SVKM’s NMIMS
School of Business Management, Bengaluru
Program: MBA Year: I Trimester: I
Subject: Organizational Behavior Marks: 40
Date: 13 September, 2021 Time: 11:00 am to 1:00 pm
Instructions to Students:
Please read all instructions printed on the question paper carefully.
All questions must be attempted. Answer all sub-parts of a question together.
Any act of copying would be considered as violation of examination code and would be
directly awarded F grade
Submission format - Typed word document
Plagiarism check: Permissible limit “15” percentage
Evaluation Rubric: Conceptual clarity, Critical Thinking, Written communication
Excellent Good Fair Poor
Conceptual Demonstrated complete Reflected most of the Showed partial Showed minimal
clarity knowledge of concepts of knowledge or main knowledge of some knowledge of
(40%) the course; showed a points of concepts of the points of the concepts concepts; showed a
thorough and excellent course; showed a good of the course; showed a poor understanding in
understanding in understanding in basic understanding in interpretation from
interpretation of the interpretation of the interpretation from learning materials
content from learning content from learning learning materials
materials materials
Critical Clear evidence of critical Critical thinking was Some critical thinking Lacks critical
thinking thinking (application, evident (application, evident. thinking
(30%) analysis, synthesis and analysis, synthesis and
evaluation). Arguments evaluation).
are original and relevant
Presentation Well organized. Clear Minor edits needed in Major edits needed in Highly disorganized.
(30%) articulate writing. No organization. 1-3 errors organization. 4 - Many grammatical
errors in grammar or in grammar or spelling 6errors in grammar or and spelling errors
spelling that distract the that distracts the reader spelling that distracts
reader from the content from the content the reader from the
content
Case 1 - Hillton’s Transformation
Twenty years ago, Hillton was a small city (about 70,000 residents) that served as an outer suburb
to a large metropolitan city. Hillton treated city employees like family and gave them a great deal
of autonomy in their work. Everyone in the organization (including the two labor unions
representing employees) implicitly agreed that the leaders and supervisors of the organization
should rise through the ranks based on their experience. Few people were ever hired from the
outside into middle or senior positions. The rule of employment at Hillton was to learn the job
skills, maintain a reasonably good work record, and wait your turn for promotion.
As Hillton’s population grew, so did the city’s workforce, to keep pace with the increasing demand
for municipal services. This meant that employees were promoted fairly quickly and were almost
assured lifetime employment. Until recently, Hillton had never laid off any employee. The
organization’s culture could be described as one of entitlement and comfort. Neither the elected
city council members nor the city manager bothered departmental managers about their work.
There were few cost controls because the rapid growth placed more emphasis on keeping up with
the population expansion. The public became somewhat more critical of the city’s poor service,
including road construction at inconvenient times and the apparent lack of respect some employees
showed toward taxpayers.
During these expansion years, Hillton put most of its money into “outside” (also called “hard”)
municipal services. These included road building, utility construction and maintenance, fire and
police protection, recreational facilities, and land use control. This emphasis occurred because an
expanding population demanded more of these services, and most of Hillton’s senior people came
from the outside services group. For example, Hillton’s city manager for many years was a road
development engineer. The “inside” workers (taxation, community services, etc.) tended to have
less seniority, and their departments were given less priority.
As commuter and road systems developed, Hillton attracted more upwardly mobile professionals
into the community. Some infrastructure demands continued, but now these suburban dwellers
wanted more of the “soft” services, such as libraries, social activities, and community services.
They also began complaining about the way the municipality was being run. The population had
more than tripled between the 1960s and 1990s, and it was increasingly apparent that the
organization needed more corporate planning, information systems, organization development,
and cost control systems. In various ways, residents voiced their concerns that the municipality
was not providing the quality of management that they would expect from a city of its size.
A few years ago, a new mayor and council replaced most of the previous incumbents, mainly on
the platform of improving the municipality’s management structure. The new council gave the city
manager, along with two other senior managers, an early retirement buyout package. Rather than
promoting from the lower ranks, the council decided to fill all three positions with qualified
candidates from large municipal corporations in the region. The following year, several long-term
managers left Hillton, and at least half of those positions were filled by people from outside the
organization.
In less than two years, Hillton had eight senior or departmental managers hired from other
municipalities who played a key role in changing the organization’s value system. These eight
managers became known (often with negative connotations) as the “professionals.” They worked
closely with one another to change the way middle- and lower-level managers had operated for
many years. They brought in a new computer system and emphasized cost controls where
managers previously had complete autonomy. Promotions were increasingly based more on merit
than seniority.
The professionals frequently announced in meetings and newsletters that municipal employees
must provide superlative customer service and that Hillton would become one of the most
customer-friendly places for citizens and those who do business with the municipality. To this end,
these managers were quick to support the public’s increasing demand for more soft services,
including expanded library services and recreational activities. And when population growth
recently flattened out, the city manager and other professionals gained council support to lay off a
few of the outside workers due to lack of demand for hard services.
One of the most significant changes was that the outside departments no longer held dominant
positions in city management. Most of the professional managers had worked exclusively in
administrative and related inside jobs. Two had masters of business administration degrees. This
led to some tension between the professional managers and the older outside managers. Even
before the layoffs, managers of outside departments resisted the changes more than others. These
managers complained that their employees with the highest seniority were turned down for
promotions. They argued for more budget and warned that infrastructure problems would cause
liability problems. Informally, these outside managers were supported by the labor union
representing outside workers. The union leaders tried to bargain for more job guarantees, whereas
the union representing inside workers focused more on improving wages and benefits. Leaders of
the outside union made several statements in the local media that the city had “lost its heart” and
that the public would suffer from the actions of the new professionals.
Q. No. 1. Evaluate the corporate culture of Hillton. Recommend some ways to help the municipal
corporation to sustain its success. (500 words, 7 marks)
Q. No. 2. Critically assess the change management process. Suggest alternative ways of handling
the change by the management council. (500 words, 8 marks)
Q. No. 3. Analyze change in attitudes of the employees. If there was a change, why? (500 words,
7 marks)
Case 2 - GE’s Leader
In 1981, John W. Welch junior became CEO of General Electric. His appointment ushered in an
era of disdain for the elaborate planning and centralized control that had been the hallmark of his
predecessor, Reginald Jones. “Jones felt the others would be caretakers,” says one
former GE Vice President, “Welch was one who would take the company in radical directions
if necessary.”
Indeed, Welch has proved to be anything but a caretaker. He quickly articulated a plan to change
GE from a manufacturing company deriving more than half its revenues from heavy industry to
one reaping a larger share of its earnings from technology and services. He also stated that GE
would sell those of its businesses that weren’t either first or second in their markets.
Since becoming CEO, Welch has sold more than 250 businesses and used $20 billion to purchase
more than 300 new ones. Among the acquisition are the RCA Corporation,
The Employers Reinsurance Company, 80 percentage of Kidder, Peabody and Co, the medical
equipment business of Thomson SA the appliance making Roper Corporation and the chemical
businesses of the Borge-Warner Corporation. In the process, he has eliminated more than 2 lakh
jobs through forced retirements, layoffs, resignations and outright divestitures.
His moves have caused revenues to increase by 50% up to about $70 billion. Admirers say
that Welch has vision and is transforming GE from stodgy bureaucracy to a nimble company
much more fit for the challenges ahead. He was named “CEO of the year” by the American
Management Association in 1991. Detractors have dubbed Welch “Neutron Jack,” after the bomb
that destroys people but leaves buildings intact.
A notorious disliker of bureaucracy and red tape Welch has cut layers of management, eliminating
the group and sector levels that once fell between the heads of the various businesses and the CEO.
Having fewer hierarchical levels fit in with his basic philosophy that managers should have the
freedom to run their businesses as they see fit and to react to the fast-changing environment.
“The early ‘80s were a hardware decade, getting the right stuff in the right place,” Welch says.
“The ‘90s and late ‘80s are what we call software. We are working desperately to get everyone
participating in the process. To be a winner in the ‘90s, you have got to have the creativity of
everybody in the organization.”
To that end, Welch has recently identified four types of leaders. Type One leaders deliver on
commitments and share in the values of the company. Such leaders have a promising future at GE,
says Welch. Type Two leaders do not deliver on commitments and do not share company values.
These leaders will not survive at GE. Type Three leaders miss commitment but share company
values, so they will usually be given a second chance. Type Four leaders deliver on commitments,
make all the numbers, but do not “share in the values we must have”, says Welch. The Type Four
leaders “is the individual who typically forces performance out of people rather than inspires it:
the autocrat, the big shot, the tyrant. Too often all of us have looked the other way,” according to
Welch. The tendency is to allow Type Four managers to continue to function “because they always
deliver’ ‘at least in the short run. Now, says Welch, “in an environment where we must have every
good idea from every man and woman in the organization, we cannot afford management styles
that suppress and intimidate.”
In order to further promote creativity and innovation, Welch has been advocating the development
of a “boundaryless” company, in which workers at all levels are encouraged to communicate and
share ideas with one another. He has also instituted the Best Practices Program, in which GE
employees study the attitudes and management practices of other admirable companies and adapt
the best for use at GE. Another means of fostering change is GE’s work-out program, in which
managers and their subordinates meet in a forum similar to a New England town meeting and seek
ways to eliminate unnecessary work and solve problems together.
According to Welch, “Leadership starts with absolute integrity. Leaders need to define and
communicate their vision. They must have enormous energy and the ability to energize and excite
others. Leaders embrace change - they know it creates opportunities. Leaders are accountable and
decisive. They set and meet aggressive targets. They act sooner rather than later on issues.” He
noted recently, I don’t know what the world's going to be; all I know is it's going to be nothing like
it is today. It's going to be faster; information is going to be everywhere.” As a result, he says
everyone at GE needs to come to work each day “on the razor's edge of a competitive battle.
Q. No. 4. Analyze ‘power’ that is likely to be used by the four types of leaders identified by Welch.
(300 words, 8 marks)
Q. No. 5. Examine the leadership style of Welch. Justify your arguments. (500 words, 10 marks)
