Case Study - Unusual Health Products

Background

Unusual Health (UH) is a company that imports health products from different regions of the world and sells these products to the local market. UH employs salespeople who sell the products at various locations and using different channels, through direct contact with customers.

In the initial years, salespeople worked independently and looked for their own contacts. Business was good as the products were reasonably priced and the salespeople provided good service. However, in the recent years, demand for UH products decreased due to increased competition offering a growing number of similar health products sold in the same market. Even UH's regular customers were beginning to switch to competing products. The morale of the UH salespeople was low as they regularly failed to meet their monthly sales targets.

Teams at UH

The manager at UH decided that the way to boost morale and sales was to have the salespeople work in teams instead of individually, an idea that he decided to implement after reading some management articles on the benefits of team work. To make it easier for him to manage the teams, he decided it would be best not to have too many teams. Hence, the salespeople were divided into a few teams of 15 people. He appointed a team leader for each team. With the new team arrangement, performance evaluation and reward for each salesperson remained the same. Salesmen were rewarded with individual bonuses based on individual sales targets. In addition, each month, the team leader was also rewarded with an individual bonus if his team achieved the highest level of sales.

Albert was one of the team leaders. To improve the sales in his team, he decided that all salespeople should share their customer contacts with the rest of the team. This way, if a salesperson was not available when the customer wanted to purchase products, another salesperson could easily take over and serve the customer, a policy that created tension within the team as some salespeople were being accused of "stealing customers". There were also salespeople who were not motivated to look for new customers as they simply relied on the customer contacts from the other salespeople in their team. The high-performing salespeople were also unwilling to share their customer contacts as they felt that it would not improve their individual performance evaluation. They also felt that they had worked hard over the years to establish regular customers and feared that their performance would be adversely affected if their customers were "stolen" by other salespeople. They were also unwilling to look for new customers as this meant sharing the contacts with the other salespeople in the team. There were also rumours that some salespeople were bad-mouthing other salespeople in front of the customers.

Ben was another team leader. Like Albert, he was facing various issues in his own team of 15 salespeople. Although he tried to organize team meetings every week to share updates and sales tips, most of his salespeople were unwilling to share information. They did not really know each other as they had worked independently before the teams were formed. Some of them did not enjoy working in teams and stopped attending team meetings altogether because they did not see the benefit of such meetings nor how they could help their sales performance. For salespeople, team meeting attendance was a burden as it meant that they had to be in the office for that day of the week. A few salespeople started taking medical leave on the meeting days as they found team meetings to be boring and did not like to attend the meetings. Caleb was another team leader. He was zealous about his new role. He decided that he should manage his salespeople closely and in a systematic manner so that they could maximize their sales. He developed a roster for the salespeople and also assigned them to various geographical regions. Each salesperson must follow the schedule and cover the region that Caleb had assigned. In addition, all the salespeople must submit timesheets every week to indicate the hours worked and the progress made in their assigned regions. Some of the salespeople were unhappy with the new arrangement, as they were assigned to regions that were far from their homes and their regular customers. Other sales people were also unhappy as they could not choose their working hours. They did not see the rationale of working fixed hours as they were doing direct sales. They started grumbling about Caleb. Some of them decided to ignore Caleb's arrangement and went back to their usual way of meeting customers at their preferred schedule.

Dilemma

After a few months of setting up the sales teams, the manager was dismayed to see that sales had further declined instead of improving. Some of his best salespeople had also tendered their resignation, especially those from Albert's team. The manager did not understand what was wrong as he thought that teams should help improve performance. He did not know what to do. Should he do away with the teams? If not, how should he improve team performance so that overall sales performance improves?

Question 1 (Word Limit: 1000)

(a) What is the purpose of studying OB? Describe an example where knowledge of OB can be applied in your workplace.

(b) One of the ways to apply OB concepts in this case is to examine the job attitude of employees. List and explain the three components of attitude, using examples from this case.

(c) Explain the four major work-related attitudes that are relevant to organisational behaviour. Which work-related attitude is affected in this case? Explain your answer.

Question 2 (Word Limit: 1000)

(a) We have learned three contemporary theories of motivation. Explain one of the theories which is relevant to this case and describe how it is illustrated in this case.

(b) Describe the Job Characteristics Model. Determine which job dimension was changed with the team arrangement and explain how that dimension was affected.

Question 3 (Word Limit: 1200)

(a) State four benefits of work teams compared to groups. Do you think the teams in UH demonstrate these benefits? Explain.

(b) Identify and describe four issues in the teams that affected performance. For each issue, suggest solutions that are likely to make the teams more effective.