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A case analysis entitled

Ameritech in the Philippines

Submitted to the

Ramon V. Del Rosario College of Business

De La Salle University - Manila

In partial fulfillment

Of the course requirements in

BUS 500M Management Principles and Dynamics

Saturday Class 1245 – 1600, Section KRG

Term 1, A.Y. 2014-2015

August 15, 2014

Submitted by:

Group 3

Añora, Maria Wilvenna

Bariuan, Dennis

Gabato, Jomar

Malibiran, Bernard

Submitted to:

Mr. Rey Lugtu

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I. SYNTHESIS

Ameritech is an American computer supply company which was started in Lexington, Kentucky by a small group of former IBM employees. The operation was successful at first as the demand for their products rose globally. However, over time, Ameritech became less competitive in terms of cost over rivals from other Asian countries. In an effort to be more cost competitive, it moved its operations to Mactan Island near Cebu City in the Philippines. Ameritech purchased an underperforming Korean firm along with its facility and retained its entire workforce (hereinafter “Company” or “Ameritech Philippines”).

Mr. William “Bill’ Dawson, an American from Ameritech’s North Carolina office was tasked to oversee the operations of the plant in the Philippines. Bill knew little about the Philippines and its people. Miguel Santos, an MBA graduate of DLSU in Manila, was hired as Bill’s assistant to help bridge any cultural gap between Bill and the employees. However, considering Miguel was from Manila, another sub-culture gap resulted between Miguel and the Cebuano employees of the Company. Miguel was not happy leaving his family in Manila and transferring to Mactan. Moreover, the Cebuanos distrust people from Manila at that time.

Over the course of several months, productivity at the plant remained low. Bill felt that the Filipino workers wasted much time chatting, taking extended breaks, and engaging in non-work activities. As such, Bill decided to implement changes, including holding after-work training sessions, which we not well received by the workers. These decisions eventually led to a high turnover of employees and consistent low productivity level.

II. POINT OF VIEW The case study shall adopt the point of view of Mr. William “Bill” Dawson, the Plant Manager of Ameritech Philippines. . III. STATEMENT OF THE PROBLEM Faced with a demoralized workforce, high turnover rate, and low productivity, what actions must Bill Dawson take to increase motivation and productivity, and regain employee respect and satisfaction? IV. OBJECTIVES Short-term Objective: Motivate employees and increase productivity level at Ameritech Philippines. Long-term Objective: Implement controls to maintain high productivity level and develop a highly-motivated and skilled workforce. V. AREAS OF CONSIDERATION

The case will be analyzed with specific emphasis on two key elements: control and motivation. Under Control, Ameritech Philippines needs to establish certain elements of control to increase productivity. One of the methods of establishing control is the multistream approach that utilizes the four-step control process shown in Figure 1 (Dyck, 2012). The mutlistream approach does not only emphasize maximizing productivity and profitability, but also considers workplace issues such as work-life balance, and the natural environment among others. The multistream focus is not so

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much on systems that control employee behavior but on systems that help stakeholders to participate in the control process (Dyck, 2012).

Figure 1. Four-Step Control Process

The management of Ameritech Philippines should establish standards by which its employees should perform, such as key performance indicators. Presently, workers waste much time chatting, taking extended breaks, and engaging in non-work activities. Also, most employees were female, with no previous experience in a manufacturing company. The establishment of standards at Ameritech Philippines would allow management to monitor and evaluate the performance of its employees. The outcome of its evaluation would allow Ameritech Philippines to respond accordingly. While mainstream managers would respond to poor evaluation by taking unilateral action—such as what Bill did—“when Multistream managers encounter inadequate performance, they often seek help from others to understand why it occurred and to develop a way to resolve the problem.” (Dyck, 2012). Thus, in order to improve Controls at Ameritech Philippines, Bill must seek help (e.g. hire) from an experienced adviser, or perhaps a consultant, who understands Cebuano culture and who is experienced at establishing the proper Controls, taking into consideration local cultural idiosyncrasies.

A balance between the mainstream and multistream approach can be used to increase motivation at Ameritech Philippines. Using the mainstream approach, motivation at Ameritech Philippines can be improved using the Goal-Setting Theory (Dyck, 2012). “The appropriate use of goals can increase performance” (Dyck, 2012). These goals must be SMART—specific, measurable, achievable, results oriented, and time specific. The shortcoming of Bill was that he wanted to increase productivity—such as by organizing after-work training sessions and stressing the importance of reduced wasted time—without providing the proper motivation to increase such productivity. By setting SMART goals, perhaps the employees at Ameritech Philippines would reduce their “wasted time” considering that they need to meet their goals.

To reduce turnover at Ameritech Philippines, Bill must also improve Organizational Commitment, which is “a motivational force that binds a person to a particular organization.” (Dyck, 2012). “Mainstream managers promote organizational commitment so as to lower turnover costs or to increase group productivity.” (Dyck, 2012). Further, “research suggests that employees who are emotionally attached to the organization (affective commitment) are motivated to contribute positively to the organization by willingly exerting effort, helping others, and making creative contributions.” (Dyck, 2012). Thus, to prevent employees from leaving Ameritech Philippines, Bill must create a certain affinity by and among the Company’s employees, “by providing a fun environment in which to work.” (Dyck, 2012).

Simultaneously, using the multistream approach and the Expectancy Theory, Bill may be able to improve Group Efficacy at Ameritech Philippines (Dyck, 2012). Under the mainstream expectancy theory, “high levels of expectancy are likely if the individual has the appropriate capability, experience, and resources.” (Dyck, 2012). In the case of Ameritech Philippines however, most employees were females who had no previous experience working in a manufacturing company. Thus, under the multistream expectancy theory, “instead of primarily focusing on and building self-efficacy, a Multistream approach tends to focus on pursuing goals in the context of community and building group efficacy, which is the collective belief about the group’s performance capability.” (Dyck, 2012). Thus, once proper Control measures are in place, Bill must motivate the employees at Ameritech Philippines by building Group Efficacy.

Establish Key

Performance Standards

Monitor Performance

Evaluate Performance

Respond Accordingly

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VI. ALTERNATIVE COURSES OF ACTION Plant Manager Bill Dawson can choose among the following alternative courses of action: ACA1: Mainstream Approach A purely mainstream approach can be used to address current problems at Ameritech through the following: (a) Bill will direct employees how to complete their individual task most efficiently and enable productivity through after-work trainings; (b) Motivate employees through praising and extrinsic motivators, such a rewards and recognition system; (c) retain Miguel Santos as Assistant Plant Manager; (d) hire a new HR director along with a new set of skilled workers.

Pros: This will hasten the identification of efficient work systems that would the Company to address the objective of increasing productivity level at Ameritech Philippines. Cons: This might not effectively address the long-term objective of developing a productivity culture among employees that are highly-skilled and motivated.

ACA2: Multistream Approach Ameritech can impart a multistream approach to address their current problems through the following: (a) Develop and set company culture, mission, vision and rewards and recognition system through consensus among all stakeholders involved; (b) Retain Miguel Santos as Assistant Plant Manager; (c) promote a new HR director; (d) Hire a new set of culture-fit employees and (e) empower employees by creating an environment for continuous learning.

Pros: This may effectively address the long-term objective of establishing a productive and motivated culture among all employees at Ameritech Philippines. Moreover, it encourages total employee involvement promoting sustainability and decreases likelihood of employee turnover. Cons: Achieving targeted productivity level may take a much longer time to accomplish, due to the time required to obtain consensus from all stakeholders.

ACA3: Balanced Mainstream and Multistream Approach A balance between the mainstream and multistream approach can be used to achieve both short-term and long-term objectives through the following: (a) promotion of a current employee to replace resigned HR director; (b) promotion of a current employee to replace Miguel Santos as assistant to Bill; (c) Hiring of advisers or consultants who are experienced with local culture; (d) development and establishment of key performance indicators (“KPI”); (e) installation of information systems to monitor performance; (f) establishment and strengthening of compensation, rewards and recognition system; (g) improvement and adaptation of Bill’s leadership style to Filipino culture; (h) conducting of team-building activities to improve Organizational Commitment and Group Efficacy; (i) development of effective and shared company culture, mission and vision; (j) hiring of new skilled and culture-fit employees; (k) emphasizing and enabling productivity culture and efficient work systems among employees through effective training sessions; and (l) empowerment of employees along with the creation of an environment for continuous learning.

Pros: This ACA will likely address both short-term and long-term objectives of increasing productivity and creating desired company culture with motivated and highly productive employees. Cons: Creating desired company culture and productivity level might take a long time due to several alignments, consensus and establishment of new systems. VII. RECOMMENDATION Ameritech Philippines must establish systems and controls that will encourage a productive and motivated workforce. Initially, the Company must address the need to increase productivity while dealing with unmotivated employees and a high turnover rate.

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Decision Criteria Weight ACA 1 ACA 2 ACA 3

Agility in increasing productivity level 30% 25% 10% 25%

Promote total employee involvement on desired company

culture (motivated, efficient, productive)

40% 10% 40% 35%

Decrease in turnover rate 10% 5% 10% 10%

Sustainability of results 20% 5% 15% 20%

Total 100% 45% 75% 90%

Based on the criteria indicated above, ACA 3 is the best option for Mr. Dawson. A balance between the mainstream and multistream approach should sustainably address both short-term and long-term objectives. Bill should replace Miguel Santos with a Cebuano, preferably from among the existing employees. The reason for having Miguel was to address the cultural divide between Bill and his Cebuano colleagues. However, Miguel proved ineffective at advising Bill due to the fact that he himself was not familiar with Cebuano culture and was not respected by the Cebuanos. Bill must hire an assistant who was more senior, familiar with Cebuano culture, and respected by the Cebuano employees. Bill should also realize that he needs help in establishing Control at his plant. Bill must therefore engage an adviser or consultant, who understands Cebuano culture and who is experienced at establishing the proper Controls, taking into consideration local cultural idiosyncrasies.

In order to remove wasted-time as well in the Company, Bill must establish specific, measurable, achievable, results oriented, and time specific (SMART) goals to improve motivation. By setting Key Performance Indicators (“KPI”), Bill is not only able to establish Controls, he is also able to motivate employees to waste less time and improve productivity. Under the four-step control process described above, with SMART goals, Bill will be able to evaluate performance at the Company, and calibrate its KPIs. The evaluation of performance may be done through the establishment of information systems to measure output. Setting goals relating to output, and tying such goals to a performance bonus, will motivate employees to achieve their goal.

The Company must also hold team-building activities to improve Organizational Commitment and Group Efficacy. The more time and emotion employees have invested in Ameritech Philippines, the more motivated they would become, and less likely to leave.

Bill must also promote a new HR director from among the current employees to boost employee morale. Further, a shared company culture, vision and mission can be developed through the consensus of all members of the company. This will ensure total employee involvement and reduce opposition to the implementation of changes. Further, new employees who will be hired to replace those who resigned can already be easily-tailored to be skilled and culture-fit. Moreover, to maintain high productivity level and develop a highly-motivated and skilled workforce, Mr. Dawson should improve and adapt his leadership style to Filipino culture, emphasize a culture of productivity, promote efficiency among employees through effective training sessions, and empower employees while with creating an environment for continuous learning. VIII. IMPLEMENTATION PLAN Initially, Bill must replace his assistant, Miguel Santos, with a senior and respected Cebuano, preferably by promoting one of the current influential employees. Bill’s new assistant can help in improving relations between Bill and the Cebuano employees. Bill must also promote one of the current employees to replace the resigned HR director. These promotions will improve morale among the remaining employees. Thereafter, the Company can formulate its vision and mission by obtaining the thoughts and opinions of all the employees through several focused group discussions. The vision and mission will guide the Company in attaining its “new” shared culture.

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To establish Control within the Company, it must determine its current level of productivity to set a baseline for improvement. Once this baseline is established, the Company can analyze its business processes, and set SMART goals and KPIs against which the Company will evaluate any improvement. In establishing SMART goals and KPIs, Bill must engage an adviser or consultant, who understands Cebuano culture and who is experienced at establishing the proper Controls, taking into consideration local cultural idiosyncrasies. These consultants will help determine whether the SMART goals and KPIs are appropriate and achievable.

The Company must install information systems to effectively monitor performance. Improvements in productivity and performance will be tied up to a newly established compensation, rewards and recognition system, described below. As the Company meets specific SMART goals and KPIs, its employees will be given corresponding rewards. SMART goals and KPIs set for all the employees as a group would also improve Group Efficacy. In this process, employees of the Company would be motivated to help each other to improve productivity, rather than focusing on one’s own tasks and achievements to obtain an individual reward or bonus. Any reward system must therefore also consider group performance, to motivate the entire organization. Of course, the setting of SMART goals and KPIs is a continuing process that requires evaluation and adjustment, following the four-step control process cited above.

To motive the employees of the Company, it must establish an individual career development plan system. Further, a comprehensive promotion system with a clear set of criteria should be formulated to allow the employees to understand the opportunities available within the Company. These actions will develop a healthy competitive culture that can motivate employees and increase productivity. Aside from individual motivation, the Company must also establish and strengthen its compensation, rewards and recognition system, with particular emphasis on group performance and rewards. The Company, for example, may set a bonus for achieving productivity KPIs. By simultaneously establishing individual and group rewards systems, employees will be motivated to work both individually and as a group, that will ideally result in better productivity. With these in place (i.e. vision and mission, career development plan, promotion system, SMART goals, KPIs, rewards system, etc.), new employees can easily be oriented to fit the Company’s “new” culture.

The Company must also continuously hold team-building activities. Aside from improving relations between the employees, Bill, and the rest of management, it will also improve Organizational Commitment. Employees who have vested emotional ties with an organization through happy experiences are likely to stay longer. Of course, Bill himself must learn more about local culture. There are several seminars available for expatriates which Bill can attend, in addition to books providing guidance for expatriates in the Philippines. By learning more about local culture, Bill will be able to participate effectively in team building efforts, and improve his leadership and management skills. Bill must also regain his credibility among the employees by using emotional appeal, and convince his employees one by one, beginning with the most influential. Bill must do this, initially through his new Cebuano assistant, and eventually by himself speaking and relating with his employees. By earning the respect of his employees, Bill will be more effective at motivating his employees.

Simultaneously, management can promote a culture of productivity among employees through effective training sessions during work hours. This will empower employees by creating an environment for continuous learning.

The succeding table shows the implementation plan details of the selected course of action

(ACA3).

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Action Plan Responsible Parties Timeline 1 2 3 4 5 6 7 8 1. Evaluate performance to establish productivity baseline

Bill, Operations Team, I.T.

1 Month

2. Replace Bill’s assistant with a respected Cebuano from among the current influential employees

Bill 1 Month

3. Engage consultants to assist in analyzing business processes, and establishing controls and key performance indicators

Bill, Operations Team, Consultants

1 Month

4. Analyze business processes Bill, Operations Team, I.T.

1 month

5. Establish controls, SMART goals, and key performance indicators

Bill, Operations Team, I.T., Consultants

1 month

6. Install information systems for performance monitoring

Bill, Operations Team, I.T.

5 months

7. Evaluate performance as against baseline Bill, Operations Team, I.T.

1 month

8. Adjust controls, SMART goals, and key performance indicators

Bill, Operations Team, I.T.

2 months

9. Re-evaluate performance and refine controls, SMART goals, and key performance indicators

Bill, Operations Team, I.T.

2 months; continuing

10. Promote HR Director Bill 1 month 11. Conduct focused group discussions to formulate a shared company culture, mission and vision

Bill, H.R., All Employees

3 months

12. Hire new skilled and culturally fit employees Bill, H.R., Operations 3 months 13. Analyze, establish, and strengthen compensation, rewards and recognition system; develop a career development plan system and a comprehensive promotion system

Bill, H.R., Operations Team

4 months

14. Adopt Group Efficacy by improving group performance capability, measurement, and rewards and recognition system.

Bill, H.R., Operations Team

4 months

15. Conduct continuous team-building to improve organizational commitment

Bill, H.R., All Employees

7 months

16. Conduct training sessions on productivity culture. H.R., All Employees 7 months 17. Bill to take training sessions and read book on guide for living and working in the Philippines; earn respect of employees

Bill 5 months

LEARNING POINTS 1. A mainstream and/or multistream approach can be carried out to address leadership problems

within a company. The type of approach to use depends on the circumstances and the objectives to be accomplished, where the need for support and need for direction can either be high or low. Mainstream leadership can include directing, coaching, supporting while a multistream approach can include enabling, equipping, engaging and empowering.

2. To address both commitment and productivity problems within an organization or company, both the need for a support (need for supportive, employee-centered, relationship-oriented, consideration behavior to improve follower’s commitment) and need for direction (need for directive, task-oriented, initiating, structure behavior to improve followers’ competence) must be considered and weighed accordingly.

Bibliography Dyck, B. & Neubert, M. (2012). Management: Current Practices and New Directions. Cengage Learning. Robbins, S.B. & Judge, T. (2011). Organizational Behavior. NJ: Prentice-Hall.