You are working as the consultant for the bank which provides banking services to Hole in the Wall. In fact, the bank has concerns about how the company is being run which is why it is offering a free consultancy service. What do you consider is the major problem with the business and what would you suggest is done about it? Define and describe the issue (using appropriate theories, models and/or concepts) and provide feasible and realistic recommendations for improvement or change to address it.
Provide an evaluation of the management structure at the company in the case study and show how this affects workers’ motivation levels. Ensure that you support your findings with appropriate theory, models and/or concepts and include feasible and realistic recommendations on what changes could be beneficial.
CASE STUDY: HOLE IN THE WALL
John Barker had built up the double glazing business “Hole in the Wall” from a one‑person business to a sizable firm employing nearly 20 people. Originally Barker had simply made door‑to‑door sales: the windows themselves had been manufactured in a small factory by a friend from components supplied by major companies who supplied most of the double‑glazing businesses in the country. When the friend had retired due to ill‑health, Barker had seized the opportunity to buy the factory, and had rapidly expanded the business, taking on more sales staff. The sales people still made “cold calls” on a door‑to‑door basis, but also followed up leads provided by advertising in the local press, and on local radio. Barker took a pride in knowing the local market, and took personal responsibility for devising and placing the advertisements.
The factory assembled the windows according to standard specifications drawn up by Barker, and dimensions given by the salespeople. The factory shop floor was supervised by Paul Jobson, who reported directly to Barker, as did Pat the storekeeper.
There have recently been problems. Barker expected difficulties in a recession, but some of the problems seemed to go deeper. Customers had been complaining that the fitting teams took longer than promised to install the windows, or left work unfinished or left the site in some other unsatisfactory state. In turn the fitting teams blamed shoddy workmanship in the manufactured windows – an increasing number were being returned to the factory to be reworked. When Barker had tackled Jobson about this, the latter had complained of poor materials being bought in, or inadequate stores, or too many rush orders, all of which caused delays. “It’s the sales staff’s fault” the supervisor had complained. “They just want to make as many sales as possible. They promise customers anything and don’t think about us.”
On top of everything else, one of the three fitting teams had quit altogether, which Barker thought was strange in a recession.
As part of a promotional exercise, the local bank was offering a free consultancy service, so Barker decided there was nothing to lose in making use of the service. This is what the consultant heard:
“I’ve got a feeling people just don’t want to work these days. I can’t understand it. I’ve loved the challenge of building this business up – I still do. I’m always the first one here in the morning, and the last to go at night. No of course I don’t want them to work all hours! Just a fair day’s work for a fair day’s pay, that’s all I ask.”
“What sort of pay? It couldn’t be fairer. The sales team – they’re all on commission. There’s a standard price for each job. If they want to cut the price to get the job that’s up to them; it just means they get less commission. They know how much we’ve got to make on each job: what they can quote for on top is their commission. That’s the way I learned to do it.”
“The factory? All on piece rate – so much per job. The more they get done, the more they get paid. It stands to reason people will work harder if you pay them that way. The same goes for the fitting teams – they get paid by the job. I’ll tell you something else – it builds up a bit of competition to see who can be the most efficient – and they know that I’m watching the figures – I can come down hard on anyone who’s slacking. What’s more, if they’re getting on with the job, they’re not standing around drinking tea or gossiping about last night’s football.”
“Our Purchasing Officer, Les? Sorry, not available at the moment. In fact you’d be very lucky to find Les in. In my view the job of a Purchaser should be to be out there, meeting suppliers, negotiating deals, and so on. We just meet up on an informal basis, whenever Les is in, and thrash out whatever problems have come up. I did try a regular meeting with me, Les and Jobson, every week but it was a disaster! All they did was argue. Now Les reports to me, and I can decide if we need any changes in purchasing and let Jobson know.”
“That’s the way I like things – everybody’s got a job to do, and I expect them to get on with it and not stick their noses in to what doesn’t concern them. Like the sales staff. I want them out there, selling, not sitting around here wasting each other’s time. As long as they can get the order and drop the details in to me, I can sort out the specifications and send them down to Jobson.”
“Actually I wonder if Jobson isn’t half the problem – always worrying and moaning given half a chance. Actually came up here this morning, trying to complain about something. I was busy trying to calm down a customer on the phone, so I made it quite clear that the supervisor’s job was down on the factory floor, supervising, not up here. No I don’t know what the problem was –but that’s Jobson’s job, to sort it out! I believe in delegation!”
At that moment, Mrs Stubbs, Barker’s secretary, put her head round the door. “I’m sorry to interrupt,” she said “but it’s Sally, the receptionist. You know she’s got this problem…”
“Can’t you sort it out Mrs Stubbs?” said Barker impatiently. “You can see how busy I am.”
When Mrs Stubbs had gone, Barker sighed: “Heaven knows what all that’s about – that girl Sally has had five days off this month already. I think I’ll be looking for a new receptionist soon – one more job for me.”
“Is that the time? I’m sorry, we’ll have to wind this up. I’ve got the wages to do, a couple of jobs to schedule, and some invoices to prepare. I know I should put it all on the computer but when am I going to get the time to learn how to use the packages?”
HOLE IN THE WALL – Personnel
Barker – Proprietor
Jobson – Manufacturing supervisor
Machinists – (6)
Sales Staff – (4)
Pat – Stores
Les – Purchasing Officer
Mrs Stubbs – Secretary
Sally – Receptionist
Fitting Teams – 2 Teams of 2 people