I.Facts of case:
a.Brikerhoff International, Inc. is currently in an economic boom following 8 years of economic depression
b.President Tom Brikerhoff wants to expand company efforts & revenues, and also relieve tension around Safety Supervisor, Kurt Mannheim
i.Kurt Mannheim concerned about safety of Rig #1-E, however, he had also recently accused Rig #1-Es rig manager, Rick Kopulos of allowing alcohol into their base
1.concern for rig safety might have risen from personal tensions rather than actual safety issues
2.Brikerhoff considering promotion of Mannheim
ii.Actually concerned w/safety of Rig #20 under Tom Rossick
c.Drilling IndustryXhigh risk & high uncertainties
i.Rig activity could go from 60% utilization to 20% in 2 weeks b/c of fluctuating demand
ii.Rig operates 24 hours a day w/2 12hour crew shifts
iii.Working , isolated life for 2 of 3 weeks most of the year; only shared w/other workers; far from other cities & towns
iv.Harsh environmental conditions
v.Alcohol & drugs were not permitted
1.Mannheim violated company rules by allowing, although small & controlled amounts, of alcohol onto the base camp
i.Brikerhoff continued to buy additional rigs after the Canadian gov. introduced the National Energy Program, which gave a large portion of Canadas oil & gas to another company called Petro-Canada; also charged remaining companies 25% royalties on output, which led to the decline in drilling activities
1.caused additional debt to company when a year later, oil prices fell to less than $10/barrel; if had purchased less, perhaps would have been in less debt
2.BII took drastic steps to cut overhead from $2 million plus to less than $500,000
3.cost reduction not enough, which led to buyout & stock swap between Tom & his father & brother, giving him sole operation
i.Business began to boom again in 1992 when Albertas gov. granted a royalty holiday til June 93 & other environmental forces gave further incentive to gas exploration & drilling
ii.However, serious labor shortage & high turnover rates caused problems
iii.BII had problem in 1993Xnot large enough to cover total customer demands w/its small inventory of rigs
1.However, regardless of small size, BII could charge higher per diem rates for some rigs b/c of company reputation for good work, excellent safety record & low maintenance costs
a.Proves that safety directly affects the rates of oil, which is why current safety concerns are not a miniscule issue.
b.Good rig record = fewer delays & shorter completion times
i.Horizontal drilling assisted in the efficiency of a wells production
ii.If drilling could be cut by 10 days, could save a customer $200,000-$250,000 on a job which costs between $20-25,000/day
f.Uncertainties of the Business Recovery
i.Government & customers had imposed though environmental & safety standards
ii.Brikerhoff made failed attempts to arrange joint venture agreements w/other drilling companies (other companies not willing to explore new organizational combinations)
iii.Brikerhoff went against his hesitation & put Rig #22 back into operation
1.more rigs into operation could lead to low quality, low performance, unsafe practices, & high drilling costs w/unskilled workers, which could hurt more than help the company
2.Introduced a Quality Assurance Mission Statement
a.Safety of each employee is the first priority of the company. Required employee involvement w/quality assurance program will lead to improved attitudes to produce better work practices, reduce accidents, reduce days on the job to improve cost efficiency for customers. Will lead to reduced operation costs & a more cooperative environment. Higher efficiency will lead to more projects & the company morale will increase. W/good quality policy, turnover will be reduced , team environment.
iv.Kurt Mannheim responsible for implementing & monitoring rig safety (See exhibit 5 for job description)
1.Mannheims description of seen problems
a.Problems due to: lack of training, understanding, knowledge; also feel threatened, which leads to tunnel visionXit is their business not to know things.
2.believes in addressing problems directly & discussing them
a.hypocritical in that avoids direct discussion w/Kopulos regarding alcohol incident
3.believed that his instance upon honesty posed a threat to some people
4.believed in following the manual, to understand it & live by it
5.called a dictator by some, but feels that economics demand that people be dictated to
6.feels that the director of a company has to set policies & goals or else company will suffer
a.his job description does not include setting policies & goals; only to review Safety policies
7.believes that other people are avoiding responsibility in company; thinks that his job is to do initial training, set goals & be involved & that the actual training goes to the rig managers
a.Mannheims job description does not involve setting goals & confirming orientation of new employees. Rig managers do not have training in their job description.
i.Tom RossickXmanager of Rig #20
1.ignored by crew members
2.conversation between crew members & Rossick akward
a.akward conversation is a sign of poor communication & tension
3.one crew member commented that they would say more if Rossick werent attending the meeting
a.shows dislike & discomfort between Rossick & his crew members
4.Crew members complained about the uncertainty and the unpleasant crew life as members are shifted from rig to rig
a.If members are being shifted constantly, there is no time for them to become adjusted to their peers. It also creates an environment of fearXbeing moved. They dont want to get to comfortable b/c might get moved again.
5.Mannheim compliments Rig #20 about safety & maintenance situation
ii.Mannheims view of good rig operations
1.its the politics that keeps the company down.
2.believes top management to be good, but problems at lower levels
3.Parallels Safety supervisor job to king
4.competition & rivalry is expensive for the company
5.the whole thing starts at the bottom w/the roughnecks. If those guys dont do things right, then its usually true of every position. Vbelieves problems start from the bottom
iii.Kopulos & driller Vander Heides vision of a good rig
1.depends on how well crew members worked w/each other, other crews on rig, & w/the rig manager
2.Vander Heide: It all starts w/Rick. . . . if he doesnt come around & show an interest in the rig & how its running, then nobody else will. Vbelieves problems start at top
a.Differences in good rig operations & personal views can cause problems w/in the company and hinder communication
3.steady hands make rig run best. The longer the same people work together, the better the rig runs & the better it looks.
a.Currently, people change rigs frequently, which can lead to poor quality and efficiency of company
4.Understands the importance of teamwork
a.Concurrent w/Brikerhoffs vision of a team oriented company
5.Drillers who are self-oriented & dont get along w/others cause problems; try to impress
a.Differences in personalities traits, like being self oriented rather than team oriented can cause problems as well.
6.believes the first thing a rig manager has to do is to get the crew to like you
a.Mannheim is more goal oriented as opposed to being relationship oriented.
iv.Vander Heide on Crew norms (similar to group norms)
1.crew members usually take care of those who are not working along w/group norm
2.They count on self-motivation and self-pride. Vpersonality traits
h.Incident between Mannheim & Kopulos
i.Mannheim told Don Noakes in Calgary that Kopuloss group had a drinking problem.
ii.Kopulos heard through others of this; Mannheim told others w/o validation; going by hearsay
iii.Mannheim told Don that he was going to talk to Kopulos but never did
1.goes against Mannheims personal beliefs of addressing a problem directly
2.communication problems!…method of communicationK
iv.Kopulos tries to justify alcohol incident by saying that he has trust in his team that they wouldnt abuse their privilege if allowed to drink.
1.shows trust in team and good relationship between rig manager & crew, but also directly violates company rules
2.Knowledge & identification based trust between Kopulos & crew
v.Mannheim made many assumptions & reported them
1.another communication problem
i.Considered to be cheap
ii.Brinkerhoff tries to fix problem short term by making him in charge of Rig #22 to try and reestablish his credibility w/rig managers
1.will give him lots of responsibility
2.could do well w/other workers so they can respect him again
iii.might have bias opinionXseen in reports of Rig 20 & 1-E.
II.Clarify the Problem & Diagnose its Causes
i.4 Functions of Communication: control (have/maintain power), motivation (clarify what is to be done & how they are doing), emotional expression, information (transmitting data)
ii.Formal channels of communication are broken
iii.Mannheim avoids face-to-face communication which provides the richest level of communication
iv.Defensiveness: barrier to effective communication
v.No clear communication of job description, which causes many problems
i.Focus of Attention
1.According to the Myers Briggs Type Indicator, Mannheim is very extroverted, sensing, thinking, judging
ii.?Values: convictions that a mode/conduct is personally/societally preferred
1.terminal values: desirable end-state of existence
2.instrumental values: preferable behaviors that can achieve terminal values
iii.Attitudes: evaluative statements/judgments concerning obj., people, events
1.people seek consistence between attitudes & behavior
2.Mannheims attitude about addressing problems directly does not follow with his avoidance of the alcohol problems w/Kopulos
iv.Differences in Emotional Intelligence among workers
1.self-awareness: confidence, self assesment
2.self-management: trustworthiness, integrity, openness to change
3.self-motivation: drive to achieve, optimism, commitment
4.social skills: ability to lead change, persuasivness
5.Crews required high emotional intelligence; a lack thereof leads to problems
i.Fundamental Attribution Error: over emphasis on internal, underestimate external
ii.Self-Serving Bias: success for self, failure to environment
1.attribute success internally, & failure externally
2.Each group on hierarchy attributed problems starting from opposite end
iv.Expectancy Effects: belief that w/expectance of success/failure will lead to harder work
1.self-fulfilling prophecy: peoples expectations determine behavior
i.Locus of Control
iii.Self-monitoring: consistency between person & action
i.Tenure: how long working at job
1.Mannheim has been working at BII for a long time, so Brinkerhoff does not want to let him go; takes short term problem fixing instead of long term
i.Self as opposed to Team
ii.Low Job enrichment
1.Business Strategy: dictates what is important, reason to be in teams
a.Although Brinkerhoff has a clear business mission statement, that safety is important, his actions (transferring crew members frequently) discourages crew members from being team oriented
2.Authority Structure: dictates amount of power a team has; tells what other teams in workflow interrelate w/them
a.There is a skeletal authority structure, but higher management positions seem to have less structure of authority and power.
3.Personal Selection Process
a.There is no real selection procedure b/c there is a shortage of laborers, which leads to more heterogeneity and more conflict.
4.Performance Evaluation and Rewards
a.Individuals rather than teams seem to be rewarded.
5.Organizational Structure: dictates norms of team
a.Norms are clearly stated
a.Harsh conditions at work create an isolated environment that requires strong relationships between workers in order for the work environment to be pleasant.
ii.Group Member Resources
1.Industry lost many of its experienced workers, with higher skills and abilities. Now forced to pay for training for new workers.
1.Groupthink: excessive conformity to norms
2.Groupshift: a change in decisional risk between group & individual decision
iv.BII relies mainly on self-managed teams (each rig) that work for a common purpose/goal, and have control over their own methods.
1.However, b/c of this, it does not work well during downsizing.
2.there is a higher absenteeism & higher turnover rates
i.BII takes a the Behavioral Approach: leaders can be trained
1.Problem: Effective behaviors do not generalize across situations
a.Mannheims dictating leadership style does not fit w/some of the crew members
2.Initiating Structure: the extent to which a leader is likely to define & structure his/her role & those subordinates in search of goal attainment
a.Mannheim tries to create a strong structure
3.Consideration: the extent to which a leader is likely to have job relationships characterized by mutual trust, respect, & regard to feelings
a.Kopulos has strong consideration for his crew members.
4.Mannheim is a production-oriented leader & places emphasis on technical & tasks
5.Kopulos is employee-oriented by emphasizing interpersonal relationships, and sensitive to the needs of employees and accepting individual differences
6.Brinkerhoff wants to be development oriented: one who values experimentation, seeks new ideas & generates & implements change, by creating a new Quality Assurance Mission Statement, but is having a difficult time due to differences in management
ii.According to the Fiedler Contingency Model, Mannheims and Kopuloss leadership styles will work in different situations
1.Mannheims task oriented style works best in high and low control situations
2.Kopuloss relationship oriented style works best in moderate control situations
iii.According to the Hershey & Blanchard Situational Model, which focuses on the readiness of followers, it is assumed that leaders can change styles and that style must fit the situation. Its goal is to train leaders to fit style to situation.
iv.Mannheims behavior seems to follow the Leader-Member Exchange Theory: leaders create ingroups and outgroups. Rig 20 seems to be in the ingroup & Rig 1-E in the outgroup, due to their reports.
III.Identify Alternative Courses of Action
a.Change leadership styleXcan be done according to the Hershey & Blanchard Situational ModelXdependent on readiness & ability of followers
i.If follower is unable & unwilling , give clear & specific directions
ii.Unable & willing , high task orientation & high relationship orientation
iii.*Able & unwilling , supportive & participative
iv.Able & willing , no need to do much
v.*crew members seem to be able, but unwilling
b.Brinkerhoff must be a transactional leader: guide & motivate his followers in the direction of established goals by clarifying role and task requirements b/c many of the problems seem to be the result of inadequate understanding of job requirements.
c.Provide Effective Feedback w/least amount of communication barriers
i.Focus on specific behaviors
ii.Keep feedback impersonal
iii.Keep feedback goal-oriented
iv.Make feedback well-timed
vi.Direct negative feedback toward behavior that is controllable by the recipient
d.Reward teams rather than individuals, which will lead to less conflict and less coordination costs.
e.Ensure that Equity theory is fulfilled
f.Address Learning Theory
g.Goal Setting Theory: specific & difficult goals w/feedback , high performance
h.Increase employee involvement: a participative process that uses the entire capacity of employees & is designed to encourage increased commitment to the organizations success
i.Right now workers do not feel committed to mission statement
i.Perhaps start gainsharing: a type of variable pay program; an incentive plan in which improvements in group productivity determine the total amount of money allocated
i.Reward specific behavior less influenced by external factors
ii.Can receive rewards even when not profitable
iii.Increased motivation & productivity
iv.Downside = unpredictable