic reason. When results were compiled at the end of the year it was a great surprise to all including BK‘s colleagues themselves and particularly the ZM as never in the history of the Division there was 38% achievement in number of policies March alone. Not only that the premium target was achieved separately for linked and nonlinked, single and non-single separately and on composite basis but also crossed the number of policies target. This was a rare achievement for any Division. Apart from new business, on all other key result areas also the Division performed well achieving total premium targets, nil outstanding ratio in claims, submitting quality final accounts in time etc. The most remarkable achievement of the three year period was that the early claim ratio had fallen from 23% in 200203 to 18% in 2005-06. The new business premium increased from Rs. 56 crores to Rs. 240 crores during the same period. Disciplinary action was also completed after the closing. 2. Depending on the individual‘s personality traits and values different methods can be adopted to reach similar result. Training, counseling, and helpful attitude is one such method. 3. Role of the Zonal Manager should have been better if the SDM was supported wherever he was legally and morally correct and any agitation should have been firmly handled.

4. Marketing Manager would have nursed a grouse against the SDM as his ego would not have been satisfied or SDM would have checkmated his willful designs earlier. Now in SDMs absence he got the opportunity. As the target was reached despite the backstabbing by the Marketing Manager and even after ignoring the MM, the message was loud and clear for one and all.

Case Study 1: Alton Towers

Alton Towers was voted the UK‘s number one theme park again this year. It is located in the heart of England in Staffordshire, where there is easy access from both the M1 and M6, although access through the village of Alton towards the site is difficult. The roads are narrow and there are twisting bends, which coaches find difficult to manoeuvre round.

The site evolved from being a traditional English garden attraction in the 1950s to an exciting leisure park after a company decision was made in the 198 0s to convert the gardens to an American-style theme park. The aim was to attract more visitors. The idea was a success and over the years the park has been constantly updated with increasingly bigger and more exciting rides and spectacular attractions. Alton Towers set out to be the market leader from the beginning. It boasts the best attractions in the UK. It was the first to have the largest flume in the world in 1982.

The company was taken over by the Tussauds Group in 1990. Changes were made to existing attractions and layout of the park. Other changes included a short walk towards Thunder Valley, leading to the Haunted House.

In 1994 the most spectacular ride ever seen in the UK was introduced. This was Nemesis – an inverted roller coaster. The thrilling suspended ride – Oblivion – was opened in 1998. This is a vertical drop roller coaster. The latest addition to the park in 2000 is the Hex – the legend of the Towers. This is a disorientating ‗haunted‘ swing. These ‗white-knuckle‘ rides are now located in the X-Sector. In 1996 a £10m themed hotel on the outskirts of the park was opened.

Participants in the Haunted House and X-Sector rides are photographed as they take part. These photographs are ready for viewing and purchasing at the end of the rides.

There is an admission charge to the park, but once inside the park all the rides and attractions are free. Ticket prices are differentiated and include Peak and Off -Peak, Day Tickets, Family Tickets and Season Tickets.

Visitors to the park can choose to eat at a variety of restaurants dotted all over the park.

Each ride has its own souvenir shop attached and there are also gift shops where Alton Towers merchandise can be purchased at prices to suit all pockets.

Alton Towers is open every day to visitors from around 24 March until 31 October each year. Every year 2.7 million visitors visit the park. The volume of visitors in the summer means that long queues can form, although a ticket reservation process is in operation for the most popular rides. Alton Towers is not seeking to increase the number of visitors passing through the gates, but to encourage people to spend more on food and merchandise and to come back again.

Questions

1.

2.

(a)

Alton Towers set out to be the ‗market leader‘. Explain what this means.

(b)

What evidence is given in the case study to suggest Alton Towers is achieving its objective of being market leader?

(a) State two advantages Alton Towers gained by being part of the Tussaud‘s group? (b)

Name one other Tussaud‘s attraction.

3. Explain how Alton Towers kept ahead of the competition in the years from 1982 until present. 4.

Explain the benefits to Alton Towers of having restaurants and souvenir shops dotted around the site?

5.

Why does Alton Towers use differentiated prices for their admission tickets?

6.

Explain how Alton Towers can use field research and desk research to find out if they are achieving their objectives.

7.

Lately there has been a lot of adverse publicity in the press concerning accidents on ‗white-knuckle‘ rides on the Pleasure Beach, Blackpool. Do you think this adverse publicity could have an effect on Alton Towers Theme Park? Explain your answer.

8.

Give two examples of how Alton Towers can promote itself as a safe park to visit.

9.

State one advantage for Alton Towers of selling tickets on the internet.

10.

Give one advantage for customers of purchasing tickets on the internet.

Reference: © Learning and Teaching Scotland 2006, Extended case studies (SET 1) (Int 2, Business Management)

Answers:

1.

2.

(a)

Market leader – keeping ahead of the competition, first with ideas, etc.

(b)

Biggest attraction in UK and largest flume in 1982.

(a)

Access to more finance, access to more marketing expertise.

(b)

Madame Tussaud‘s Waxwork Museum.

3. Years 1982 – present – by introducing more exciting rides e.g. largest flume (1982), Nemesis (1994), Oblivion (1998), Hex (2000) and themed hotel in 1996. 4.

By diversifying into shops and restaurants Alton Towers wil l generate more profits, souvenirs reinforce brand name, restaurants all around the park prevents queues and customers having to walk far.

5.

Prices are differentiated – to encourage visitors to the site on less busy days; to encourage families to come; to offer promotional prices for certain days that may be less busy.

6.

Field research – questionnaires can be given to visitors to hand in or send back, visitors can be asked questions by researchers going round park. Desk research – information about new rides can be gathered from suppliers/designers. Information can be collected regarding other theme parks (globally).

7.

Adverse publicity could have a knock on effect on Alton Towers. People might feel that ‗white-knuckle‘ rides are all dangerous. This could result in fewer visitors to the park.

8.

Alton Towers can promote itself as a safe park to visit by focusing on its safety record over the years, and any safety certificates they have obtained. They could make safety a main feature for any future rides, and advertise this fact.

9.

Alton Towers selling on the internet – more opportunity for extra sales.

10.

Customers now prefer purchasing online – more convenient etc.

Case Study: Can a Leader‘s Means Justify the Ends?

By any objective measure, Jack Welch‘s 20-year reign as CEO of General Electric would have to be called an overwhelming success. When Welch took over the head job at GE, the company had a market value of $13 billion. When he retired in 2001, the company was worth $400 billion. Its profits in 2000 of $12.7 billion were more than eight times the $1.5 billion it earned in 1980. Welch‘s performance paid off for stockholders. Including dividends, the value of GE shares rose an average of 21.3 percent a year since he took over. This is compared with about 14.3 percent for the S&P 500 during the same period. How did Welch achieve such success? On a strategic level, he redefined GE‘s objectives for every business in which it operated. He said GE would either be No. 1 or No. 2 in all businesses or get out of them. He dropped those with low growth prospects, like small appliances and TVs, while expanding fast-growth businesses such as financial services and broadcasting. During his tenure as CEO, Welch oversaw 933 acquisitions and the sale of 408 businesses. He was obsessed with improving efficiency, cutting costs, and improving performance. To achieve these ends, Welch completely remolded GE in his style—impatient, aggressive, and competitive. In the 1980s, as Welch began his remaking of GE, he picked up the nickname of ―Neutron Jack.‖ A play off of the neutron bomb, which kills people but leaves buildings standing. Welch cut more than 100,000 jobs—a fourth of GE‘s workforce—through mass layoffs, divestitures, forced retirements, and relocating U.S. jobs to overseas locations with cheaper labor. He pressured his managers and the employees who remained to drive themselves to meet ever-more-demanding efficiency standards. He was blatantly impatient when things did not move very rapidly. For instance, a former technical worker at a GE plant that makes industrial drives says his unit set aggressive goals every year. ―We would meet and beat those goals, but it was never good enough. It was always, ‗We could have done more.‘ We felt the philosophy at General Electric was that they could replace us in a heartbeat.‖ To reinforce the competitive environment, Welch established a comprehensive performance evaluation and ranking system for managers. Outstanding managers were highly rewarded while those at the bottom of the annual rankings were routinely fired. Welch‘s demanding goals and penchant for closing down poor-performing units upended the lives of thousands of employees and severely strained the bonds between the company and many of the communities in which it operated. There were also a number of scandals that surfaced under Welch‘s watch at GE. These ranged from the company‘s 1985 admission that it had submitted time cards for too much overtime on government contracts to the 1994 bondtrading scandal at its former Kidder Peabody & Co. investment-banking unit.

Welch‘s style was a blend of restlessness, bluntness, sarcasm, emotional volatility, and teasing humor. As one former GE vice chairman said about Welch, ―even when he has fun, he‘s driving himself. He won‘t give up till he has won, whatever he does.‖ Welch regularly put in days of 12 hours or more but he expected the same kind of dedication from his employees. When he got angry, he could lash out with personal attacks that sometimes left shamed managers hurt and speechless.

Questions 1. 2. 3. 4. 5.

Describe Welch‘s leadership style Assess Welch‘s leadership effectiveness Would you describe Jack Welch as a successful leader at GE? Explain. How would you rate the ethics of Welch‘s leadership? Would you have wanted to work for Jack Welch? Why or why not?

1. Welch‘s leadership style is highly directive. 2. Leadership effectiveness was generally judged as effective by stockholders, and less so as one goes down the list. 3. A community like Erie, PA, for example, has been devastated by the loss of jobs from one of its major employers, GE. The loss of jobs as a measure of effectiveness would find Welch ineffective as a leader. 4. Welch‘s behavior was, at times, terrible—but not necessarily unethical. As for working for Welch—student‘s will no doubt discuss the employees‘ dilemmas of lack of opportunities, unwillingness to relocate, too close to retirement to leave, etc. and reasons for staying. 5. Some may like Welch‘s style of being a hard driving businessman who turned companies around and want to learn what they can from him. Reference: M. Murray, ―Why Jack Welch‘s Brand of Leadership Matters,‖ Wall Street Journal, September 5, 2001, p. B1.