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Organizational Behavior Case for Discussion #2

Using Groups to Get Things Done

After years of difficulties and many attempts to change, a Myerstown, Pennsylvania, pharmaceutical plant, part

of the commission Care Division of German-owned Bayer Corporation, instituted a teams-based changed program.

The facility had been sold several times in recent years and had operated under various organizations. The fifty-

year-old factory was staffed at less than 50 percent when it was purchased by Bayer. There has been no plant

manager for almost a year, and morale was at an all-time low. Worse yet, the factory was losing money, and the

remaining employees feared a shutdown. The outlook was bleak, but in the absence of leadership from the top level,

the Human Resource Department, under the guidance of director John Danchisko, decided that the employees

themselves could turn the low-performing facility around.

First, ninety-three employees were selected at random to participate in seven focus groups. At the meetings,

workers brainstormed the answers to open-ended questions such as Why do people work here? and Why do

people leave here? Their answers were compiled and sent to every employee for comments and input. Employees

were impressed; they liked the new proactive and collaborative management style. Rick Higley, a pharmaceutical

operator, says, The thing I rally appreciated about the process was that the managers lis tened to what everyone had

to say , treated is as equals, and really valued our opinions.

Next, an eighteen-member cross-functional team was formed to recommend and help implement improvements.

The team approach was clearly popular because fifty people volunteered for those eighteen slots. The team focused

on five key priorities:1. Define site goals and strategy and communicate them interactive employee

conferences. Job security concerns and a need to see how shorter-term goals to fit

into the long-term strategy were important to employees.

2. Develop a site communication process. Employees felt that their best option for

information was no better than a rumor mill while supervisors often werent

given critical information. Having consistency of information from the top to the

bottom of the organization benefited everyone.

3. Develop hourly employee and supervisory role definitions and competency

profiles. Changing ownership had led to too many abandoned programs, and

training has been inconsistent. Decision-making authority, span of control, and

management roles were just a few of the areas of confusion.

4. Identify areas of perceived inconsistencies in site practices and policies anddetermine appropriate actions. Employees wanted to ensure that any system used

at the facility would be used consistently and that all workers would be treated the

same.

5. Developed a performance measurement process (a performance scorecard system).

Without some type of measurement system, workers and supervisors were unsure

whether goals were being reached.

One of the biggest obstacles to change was the factories past history of failed changes. An employee noted, It

would be nice if [managers] were really sincere in this, but weve all been through this before. I think this is going to

be another flavor of the month. Employee skepticism began to change as the teams focused on what really mattered

to the hourly workers. Employees began by asking, Whats in it for me?but the teams proposed a pay-for-

performance system, with employees earning up to an additional 8 percent on top of their base pay when

profitability was above target.In its first year, the facility reached four of its five financial goals and became profitable earlier than expected.

Employee satisfaction is now up, and accidents are down. On-time completion of weekly production quotas has

risen from 53 percent (about average for this industry) to 85 percent. In 2000, the plant received Workforce

magazines Optimas award for excellence in human resources. Management was so pleased with the results of the

program that the teams have become permanent, with rotating membership. Danchisko says, When we first started

this, we didnt realize how big it would actually become for our site. Hire We are, a few years down the road, and

were still heavily into this. The sites teams process has become a model for other Bayer facilities.

Werner Wenning, the new chairman of Bayer, has taken control of the firm at a difficult time. The stock price is

declining, new products are slow to reach market, and the company is restructuring its divisional organization.

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Wenning admits that Bayer was too slow in its response to changing market condition, noting, In the future, we

have to act more quickly. Perhaps the CEO ought to consider the team-based methods that were developed by his

own employees at the Myerstown facility.

References: About the Awards, Workforce web site.www.workforce.com, 2001 Bayer Annual Reprot,

www.bayer.com, Bayers Big Headache, Business Week, May 6, 2002.www.businessweek.com,on May 21, 2002.

Case Questions1. What type of group are the focus groups that were initially formed at Bayers Myers town facility? What type is

the current eighteen-member, permanent group? What factors led you to make the choices you did?

2. Based on group performance factors, what do you predict will be the likely performance of the eighteen-

member cross-functional team?

3. Initially, workers at the Myerstown plant were skeptical about the use of teams and resisted the change. What

conflict resolution approach was used to address this problem? Is that the approach you would recommend for this

situation? Why or why not?

http://www.workforce.com/http://www.workforce.com/http://www.workforce.com/http://www.bayer.com/http://www.bayer.com/http://www.businessweek.com/http://www.businessweek.com/http://www.businessweek.com/http://www.businessweek.com/http://www.bayer.com/http://www.workforce.com/