The Case Study 5 “KD Transport” is clearly concerned with the issue of managerial effectiveness, as the fact that KD Transport began to loose its competitive edge, while being ran by John and his wife Ursula, points out to both individuals’ inability to realize that the effectiveness of employees’ professional performance does not solely depend on whether they are being provided with psychological incentives or nor. Moreover, as it appears from this case, it is namely because John had failed to base a managerial strategy within KD Transport on the principle of euro-centric rationale, which created a situation when company’s executive decision making became the prerogative of his wife Ursula, who despite being a woman, had proven herself as someone who had a “vision” as to what needed to be done, in order for KD Transport to get back on the horse, in commercial sense of this word.
Therefore, the relevant literature that is going to be reviewed in the next part of this paper, will be mainly concerned with what accounts for effectiveness or ineffectiveness of a particular managerial style, under the set of specific circumstances, as well as what constitutes manager’s psychological weakness, which impair his or her operational efficiency, while executing its professional duties.
1). In her article “The Style Split”, Angela Beasley comes up with a suggestion that manager’s gender affiliation has absolutely no affect on his of her professional performance: “Good leadership is not male or female; it is simply good leadership. Successful leaders adapt to meet the needs of a particular situation” (Beasley 2005, p. 91). Nevertheless, in this article, author contradicts such her thesis by stating: “Listening and acknowledging are important traits to women, but they can be tiresome to men. Men tend to make decisions faster than women and to be more aggressive” (Beasley 2005, p. 92). It is needless to mention, of course, that being a woman, author does not even try to substantiate the validity of such her suggestion. In other words, by providing a negative connotation to men’s managerial style, Beasley’s article fosters the traditional stereotype of women being essentially irrational creatures even further, despite the fact that author strived for something entirely opposite. Later in this paper we will show that “male” and “female” managerial styles are the part of corporate reality. However, as practice indicates, many today’s men are being deprived of traditional masculine virtues (John), which is why they act as women, while addressing managerial challenges. In its turn, this undermines the effectiveness of their decision making.
2). In his article “Crocodile or Dinosaur?”, Richard Robie compares authoritarian and democratic managerial styles to dinosaur and crocodile – whereas, the proponents of managerial authoritarianism are being preoccupied with imposing strict control over organization’s functioning, the practitioners of managerial democracy are being primarily concerned with organization’s growth, as their foremost agenda: “The dinosaur wants to know what is happening, make all the decisions, and be in control. Growth, not control, is comfort for a crocodile. Crocodiles are driven by stretching, pushing, pulling, and improving” (Robie 1997, p. 29). Given the fact that dinosaurs had extinct, while crocodiles have proven themselves being capable of adapting to ever-changing natural environment, article implies authoritarian managerial style having essentially retrograde subtleties. Thus, Robie’s thesis relates to case study “KD Transport” in most immediate manner – while Ursula perceived the degree of employees’ professional satisfaction as being quite inseparable from the strength of KD Transport’s overall commercial standing, John continued to think of KD Transport as family-run enterprise, with its employees being necessary but expandable instrument of generating monetary income.
3). In their study, Salesperson Performance, Pay, and Job Satisfaction: Tests of a Model Using Data Collected in the United States and Japan”, Bruce Money and John Graham have attempted to expose the actual factors that account for the fact that Japanese style of running a commercial enterprise (Japanese Corporate Culture) is assumed to be at least twice as effective as the American one. The conclusion of this study can be summarized as follows: the reason why Japanese employees are being instilled with the strong sense of corporate loyalty is because various incentives that they are being provided with by their employers, to insure this loyalty, have nothing to do with the practice of psychological manipulation, as it is often the case in U.S: “Clearly what motivates the U.S. salespeople differs from what motivates the Japanese salespeople in our study. The primary means of motivation of Japanese employees is encouraging their commitment to the firm, and clearly communicating the goals and values of the organization. Japanese employees are being instilled with the sense of “corporate belonging” – the very fact that they had been hired accounts for their professional value more then anything else does. This is why Japanese employers do not need to resort to meritocracy, in order to boost workforce’s performance” (Money & Graham 1999, p. 169). As is appears from the case study, John did try to improve KD Transport workers’ performance by the mean of instilling them with the similar sense of corporate belonging: “An often-quoted example was an incentive scheme that had offered an all-expenses-paid holiday to the Gold Coast for the first staff member to generate new business beyond a predetermined annual amount” (Fisher, Case Study 5). Yet, he was not serious about providing staff members with such a vacation, while simply trying to psychologically manipulate employees to give their best, without giving them anything in return, except for severely tax-hampered salaries. By doing it, John had proven its managerial short-sightedness.
From information, contained in the case study, it appears that John simply cannot be referred to as leader, because it is namely his wife Ursula who was in charge of making executive decisions, within a context of company’s competitive strategy being designed: “When John changed his mind about business decisions, it was because Ursula had persuaded him to do so” (Fisher, Case Study, p. 5). Therefore, it is of very little importance whether John would decide to practice an authoritarian or democratic managerial style – given the fact that psychologically, he was more of a woman then his wife, it is highly unlikely that he would ever be able to adjust his decision making to the notion of rationale.
As we know from the case study – John strived to remain in full control over company’s operations, while naively thinking that being the grandson of KD Transport’s founder fully qualified him for such a position. Yet, in such highly competitive business as moving physical goods, the notion of “blood relationship” among company’s executives matters very little. An effective manager never goes about artificially imposing its authority upon others – it is whether employers perceive him/her as a leader (“man”) or not. Unlike Ursula, John simply did not posses leadership qualities, while never ceasing to be what he really was – an overindulgent, whiny, vindictive and self-presumptuous individual, who could hardly inspire respect among workers, especially if most of these workers happened to be physical laborers.
It might very well be the case that John knew a whole lot about such sophistically sounding but utterly meaningless concepts as “transition-decision making” or “employee empowerment”, yet he was clearly incapable of recognizing a simple fact that running a successful commercial enterprise has very little to do with the notion of conventional lawfulness. Unfortunately, the same applies to his wife Ursula, even though she clearly radiated more intelligence, as compared to her husband. The major problem, KD Transport experienced under John/Ursula’s management, was: “Turnover and profitability had decreased over the past two years while levels of short-term debt had doubled” (Fisher, Case Study, p. 5). For some unknown reason, both: John and Ursula, had decided that the only way out of this situation was getting rid of company’s two depos and reducing company’s truck fleet in size.
Yet, they could go about addressing this problem by hiring illegals to work as movers (given the nature of KD Transport’s business, it is quite safe to assume that at least half of company’s 250 employees are physical laborers), who could have been paid as little as $3 per hour, with a little legal risk involved. As practice shows, America’s most successful moving companies are the ones that do not apply strict legal requirements to job applicants. Moreover, as time goes by, such practice is becoming ever-more spread out, across the nation. For example, ever since 2007, police officers in New Haven CT have been forbidden to make inquiries onto the legal status of physical laborers in just about any state’s industry. The article “New Haven Becomes First City in U.S. to Offer ID Cards to Illegal Immigrants”, contains excerpts from an interview with Coordinator of the Southern Connecticut Immigration Reform, Bill Farrel, who points out at the practice of hiring illegal aliens as being utterly beneficial to the community: “It’s going to be a welcome mat (New Haven) for illegal aliens to come to the region, flood the labor market and dry up working-class and middle-class jobs” (Fox News, 2007). Apparently, it never occurred to John and Ursula to seek a truly innovative ways of increasing KD Transport’s commercial efficiency, which in its turn, points out at their inflexibility as managers.
This brings us to the points raised in Robie’s article – it is only those managers that are capable of recognizing organization’s operational challenges as such that simultaneously represent commercial opportunities, who will be able to insure that their companies stay afloat, in commercial sense of this word, especially in times of economic crisis. However, John can be the least referred to as this type of a manager, because it appears that he truly believed in application of psychological manipulation as the only legitimate way of insuring company workers’ loyalty.
Why is it that McDonald’s annual turnover ratio accounts for 80%? It is because this company’s officials expect workers to be instilled with a “team spirit”, while failing to provide these workers with a rational explanation as to why this should be the case, in the first place. Yet, whereas McDonald’s can well afford having its employees coming and leaving on the permanent basis, due to its sheer size, KD Transport could never expect that it will be able to treat its workers as dirt (unless they are illegal immigrants), while continuing to rely on their professional enthusiasm, as the main factor of assuring its overall competitiveness.
From what has been said earlier, it appears that KD Transport has only two ways of preventing itself from going bankrupt: 1). Sticking to Ursula’s proposition of reducing the range of company’s operations and “empowering” employees in concrete rather then purely declarative manner. 2). Taking an advantage of the fact that in today’s America the cost of physical labor is dirt-cheep, due to the presence of 15 – 20 millions of illegal aliens in this country.
However, given the fact that the concept of Japanese style corporate loyalty among employees is being traditionally associated with highly technological industries, it is very unlikely that KD Transport will be able to utilize this concept in a way it is being done by such large IT corporations as Microsoft, for example. Therefore, the only realistic method for KD to begin generating more income, without causing any damage to its reputation as middle-sized moving company, is to begin offering potential customers a competitive prices for its services at the expense of cutting on employees’ salaries.
Given the realities of current economic crisis in America, it appears that company might very well pursue with such a strategy, without having to face much of a commercial risk – the greater are there the rates of unemployment in America, the more likely the potential employees are going to be willing to work for less, especially if they are being paid cash. The one thing remains clear though – if John continues to be in charge of managing KD Transport, this company will become a part of history much sooner then it would have been the case, had Ursula enjoyed the managing seniority over her husband.
- Beasley, A. L. (2005) The Style Split. Journal of Accountancy, 200 (3): 91-2.
- Fisher, R. Case Study 5. KD Transport.
- Furnham, A. (1998) The Psychology of Managerial Incompetence: A Sceptic’s Dictionary of Modern Organizational Issues. London: Psychology Press.
- Johnson, K. (2007) Opening the Floodgates: Why America Needs to Rethink Its Borders and Immigration Laws. New York: New York University Press.
- Money, B. & Graham, J. (1999) Salesperson Performance, Pay, and Job Satisfaction: Tests of a Model Using Data Collected in the United States and Japan. Journal of International Business Studies. 30 (1): 149-72.
- New Haven Becomes First City in U.S. to Offer ID Cards to Illegal Immigrants. (2007) Fox News. [Online].
- Rao, C. P. (2001) Globalization and Its Managerial Implications. Westport, CT: Quorum Books.
- Robie, R. S. (1997) Crocodile or Dinosaur? Which Type of Management Culture does your Organization have?. Quality Progress. 30 (5): 29-30.
- Schminke, M. (1998) Managerial Ethics: Moral Management of People and Processes. Mahwah, N.J: Lawrence Erlbaum Associates.
- Topping, P. (2002) Managerial Leadership. New York: McGraw-Hill Professional.