Peer Leadership Case Study: Peer Leadership Influence in Higher Education

 

The Technology Department was one of the largest and most popular departments at the university. Two of the largest undergraduate programs were housed within the Department and its graduate programs were selective. The Department had a reputation and long history of conducting quality research that had, in years past, provided external funding that the Department used to sustain the robust research interests of its faculty. That funding was almost non-existent now as the faculty pursued their personal research agendas versus pursuing external grant funding in other research areas. Although one of the largest departments, it was increasingly seen as difficult to work with and was perceived as somewhat arrogant by both faculty and staff.

The department head, Peter Helms, was very popular with several senior faculty that he had promoted throughout his tenure as department head, and was viewed favorably by most of the other tenured and junior, non-tenured faculty. However, he had issues with the dean of the college. The issues with the dean had evolved over the years and were ongoing. Most of the issues focused on the dean’s desire to have more outreach programs, to develop an online degree and to pursue more external grant funding. The faculty, especially the department head and senior faculty, were resistant and wanted to maintain the current pedagogy of teaching in the classroom and pursuing their own personal research agendas.

Peter was convinced that the Technology Department needed to change if it wanted to remain relevant in higher education. The name of the department did not accurately represent the curriculum and pedagogy that had evolved over the past 10 years. The research efforts of the faculty enhanced their professional development but was not focused on winning external grants that would provide needed funding to continue research efforts within the Department. The college that the Department was in did not have the funding to support the new technology faculty needed to conduct research that could attract external grants. On top of all these needed changes, the

conflict between Peter and dean was progressing to a critical point.

Peter was focused on renaming the Department and moving the Department to another college within the university to achieve the perceived needed changes. Without knowledge of the dean, Peter began discussions with the dean of another college at the university, exploring the possibility of the Technology Department moving to that college. Without faculty involvement, Peter advanced his talks with the other dean to the point where Peter wrote a white paper outlining the advantages of moving the Department to the other college. Once written, Peter distributed the white paper to the Department faculty with explicit guidance not to distribute the paper outside the department.

The faculty had mixed opinions regarding the white paper. The senior faculty, whom Peter had considerable influence, were unanimous for changing the name and moving the Department to another college. This group also had considerable influence with key university administrators. The other tenured faculty had mixed views as some were for the proposed changes as it could afford them more research opportunities while others were still loyal to the college that housed their tenure. The junior, untenured faculty was afraid to voice an opinion for fear of either upsetting their senior mentors within the department or the college dean, who also had input to their promotion and tenure.

The conflict between Peter and dean reached a critical point when the dean anonymously received a copy of the white paper. Saying he had lost confidence in Peter’s ability to effectively lead the Technology Department, Dean Manion immediately removed Peter as department head and appointed another faculty member as interim chair over the objections of outraged senior faculty.

Removing Peter did not quell the issue, however; the ball had already started to roll. After several months of negotiations and approval by the university administration, the Technology Department split. Approximately half of the faculty remained in the established Department of Technology in Dean Manion’s college while the rest went with the new department, named the Department of Information Innovation, to another college.

 

1. Analyze Peter’s use of peer leadership with Dean Minion in terms of the four peer leadership competencies (Assist, Participate, Reflect, Presence).

 

2. What could Peter have done to better influence Dean Minion?

 

3. What could Dean Minion have done to better influence Peter to abandon his efforts to reorganize his department?

 

4. What could Peter have done to better influence the faculty that were against his proposed reorganization?

 

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Review the Portfolio Project instructions in the Module 8 folder. This Portfolio Project Milestone requires the demonstration of your progress toward the completion of your final Portfolio Project—the emphasis of this Portfolio Project Milestone is related to the “Section 1: Principle Components Discussion,” which is common to both options.

Using the framework that you drafted in Module 2, add substantive content to the Section 1: Principle Components Discussion section, which describes the project management standards and processes based on the Project Management Institute’s A Guide to the Project Management Body of Knowledge® (PMBOK® Guide) (6th ed.). For each of the following items not previously completed in the Module 2 Portfolio Project Milestone, include a brief, yet substantive synopsis (1- to 3-paragraphs for each subsection level-2 bullet item):

• Project, Program, and Portfolio Management distinction
• Project Selection
• Project Charter (plus template in appendix)
• Project Organization
• Project Planning
• Project Scheduling
• Project Estimating
• Monitoring and Control
• Risk Management.

Please note that the project charter template must address the unique requirements of a small-to-medium projects in a global organization.

Include the Portfolio Project option that you selected as part of the cover page, running header, and the paper title to confirm which scenario-specific project management simulation you will complete and that aligns with your Portfolio Project option.

 

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Acme Home Improvement de Mexico, SA de CV Project Plan

Team Four: Folasade Bamidele Alibaloye

John C Caputo Garner Frederick Hixson

Hector G Rosado

AMBA 604, Section 9093

Professor Stewart

February 6, 2004

Acme Project Plan 2

Table of Contents

Section Page I.

Executive Summary

3

II.

Introduction

4

III.

Project Organization

5

Organization Chart

5

Project Responsibilities

6

Staffing Plans

7

IV.

Management Process

10

Management Objectives

10

Priorities

10

Monitoring/Controlling Mechanisms

10

V.

Technical Process Plan

11

Computing System

11

Project Plan Modification Process

12

Computer Usage Policies

12

Construction Guideline Support

13

Project Acceptance Process

13

Lessons Learned Documentation

13

VI.

Work Packages, Dependencies, Schedules & Budgets

14

Work Packages

14

Dependencies

17

Project Budget

20

VII. Summary 23 Appendix A Tasks on the Critical Path 24 Appendix B Assignment Matrix 25

James Stewart
Note
A t/c helps the busy reader, is thus positive for project communications, and can serve as a control or check list for necessary project elements.
Acme Project Plan 3

I. Executive Summary

Acme Home Improvements has determined it essential that expansion into international

markets take place immediately. Acme Home Improvements has initiated a joint venture with

local partners in Mexico City to form Acme Home Improvements SA de CV. The intent of this

partnership is to open Acme’s first ‘Do It Yourself’ – (DIY) home improvement store outside of

the United States, to meet the competition head on and establish a foothold in international

markets. This document spells out our plan for the project’s success.

The project’s sponsor is the Acme CEO, Alex R. Fitzgerald. This project is the first step

in his strategic initiative to expand Acme into international markets. Based on assessments, it is

critical that Acme SA de CV complete the opening of this store in 12 months or less with a

budget of up to $7.5 million. A key risk is Acme’s lack of experience in international markets.

As a result, we will rely heavily on our partners to help us mitigate ‘soft’ cultural issues and

navigate local nuances of business. Because of the soft issues, remaining on schedule is a key

driver of project success. To mitigate risks to the project’s critical path, we have built feeding

buffers into the schedule, and added a project buffer to the project end.

Our plan outlines staff responsibilities and a staffing plan for project execution. This

staff has strong support from corporate headquarters, a defined scope, budget, timeline, and

processes by which to execute the plan. Included in these processes is a structured change control

process that ensures changes are relevant, followed through, and controlled.

In addition, this document, and the accompanying project plan clearly identify

dependencies that can impact project execution. We have separated these dependencies into

mandatory, external, and discretionary dependencies (Schwalbe, 2004). Doing this has enabled

us to maximize scheduling efficiency. Acme SA de CV has an established technology

infrastructure to draw upon. Our plan will leverage this technology through wireless local area

networks, corporate servers, and use of project management software. Finally, we will utilize a

feedback process to capture lessons learned for our future expansion into international markets.

James Stewart
Note
This is a reasonable choice/assumption in view of the strategic importance of the Mexican entry to Acme.
James Stewart
Note
This is the thing to do to supplement the team’s knowledge where needed, even after forming a cross-cultural (Mexico-US) team. It’s behind the stated formation of a JV with local interests to pursue the Mexican entry.
James Stewart
Note
Let’s remember this when we reach Week 11, in which an IT plan for the Mexico City store will be developed.
Acme Project Plan 4

II. Introduction

Acme Home Improvements de Mexico, SA de CV intends to build a 100,000 sq ft retail

facility in Mexico Distrito Federal (DF). This effort is part of Acme’s strategy to expand into the

international home improvement markets. Our Mexico City store will be the initial push into

Mexico to meet our competitors head-on outside the United States. This project is critical to

Acme’s long-term strategy to expand beyond the US borders. Headquarters has allocated $7.5

million to complete this task. Strategic alignment with Acme’s long-term goals, experience with

similar projects, and an assessment of the competition dictates that we complete this project

within 12 months.

Our project is a joint venture with local interests. The project will be challenging for

Acme, with inherent risk laying in our inexperience in international joint ventures. ‘Soft’ issues,

cultural human resource issues will be as much of a driver of cost and schedule as the ‘hard’ issues

like planning and execution. It is critical to the success of this project, and perhaps the

organization’s international growth strategy, that this project be completed on time, and on

budget.

The organization anticipates possible schedule delays and cost overruns due to cultural

assumptions and misunderstandings. Knowing that schedule delays will affect costs and

international expansion strategy, we pay particular attention to the project’s critical path (see

Appendix A, and the accompanying MS Project file’s network diagram view). To deal with these

risks, the team has built several feeding time-buffers into the work breakdown schedule, at

constraints along the critical path (Goldratt, 1998). A large project buffer has also been added to

protect the end of the project. Attention to the safety buffers along the critical path will

contribute to the team’s successful execution of the project.

This plan presents an overview of the project organization, including the team’s

organization chart, project responsibilities, and staffing plans. Next, the plan addresses the

organization’s management process related to this project. Management’s objectives, priorities,

James Stewart
Note
This seems a reasonable amount, given that the project includes design, construction, equipping, staffing and training, along with initial marketing and supplying. However, none of us is expected to be an expert in DIY store cost estimation; important is only that cost of the necessary tasks be considered.
James Stewart
Note
Application of Goldratt here will be useful again when we take up critical chain project management in Week 8.
Acme Project Plan 5

and monitoring and control mechanisms are covered in this section. The project’s technical

process plan is covered next, reviewing such things as the IT support and guidelines for the

project, processes for modification, and acceptance of the plan, and the process for documenting

lessons learned on the project. Lastly, this plan discusses the work packages, dependencies,

schedules and project budget. We begin with a look at the project organization plan.

III. Project Organization

Organizational Chart: Acme Home Improvements de Mexico Site Construction & Opening Project Organization Chart

Prepared by: John Tarea, Project Manager

This organizational chart shows the authority and communications organization for the

project. Every one of the team members reports to the Project Manager. Team members are

from different knowledge areas and each will contribute with their knowledge and skills to the

project.

John Tarea Acme Projects

Project Manager

Sade Venda Acme Store Manager

Anita Socio Acme Mexico HR Manager

Donna Promueva Acme Mexico Marketing

Fred Conde Acme Finance

Joe Martillo Construction Manager

Maria Diseño Architectural Contractor

James Stewart
Note
One sees the various functional area skills represented, and as described, a clear chain of command/authority. Tarea appears to come from the project management part of Acme. Acme probably has on staff people who routinely design, construct, etc., etc. its new stores – in other words, it is a partially projectized organization in a structural sense.
Acme Project Plan 6

Project Responsibilities:

Project Sponsor, Alex R. Fitzgerald, CEO Acme Home Improvements. Mr. Fitzgerald

has been CEO of Acme Home Improvements for 10 years. He started with the company 25 years

ago, working in one of the first Acme Stores. He started as a traditional department manager and

worked his way up through Acme’s chain. He attended business school at the University of

Maryland University College. Mr. Fitzgerald has unsurpassed expertise in the DIY Home

Improvement business and has lead Acme through an unprecedented period of growth. Mr.

Fitzgerald has a strategic vision that mandates Acme’s expansion into international markets. His

high level of interest in this project cannot be overemphasized. His role as project sponsor is to

take ultimate responsibility for the project. He must sign off on the project charter, confirm

successful completion of project milestones, and provide leadership and support to the project

manager.

At a recent executive retreat, Mr. Fitzgerald commented, “With the growth of technology,

and productivity, the world has never experienced the level of wealth and opportunity for home-

ownership that it is experiencing now. Our ability to remain competitive and grow is completely

dependent on our ability to expand into international markets.”

John Tarea, Project Manager: John is in charge of managing the whole project, and the

members that are in charge of the project activities. Also, he is in charge of working with the

sponsor and any general people involved with the project. His role is important since he should

be able to manage the problem in an effective manner for the project to meet its goal.

Joe Martillo, Construction Manager: Joe is in charge of managing the construction

activities of the project. As a heavily tasked team member, project planners will watch for

constraints associated with this project resource. To enable Joe meet the construction project

schedule, he has been allocated the necessary budget to contract various local trades-people and

construction specialty firms.

Acme Project Plan 7

Maria Diseño, Architectural Contractor: Maria is the architect that researched

competitive stores in Mexico, became familiar with Acme store designs in the U.S., and designed

the store to be constructed in this project.

Fred Conde, Acme Finance: Fred is in charge of financial oversight of the project. He

will assist team members in analyzing bids, projecting costs, and controlling expenditures.

Sade Venda, Acme Store Manager: Sade will be in charge of managing the store when it

is operational. She will also collaborate with H.R. manager, Anita Socio, and Anita’s staff in the

recruitment, interviewing, and training of new employees.

Anita Socio, Acme Mexico HR Manager: Anita will be in charge of the recruitment

effort and training of the personnel hired to work in the store. She will work closely with the

Store Manager.

Donna Promueva, Acme Mexico Marketing: Donna will collaborate with Maria Diseño

and Sade Venda on the design and layout of the store interior, displays, and inventory. She is to

ensure the store reflects the marketing strategy for the Mexico City market. She is in charge of

performing local market analyses, selecting products, and designing merchandising, advertising

and promotional efforts for the store.

An assignment matrix can be seen in appendix B.

Staffing Plan

The following charts illustrate the project’s staffing and training plans from three

perspectives. The first graph presents baseline staffing plans, not taking into consideration

feeding buffers that will likely push the actual dates closer to the store-opening deadline of March

1, 2006. The second chart depicts preliminary training targets, and the third illustrates contractor

staffing needs.

James Stewart
Note
Putting the future store manager on the project team is a good way to accommodate the transition of the store from project to continuing or process status.
Acme Project Plan 8

Acme Staffing Plan

0 10 20 30 40 50 60 70 80 90

100

Jan Mar May Jul Sept Nov

Project Managers

Acme- Accts, IT, Supt

Lead Contractor

Sub-Contractors

Sub-Contractor Laborers Training Team Functional Leads Department Heads

Store Employees

1 Dec as opening goal

Acme SA de CV Training

0 10 20 30 40 50 60 70 80 90

100

Jan Mar May Jul Sept Nov

Training Team Functional Leads Department Heads

Store Employees

Acme Project Plan 9

0

5

10

15

20

25

30

Jan Mar May Jul Sept Nov

Lead Contractor

Sub-Contractors

Sub-Contractor Laborers

Acme SA de CV Construction Team

Now that we have discussed the project staffing and responsibilities, we turn to the

project management processes, including the objectives, priorities, and monitoring and

controlling mechanisms of the project.

James Stewart
Note
These charts are a quick read, again beneficial to the busy reader, such as CEO Fitzgerald.
Acme Project Plan 10

IV. Managerial Processes

This section of the project plan provides an overview of Acme’s perspective of this

project from the point of view of the top managers. Included in this section will be a discussion

of top management’s objectives, priorities,

Management Objectives The Acme de Mexico project has three primary objectives:

1) Complete the six site component preparation activities on time and at/below cost.

2) Execute the Acme Mexico FD site opening with a staff fully trained and integrated

into the company.

3) Leverage success in Mexico FD to expand and compete across the greater Mexico.

Priorities The first priority is completing the construction site on schedule. Operations must

quickly assess the impact of unknown and unexpected events as they occur. Delays to the

schedule drive up our costs. The second priority, which becomes the first priority as the site

nears completion, is the hiring and training of a store staff. The staff must be fully

knowledgeable and fluent in Acme’s processes and procedures.

Monitoring/ Controlling Mechanisms Acme is new to Mexico and thus requires some very specific tools and techniques to

ensure that we remain in control of the project. Given the amount of variables that we may come

up against in this project we will have a very strong change control process. This change control

process will meet three main goals (Schwalbe, 2004):

1. Influence the factors that create change; ensure that the change is beneficial and

impact to time, scope, and budget is understood.

2. Determine that the desired change has occurred.

James Stewart
Note
Given the presence of established competition from national (eg, Sanborns), European (eg, Carrefour), and other US (eg, Home Depot) DIY store chains, Acme is going to have to fight for market share in Mexico just as in the USA. See Dr. Forbes’s photos of Mexican DIY stores.
Acme Project Plan 11

3. Manage the changes as they occur; trying to minimize the number of changes the

project is subjected to. (p.122).

There are specific criteria that will drive changes. Specifically, we have a management

reserve pot set aside. The reserve will be called upon if our SPI falls below 90%. The additional

capital spent will be tightly focused upon the current problem and prevention of reoccurrence.

Should both our SPI and CPI fall below 90% senior management will become involved to

assess status and affect needed changes.

V. Technical Process Plan

Having now seen the project’s organization plans and managerial process plans, we turn

now to a few technical aspects of the project. This section describes the technical approaches to

control and support this project. In it, we describe the technical processes and approaches

relating to this project’s computing system, computer usage policies, plan modification processes,

construction guidelines, acceptance process, and documentation process of lessons learned. We

begin with an overview of the computing system used to support the project.

Computing System

This project will utilize Acme’s wide area network, via wireless access at the construction

site, temporary office locations, and residences. Utilizing portable personal computers, the

project manager and team will access the various project tools using MS Project, synchronizing

local copies with the master file on the company server.

Acme will utilize MS Project Server and MS Project Web Access features to allow

project team members to view, collaborate, and update project information from various remote

locations and connections. All project plan outputs will be date and time stamped. Modifications

to the plan will be tracked electronically, logging a record of who changed what, and when the

changes were made.

James Stewart
Note
Again this information will be useful in Week 11 when an IT plan is developed.
Acme Project Plan 12

Project Plan Modification Process

Only the Project Manager will be able to modify the schedule, budget, and the work

breakdown structure (WBS) portions of the work plan. Changes resulting in delays greater than

five workdays or adding more than $5,000 to the budget estimate must be approved first by the

project sponsor. All other changes may be made at the discretion of the project manager.

Individual team members will be able to update task completion progress in the work plan. All

changes must be requested on the following Change Request Form:

Change Request Form Project Name: Date Request Submitted: Title of Change Request: Change Order Number: Submitted by: (name & contact information) Change Category: Scope Schedule Cost Technology Other Description of change requested: Events that made this change necessary or desirable. Justification for the change/why it is needed/desired to continue/complete the project: Impact of the proposed change on: Scope: Schedule: Cost: Staffing: Risk: Other: Suggested implementation if the change request is approved: Required approvals: Name/Title Date Approve/Reject (Schwalbe, 2004, p. 630) Computer Usage

Computer use will comply with Acme Home Improvement, Inc.’s corporate computing

policies, available online to employees on the company intranet. Employees can access the

corporate intranet through the company server WAN, or over the Internet.

James Stewart
Note
This is a classic way to control project “scope creep.”
Acme Project Plan 13

Construction Guideline Support

Standards for implementing the site construction will comply with Acme Home

Improvement, Inc.’s Construction Guidelines. Since the guidelines were developed for use in

U.S. construction projects, however, the project team will consult Mexico City based law firm,

Goodrich, Riquelme y Asociados (anonymous, n.d.). The team will coordinate activities related

to zoning, environmental practices, and compliance with other local and federal regulations with

the law firm.

Project Acceptance Process

The project manager is responsible for obtaining sign-off from the project sponsor and

project manager at each milestone, and at project completion. The following form will be used to

document acceptance of the project:

Client Acceptance/Project Completion Form

Project Name: Project Manager: I (We), the undersigned, acknowledge and accept delivery of the work completed for this project on behalf of our organization. My (Our) signature(s) attest to my (our) agreement that this project has been completed. No further work should be done on this project. Name Title Signature Date

1. Was this project completed to your satisfaction? Yes No

2. Please provide the main reason for your satisfaction or dissatisfaction with this project.

3. Please provide suggestion on how our organization could improve its project delivery capability in the future.

(Schwalbe, 2004, p. 633) Lessons Learned Documentation:

Acme Project Plan 14

The project manager is responsible for completing a summary of lessons learned

throughout the project. The lessons will be documented on the form below, added to Acme

Home Improvement’s repository of project lessons learned, accessible through the company

intranet.

Lessons Learned Report Prepared by: Project Name: Project Sponsor: Project Manager: Project Dates: Final Budget:

1. Did the project meet scope, time, and cost goals? 2. What was the success criteria listed in the project scope statement? 3. Reflect on whether or not you met the project success criteria. 4. In terms of managing the project, what were the main lessons your team learned? 5. Describe one example of what went right on this project. 6. Describe one example of what went wrong on this project. 7. What will you do differently on the next project, based on your experience working on this

project?

(Schwalbe, 2004, p. 624) VI. Work Packages, Dependencies, Schedules and Budgets Work Packages

The seven major activities of which Acme’s construction project consists, involve various

work packages. By definition, work packages are tasks at the lowest level of the work breakdown

structure or WBS (Schwalbe, 2004).

The preparation of the site and laying of the foundation is the first course in the

construction process. The foundation is the most important part of construction and requires a

substantial amount within the apportioned budget for building materials, as well as time. This

stage involves the preparation of the site, which may involve some weeding, smoothing and

sectioning, before the laying of the sewer pipes, concrete slabs and the sectioning of drainage

James Stewart
Note
Presumably project manager Tarea has been studying previous lessons learned reports now.
Acme Project Plan 15

gutters. These different tasks are altogether estimated to take a total of about 50 days, a little over

5 weeks or over a month. Factored into the time is the acquisition of the necessary materials and

labor.

The next step is the building of the walls, floor and roof of the structure. Once the

foundation is underway, the next step is to start building the actual store structure. This involves

several work packages including the framing of the floor and walls, and the construction of the

roof of the building. The carving out of the different sections of the store, such as the offices,

break rooms, greenhouse and bathrooms also occur here. The estimated time here is about 45

days. The dependency here is of the ‘Finish to Start’ type (Schwalbe, 2004), which necessitates

that the construction of the walls, floors etc, will not take off before the completion of the

foundation. Since these construction work packages are on the critical path, and the construction

resources could become a constraint, we inserted a fifteen-day feeder buffer to ensure any delays

in the critical path construction activities do not delay the rest of the project.

Next is the installation of the electrical and plumbing fixtures. Pipes are run through the

building at this point for water outlets at designated spots, including the break rooms and

bathrooms. Plumbing fixtures such as water closets, toilets, sinks and drinking fountains are

installed. Electrical work is being done at this point, with the installation of wiring, cabling,

outlets, the installation of electrical generators, and subsequently the connection to service for

both electricity and water. Work here is slated for a total of 45 days.

Building construction wraps up with the finishing of the interior, and the stocking of

inventory. Here, the necessary dry walling, painting and finishing is applied to the interior of the

building, thereafter, the interior decorators take up the job of smoothing and designing to the

specifications provided. Other work packages at this point are floor planning for product location

and shelf arrangement. The last part of the interior is the stocking of the shelves with products;

after all interior fixtures have been tested for safety and durability.

Acme Project Plan 16

The building of the garage is not directly dependent on most of the preceding processes

up to this point, but does necessarily occur after the preparation for the site has taken place. So,

this portion of the project starts after the foundation for the site has taken place and the adjacent

wall has been erected. The construction of this, like the main building, will involve installation of

the garage foundation and the framing of its walls, which are then painted, and ending with the

marking of parking spaces. The schedule for finishing the store and the garage allows for 155

days, which includes another feeding buffer of twenty days.

Acme’s construction plan includes an outer garden, and landscaping for this is for 10,000

square feet. This activity will involve the landscaping of the already sectioned area, which entails

the layering with soil, rock and concrete slab placing as designed; paving installation and finally,

the planting of selected plants and flowers. This is scheduled for a total of 40 days. This time

takes into consideration the various needs of the selected plants and the time needed to ready the

soil for planting.

Throughout these activates, the marketing and promotion planning proceeds. Scheduled

to conclude as the store becomes ready for opening, the marketing work package begins with an

analysis of the market, including a competitive analysis, a consumer analysis, and an analysis of

Acme’s strengths and opportunities in the market. Next, the project calls for the development of a

product, pricing, and promotion plan. Last comes preparation of the merchandising, advertising,

and grand opening promotion plan. These marketing activities are scheduled to take 180 days,

but they do not fall on the critical path, nor do they require resources that appear at risk of being a

project constraint.

The last order of the project is to hire and train the employees for each of the

departments. This process will involve the advertisement of vacancies. It will also involve a

selection process of interviewing, checking of references and candidate consideration. The

training may likely be done in groups and will entail customer service dynamics and necessary

need-to-know information on products being sold. This takes time and has been scheduled to

James Stewart
Cross-Out
James Stewart
Inserted Text
activities
James Stewart
Note
Good. Acme must establish itself in this competitive DIY store market – see again Dr. Forbes’s photos.
James Stewart
Note
It’s really necessary to use a local agency to at least vet the marketing plan, working cooperatively with home office marketers who know what general image they would like to achieve. Perhaps in AMBA 603 you were exposed to some of the humorous mistranslations that have occurred in international marketing, such as the Chevrolet Nova = No va or “doesn’t go” in Spanish.
Acme Project Plan 17

take 65 days, twenty of which are a feeding buffer at this potential constraint along the critical

path for a timely store opening.

Dependencies

Work on the site is dependent upon several things and based on several assumptions.

There is an assumption that we have a specific piece of commercially zoned real estate selected

and purchased. There is also the assumption that we have, in hand, the required permits to begin

construction and open for business. Acme could not begin the joint venture with its local partners

without these items in hand. We would rely heavily on our partners’ knowledge of local and

regional governmental processes and procedures. Our 12-month timeline could not start until this

initial hurdle was cleared.

With permits in hand, construction could begin. The mandatory dependencies are such

that a natural progression of events must occur for the completion of the structure. Each event is

a unique task, however, many are highly dependant on other activities. Certain tasks, like laying

the foundation, have finish-to-start relationships with their predecessors. The foundation cannot

be poured, obviously, until the site is cleared, leveled, and otherwise prepared. Other activities,

like establishing a mobile construction site office, can start simultaneously with another activity,

such as beginning to prepare the site, but no sooner. This would be an example of a start-to-start

relationship. Of course, other dependencies are also possible. Some tasks must finish along with

other activities, while others must finish before another can start. Following is a look at

dependencies in the project.

As already mentioned, the site must be prepared before the foundation can be laid.

Similarly, construction of the walls and floors is dependant upon the foundation being established

first.

Another finish to start dependency involves building the roof. The walls must be finished

before a roof can be constructed. Any delay in completing the wall will push back the start of

constructing the roof. A feeding buffer is inserted at this point on the critical path to guard

James Stewart
Note
The idea here is to maintain friendly, cooperative relations with Mexican authorities and other local stakeholders. In Mexico, permits can be taken away, just as can happen in the USA, and this is necessarily to be avoided, of course.
James Stewart
Note
Corruption is also a consideration in Mexico – as well as in some parts of the USA. One corruption index by countries is found at http://www.transparency.org/cpi/2004/cpi2004.en.html; according to it, in 2004, the USA ranked 17th, and Mexico 64th, in a list of 145 countries. Finland was #1, the least corrupt nation. What might be Acme’s policy on bribes?
Acme Project Plan 18

against slippage on the project schedule by the construction resource, which is used

heavily at this point of the project.

Likewise, the walls must also be constructed before wires and plumbing can be run

throughout the building. Wiring is designated as having a start to start dependency with installing

the generator and electrical circuit boxes. Installing the electrical fixtures, however, is dependant

on three predecessors being completed first. Wires must be run, walls must be dry-walled, and

electrical service must be established with the utility provider.

Much like the electrical fixtures, plumbing fixtures cannot begin to be installed until the

pipes have been run, drywall installed, and water service established with the utility provider.

Finishing the interior presents another series of finish to start dependencies. Walls and

roof must be up before they can be dry-walled. The dry wall must also be installed before they

can be painted. Painting is a necessary precedent to installing the shelves and display units.

Since these activities fall on the critical path where resources are close to being overloaded, an

additional feeding buffer is added here. If any of the string of finish to start dependant activities

falls behind schedule, the feeding buffer will help maintain the project schedule.

Stocking the inventory cannot begin until the interior is finished. We, therefore,

have another finish to start dependency.

The construction of the garage is a task that would drive how much inventory we

can handle, assuming it is used partly to store inventory. With the interior complete we

could stock a certain amount of inventory but the garage would have to be complete

before we could finish taking receipt of our entire inventory. This would really be a both

an external dependency and discretionary dependency.

It is a discretionary dependency in that we could stagger our inventory ordering to

take receipt based on how the store is completed. If for, example the lights take the

longest to receive, from an inventory perspective, we could stagger the completion of the

James Stewart
Cross-Out
James Stewart
Inserted Text
, for example,
Acme Project Plan 19

interior portion of the structure. We could order our lighting inventory while completing

a different area’s interior first and stock it, then come along and finish the interior of our

lighting department in time to take receipt of the inventory.

It is also an external dependency because we do not control the timetable that our

suppliers deliver on. There is inherent risk in setting up a ‘just-in-time’ approach to

taking receipt of inventory. If, for example, our supply of wiring for electrical instillation

is unstable or unpredictable, we may not be able to wire-up our lighting department in

time to take receipt of our staggered inventory order. The extent of discretionary

dependency that we establish is contingent on our tolerance for risk.

Completion of paving and landscaping is purely discretionary. We could build

the parking lot and landscaping almost entirely independent of the rest of the project but

it would not make much sense. This task must simple be finished prior to opening the

business. Most of our vendors would need the paving completed for access to the

property. It would be a start-start for our inventory. It seems sensible to pave the parking

lot simultaneously with paving the garage, making this a start-to-start dependency with

pouring the garage concrete.

Hiring and training employees is both a discretionary and external dependency.

At a macro-level it is externally dependent upon the retail and construction job market in

Mexico City, it we hire, rather than contract for, construction workers. If the construction

market is soft in Mexico City in the window where we are to hire employees, it is likely

we will have many applicants with construction expertise applying for work, in an effort

to supplement their incomes. If the construction market is brisk when we are to hire, we

may have a harder time finding experienced construction labor.

Acme Project Plan 20

As a discretionary dependency, we can begin hiring and training when we deem

best. While it is optimal to train most of the floor employees in a fully stocked facility

that is nearly operational, we could train the core of the store’s management/ department

heads at one of our American stores. It would be desirable for these new managers to see

how a fully functional store runs and meet with US counterparts to gain lessons learned.

Acme SA de CV will groom promising managers at its Mexico City site to open new

stores across Mexico, so it is to our advantage to train new managers as early as possible.

Having discussed the work packages, and task dependencies in the project, we

turn now to a breakdown of the $7.5 million project budget.

Project Budget

Acme Home Improvements de Mexico, SA de CV 12 Month Construction Budget

DIRECT COST DESCRIPTION SUBTOTALED AMOUNT 1

1. Construction Materials Temporary Utilities/Rentals Excavation / Blasting Footings / Drainage Foundation/Waterproofing Retaining Walls Underground Utilities Trenching, Backfill, Rough Grading Concrete Slab City Water / Well & Pump City Sewer / Septic System Sewer/Septic/Underground Connections City Water/Underground Connections Gutters and Downspouts Interior Masonry Rough Framing Materials Structural Steel Trusses Lumber &Other wood types Plumbing fixtures Fire System HVAC Electrical – Lighting, Cabling, etc. Electrical Generators

James Stewart
Note
This is the approach used by Toyota when it opens manufacturing plants in the USA. Employees down to about foreman level are sent to Japan to learn how things are done in the TPS.
Acme Project Plan 21

Exterior Stairs Rough Framing Labor Roofing materials Windows & Exterior Doors Garage Framing Garage Doors Exterior Stucco Exterior Siding/Masonry Exterior Painting Insulation Sheetrock/Taping Vanities Cabinets Interior Trim Interior Doors Hardware – Bolts, screws, cords, etc. Carpentry Landscaping Soil Granite / Rocks Plants Walkway Slabs Interior Shelving units Equipment rental Safety Equipment Other

Total Materials Cost 40% or USD 3.0 million 2. Overheads and Other Costs

Personnel salaries – Direct Project Workers

Consultants / Professionals Administrative personnel Construction Laborers Accommodation Travel Utilities (Phone, electricity, water)

Supplies (Stationery, postage, printing, etc.)

Insurance (Workers Compensation) Teachers / Trainers Other

Total Overheads and Other Costs 20% or USD 1.5 million 2 3. Inventory & Labor Costs

Shipping Products Truck rentals Loading & Off loading Other Labor Duties (Customs & Excise)

Total Inventory Costs 40% or USD 3.0 million 3

Acme Project Plan 22

Considerations: 1 The percentages and USD estimates are based on a USD 7.5 million budget.

2 Wages and Salaries may vary significantly, especially with the current exchange rate of 1USD =

11.1345 MXN and the difference in the cost of living between both countries. This is cheaper in

Mexico and since most labor used will be local, the cost of it may be lower than estimated.

3 It is possible that the cost of inventory may vary from the above stated due to considerations

such as; delays and pressures of delivery, but with more of a leaning towards an

increase.

Assumptions:

The assumption of the total cost for construction materials is derived from the size of the

facility to be built and all that will be required to build it, with a sizeable amount of the cost gong

towards the materials for the foundation and walls.

Mainly personnel wages and salaries rule the total budget amount for the overheads, with a

majority of this going to the professionals or experts in charge of various sections of the project.

The total number of people working on this project, aside from its management committee, is

estimated to be in the neighborhood of 78. The division is as follows:

Approximately 60 for all construction activity and interior work. Among these,

professionals are estimated to be five, with a distribution of 1 garage expert, 2 interior

designers and 2 building experts.

Approximately eight for landscaping duties, with one professional among them.

Approximately 10 company professionals for the initial hiring and training of employees.

The products to be for inventory will likely cost about as many dollars as the construction

effort, if not more, due to shipping, handling and the payment of duties on them.

James Stewart
Note
This seems to be a reasonable number, given your breakdown of assignments for the project workforce.
Acme Project Plan 23

VII. Summary

Acme Home improvement’s international expansion strategy begins with this project. The

company’s joint venture in Mexico City, will lead to the company’s first store outside the United

States. Within twelve months, and $7.5 million, the project team is expected to plan, locate,

construct, and open the company’s first international home improvement store.

This plan provided an overview of the project organization, management processes,

technical processes, work packages, dependencies, schedules and project budget. Accompanying

this document is a MS Project work plan, and Project Charter.

We believe the information contained in these documents lay out a realistic plan to enable

Acme Home Improvements to successfully open its first store outside the U.S. By executing the

plan above, we believe Acme can complete this strategically critical project on time and on

budget.

James Stewart
Note
This is a useful conclusion, allowing Mr. Fitzgerald or another Acme senior management reader to see that the project team believes that it has the resources, time and other guidance necessary to proceed with the project.
Acme Project Plan 24

Appendix A:

Tasks on the Critical Path

Task Duration Start Finish Dependncy Resource Prepare site 40d Mon 2/28/05 Fri 4/22/05 Construction Lay foundation 10d Mon 4/25/05 Fri 5/6/05 2 Concrete & Paving

Site & Foundation Ready 0d Fri 5/6/05 Fri 5/6/05 3 Joe Martillo

Build walls 15d Mon 5/9/05 Fri 5/27/05 4 Construction

Construct roof 5d Mon 5/30/05 Fri 6/3/05 6 Construction

Feeding Buffer 15d Mon 6/6/05 Fri 6/24/05 7 John Tarea

Install floors 10d Mon 6/27/05 Fri 7/8/05 8 Concrete & Paving

Dry Wall 10d Mon 7/11/05 Fri 7/22/05 9 Drywall

Paint 10d Mon 7/25/05 Fri 8/5/05 22 Painters

Feeding Buffer 20d Mon 8/8/05 Fri 9/2/05 23 John Tarea

Stock Inventory 10d Mon 9/5/05 Fri 9/16/05 25 Stock Workers

Interior Finished & Inventory Stocked 0d Fri 9/16/05 Fri 9/16/05 26 Joe Martillo

“Recruit, interview & hire employees” 30d Mon 8/8/05 Fri 9/16/05 27FF Human Resources

Feeding Buffer 20d Mon 9/19/05 Fri 10/14/05 37 John Tarea

Train employees 15d Mon 10/17/05 Fri 11/4/05 38 Human Resources

Employees Hired & Trained 0d Fri 11/4/05 Fri 11/4/05 39 Anita Socio

Project Buffer 82d Mon 11/7/05 Tue 2/28/06 40 John Tarea Note: Feeding buffers have been inserted along the critical path where resource

constraints exist, and a project buffer has been added to protect the end of the project.

James Stewart
Note
A list like this facilitates management emphasis on the critical task, to include by those not able to readily manipulate mpp or other project management software files.
Acme Project Plan 25

Appendix B: Responsibility Assignment Matrix:

Responsibility Assignment Matrix for Acme Home Improvements de Mexico Site Construction and Opening Project

Prepared by: John Tarea, Project Manager Date: 2/5/05

1. 1

1. 2

2. 1

2. 2

2. 3

3. 1

3. 2

3. 3

3. 4

3. 5

3. 6

3. 7

3. 8

4. 1

4. 2

4. 3

5. 1

6. 1

6. 2

6. 3

7. 1

7. 2

8. 1

8. 2

Joe Martillo R R R R R R R R R R R R R R R R R R R R Donna Promueva R R

Anita Socio R R

Construction P P P P P P Concrete & Paving P P P

Electricians P P P P P

Plumbers P P P

Drywall P

Painters P P

Stock Workers P

Landscapers P Human Resources P P

R = Responsible for task P = Performing task

Acme Project Plan 26

Resources:

Anonymous. (No Date). Mexico business opportunities and legal framework. Retrieved

February 4, 2005 from http://www.mexico-trade.com/firm.html#gra.

Anonymous. (No Date). Mexico business opportunities and legal framework. Retrieved

February 4, 2005 from http://www.mexico-trade.com/sense.html#zon.

Goldratt, E. (1998). Critical chain. Great Barrington, MA: The North River Press.

Hampton Group, The. (2001). PMTalk newsletter. The project management knowledgebase

http://www4pm.com. Retrieved February 3, 2005 from

http://www.4pm.com/articles/PMTalk07-24-01.pdf.

Rigby, Ken (2003). Technical Management – a pragmatic approach. 2nd Edition. Retrieved

February 3, 2005 from http://home.btconnect.com/managingstandard/techman.htm.

Reed Construction Data. (2004). RSMeans® preliminary cost estimate. Retrieved January 29,

2005 from http://www.firstsourceonl.com/Means/members/result.asp?

prname=&project=300&gsf=100000&zip=&Calculate.x=24&Calculate.y=2&Calculate=

submit.

Schwalbe, K. (2004). Information technology project management (3rd ed.). Boston: Course

Technology.

State of Texas, Department of Information Resources. (2003, April 17). Planning guideline:

Template project development plan. Retrieved February 2, 2005 from

http://www.dir.state.tx.us/eod/qa/planning/projplan.htm#techplan.

James Stewart
Note
The references consulted appear usefully diverse – good.

 

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THE KING COMPANY BACKGROUND

The King Company experiences many of the difficulties common in today’s business climate. In response to declining sales, the company must transform itself from a strategy of expansion and high profit to one of cost containment and staff reductions.

The case discusses the organization and provides details of the human resource department. Also presented are e-mails from various staff members. The e-mails identify specific problems that need to be addressed by the HR department and provides a look at King’s overall culture. You may find the tone of some e-mails to be unprofessional. This is a good lesson for us all–As much as we enjoy informality in the workplace, all documents and correspondence— including e-mails—can be retained and are discoverable in litigation. Managers must be cautious in their writing because inappropriate language may be impossible to defend in court.

 

Employees In the Case:

Amera, Argonta—Accounting employee

Andreas, Gary—employee on workers’ comp

Call, Jake—Compensation & Benefits Manager

Dean, Don—C.E.O.

Dugas, Karla—Benefits Coordinator

Folkner, Meg—Supervisor, CAD Design

Grant, Alan—Current HR Director

Honduras, Margo—Previous HR Director

Jones, Lyle—Production Employee

Madison, Charles—Senior V.P.

Petersen, Matt—Production Supervisor, Team 3

Planky, Burt—fishing buddy

Putt, Tonia—CAD Designer

Rey, Dave—Production Foreman

Sanders, Tomas—Design Manager

Scholl, Karmen—HRD Manager

Simms, Bertie—Designer

Smith, Mike—V.P.

Songun, Amy—Accounting Supervisor

Stone, Guy—Production Supervisor

Tu, Kevin—Staffing Manager

Varn, Juan—Safety & Security Manager

Warner, Salty—union promoter

White, Shaun—Employee Relations Manager

 

COMPANY BACKGROUND:

The King Company is a small manufacturing company located in a mid-sized city in the upper Midwest. King manufactures high-quality specialty components for the computer industry. The company was founded in 1994 by current CEO, Don Dean. Dean was a talented young engineer in Silicon Valley. When the industry hit the skids in the early 1990s, he found himself out the door with little more than an entrepreneurial spirit and a small severance. Dean left California, moved back to his home state and used his severance to finance The King Company, starting the company in small rented quarters in a nearly vacant strip mall. He brought in Cliff Madison early on as chief financial officer. Dean was smart enough to know that he had no head for figures, but Madison did. Madison was an old college buddy, a super accounting wiz, and somebody Dean could trust to squeeze as much mileage as possible out of his severance money. It was a good match. Madison managed the business, and Dean was the idea man and designer of the specialty components, patents of which were the backbone of King’s success. Today, the low-rent strip mall is a part of company history, and King employs 835 full-time workers in its own contemporary facility built in 2002.

So far, King has not been significantly affected by the latest downturn in the industry. Its market niche continues to be high-quality, specialized equipment. The company is proud that its products continue to be made in the United States and also proud of its ISO quality certification granted by the International Organization for Standardization. Dean believes this is what has kept his company in business while others in the industry shipped jobs offshore or went by the wayside.

King sells its own products and has a small customer base scattered throughout the United States and Asia, but this generates only a small percentage of King’s revenue. Eighty-three percent of King’s sales come from building original specialty components for one manufacturer. This has been a steady income source for King, but heavy reliance on one customer is a significant source of worry for King’s management team, especially because sales of finished products are down for this customer and cutbacks are expected. If the rumor proves true, King will not escape unscathed. Consequently, the push is on for belt-tightening in the organization.

 

King instituted a hiring freeze, and marketing and sales budgets were directed to increasing the company customer base. Canadian and European markets are being explored, and while there is some interest, there are no solid contracts. King employees are understandably jittery.

Though King remains non-union, three years ago the organization went through a difficult period of employee unrest. There were complaints of poor management, inconsistently enforced policies and unfair practices regarding job changes and movement of employees within the organization. Because of the company’s standing as a respected employer in the community, it was a significant public relations black eye when an anonymous employee wrote a scathing letter to the editor of the local paper. This brought in union organizers who distributed leaflets and circulated authorization cards. To address employee concerns, The King Company responded with management training and reorganization of lower-level supervisory positions. A companywide “Talk-to-the-Boss” program was implemented, allowing employees to bring issues to any level of management without fear of reprisal. It seemed to help. The authorization cards failed to generate enough interest for an election, and things settled down. Unrest, though, never goes away entirely. Employees became cynical about “Talk-to-the-Boss,” and “the union buzzards,” as Dean calls them, never completely went away.

Things have certainly changed for King from the old days of the store-front location and a handful of employees. Dean remains the CEO, but he no longer manages the day-to-day operations, spending time instead at his family’s summer retreat on the Maine coast or in the Caribbean during the winter months. Decision-making is primarily in the hands of Madison, who is now the organization’s senior vice president, and a second vice president, Mike Smith. Smith came to King eight years ago with an MBA/ HR concentration from TUI and a successful military career.

With a history that has known only growth and strong revenue, it will be a major culture change for King to respond to the eroding economy and a possible decline in sales. In addition to the hiring freeze, Madison directed managers to cut waste and improve productivity across the board. Employees were reminded that every department would be affected and that nothing was sacred.

 

The Human Resources Department

Margo Honduras was HR director at King for eight years before her departure in 2007. The official word was that she had taken early retirement to spend more time with her family, but what everyone really believed was that Smith finally got fed up and gave her the boot. Of course, there was the official retirement party where everyone said how much they would miss her, but really, most employees in the department raised a toast to her departure and gave a collective sigh of relief. Her management style—when she managed at all—was divisive. She had her favorites, especially Karla Dugas, King’s benefits coordinator, for whom no perks were ever too many. Consequently, the compensation and benefits staff fared well under Honduras because it was Dugas’s area. Other employees in the HR department found Honduras to be unfair and abrasive even on the best of days.

With approval from Madison and Smith, Honduras and compensation manager, Jake Call, had established a merit bonus plan early in Honduras’s tenure at King. Though Honduras continued to champion the bonus plan as a success in accomplishing objectives and controlling costs, it has been a bone of contention across the organization, particularly in the HR department. The bonus plan required everyone to have annual performance goals. Honduras allowed Call’s compensation and benefits staff to set their own goals, but for everyone else in the department, Honduras alone set the goals with no input from those expected to carry out the activities.

The result was hard feelings and perceived inequity that continues today. There is grumbling that even with Honduras’s departure, things never changed. Dugas still offloads most of her work on others and is never dependable for project completion, yet she and her staff members receive top-tier bonuses year after year. Even Call seems to look the other way. Other HR department employees feel their work is not supported by management and that there is little feedback on progress toward goals. For them, bonuses, if paid at all, are based on unknowns controlled arbitrarily by Call. As a result, the HR department is rife with animosity and there is little cooperation across functional areas. Certainly things couldn’t get worse.

 

When Honduras retired, Smith promoted Alan Grant, manager of safety and security, into the director’s position, even though he had only been with King for a year before his promotion. Though Grant had reported directly to Honduras, his good track record at safety and security kept him below the radar of many of the problems in the HR department. As manager of safety and security, he focused primarily on increasing wellness activities. Establishing an active wellness team across the organization, he became the most visible member of the HR department, and with his positive upbeat attitude, many employees thought of him as the organization’s “cheerleader.” Best of all, his management style was the polar opposite of Honduras’s. Where she micromanaged and criticized, Grant believed in encouragement and responsibility. Smith thought Grant would bring a breath of fresh air to the HR department, and he gave Grant free reign to make the changes necessary to turn the department around.

When Grant moved into Honduras’s old office, he set a big jar of candy on the desk and invited everyone to stop by and chat with him whenever they wanted. Of course, Dugas was first in the door.

 

The King Company, Inc.

 

	CEO Don Dean
	Vice Pres. Mike Smith		Sr. Vice Pres. Cliff Madison
	Operations		Human Resources Alan Grant		Finance		Sales and Marketing
Human Resource Development		Compensation and Benefits		Staffing		Safety and Security		Employee Relations

 

 

 

HR Director: Alan Grant

HRD Manager: Karmen Scholl

Compensation and Benefits Manager: Jake Call

Benefits Coordinator: Karla Dugas

Staffing Manager: Kevin Tu

Safety and Security Manager: Juan Varn

Employee Relations Manager: Shaun White

 

Current Situation

Three months ago, Alan Grant, director of HR, resigned unexpectedly because of a family emergency. Despite the hiring freeze, a quick but thorough selection process was conducted, and you were hired as the new director of human resources. You’ve come to King with an HR degree from a respected university and with several years of experience as an HR generalist in a large organization. This is an outstanding career opportunity for you. You will be a member of the management team, and this is a chance for you to make a real difference in the organization. Congratulations on your new position and welcome to The King Company.

It’s your first day on the job. You hang your diploma on the wall, arrange a few personal mementos on your desk and settle into Grant’s old chair. You notice his in-basket is overflowing. You reach for the top file, open the bulging folder and start to read the stack of e-mails Grant printed out before he left. You notice that the emails are numbered, with the oldest one first.

 

Email 1:

To: Mike Smith, Vice President

Alan Grant, Director, HR

From: Charles Madison, Senior V. P.

It has come to my attention that our sales numbers were misrepresented for the last two quarters. A number of unconfirmed sales anticipated for January were pre-booked into our accounting system between September and December of last year. These sales were entered without signed purchase orders or confirmed contracts. Most of them did not come to fruition, and this significantly inflated our sales totals for the last fiscal year. As you know, pre-booking of sales without confirmation is a violation of company policy.

First, I want an immediate accounting of all bonuses paid to the sales staff. Any bonuses paid on fictitious orders must be returned to the company, and disciplinary action will follow for those involved.

Second, because our staffing forecast is based on sales numbers, this indicates that The King Company has a surplus of labor. The hiring freeze may not be sufficient.

 

Email 2:

To: Alan Grant, Director, HR

From: Charles Madison, Senior V.P.

Alan,

I know you have already put in place a hiring freeze, but considering the news that has come out of sales, we believe that it will not be enough. You are directed to design a comprehensive plan to reduce labor costs across the board. You should plan for a 10% reduction in labor force by the end of this fiscal year. We have scheduled a meeting with you in two weeks to go over your plan and finalize decisions.

Email 3:

To: All staff

From: Charles Madison, Senior V.P.

Like all of you, I have watched the ups and downs in our national economy, and I worry about reports of declining sales in our industry. The business news is greeted with increasing concern each time we hear of yet another company that moves jobs off-shore and shuts down its U.S. facilities. Throughout it all, King remains steadfast in our policy of American-made products, and it is the quality of our workforce that has garnered our success. Each of you is to be commended for the good work that you do.

However, we must recognize that business cannot be sustained today with policies of the past. We must be proactive and anticipate change. Though the company remains healthy, our revenue has been flat for the last two quarters, and sales projections indicate a downturn going into next year. This necessitates cost-saving measures throughout our organization. Mike Smith (V.P.) and I will be meeting with all department managers to determine specific goals and plans for the future. All departments will be involved.

With falling sales, there will be significant cuts in staffing expenses because our hiring freeze did not sufficiently reduce labor costs. We cannot continue to build and stockpile inventory without sales. Effective immediately, all areas of the organization must plan for a 10% reduction in costs. I know this will be a difficult time for all of you, but know that this is for the health of the organization and not a reflection of the quality of your work. As in the past, we will work together, and the good work that you do will sustain us during these difficult times.

 

Email 4:

To: Alan Grant, Director, HR

From: Jake Call, Compensation & Benefits Manager

Alan—

I am sending this on to you because I don’t know what to tell her. Do we have a policy on this?

Jake

 

Forwarded message:

 

To: Jake Call, Compensation & Benefits Manager

From: Karla Dugas, Benefits Coordinator

Hey Jake—

I just got back from vacation today, and I wish I could say I had a great time and was well-rested and ready to hit the ground running. But, unfortunately, I was sick for 10 days of my two-week vacation. What a bummer and a lousy way to burn up all my vacation time! Since I have unused sick time available, can I change the 10 days of vacation to 10 days of sick leave so I can take a vacation when I’m not sick? Thanks in advance for doing the paperwork for me!

 

Email 5:

 

To: Alan Grant, Director, HR

From: Shaun White, Employee Relations Manager

Hi Alan,

Hey, sorry to bring all these problems to you when I know you have your hands full with the pending staff reduction, but we had another issue with Guy Stone (Production Supervisor) on the production floor this week. You know he’s hot under the collar most of the time. He gets production out of his staff, but he certainly has issues as a supervisor. I don’t think he’s learned even one thing from all the management training Karmen’s HRD group has provided. He had a run-in with Lyle Jones (production employee) yesterday. I guess he and Lyle really got into it—a real shouting match. In front of the whole shop. Guy fired Lyle, marched him right over to his locker, dragged out all his personal stuff and hauled it out the front door. Granted, Lyle’s kind of a bad apple and having him gone might be for the best, but I had a call this morning from some junior lawyer at Ness, Terry and Smith saying he was representing Lyle in his employment lawsuit. I thought you’d want a heads up.

Hey, look at the bright side—one less person to downsize!

 

Email 6:

To: Karmen Scholl, HRD Manager

From: Alan Grant, Director, HR

Karmen,

As you know, upper management is looking for areas to cut costs. In light of Shaun’s memo regarding the termination of Lyle Jones, it looks like the supervisors aren’t getting much benefit from your management training program. I hate to be the bearer of bad news, but Charles Madison (Senior V.P.) has management training on the chopping block. If you want to save your training programs, you need to get a report to Charles that demonstrates a clear ROI for training expenditures. Better get to it ASAP before your whole department disappears.

 

Email 7:

To: Shaun White, Employee Relations Manager

From: Dave Rey, Production Foreman

Hey Shaun, I don’t know what’s the matter with people these days. The rumor mill is crazy, and I know everybody’s nervous about possible layoffs, but we’ve got some real problem employees down here on the production floor. Salty Warner and his gang are stirring things up with the unions again. He’s getting quite a following, and there’s a group that meets in the cafeteria at lunch and the talk is they are calling the union to get out here again with the authorization cards. Attitudes are terrible, production damage is up, and production’s hitting the skids. I’m trying to put a stop to it. I changed everybody’s lunch schedule to break up the group, and I transferred Salty to a different shift. Frankly, I’m looking forward to some good layoffs. You’d think they’d listen up and think about what’s good for them.

 

 

Email 8:

To: Shaun White, Employee Relations Manager

From: Dave Rey, Production Foreman

Hey Shaun.

Some guy in a suit was here today, said he’s legal counsel for the union. Gave me a bunch of lip service about switching around employee lunches. Said it was an unfair labor practice. I told him to get his fanny outta here. I’m the boss; I can make lunch schedules any way I want, and besides, we aren’t even a union shop. Can you believe the nerve of those guys? He also said something about your employee involvement teams, but I don’t know what he was talking about. He said he’ll be around to see you later. I just thought I’d give you a heads up. When do we start the layoffs?

 

Email 9:

To: Jake Call, Compensation & Benefits Manager

Alan Grant, Director, HR

From: Karla Dugas, Benefits Coordinator

Hi Jake and Alan,

I’m forwarding this on to you. I don’t know how this happened, but it looks like we’ll have to do something about it. It must have happened while I was on vacation. Thanks a bunch.

Karla Dugas

 

Forwarded message:

To: Karla Dugas, Benefits Coordinator

From: Meg Folkner, Supervisor, CAD Design

Karla–

As you must be aware, Tonia Putt in CAD design went on approved family medical leave on the first of last month. Somebody in your department messed up the paperwork and put it through as a termination instead of FMLA leave. She should have continued to get her regular salary because King policy allows her to use sick leave and vacation pay under FMLA. Because it was a termination, though, her salary was cut off. She has direct deposit and didn’t even know it was cut off until her checks started bouncing. Now she has overdraft fees, she says her credit’s ruined, and her mortgage company is threatening foreclosure. She is hopping mad, and I don’t blame her. She wants the mix-up fixed right now. She wants all the fees reimbursed, and you need to do something about her credit score and her mortgage company. She says she’ll get an attorney if need be. It’s crazy. Why would anybody think she was terminated? She’s my best CAD designer!

 

Email 10:

To: Juan Varn, Manager, Safety and Security

Cc: Alan Grant, Director, HR

From: Matt Petersen, Production Supervisor, Team 3

Hey Juan—

You know we’ve got Gary Andreas out on workers’ comp for a back injury, but the scuttlebutt is that it’s not a King Company work injury. Burt Planky went fishing with Gary last weekend, and after a few beers, Gary tells Burt he hurt his back moving his sister’s refrigerator. The guys on the floor think it is a big joke. Seems everybody but management knows that old ankle injury that kept Gary off work a few years back was a motorcycle accident and not a pallet that fell in the warehouse. I suggest you cut off his workers’ comp and put him at the top of the reduction list.

 

Email 11:

To: All Employees

From: Charles Madison, Senior V.P.

Mike Smith, V.P.

In light of the economic difficulties we are experiencing, the following actions will become effective immediately. In addition to the hiring freeze already in place, compensation paid to all hourly and salaried employees will remain at the current level until further notice. Accrual to the merit bonus system will end at the close of this quarter, and the bonus system will be eliminated at the end of this fiscal year. All travel expenditures will be strictly scrutinized and must be approved by Charles Madison (Senior V.P.). All equipment purchase orders will be delayed by 90 days and must then be approved by the Senior V.P.’s office. Tuition reimbursement is discontinued, effective today.

In light of the importance of health care and retirement savings to the well-being of employees, The King Company will, for the present time, continue its current level of employee health insurance coverage and King’s contributions to employee retirement accounts. We are hoping these efficiencies will get us through these difficult times and sincerely appreciate your understanding and cooperation.

 

Email 12:

To: Karla Dugas, Benefits Coordinator

From: Amy Songun, Accounting Supervisor

Hi Karla,

You know Argonta Amera in accounting has been taking MBA classes at the university using tuition reimbursement. She’s already enrolled in a class for this term on a program we approved last fall. We’ve paid her tuition reimbursement in the past and she told me yesterday she would be turning in another reimbursement form at the completion of this term, and she expects to be paid because she was enrolled before the cancellation of the policy. Her reimbursement is $1395. I’m assuming it’s ok.

 

Email 13:

To: Amy Songun, Accounting Supervisor

From: Karla Dugas, Benefits Coordinator

Re: Tuition reimbursement for Argota Amera

Sorry Amy. No can do! I checked with Charles Madison (Senior V.P.) and he said “No Way”! The reimbursement benefit has been cancelled effective immediately.

 

Email 14:

To: Karla Dugas, Benefits Coordinator

From: Amy Songun, Accounting Supervisor

Karla—

I passed your message on to Argonta and she was pretty huffy about it! She said Charles had approved Tomas Sanders’ reimbursement, and he’s in the same MBA class as she. You know Tomas, he’s the manager over in Design. Argonta said you couldn’t discriminate in benefits if one gets it, it has to be available equally to all. I don’t know where that comes from, but she acts like she knows everything since she’s been taking those classes.

 

Email 15:

To: Amy Songun, Accounting Supervisor

From: Karla Dugas, Benefits Coordinator

Re: Tuition reimbursement for Argonta Amera

Wow! Now Charles is hopping mad! He said he didn’t have to reimburse anybody after the policy had been cancelled. He said he’d pay her $500 and that’s all she’s going to get. She can take it or leave it. Besides, he said The King Company doesn’t need an MBA at her level in the company.

 

 

Email 16:

To: Karla Dugas, Benefits Coordinator

From: Amy Songun, Accounting Supervisor

Re: Tuition reimbursement for Argonta Amera

 

Charles is not the only one that’s mad. You should have seen Argonta! She said if her choice was to take it or leave it, she’d leave it. But, I don’t think we’ve heard the end of this.

 

Email 17:

To: Alan Grant, Director, HR

Juan Varn, Manager Safety and Security

From: Mike Smith, Vice President

Re: Wellness Activities

I’ve gotten word from Charles Madison (Senior V.P.) that the budget committee is about to ax our wellness program. I know you both feel strongly about wellness, but it doesn’t seem appropriate in this climate to pay people for fitness activities or to stop smoking. You know Charles’ attitude has always been that wellness is just a lot of expensive fluff anyway and not the company’s responsibility. If you want to save the wellness program, you’ve got a hard sell. You need to convince the budget committee that there is a real return on investment for wellness activities.

Charles is also looking at health insurance coverage for nonsmokers only. Seems the company could save on premiums if our entire workforce was nonsmokers. He is considering giving our smokers 90 days to quit or lose their health insurance. Can we do that here in Michigan?

 

 

Email 18:

To: Alan Grant, Director, Human Resources

From: Shaun White, Employee Relations Manager

Re: Pending Lawsuit

Hi, Alan. It looks like we’ve got a bad one here. I received a letter from the law firm representing Bertie Simms. You remember Bertie; she’s that girl who used to work in Design. I thought she left The King Company to go back to school, but I guess not. Looks like she’s got a chip on her shoulder. Her attorney claims she reported sexual harassment twice, and nothing was done about it. In fact, he says that somebody in HR told her to stop complaining. I can’t imagine who would say such a thing, but looks like we’ve got to answer for it. He also claims when our HR people ignored her, she called our HR Answers hotline, and all she got was somebody with a strong accent she couldn’t understand and who didn’t help her at all.

I don’t expect this to amount to anything, but the attorney wants to meet with us. I suspect they’re trying to strong-arm us for a settlement. When are you available? We should keep this off V.P. Mike Smith’s desk if possible. Agree?

 

In the HR’s Office:

You frown as you close the file and set it back on top of the in-basket. There is a lot of work to be done here. There may be more to The King Company than you thought.

As director, you must help resolve the organizational issues confronting The King Company and develop solutions for the issues facing the HR department.

 

Good Luck!

 

 

 

Source: The King Case is adapted from SHRM 2014 education documents.

 

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