Recession and Employee Engagment

My article I found was on how the recession is affecting employees. Researchers at Southern Arkansas University and University of Arkansas have created a model backed on data collected in 2009. It found that job satisfaction is impacted by many different things. Rewards/Salary is a large portion of the article. As employees become more worried about financial issues it shows that commitment and engagement with the company are all affected detrimentally. The employee becomes so w orried that they become less engaged with the company. This is a double edged sword because they are worried about their job but the stress of finances reduces their productivity in the job thus reducing how well the company is doing.

http://www.usnews.com/science/articles/2010/12/01/how-to-avoid-employee-depression-in-a-recession

Cisco without John Chambers---?

When AIG, Citi, and General Motors went into tailspins after the financial bubble burst in 2008, they abruptly changed leadership. Lehman Brothers had just declared bankruptcy after 158 years in business. Merrill Lynch had been snapped up in a fire sale by Bank of America. But Cisco Systems did not, and now in his 14th year as CEO, John Chambers has led one of the biggest comebacks of modern times. Cisco CEO John Chambers is one of the most revered executives in the history of the technology industry. Since talking over as CEO of Cisco in 1995, Chambers has grown the company's revenue from $1 billion to more than $40 billion. For 15 years, he has been a soothing, straightforward presence in the industry, free of the bombast and arrogance that so often characterizes big-league CEOs. But Cisco is in news these days.

The CEO of Cisco, John Chambers, admits that his company has disappointed investors, as well as leaving their employees confused. Chambers pointed out that Cisco lost some credibility that was crucial to its success, according Cnet. Chambers also said that Cisco and the marketplace are in a transition, and the company needs to help define the transitions. Chambers has grown Cisco's earnings per share over the past decade--Cisco's EPS have climbed from $0.36 in 2000 to $1.36 in 2010--but he has increasingly lost the confidence of the market.
Cisco, one of the valley's best performers over the past decade, has stumbled in recent months: Profits are down from a year ago, its core business is under attack, and the company's stock has plummeted to nearly its lowest point in more than two years -- costing shareholders billions of dollars and prompting Chambers to announce a corporate overhaul that could lead to significant layoffs this summer.

At a base level, a company's chief executive is responsible for two things: A strategy to create shareholder value, and the company's execution of that strategy.

For the past decade, Cisco's John Chambers has failed at both.

Chambers' shareholder-value-creation strategy has failed. His growth strategy has failed. His management structure has failed. And the result is that Cisco's stock has been dead in the water for more than a decade, even when measured from the bottom of the NASDAQ bust.

Ten years is a long time--plenty of time to evaluate a CEO's performance. And based on Chambers' performance, as Cisco begins its latest re-organization and rebuilding, it's time for Cisco's board to seriously consider giving John Chambers his walking papers.

Many analysts believe the company lost that focus as it expanded into a host of other businesses. Some have also blamed Chambers' reliance on interdepartmental "councils" and "boards" to steer new initiatives.

What do you think? Is John chambers solely responsible for Cisco's losing credibility among its customers or it is just a timely phase as John Chambers commented in Cisco Blog, " We are all responsible for driving operational excellence across Cisco. As you’d expect, I’m asking each of you to play your part in this transition. The responsibility does not fall on one leader or one team. It will not be easy and I expect your participation, flexibility and feedback along the way. As I’ve said before, we will look back at this time in Cisco’s history and remember it as challenging, and important to the future of our company. Plain and simple – we need to roll up our sleeves and work it out, together. I’m ready, your leadership team is ready, and I know you are ready."

http://www.mercurynews.com/business/ci_18211227?source=rss&nclick_check=1
http://blogs.cisco.com/news/message-from-john-chambers-where-cisco-is-taking-the-network/

AOL and Time Warner

HI,

"Introduction 10th January 2000 was a historical day in media world when AOL planned to acquire Times Warner for around 182 billion in stock and debt . It was a marriage of old-and new media-titans It is one of the largest deals in corporate history of USA , and this combines the USA ‘s top internet service provider with the world ‘s top media conglomerate . The new company was worth 350 billion and represents an unprecedented media powerhouse . The other side of the story is it is even the merger of two very different corporate cultures and methodologies .AOL Culture versus Times Warner Culture There are significant difference in culture of AOL and Time Warner . The major reason for a cultural difference is the generation gap among the people working in both the organization. AOL has young employees while Times Warner has employee‘s can act as fatherly figure to AOL employees. The cultural differences broaden as AOL take over Times Warner and the reporting authority changes".

I think organization culture differences between the two organization was huge and that's why there was a culture crash because of the gender differences and also difference in the style of culture......The two cultures clashed with the Time Warner employees thinking that the AOL employees are aggressive and the AOL employees thinking that the Time Warner people are lazy it is actually the way each organization perceive the things.

Secondly in order for the merger to work Time Warner will have to change their Decentralized style of organization structure to a Management one because AOL uses the Centralized way of doing the things and on its own it did not had much problem working under one roof, But before the merger, it was a relatively small company focused mostly on Internet access.  Now it has more diversity in its business with Time Warner in is picture. The last major change in AOL’s operations was the shift to flat pricing, and the company fumbled it miserably with widespread service outages as the company couldn’t keep up the increased demand for its service. This time, the stakes are much higher.  

Third Ahead of the merger the companies announced their new chief talent scout Michelle James she works with AOL Time Warner to identify top talent both internally and externally , in my opinion her leadership traits and styles has proven her to effective in her work like openness and extra-version she was at times Directive in her style but also Supportive to people she recruit , Her charisma shows that she is a Transformational Leader as one of the executive of AOL once said that  “Michele has made outstanding contributions to our company as AOL’s chief talent scout, and we are very excited that her energy, resources and experience are now available globally. With Michele at the helm, we are confident that AOL Time Warner will continue to attract and develop the world’s best talent and be a magnet for a broad range of people and perspective.

 This Merger had both the negative and positive impacts but positive was more than the negatives, like there was a culture difference between the organizations but after appointing Michelle these differences were slowly becoming negligible because she knew her roles and responsibilities. 

What do you think about the Merger and also about Michelle roles and responsibilities with respect to organization behavior? 

AYUSHI SHARMA

 

References 

http://money.cnn.com/2000/01/10/deals/aol_warner/ 

http://michelejames.net/in-the-news/aol-time-warner-names-michele-james-chief-talent-scout

ZAPPOS AND TONY HSIEH

In this article, I can recognize some of the factors that possessed by Mr. Hsieh as the successful chief leader in Zappos. Those factors are include personal traits, leadership style, organizational culture, and employees satisfaction.

After reading some article, I realized that Zappos organizational culture is a huge part of every association's success. Just like Mr. Hsieh said in the interview: I think it really boils down to our focus on company culture. How do they continue their unique culture in Zappos? One important thing is that they use formal orientation program to indoctrinate new employees to the company culture. Once they hire someone, they immediately enter into four weeks of training, during this time, they are immersed in learning about what is Zappos, what Zappos do, and what is Zappos culture. This means people learn and become part of the culture right away, instead of learning about it over time by watching others. In addition, company's physical layout is one of their culture. Zappos creates an environment of comfort for employees such as they can play musical instruments when they feel tired or wear what they want during the work, so that employee can focus on producing their best possible product. A casual observation of their work environment sends the message that employees who work there see their work as fun.

For leadership style, Mr. Hsieh's personal traits are including the following: openness, creativity, open to new ideas, and sociable. For example, in regard to the openness and open to new ideas, Mr. Hsieh is willing to talk with employees, and collect creative ideas from them. He also respects all of the employees who work with him, and considers them as one of the important partners of the company. For example, according to the article, employees know that they were hired not only because they are a great culture fit, but because they have innovative spirits, and a “look outside the box” mentality. By allowing employees to have the power and authority to make decisions, Zappos shows them that not only trust their judgment, also appreciate their contributions to the team and company. Therefore, Mr. Hsieh is a people-oriented leader. He concerns employees' feelings and treats them with respect in his actions or decisions.

This leadership style affects his decision making such as democratic decision making. For example, he encourages employees to participate in decision making processes. Also, productivity and engagement can increase with empowerment, as it allows for a creative and open work environment. Zappos' employees feel great level of trust, and be inspired to do what is best for the overall success of the business.

Furthermore, Mr.Hsieh thinks that employees can enjoy their works and will endeavor to achieve the organizational goals. Mr. Hsieh assumes that employees will act in the best interests in Zappos, thus he allows employees' autonomy and encourages strong employee commitments to achieve particular goals. For instance, some of the call center supervisors even took out the walls between their cubicles to allow for more employee interaction. Mr. Hsieh emphasizes on maintaining a work environment, where employees can be innovative and prosperous within their roles.

In the end, Amazon has agreed to a stock takeover of Zappos in 2009. After these two company acquisition, will Zappos change their unique culture in order to cooperate with Amazon? Or they should insist on their culture or continue it's unique organization culture for next ten years?

Reference:

1. http://news.cnet.com/8301-1023_3-10293262-93.html

2. http://www.nytimes.com/2011/04/10/fashion/10HSEIH.html?_r=2&pagewanted=3&sq=Zappos%20Tony%20Hsieh&st=cse&scp=1

3. http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=43360

KO CHEN

HP and Leo

The Article I found was “Executives Churn at H-P”. It was in the Wall Street Journal on May 26th 2011. There has been some change at HP since Mark Hurd, the previous CEO left August 6th 2010. He had taken control April 2005. Since he was CEO he had made major changes for the better to the company. He reduced expenses by $15,200 in his time with the company. HP also surpassed IBM as the world’s largest technology company. He was forced out due to hiding a relationship with a marketing consultant. It is also said he misused company funds. Some thought this was a harsh punishment for this CEO especially is light of other CEO issues that have come out. For example: cooked books, stolen from the company and done much worse than Mark. On the Monday after Mark was forced out HP’s stock dipped 8%. After a short time with an interim CEO Leo Apotheker has been selected as the new CEO. Apotheker took over in November 2010. Since then over 10 executives have either left or been forced out. Some are leaving due to unhappiness with Apotheker’s strategies and moves. Others are being forced out or retired. This isn’t typical for such large companies. These changes might be due to their stock hitting a 52 week low. Leo Apotheker has already filled many jobs and has another 15 executive’s position to fill. He is also changing who they report to. Almost all of the new hires will report directly to him. I can see how when some new comes in there will need to be changes but that is a high amount of turnover in less than one year with the new CEO. The people that are left would be wondering “Am I next?” There are many strategic, tactical and operational decisions to make when the management changes. While some changes are needed how could they tell that quickly over 15 executives needed to be removed from the company? While Leo did come from another company as a CEO I personally would have a hard time being lead by a person who came in and cut most of my coworkers very quickly. In the long run it might be for the best of the company but I do not feel he has been there long enough to make that decision. Mark Hurd wasn’t forced out because he wasn’t good at his job. He was forced out due to a bad decision on is part. A decision in today’s world that is very common. I have also included a chart of HP’s stock prices in the past couple months.

Here is the link to the story I was talking about.
http://online.wsj.com/article/SB10001424052702303654804576345693663298956.html?KEYWORDS=executives+churn+at+hp

Home Depot and Robert Nardelli

Robert Nardelli served in The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric. Here, I want to discussed about various control measures taken by him at Home Depot to execute his vision. Like the article said: Nardelli's strategy to expand into the contractor supply business, while cutting costs and streamlining operations in 1,816 U.S. Stores. What kind of motivation let him realized that achieving better process controls from decentralized company into a centralized corporation that could add consistency and get more profit for the company? What is the impact to the Home Depot's organization behavior after Robert Nardelli take the CEO position?

First, I think that he is task-oriented leader who provide the employees with direct and clear instruction. He makes the decision making more centralized and take away the autonomy that the store managers enjoyed at Home Depot. For example, he replaced many thousands of full-time store workers with legions of part-timers to cost-cutting program. What's more, he changed the Home Depot's return policy. In the past, customer can return the any item purchased at a Home Depot without a receipt. Now, the policy is to refund cash only for goods returned with a sales receipt within 90 days. This policy reduce the company cost for millions each year.

Second, he assured that the Home depot use central purchasing power so that it become more efficient and more uniformity throughout the organization while help Home Depot to fulfill well defined processes thereby getting some kind of discipline that makes the company can have positive growth. For example, he embarked on an aggressive plan to centralize control of the company such as he invested more than $1 billion in new technology, including self-checkout aisles and inventory management systems that generated reams of data. In addition, he declared that he wanted to make sure the company is controlled by himself.

Just like I said before, Robert Nardelli is directive leaders who provide specific directions to their employees.This also ensured that decision making power is centralized and store managers are supposed to follow orders which will help in controlling costs better to save the company money and ensure better efficiencies.

However, by using centralized method to manage the Home Depot, Robert Nardelli do not notice that there are some drawbacks for using centralized method. In order to reduce the cost, Robert Nardelli cut the great, knowledgeable salespeople or full-time employees who were so helpful to customers. The result was higher profit due to lower employee overhead. But it also dramatically changed the Home Depot brand because store staffing was sparse, the employees were not as motivated and customers struggled to find what they needed in the do-it-yourself stores.

In the end, I want to ask that is centralized method really good for company even though they know they will lose some customers? But centralized can make sure company can have dramatically gross margin growth and meet the stakeholders expectation. How can a good CEO do the best decision for the company?

Reference:

1. http://www.businessweek.com/magazine/content/06_25/b3989044.htm

2. http://www.msnbc.msn.com/id/16469224/ns/business-us_business/t/out-home-depot/

3. http://www.thelatimergroup.com/aboutus/newsversions/spotlight_v5issue2.html

Kochen

Carly Fiorina - HP Compaq merger-was she helping or hurting HP???

In the ever-changing, cutthroat business world, effective business communication skills are vital if a company is to survive. Organizational behavior deals with various issues regarding diversity, motivation, communication, leadership issues and so on. Few months back, I read about HP Compaq merger and I found that story very interesting. It raised lot of questions on my mind about the issues of communication and leadership skills. The story is all about Carley Fiorina, who was the former CEO of Hewlett-Packard. Fiorina rose quickly through the ranks at AT&T and Lucent Technologies to become the most powerful businesswoman in the United States when she took the helm at HP in 1999. She prevailed in a bitter proxy fight over the firm's merger with Compaq Computer. However, she was abruptly fired in 2005.

Organizational change, specifically to the management of the company’s corporate culture, has brought about much of the criticism. Fiorina made a controversial move in 2001, when she announced HP's plans to acquire Compaq. The sons of the company's founders, who sat on the company's board, opposed the $19 billion purchase but it narrowly passed, with 51 percent of the company's shareholders voting in favor of the deal. Walter Hewlett, son of founder William Hewlett, sued Fiorina and HP, alleging manipulation in the vote. While the merger signaled a victory for Fiorina, HP's performance in the wake of the deal was erratic. "HP shares are worth less today than on the day before the merger was announced or on the day it closed," The Economist said in 2004.

In an Organization behavior, the practice of ethical leadership includes two pillars: the moral person and the moral manager. Ethical individuals behave morally in their leadership roles and, at the same time, promote ethical conduct in followers. Fiorina acted as an ethically neutral leader who gained a reputation for being self-centered. She was perceived as lacking compassion, integrity, and humility. Her focus on the bottom line and individual rewards weakened the firm's ethical culture. Knowing the financial condition of HP in 1999, In my opinion, Fiorina had drawn criticism for what was seen as an imperious leadership style.

What are your opinion about that? Did Fiorina go wrong on the decision of merger? What are your opinions about the impact of her decision on both the companies?

References: http://www.alwebtechnology.com/mergers-and-acquisition-a-case-study-and-analysis-of-hp-compaq-merger/

http://www.allbusiness.com/company-activities-management/company-structures-ownership/11674773-1.html