CASE : TUCKER KNOX CORPORATION

HIGH PERFORMING SYSTEMS AND THE LEARNING ORGANIZATIONS

Neha SharmaPalak BajajPriya ChaliaRhythm VijRinki Gupta

Presented by:

LEARNING ORGANIZATION-

Organization that has developed a continuing capacity to adapt and change.

System-wide change program.

Emphasizes on reduction of organizational layers.

Improvement of all employees in continuous self-directed learning.

Leading to positive change and growth in the individual, team and

organization.

HIGH PERFORMING STRUCTURES-

Term coined by Peter Vall.

Calls for removal of excessive layers of structure within the organization.

Encourages participation and communication.

Performs excellently against their potential performance and a known external

standard.

TUCKER KNOX CORPORATION

PEOPLE INVOLVED

1. Larry Henderson- A strong-wiled entrepreneur, Fatherly figure and looked upon

for approvals or disapprovals.

2. Howard Watson- Knows about Larry’s fondness for equipment; eager to move up in TKC; Very aggressive manager with a positive attitude towards job traits; great deal of convincing required before he would delegate control.

3. Ed Leonard- A mechanical engineer with an MBA and both management

and manufacturing experience;

4. Jack Donaldson- Howard’s boss; relatively new member of the TK team; eligible candidate for taking Larry’s position if he retires.

5. Matt Jackson- Howard’s peer and his strongest rival.

6. Samuel Martin- Selected by Jack Donaldson from outside TKC; experience of high volume manufacturing of custom products made from “standard piece parts”; experience in worldwide competition, including creation of two foreign production facilities.

7. Art Hodges - Brought to fill Howard’s position; Lack of high experience; easily manipulated by Jack

8. Wayne Brian

9. Mark Randall

10. Allen Thomas

INTRODUCTION- TKC

Founded by LARRY HENDERSON, a retired corporate executive in a

rented garage in 1982.

World leader in automotive breaking systems design and manufacturing,

supplying breaking systems to car manufacturers.

Had pledged his personal assets, mortgaged his home and called on 5 of

his closest friends to build and grow the company into a world market

leader.

ISSUES RAISED BY LARRY

1. Major area of product uniqueness is the design of “piece parts”, comprising of the physical and mechanical portion of the breaking systems.

2. No readily available automated assembly machines on the market.

3. High labour costs for assembly.

SOLUTION PRESENTED

1. Howard Watson announced to develop a corporate automation engineering department.

2. Responsible for concept, design, manufacture, installation and maintenance of all custom automation for TKC’s 5 manufacturing facilities.

DEVELOPMENT OF NEW DEPARTMENT

Howard interested in Ed Leonard for managerial position of new deptt.

but wanted Ed first to prove his technical ability in the 7-person machine

design deptt. that Howard had created as a beginning for the automation

deptt.

Ed would then move as deptt supervisor before moving to manager and

further developing the deptt.

Ed had proven his abilities and was promoted to manager of machine

design.

Jack split the machine design team into two to reduce Howard’s power.

One part given to Matt Jackson, the decision was not founded on financial information, in Howard’s opinion.

GROWTH OF DEPTT.

Rapid growth of automation engineering deptt. due to efforts of both Ed and Howard.

Automation was viewed as essential to provide the low production costs necessary to stay ahead the competition.

Howard contributed in understanding people and using internal policies to achieve goals.

CHANGE IN SENIOR MANAGEMENT

Jack promoted to position of senior vice-president.

MD of the Ireland plant was unexpectedly forced to retire for health reasons.

Howard assigned to the Ireland plant.

Sam Martin (from outside TKC) assigned Jack Donaldson’s own position.

Sam recommended promoting Ed Leonard to Howard’s position but

was overruled by Jack, who ordered to fill the position from outside.

Jack tried to fill vacant positions in senior management staff from

people who would be loyal to him.

Art Hodges brought to fill Howard Watson’s position

Art Hodges reassigned Ed to the company’s largest

manufacturing facility to set up a maintenance deptt.

Told by Art and Jack that after successfully completing the

assignment, he would be able to return to his own deptt.

Ed’s automation engineering deptt. assigned to Matt Jackson.

Six months after being given the assignment to set up the

maintenance deptt., Ed was brought back to the corporate

facility and given 6 weeks to find another job in the company

or be laid off.

PROBLEMS

A. MACRO

1. Political turbulence within the organization.

2. Possible retention of the Market share in a sharply priced competitive market. (Global competition).

3. Needs to set goals by going global for competitiveness.

B. MICRO

1. High labor cost that ultimately increases the cost of the

goods they produce.

2. Huge power given to some (Jack Donaldson) and little

power to others (Howard and Ed).

3. People with low managerial background getting appointed.

4. Decisions taken not based on sound financial information.

5. Unclear objectives of people involved and goal

alignment/diversion.

6. Jack Donaldson’s attempts to control and influence others.

7. External recruits.

CAUSES

1. New executives brought into the company from the outside.

2. No loyalty to the old employees.

3. Power ,ego and insecurity issues of Jack.

4. No proper succession planning

SYSTEMS AFFECTED

1. Structural

The company had a very stable structure and CEO was looked up for all approval or disapprovals but now it is in an upheaval due to changes in top management, without using the financial information or considering the benefit of organization.

2. Psychological

Vice presidents used to look up to Larry for approval or disapprovals but now the whole game is in the hands of one person.No employee is engaged in decision making.

3. Technical

TKC handles highly technical business and is a world leader in its work.All the managers new and old are technically skilled in their own areas.But now people with little experience are selected just to please the senior VP.

4. Managerial

Larry has always been the fatherly figure for TKC and personally selected his senior managers.Jack Donaldson selected people to retain his power in the company.

5. Goals

Larry told the managers that their goal is to retain a market share in an aggressive price-competitive market by competing with other manufactures; Jack is not talking of the goal of the organization and people are working without proper vision.

ALTERNATIVES/POSSIBLE SOLUTIONS1. Larry should have considered grooming one of his four original vice presidents to

take over him when he retires instead of making a new position of “senior VP”.

2. With proper T&D for 4 existing VPs, they would not have tried to go for separate loyal task force, but aligned themselves to existing goals.

The transfer of power would have caused less internal conflict.

3. Re-evaluate the roles and responsibilities of each person and department so that no one is overlapping or stepping on the toes of the others.

4. Develop some clear and concise goals for the organization so they can remain #1.

5. Make sure everyone is working together as a whole.

6. Involve the employees in the changes.

7. Have Ed as head of the Automation Engineering Department. It was not morally correct for Jack to promise him his job and then give it away.

RECOMMENDATIONS Since Larry opted to bring in an outsider, namely Jack Donaldson, to potentially

take his position, the original goals and the direction the company wants to achieve should be redefined. This would help Jack and the overall company do what is best for all and not just themselves.

They could give Matt Jackson on of the vacant manager positions in the area of testing or new product production. This would eliminate the necessity for Ed to have to find a new position within the company. Maybe also Ed would not be searching outside TKC for a new job.

Larry should also inform the senior vice presidents of the changes that are going on and his future plans at TKC. This would give them a sense of job security.

Stress that communication is the key issue. Because Larry has always been straight forward who ever is in charge of the company in the future should do the same. With communication this company should be able to overcome this change in top management.

Larry may need to address Jack and the situation before his unfairness gets any more out of control.

Interventions :

Survey Feedback : will help to analyze the core problems and design the corrective action steps.

Step 1: Organization members at the top of the hierarchy Larry , Howard Watson , Ed Leonard should be involved in preliminary planning.

Step 2 : Data should be collected from all of the organization , including the plant in Ireland.

Step 3 : Data are fed back to the top executives and then down through the hierarchy.

Step 4 : A. Subordinates should be asked to help interpret the data. B. Plans should be made for constructive changes. C. Plans for introducing that data at the next lower level.

Step 5 : Most feedback meetings include a consultant who has helped prepare the superior for the meeting and who serves as a resource person.

High involvement & High Performance work systems :

1. Decision making should be moved downwards.2. Extensive use of self managed teams .3. Widely shared information.4. Modifications in leadership style.

GRID OD

Prephase 1: Phase 1: The Managerial Grid (assessing managerial styles)Phase 2: Teamwork Development (Technology team)Phase 3: Intergroup Development (Ed Leonard- Art Hodges)Phase 4: Developing an Ideal Strategic Corporate Model (Reintroducing Larry)Phase 5: Implementing the Ideal Strategic ModelPhase 6: Systematic Critique (Evaluation, Feedback)