Immediate Survival or Long-term Growth, What Should Be The Focus Now?

Cover image for latest issue of VikalpaOn a January morning in 2014, Mr Amit Kapoor, the Managing Director (MD) of Automotive Equipment Manufacturing Limited (AEML)1—a state government enterprise in India—was found in serious discussions with his senior management officials about the deteriorating condition of the company and how to devise a turnaround blueprint while working through many bottlenecks. The team seemed to be unable to reach any concrete decision about the future course of action.

Just the previous day, Kapoor was told in the Board of Directors’ meeting that the state government was unable to continue providing financial support to the sinking company, which had been incurring losses since 2008 (Exhibit 1). It was decided in the meeting that funds for employee salaries for the next six months would be provided by the government only under the condition that a revival plan would be produced to the Board within the next three months. The Board would decide the future course of action after evaluating the proposed plan and the financial condition of the company.

So far, the company had managed to focus only on immediate survival like earning next month’s salaries for the employees. This put the long-term survival of the company in question. The crisis management team had an idea for the revival of the organization, but that would essentially require capital flow for immediate breathing. The organization was already in adverse financial leverage condition. The only option to acquire working capital was government support. The condition of the organization would worsen if no relief fund was allotted to AEML in the next state government budget.

Kapoor and his team were appointed to the organization with the objective of bringing about a turnaround of the company. The financial health of the state government did not allow it to continue financial support to the organization. However, neither the state nor the union government, led by the ruling party of the state, was in favour of divestment due to hidden political agendas. Thus, the crisis team faced a new challenge of redesigning the revival plan under the provision of minimal external financial assistance. The state government did promise Kapoor that it would provide minimum support for the company revival if the turnaround blueprint was realistic.

A host of external and internal factors had led to the decline, and Kapoor and his team understood that some of the root causes required immediate focus. However, if the crisis team focused on these root causes, it would hold back the long-term strategy since finances would get redirected. Therefore, the team was in a dilemma about what to focus on in designing the revival plan—the immediate survival or the long-term growth of the company.

What according to you should be their focus now?

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Customer misbehaviour in the collaborative economy: Is it contagious or not?

Co-authors Tobias Schaefers, Kristina Wittkowski, Sabine Benoit, and Rosellina Ferraro recently published an article in the Journal of Service Research entitled “Contagious Effects of Customer Misbehavior in Access-Based Services.” Below is their informational video as a supplement to their article, which helps analyze how connections to a person’s community can influence behavior in the given shared space.

 

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New Articles from California Management Review

 

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Newly published research from California Management Review is now online! We invite you to view all of the Online First articles for CMR by clicking here, that hosts articles covering a variety of topics such as corporate misconduct, competitive strategy, and  benefits of minority stake strategies.

One article in particular, “Strategizing with Biases: Making Better Decisions Using the Mindspace Approach,” co-authored by Chengwei Liu, Ivo Vlaev, Christina Fang,
Jerker Denrell, and Nick Chater focuses on Mindspace when it is applied to strategic decision making. The complete abstract for the article is below:

This article introduces strategists to the Mindspace framework and explores its applications in strategic contexts. This framework consists of nine effective behavioral interventions that are grounded in public policy applications, and it focuses on how changing the context can be more effective than attempts to de-bias decision makers. Behavioral changes are likely when we follow rather than fight human nature. Better decisions can be achieved by engineering choice contexts to “engage a bias” to overcome a more damaging bias. This article illustrates how to engineer strategic contexts through two case studies and outlines directions and challenges when applying Mindspace to strategic decisions.

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Quitting the Boss? Data on how managers affect voluntary turnover

33772074972_777fae408f_z.jpgResearcher S. Bhattacharya conducted a survey of 10,000 job seekers and found that 42% left their jobs due to dissatisfaction with managers (Bhattacharya 2008). Does this sound like a reason why you left a job you’ve held in the past?

Companies everywhere want to retain the most efficient performers, so what can “bad” managers do to motivate and inspire the current employees to stay? Authors Christopher S. Reina, Kristie M. Rogers, Suzanne J. Peterson, Kris Byron, and Peter W. Hom analyze both positive and negative tactics that managers practice in their recently published article, “Quitting the Boss? The Role of Manager Influence Tactics and Employee Emotional Engagement in Voluntary Turnover.” This article can be found in the Journal of Leadership & Organizational Studies, and is currently free to read for a limited time.

Please find the abstract below:

Employees commonly cite their managers’ behavior as the primary reason for quitting their jobs. We sought to extend turnover research by investigating whether two commonly used influence tactics by managers affect their employees’ voluntary turnover and whether employees’ emotional engagement and job satisfaction mediate this relationship. We tested our hypotheses using survey data collected at two time points from a sample of financial services directors and objective lagged turnover data. Using multilevel path modeling, we found that managers’ use of pressure and inspirational appeals had opposite effects on employee voluntary turnover and that employees’ emotional engagement was a significant and unique mediating mechanism even when job satisfaction, the traditional attitudinal predictor of turnover, was also included in the path model. Our findings contribute to turnover research by demonstrating a relationship between specific managerial behaviors and employee turnover and shed light on a key mediating mechanism that explains these effects.

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Game tiles picture attributed to airpix (CC).

Reference
Bhattacharya S. (2008, March). Why people quit. Business Today. Retrieved from http://www.businesstoday.in/magazine/trends/why-people-quit/story/1542.html Google Scholar

 

A call for intervention: Lack of diversity in career pyramids

[We’re pleased to welcome author Claartje J. Vinkenburg of VU University, Amsterdam. Vinkenburg recently published an article in The Journal of Applied Behavioral Sciences entitled, “Engaging Gatekeepers, Optimizing Decision Making, and Mitigating Bias: Design Specifications for Systemic Diversity Interventions.” Below, Vinkenburg discusses the motivation for pursuing this research, along with future applications. From Vinkenburg:]

3374725110_74426ba883_m.jpgWhat inspired you to be interested in this topic? I was triggered by the cover article of the July 2016 issue of Harvard Business Review which stated that diversity efforts fail. I have seen such failures, but also examples of quite successful diversity interventions in up-or-out systems such as academia and professional service firms that deserve a wider audience of researchers and practitioners. This journal and especially the special issue addressed questions around systemic change that provided a great fit with my story of design specifications for successful diversity interventions.

Were there findings that were surprising to you? I was surprised to discover in writing the article but also in presenting it in various forms to different audiences that so many people are unaware of the existence and effects of bias, and firmly believe that the way people are promoted in their organizations reflects meritocracy. Making them aware is one thing, but doing something about it is a wicked problem that requires working through paradox.

How do you see this study influencing future research? While the successful diversity interventions described may not challenge meritocracy directly, but they help to achieve ³true² meritocracy by reducing bias in the assessment of merit, focusing on the often capricious application of criteria in performance evaluation and/or reward allocation. Future action research or intervention studies could look at mediated sensemaking and other forms of working through paradox with gatekeepers, as well ways to de-bias our HR or people decision making such as selection and promotion.

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Diversity pyramid photo attributed to Ben Mason (CC).

Group decision making: Are you the bully?

[We’re please to welcome author David Dryden Henningsen of Northern Illinois University. Henningsen recently published an article in the International Journal of Business Communication entitled, “Nuanced Aggression in Group Decision Making” co-authored by Mary Lynn Miller Henningsen, also of Northern Illinois University. The article is currently free to read for a limited time. From D. Henningsen:]

IJBC_v51n1_72ppiRGB_powerpoint.jpgWhat inspired you to be interested in this topic? Reflecting on our experiences in meetings, my co-author and I both noted the presence of people who rely on bullying or whining as their preferred influence style. It occurred to us that this is likely a common experience. Everyone probably knows a whiner and/or a bully. Examining the literature on group decision-making revealed that this is an area that has been largely unaddressed by scholars. We decided to conduct this study as a preliminary test of the effects of whining and bullying in organizations. It was the insights of one of the reviewers which helped us to frame both bullying and whining as aggressive behavior, but that offers an intriguing perspective on how submissive behaviors (i.e., whining) need not be passive behaviors.

Were there findings that were surprising to you? The findings were largely consistent with our belief that whining and bullying would be detrimental in the workplace. There is an interesting sex difference that emerges with regard to effectiveness. Whereas women tend to feel effectiveness is hurt by the presence of whining, bullying, or both, men tend to feel effectiveness is really only hurt when both whining and bullying occur.

How do you see this study influencing future research and/or practice Although this is an exploratory study, it provides important insights into the use of aggressive tactics to gain influence. There is a lot of research on informational and normative influence. However, we suspect that non-rational forms of influence are fairly common in the workplace. We hope to further explore how those tactics may offset more rational approaches.

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Do Groups Make Better Decisions than Individuals?

Group projects are everywhere–whether you’re at school, at work, or even in your household. It’s customary to listen to each member of the group, and what he/she has to say about a strategy for approaching the project, or ways to improve the process in the future. Often,MTR_72ppiRGB_powerpoint.jpg the ideas are compounded and morphed into a strategy that the group can agree on, but does that mean someone would choose not to offer an idea if it’s a different perspective than the “norm”?

A recent study in Management Teaching Review focuses on group decision making and how groups are more likely to accept a decision as “the best” when group members conform to social norms. Authors C. Melissa Fender and Lisa T. Stickney present the data for us in their article, “When Two Heads Aren’t Better Than One: Conformity in a Group Activity.” The article is currently free to read for a limited time; click here to view the full text.
The abstract for the article is below:

Group and team class decision-making activities often focus on demonstrating that “two heads are better than one.” Typically, students solve a problem or complete an assessment individually, then in a group. Generally, the group does better and that is what the students learn. However, if that is all such an activity conveys, then a significant teachable moment has been missed. It is often the case that a group member has one or more correct answers that the group did not use, or perhaps even outscores the group. The simple activity described here provides an opportunity to discuss a number of reasons that can cause such conformity to happen, integrating several areas of human psychology and behavior, and then segue into techniques to prevent it.

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