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Case 14 Ramrod Stockwell http://www.scribd.com/doc/51120088/14/Case-14-%E2%80%9CRamrod%E2%80%9D-Stockwell Teaching Notes Copyright Gareth R.

. Jones, 1994 Synopsis This case considers conflict and politics in organizational settings. Ramsey Ramrod Stockwell, vice president for Production at Benson Metals, is becoming very uncooperative and difficult. Ramrod is having frequent run-ins with sales, who are exasperated with his uncooperativeness and refusal to supply them with reliable information concerning delivery dates, and production scheduling. Most students feel the problems stem from Ramrod, his obstinacy and rough diamond personality. They favor firing to reducing conflict and getting Benson Metals back on track. The problem is due to the internal power structure, unchanged in a changed environment with more importance placed on production than on sales. More company revenues come from the production and specialty steels, only produced because of skills in manufacturing. Historically, sales has been the most important function in Benson, and it is not willing to relinquish power and prerogatives and adjust to changing realities. Backed into a corner, Ramrod is fighting to protect the integrity of his department by being uncooperative and hoarding power to make others dependent on him. The case illustrates the difference between personal and institutional power. I thighlights the need to analyze the context of behavior, not just the behavior itself. Teaching Objectives To show students how the power structure in an organization changes as contingenciesfrom the environment and technologychange. To expose students to the sources of conflict in organizational settings. To provide a vehicle for an action plan to resolve organizational conflict and devise a strategy for change. Based on real people and events, the case is best used after Chapter 14, on conflict and politics, so students have can analyze the power structure. It takes from 45 minutes to an hour to analyze, and with the Rondell Data case, it provides good exposure to managing organizational politics and conflict.

Pop Quiz Questions What is Ra mr o d St ockwells t it le ? Answer: Vice president for production Which function is Ramrod having the most problems with? Answer: Sales Issues and Discussion Questions

What kinds of products and technologies does Benson Metals use? How have these been changing recently?

Benson Metals, a medium-sized maker of specialty steel products, has traditionally used a crafts like technology to produce a variety of metals. In terms of Perrows model of technology, task variety and task analyzability are low, as there is still guesswork, skill, and even some black magic in manufacturing products. Benson also produces metals in very small quantitiespounds not tonsso that in terms of Woodwards model it is small batch, and the skills and knowledge of production people are more important than machines in getting the job donetask complexity is low. Recently, the company has moved into making sophisticated and technically difficult steels for the aerospace industry. Not only are they difficult to produce, these steels require more research skills, metallurgical analysis, and delicate handling in all stages of production. They are produced to very stringent specifications. In terms of Perrows model, task variety has increased and task analyzability has fallenproduction is more non-routine and research oriented and depends more on the skills, experience, knowledge, and judgment of production personnel. Companies cannot imitate these skills, so they form a competitive advantage. The environment surrounding the company has changed to more uncertainty because a new range of products is manufactured. Both technology and environment have changed, affecting the contingencies facing the company, and increasing potential risks and returns. What problems is Benson Metals encountering as it changes products and technologies?

An increased level of conflict between sales and production poses a problem. Production is responding to the new pressures facing the organization, yet it is continually fighting with sales. Sales wants a rapid response to unexpected customer requests or tries to discover productions plans or when the finished product will be ready. Morale is falling as the effects of these conflicts spread. Managers in different functions are taking sides, usually siding with sales against Ramrod and production. Communication and decision-making have slowed as a result of uncooperative attitudes. Integration between functions is falling. This is dangerous for nonroutine technology that requires a high level of differentiation and integration to be effective. What is causing these problems in Benson Metals?

The sources of the conflict can be isolated. Keep the discussion focused on the people, principally Ramrod, and examine what he is doing wrong; this approach makes the later analysis of power more dramatic. The attitudes and behavior of Ramrod Stockwell cause the problem. Although he is competent, he causes conflict within his own function and other functions. In his own function he fails to delegate authority and keeps the reins of power in his own hands. He has a centralized management style and does not share information, which makes it impossible for subordinates to provide salespeople with the information they need. He does not follow the chain of command; he goes to people only when he needs them. Violating lines of authority reduces the authority of his managers and also leaves them uninformed. His attitudes affect relationships with other functions, especially sales, because he also does not allow subordinates to share any but routine information. Because of the centralization of authority in production, subordinates do not possess information. Only Rob Bronson, the vice president of sales, can get information from Ramrod, and he is too busy to do so (and too proud since he would have to admit dependency on Ramrod). Stockwell says something can be done but fails to provide an accurate timeframe,

making planning difficult for sales and other departmentsmaking them dependent on Ramrod. Ramrod is a rough diamond and has little social contact with other top managers at Benson Metals, which further isolates him. Managers have suggested sensitivity training to help him better communicate and delegate. The conclusion is that Ramrod is the problemhis attitudes and values. What is the solution? Fire Ramrod? After the pros and cons have been considered (the firm would lose his valuable skills and expertise), the instructor can turn the discussion to the issue of the company power structure; students rarely raise this issue. In the past, which function has had the most power in Benson Metals? How has the power relationship between production and sales been changing recently?

Traditionally, sales has enjoyed most of the power: President Tom Hollis worked with Fred Benson and was the sales director. Most of the assistant to managers groomed for promotion come from sales. Sales gets the credit for good work while production is blamed in the bad years. Sales can slip orders into the production process, although, as in the Continental Can case, this causes significant problems that will increase as the sophistication of the metals increases. Production managers play second fiddle to salespeople: They have inferior facilities and limited access to resources and to top managers. The traditional power of sales reflects the fact that in the past, the main contingency facing Benson was to sell its products in a competitive market against four or five other companies who compete for the same customers. In this environment, developing customer relationships and servicing customers is very important. Recently the environment has changed and production has become more importantonly production can produce the kinds of steels customers want. In the new competitive environment: Production controls the main contingencies. Production has become central and non-substitutable. Production reduces the uncertainty facing sales, not vice versa. Even though the power of production is increasing, Bensons internal power structure does not reflect this change. Rob Bronson, the sales manager realizes the change but deliberately avoids a change in the status of sales, and the result is conflict. The message is that maybe Ramrod is not the problem; it is Bensons unchanged internal power structure in a changed environment. Ramrods attitudes and behaviors seem logical once it is understood that he wants to increase his functions power and status in the organization: He doesnt delegate authority and share information to increase his power over sales. Information is a power resource, and by hoarding information he can increase the uncertainty of other departments and their dependence on him. He agrees to all requests but gives no feedback. This increases his power and makes him nonsubstitutable. Ramrod, consciously or unconsciously, is withholding information to increase the dependence of others on him and to change the balance of power in his favor. A strong CEO

would understand this and might publicly recognize the importance of production and correct the imbalance. The chairman and his son are weak and the president is from sales, so nothing is being done. The level of conflict is escalating as sales fights back. Suggest some ways to try to solve the problems the company is experiencing. What would be a good strategy for change?

There are several ways of increasing the power of production vis--vis sales. Like Continental Can, Benson should create a production control department to buffer sales and production and reduce or eliminate sales ability to slip new customer orders into the production process. All requests should flow through production control, which transmits them to production. This reduces sales traditional power over production and helps promote a power balance. The support of top management is vital for a change in attitudes, and top management needs to recognize the increased status of production publicly. To increase the status of production, top management can improve manufacturing facilities and give Ramrod a bigger office and staff, a more central location, and greater access to top management. Create a task force to examine how environmental changes affect working relationships and to increase perceptions of the importance and status of production. Send Stockwell to a management training course to improve his skills at delegation. If these changes dont work, then fire him.