ACTIVITIES
CASE FOR CRITICAL ANALYSIS
MANAGEMENT PROBLEM
“More losses, I don’t know how much more we can take,” sighed Steve Silverman to his wife
and business partner, Robin. As owners of the Grand Forks, North Dakota, clothing store,
Silverman’s, they knew they would go out of business if they stayed downtown for another year
rather than move to the malls that customers now preferred. In the past three years,
Silverman’s sales had plummeted 30 percent and they were overloaded in inventory and
personnel.
Moving, though, seemed out of the question, since the 83-year-old business had purchased the
building it had been in for 40 years. Robin knew she and Steve could not manage to take care of
everything required for a move, either. Counting on their employees to pitch in and help was
impossible. The company was still managed according to the vision of Steve’s grandfather, that
is, excellent customer service and a ‘carefree’ employee family. Carefree was the operant word
here, for the employees lacked initiative to take responsibility or problem-solving. The owners
set and enforced the rules of the working ‘household’ making sure at least one of them
approved every decision made.
With red ink threatening their store’s existence, Robin and Steve leased mall space equal to
one-half their current square footage. It wouldn’t be just a move. They knew it would require a
complete makeover of the physical space as well as the way they ran their business.
QUESTIONS
1. Do you think Robin and Steve need a new leadership style?
2. What should they change?
3. What is wrong with the way they have been leading?
4. Explain, in detail, the underlined words as they relate to the passages.
CASE FOR CRITICAL ANALYSIS
TECHNICAL SERVICES DIVISION
When DGL International, a manufacturer of refinery equipment, brought in John Terrill to
manage its Technical Services Division, company executives informed him of the urgent
situation. Technical Services, with 20 engineers, was the highest-paid, best-educated, and least-
productive division in the company. The instructions to Terrill: “Turn it around”. Terrill called a
meeting of the engineers. He showed great concern for their personal welfare and asked point
blank: “What’s the problem?” “Why can’t we produce? Why does this division have such
turnover?”
Without hesitation, employees launched a hail of complaints. “I was hired as an engineer not a
pencil pusher.” “We spend over half our time writing asinine reports in triplicate for top
management and no one reads the reports.”
After a two-hour discussion, Terrill concluded he had to get top management off the engineers’
backs. He promised the engineers, “My job is to stay out of your way so you can do your work
and I’ll try to keep top management off your backs too.” He called for the day’s reports and
issued an order effective immediately that the originals be turned in daily to his office rather
than mailed to headquarters. For three weeks, technical reports piled up on his desk. By
month’s end, the stack was nearly three feet high. During that time no one called for the
reports. When other managers entered his office and saw the stack, they usually asked “What’s
all this?” Terrill answered, “Technical Reports.” No one asked to read them.
Finally, at month’s end, a secretary from Finance called and asked for the monthly travel and
expense report. Terrill responded, “Meet me in the president’s office tomorrow morning.”
The next morning the engineers cheered as Terrill walked through the department pushing a
cart loaded with the enormous stack of reports. They knew the showdown had come.
Terrill entered the president’s office and placed the stack of reports on his desk. The president
and the other senior executives looked bewildered.
“This,” Terrill announced, “is the reason for the lack of productivity in the Technical Services
Division. These are the reports you people require every month. The fact that they sat on my
desk all month shows that no one reads this material. I suggest that the engineers’ time could
be used in a more productive manner, and that one brief monthly report from my office will
satisfy the needs of other departments.”
Questions
1. What leadership style did Terrill use?
2. What do you think was his primary source of power?
3. Based on the Hersey/Blanchard theory, should Terrill have been less participative?
Should he have initiated more task structure for the engineers? Explain.
4. What leadership approach would you have taken in this situation?
