Questions regarding a case study

I need you to complete 2 questions in regards to a case study. The case study is in the attached document on pages 10-12. 12 being the page the questions are on. Question 2 and 3 are the ones i need from you. They are for a bigger report and need to be 250 words each question and ATLEAST 2 references (harvard style) included.


for professor Geek


– PRINCIPLES OF MANAGEMENT SESSION 2, 2015 CASE APPLICATIONS FOR GROUP REPORT & PRESENTATION Group No. Presentation Week Weekly Topic and Case Application Page 1 5 Topic: Contemporary issues: Ethics, sustainability and CSR Case Application: 2Day FM 2 2 6 Topic: Foundations of management: Planning Case Application: Icelandic Volcano 5 3 7 Topic: Foundations of Management: Decision making Case Application: Underwater Chaos 8 4 8 Topic: Foundations of Management: Organisational structure and design Case Application: LRN 10 5 10 Topic: Managing change and innovation Case Application: Australia Post 13 6 11 Topic: Understanding groups and managing work teams Case Application: Swimming Australia 17 7 12 Topic: Communication and Interpersonal Skills Case Application: Dominos 20 2 Group 1 CASE APPLICATION A radio prank gone horribly wrong – 2Day FM What started as a silly prank call from radio hosts Michael Christian and Mel Greig on 2Day FM, on 6 December 2012, turned deadly serious and very damaging for all of the parties involved. The two radio presenters had come up with the idea of phoning London’s King Edward VII Hospital while posing as Queen Elizabeth and Prince Charles to enquire about the condition of the pregnant Duchess of Cambridge, who had been admitted to the hospital. ‘If this has worked, it is the easiest prank call ever made …,’ Christian was heard to whisper as nurse Jacintha Saldanha transferred the call, which she believed was being made by the Queen and Prince Charles. After the call was transferred to the Duchess’s nurse, some private details of her recovery from severe morning sickness were broadcasted on the radio program, to the delight of the two radio presenters. They later boasted about their accomplishment, both on air and on their Twitter accounts. ‘This is by far the best prank I’ve ever been involved in … It’s definitely a career highlight,’ said Greig. Two days later, Jacintha Saldanha, the Indian-born nurse who had taken the call and transferred it in the belief it was genuine, was found dead. She had committed suicide out of shame following the widespread international attention that resulted from the prank. When news of the nurse’s suicide broke, a global social media storm erupted, with calls for the two radio presenters to be sacked. The radio station cancelled the segment and suspended the duo, who were moved to a ‘safe house’ after death threats were made in the social media sphere. The radio network also came under investigation by both Scotland Yard and the Australian broadcasting regulator, the Australian Communications and Media Authority (ACMA), to determine if any laws had been broken. The prank call was not the first time 2Day FM had been involved in controversy. For example, the station’s top-rating breakfast presenter Kyle Sandilands, and co-host Jackie O, had hit the headlines in 2009 when another distasteful joke went wrong. They had come up with the idea of using a lie detector to quiz a 14-year-old girl about her private life. Live on-air, she revealed that she had been raped when she was 12. Other ‘highlights’ of Kyle Sandilands’ radio shows included his drinking breast milk on air; a contest to find Sydney’s smallest penis; a race, in which Sandilands participated, to produce a sperm donation; and a foul- mouthed, on-air attack on a journalist who had dared to comment on Sandilands’ program’s ratings and content. It is estimated that the prank call to the hospital in London cost the radio station about $2.8 million in lost revenues when major advertisers and sponsors such as Telstra, Coles, Woolworths and Optus suspended their advertisements or reconsidered their continued commitments. In the aftermath, both the radio station and the two presenters defended their decisions to put the call to air. 2Day FM claimed it had made several attempts to contact the hospital and the nurses involved to get their permission to broadcast the call, which is the normal procedure in a case like this. However, the radio station never obtained consent, and ‘somebody’ had decided – most 3 likely with internal management approval – to put the call to air. In interviews which Michael Christian and Mel Greig did with two current affairs TV programs – Today Tonight and A Current Affair – in mid-December 2012, they apologised for their actions, saying they had never meant to hurt anyone and that they had expected the hospital staff would hang up on them. They were obviously very upset and emotional in the interviews, but they avoided being specific about how the idea had come about, whose idea it had been, what checks and guidelines were in place for regulating pranks of this type, the delay between making the recording and deciding to broadcast it, and who had made the final decision to broadcast it. ‘These prank calls are made every day, on every radio station, in every country around the world, and they have been for a long time … Nobody could have expected for this to happen,’ they said. Michael Christian returned to another radio program in February 2013 and was awarded the Next Top Jock award in June 2013 by Southern Cross Austereo, a decision which attracted criticism in the Australian media. In July 2013, it was reported that Scotland Yard had decided to drop charges regarding the prank call, but that they had handed the file over to the Australian Police to determine if any offences had been committed under Australian laws. In the same month, it was reported that Mel Greig, who had not returned to any broadcasting work, had taken legal action against her employer, Southern Cross Austereo, for failing to provide a safe workplace. In September 2013, the radio station took action in the Federal Court to prevent ACMA from carrying out any further investigations or publicly releasing its preliminary report on the incident. The argument from the lawyers was that the media watchdog did not have the power to decide whether the radio station had breached any surveillance laws. Another controversy was stirred on 22 October 2013, when the chairman of Southern Cross Media, Max Moore-Wilton, described the incident at the annual general meeting: ‘These incidents were unfortunate, no doubt about that … but in the immortal words of someone whose identity I cannot recall, shit happens.’ Sources: AAP, ‘Radio group defends chairman’s prank word’, SBS Online, 23 probe royal prank call’, ABC News, 19 September 2013; W. Tuohy, ‘Royal prank au>, 11 July 2013; AAP, ‘Prank call costs Austereo $2.8m’, The Age, 20 February 2013, p. B16; A. Ferguson and M. Idato, ‘Advertisers and investors not amused’, The Saturday Age, 15 December 2012, pp. B4–5; G. Kwek, ‘Radio prank fallout hits owner’s wallet’, The Age, 11 December 2012, pp. B1–2; and A. Ferguson, ‘Starbucks and 2Day FM’s trial by social media’, The Age, 11 December 2012, pp. 1, 4. See also Youtube for the first interview with Mel Greig and Michael Christian on Today Tonight, or on A Current Affair, , October 2013; L. McNally, ‘2Day FM argues ACMA lacks authority to DJ Mel Greig’s decision to sue her bosses is brave’, , 24 November 2010; D. Gross, ‘The days the earth stood still’, Newsweek, 3 May 2010, pp. 46–8; D. Michaels, S. Schaefer Munoz and B. Orwall, ‘Airlines, in flight again, see lesson in crisis’, The Wall Street Journal, 22 April 2010, p. A14; J. Thomson, ‘How I was stranded in Geneva by the Icelandic volcano: Entrepreneur tells’, SmartCompany, 21 April 2010; A. Heasley, ‘Qantas freeze on flight departures’, The Age, 20 April 2010; ‘Volcano delays parts to BMW factory’, USA Today, 20 April 2010, p. 5B; J.W. Miller, ‘Detours for perishable goods’, The Wall Street Journal, 20 April 2010, p. A11; P. Stafford, ‘Entrepreneurs and exporters suffer as Icelandic volcano forces more airlines to delay flights’, SmartCompany, 19 April 2010; and M. Brown and O.R. Valdimarsson, ‘Volcano eruptions may disrupt European air traffic for months’, Bloomberg Online, 18 April 2010. Copyright © Pearson Australia (a division of Pearson Austra
lia Group Pty Ltd) 2015 – 9781486006335 – Robbins/Management 7e 7 Discussion questions 1. Could a company even plan for this type of situation? If yes, how? If not, why not? 2. What types of plans could companies use in this type of situation? Why do you think these plans would be important? 3. What lessons about planning can managers learn from this crisis? 4. What other low-probability but severe-consequence events could there be? Is global warming and climate change one event that many businesses have not contemplated? 8 Group 3 CASE APPLICATION Underwater chaos It would be a claustrophobic’s worst nightmare – trapped in the 50-kilometre Eurotunnel beneath the English Channel on the Eurostar train that travels between Britain and the European mainland. The first time it happened was when a series of breakdowns in five London-bound trains from Brussels, which began on 18 December 2009, left more than 2000 passengers stranded for up to 16 hours. Many of those passengers trapped in the dark and overheated tunnel endured serious distress. The acutely uncomfortable temperatures led parents to remove their children’s outer clothing. Some passengers suffered stress and panic attacks. Others started feeling ill due to the heat. Was this just an unfortunate incident for the unlucky passengers who happened to be on those trains, or did poor managerial decision making about the operation of both the train and the channel tunnel also play a role? An independent review of the incident blamed Eurostar and the operator of the tunnel for being unprepared for severe winter weather. The report said that Eurostar had failed to adequately maintain and winterise its high-speed trains to protect sensitive components from malfunctioning due to excessive snow and moisture build-up. At the time of the Eurostar train breakdowns, severe winter weather had been wreaking havoc in Europe. Airlines, car and truck drivers, and other rail operators across Europe were also suffering from a winter that was on course to be the coldest in more than 30 years. Freezing weather and snow had caused travel problems for days in Northern Europe. In addition, the report criticised Eurotunnel (the operator of the channel tunnel) for having unsatisfactory communications systems in place inside the tunnel, which could have given its employees direct contact with train drivers and other Eurostar staff. If a train breaks down and passengers have to be rescued and evacuated, this must be done with greater speed and consideration. In an emergency, passengers need to have prompt information and regular updates. Although the severe weather conditions undoubtedly played a role in this fiasco, managers could have done a far better job of making decisions in preparing for such scenarios. The second disruption was in March 2012. Thousands of travellers, including Sir Paul McCartney and his family, were delayed by a faulty power cable. One passenger said, ‘There was absolute chaos at Gare du Nord and there was no information about possible delays. Eurostar staff were extremely unhelpful.’ However, another passenger said that, despite the train being at a standstill for nine hours and the lack of information, the staff were helpful and supportive. As London prepared to host the 2012 Summer Olympics, car and coach traffic was expected to increase, lending even more urgency to preventing a repeat of the incidents. Sources: ‘Eurotunnel boosts capacity’, Rail Business Intelligence, 31 May 2012, p. 2; ‘Eurostar trains disrupted by French power cable fault’, BBCNews Online, 6 March 2012; N. Clark, ‘Eurostar criticized for winter breakdowns’, The New York Times Online, 13 February 2010; B. Mellor and S. Rothwell, ‘Eurostar cuts service amid cold snap’, BusinessWeek, 11 January 2010, p. 10; D. Jolly, ‘Eurostar service disrupted as train stalls in channel tunnel’, The New York Times Online, 8 January 2010; and G. Corkindale, ‘Does your company’s reputation matter?’, BusinessWeek Online, 29 December 2009. 9 Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) 2015 – 9781486006335 – Robbins/Management 7e Discussion questions 1. What is your reaction to the events in the Eurotunnel? What does it illustrate about decision making? 2. How could the decision-making process have helped in both the response to the crisis situations and in preventing them from happening? 3. Could procedures, policies and rules play any role in future crisis situations like these ones? If so, how? If not, why not? 4. What could other organisations and managers learn from these incidents? 10 Group 4 CASE APPLICATION Self-governance at LRN Self-governance. Sounds like a term you would read in a political science textbook, but not a management textbook. However, a self-governing organisation is what Dov Seidman has created in his own company, LRN (a consulting firm), and it is what he advocates for other organisations that want to prosper in the new realities of today’s environment of interdependence. So, how does it work at LRN? LRN, which stands for Legal Research Network, is an organisation that was created in 1992 in New York by Dov Seidman. It was founded on Seidman’s idea that information should be democratised in order to help people around the world do the right thing. Seidman set out to build an organisation that could provide shared-cost legal expertise for corporate legal departments needing to navigate complex legal and regulatory environments and at the same time foster ethical cultures. Today, LRN consults with companies on legal and regulatory compliance, reputation and principled performance, environmental sustainability, business ethics, governance, leadership and culture change. It has expanded its operations to more than 120 countries, with offices in the US, Europe and India. Some of the company’s partners (as they prefer to label their clients) include 3M, Dow, Johnson & Johnson, Loews, Pfizer and Siemens. Seidman has long argued that the most moral businesses were also the most successful. Through research and experience, he began to realise that the old system of top-down command and control in organisations was not working. A large-scale study (a survey of almost 5000 managers and executives in the US) gave Seidman interesting insights into values by asking questions such as: ‘When people go around their boss because they believe it is the right thing to do, are they punished or rewarded? Are people trusted to make decisions?’ and so forth. The results showed three general categories of organisations: (1) ‘blind obedience’, which typifies companies that rely on coercion, formal authority, policing and command-and-control leadership; (2) ‘informed acquiescence’, which is characteristic of companies that have clear-cut rules and policies, wellestablished procedures, and performance-based rewards and punishments; and (3) ‘selfgovernance’, where there is a shared purpose and common values guiding people at all levels of the company, who are trusted to act on their own initiative and to collaboratively innovate. Siedman calls this a ‘theory of organisational evolution: from blind obedience to informed acquiescence to self-governance’. So, he decided to make his organisation self-governing. Seidman’s company originally had an organisational chart that showed the formal arrangement of jobs and who reported to whom. One day in 2009, in front of his 300 colleagues at LRN, Seidman ripped up the chart and announced that ‘none of us would report to a boss anymore. From that point on, we would all “report” to our company mission’. Thus began LRN’s journey to become a self-governing company. Seidman would be the first to admit that it has not been an easy process. Self-governance does not just mean making the organisation flatter (that is, eliminating reporting levels); nor is it about empowering, since the concept of empowerment reinforces the idea of ‘bestowing’ power from someone at a higher level. It does mean power and authority are used in a ‘highly collaborative way. Information is shared openly and im
mediately. 11 Employees make decisions and behave not in reaction to rules or a supervisor’s directive, but in accordance with a company mission built on shared values’. Elected employee councils at LRN handle things like recruiting, performance management and conflict resolution. LNR values character and integrity above all, and it hires people who share the company’s core values, which are integrity, humility, passion and truth. Dov Seidman has received a lot of attention for his radical approach to running and structuring an organisation like LRN in a new and revolutionary way. For example, LRN has established an unlimited vacation policy, where partners can take as much vacation as they like, as long as they are open about doing so and it does not interfere with their work. Another unconventional approach is that LRN has eliminated traditional approval processes for spending and based it on trust. The company has also thrown out its traditional performance management review process. Instead, performance assessments are based on the individual collecting information from 20 or so colleagues, and then giving themselves their own annual performance rating. LRN trusts employees to weigh the feedback they collect into their own ratings. The only ‘control’ is transparency. Self-ratings of all 300 employees are published internally. Even Dov Seidman’s own performance evaluation, which is based on the assessment that 67 of his colleagues completed, is open to be accessed by anyone in the company. ‘While it felt unnerving as a leader to have my performance appraisals published for all of my colleagues to see, it also felt necessary,’ Seidman says. ‘Our effort to become self-governing has been enlightening, frustrating, nerve-racking, authentic and urgent. It remains a work in progress.’ Welcome to the fascinating world of organisational structure and design in the 21st century! Did you ever consider that a business might actually be structured so that employees would not report to a boss and instead would all work together collaboratively? Dov Seidman and LRN were open to trying new ways of doing what they are in business to do, and the unusual structural experiment seems to be working well. Although organisational self-governance is still fairly rare – a survey done by LRN shows that only 3 per cent of employees observed high levels of selfgoverning behaviour within their organisation – the trust, shared values, and deep understanding and commitment to a purpose-inspired mission can help self-governed organisations gain competitive advantage and achieve superior business performance. Sources: Information from LRN website, , 13 November 2013; A. Kleiner, ‘The thought leader interview: Dov Seidman’, Strategy+Business, Summer 2012, pp. 1–8; D. Seidman, ‘Letting the mission govern a company’, The New York Times Online, 23 June 2012; D. Seidman, ‘To inspire others, it’s how you do it that counts’,, 3 May 2012; E. De Vita, ‘How’, Third Sector, 17 January 2012, p. 21; S. Pastoor, ‘The new competitive advantage: Values’, Official Board Markets, 10 December 2011, p. 6; and E. Frauenheim and D. Seidman, ‘Inspiration as worker incentive’, Workforce Management, May 2010, p. 8. Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) 2015 – 9781486006335 – Robbins/Management 7e 12 Discussion questions 1. What is your reaction to this concept of self-governing organisations? 2. Could you see yourself working in such an organisation? You may want to look up some of the videos that are available on LRN’s website about its culture and leadership. 3. How does the fact that employees at LRN are highly trained professionals affect why a selfgoverning structure would work in this organisation? 4. Seidman has said: ‘Our effort to become self-governing has been enlightening, frustrating, nerve-racking, authentic and urgent. It remains a work in progress.’ Why do you think he says this? What are the challenges in introducing a new organisational structure and way of operating like LRN has done? 13 Group 5 CASE APPLICATION Change agent at Australia Post Australia Post has a long and proud history in Australia, but it is now facing some tough challenges as the environment in which it operates is changing dramatically. While Australia Post has kept Australia connected for more than 200 years by delivering mail and parcels, and providing a national network that supports local communities and organisations, it needs to change and be innovative now that the internet and digital communication technologies are encroaching on its traditional postal services. Postal services in Australia started when Isaac Nichols, an ex-convict, was appointed the first postmaster in 1809 to run a post office in Circular Quay, Sydney, where the mail that had arrived on the ships could be collected. Similar positions were also set up in the other colonies to take charge of incoming and outgoing mail. Gradually, a network of mail deliveries on horseback and coaches was established throughout the colonies, with an overland service between Sydney and Melbourne starting up in 1838. The federation of the Australian colonies in 1901 resulted in the Postmaster General Department (PMG) being established and given control of post and telegraph/telephone services across the Commonwealth of Australia. In 1975 the PMG was split into two separate federal-owned entities – the Australian Postal Commission (APC, trading as Australia Post) and the Australian Telecommunications Commission (trading as Telecom Australia, which was later renamed Telstra in 1995 and privatised in stages but sold off fully in 2006). When the APC was created, it retained the monopoly of its predecessor – the carriage of letters weighing up to and including 500 grams, which is referred to as the ‘reserved service’. This monopoly still exists to some degree today, although a couple of reviews by the Australian government in 1982 and 1994 resulted in some changes to the ‘reserved service’ provision. Today, competitors such as DHL, TNT, and so on, are allowed to carry and deliver parcels over 250 grams and letters if they are not competing price wise (that is, charging at least four times the standard rate). This has obviously exposed Australia Post to more competition. Australia Post’s mail volumes peaked in 2008 and have since fallen nearly 20 per cent – around 1 billion fewer letters were sent in 2013 compared with 2008. Australia Post’s board recognised that the company needed to reposition itself or face extinction, as its core mail business was simply dying. The board felt they needed a new CEO who could work as a change agent, and they went looking for a person who had the skills and experience to do the job. The person they selected for the position was Ahmed Fahour, who was appointed managing director and CEO at Australia Post in February 2010. Born in Lebanon, Ahmed Fahour had migrated with his parents to Australia in 1970, where he completed an undergraduate degree at Latrobe University and an MBA at Melbourne Business School in the early 1990s while working for Boston Consulting Group. In 2000, Fahour joined Citigroup in New York as a senior executive, before moving up to become chief executive of 14 Australian and New Zealand operations in February 2004. In August 2004, just six months later, he was recruited by National Australia Bank (NAB) and, together with John Stewart, the then CEO, he was put in charge of the underperforming Australian operations, and made responsible for building a new brand, culture and service position at NAB after the bank had experienced some problems. Although Fahour has widely been credited with being crucial in turning around the performance both of the bank and its wealth management subsidiary MLC, he was overlooked for the CEO position at NAB in 2008 when John Stewart retired. The position was instead passed on to Cameron Clyne. For Ahmed Fahour, the job at Australia Post represented a new challenge he was eager to take up, as his comments in a press release at the time attest. ‘Au
stralia Post, as it has done many times over its two hundred year history, is in the process of reinventing itself. I’m excited at the prospect of directing this reinvention. We all recognise that the world is changing faster than ever before, especially the world of communications. Australia Post is responding to these changes. My primary role as CEO is to position the business to profit from these challenges through my leadership of a world class management team.’ The $5 billion company has Australia’s largest retail network, with 35 000 employees, and around 10 000 licensees, franchisees and contractors that deliver 20 million items to 11 million addresses across Australia every day. Fahour immediately commenced a business renewal program called ‘Future Ready’. The program involves the implementation of a more customerfocused business model that is designed to capitalise on Australia Post’s reputation as a trusted services provider, and it seems like it is starting to pay off. Under Fahour’s direction, Australia Post had two consecutive years of profit growth in 2011 and 2012, following steep profit declines in the preceding two years, 2009 and 2010, as letter volumes started to decline (see Figure 7.9). What has now become a golden opportunity for Australia Post is the increasing parcel delivery business, the result of a surge in online shopping, but it is also an area where the organisation is competing more directly with other parcel delivery companies since it is outside the ‘reserved service’ delivery provision in its monopoly status. For example, online sales were valued at $11.1 billion in 2012, a rise of 15 per cent in that year alone, and they are expected to grow by about 10 per cent a year until 2019. In 2013, it was estimated that Australia Post had about 35 per cent of the domestic parcels market, and that the volume for Australia Post had increased 24 per cent from 2008 to 2012. For Fahour it is clear that the trend of declining letter delivery will mean Australia Post will need to find new ways to change and innovate to take advantage of new opportunities, particularly in parcel delivery services. To do so, it has looked for ways to boost its services in new areas. For example, it has opened superstores across the country, where customers can access online shopping zones, 24/7 areas with self-service terminals and dedicated travel zones. New products have also been developed, such as insurance and finance products, plus a digital mailbox app for iPad, tablets and smartphones, which will be a one-stop shop for email, banking, paying and reviewing bills, retail purchases, and storing documents such as your passport and birth certificate, as well as transactions such as paying your tax. Another new initiative was Australia Post’s May 2013 launch of its first 24/7 Parcel Lockers as part of the postal corporation’s strategy ‘to build a sustainable communications business, both physically and digitally’. These 15 electronic lockers aim to address the problem of people missing parcel deliveries. Parcels are left in a locker for 48 hours, and the recipient is sent a text message or email with the location of their parcel and an access code. The innovation was described by BRW magazine as the ‘freshest business idea’ for 2012. It is currently rolling out the electronic lockers with the aim of having them in 250 locations by 2015. Australia Post has boosted its parcel delivery capabilities with the November 2012 acquisition of the remaining 50 per cent stake in the courier StarTrack Express, which was previously jointly owned by Australia Post and Qantas. It has also set up a joint venture, Sai Cheng Logistics International, to provide supply chain management and logistics services between China, Australia and the rest of the world, as well as the subsidiary Post Logistics Hong Kong to provide a freight forwarding service. And then there is the SecurePay gateway to facilitate online payments and other e-commerce solutions for businesses and individuals. Australia Post has hired outside staff for key executive positions, such as Microsoft Asia-Pacific president Tracey Fellows to improve its technology expertise and Richard Umbers, who was general manager of customer engagement at Woolworths, to run the parcel operations. Additionally, Fahour has brought in some former NAB executives, such as the new chief operating officer Ewen Stafford and Chris Blake to head corporate affairs. As Australia Post sets out to deliver its important social and economic dividends for Australia, it will need to balance its commercial objectives with its community service obligations. Australia Post also has an aim to reduce its greenhouse emissions by 25 per cent by 2020, based on its year 2000 emission levels. In 2011/12, it reduced its carbon emissions by a further 5 per cent. And there will no doubt be many other challenges ahead that will have to be met. For instance, an ongoing issue is whether the Australian government will follow the same path as with Telstra and privatise Australia Post, or part of it, sometime in the future. The issue arose in late 2013 when the government considered ways to bring the national budget deficit under control. Privatisation would require splitting up the current organisational structure, privatising the parcel section and keeping the letter delivery section under government ownership. The British government has been doing something similar with its recent privatisation of Royal Mail, for an estimated price of around £3.3 billion (approximately A$5.6 billion), so it is a path that other countries are already pursuing. There was even an idea floated around at the end of 2013 that Australia Post could be a candidate to take over the front office operations of Centrelink and Medicare. With its nearly 4500 retail outlets nationwide, including more than 2500 in rural and regional areas, this could certainly be a possibility in the future. The change process at Australia Post has also attracted some criticism. By 2013, around 2000 jobs had disappeared and more are likely to disappear in the future. There have been some dragged-out negotiations with the Communications Workers Union about a new enterprise bargaining agreement. Postal workers are complaining that they have suffered real wage cuts in recent years, including having their normal $500 Christmas bonus replaced by a $100 voucher to be spent at Australia Post stores and $60 worth of stamps; by contrast, Ahmed Fahour remains one of Australia’s highest-paid public servants, with salary and benefits totalling $4.75 million in 2012. There has also been criticism from customers that the cost of parcel delivery has gone up, as Australia Post has expanded its services to include extra charges for tracking and signature on delivery. Fahour has also been criticised for his single-mindedness in changing Australia Post – 16 being called ‘ruthless’ by some, ‘highly energetic’ by others. But one thing is for sure: everyone has an opinion about the charismatic leader, including himself. ‘There is no right or wrong style, but there will always be people who get their nose out of joint. If you want to change anything there are always winners and losers: do you want to judge the outcome by the majority or do you want to judge it by the tails?’ Sources: Information from Australia Post’s website, , 7 November 2013; J. Heath, ‘Australia Post may do Centrelink’s job’, The Australian Financial Review Online, 28 October 2013; P. Kai, ‘Australia Post “at turning point” for letter or worse’, The Saturday Age, 19 October 2013, p. B3; AAP, ‘Stamp prices to rise amid losses for Australia Post’, The Sydney Morning Herald Online, 19 October 2013; D. Crowe, ‘National icon sales may help fix budget’, The Australian Online, 28 September 2013; P. Durkin, ‘Ahmed Fahour: Agent for change’, Financial Review Boss Magazine, June 2013, pp. 22–9; and A. Coyne, ‘Inside Australia Post’s IT transformation’, ITnews Online, , 27 May 2013. Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) 2015 –
9781486006335 – Robbins/Management 7e Discussion questions 1. Does Australia Post face more of a calm waters or white-water rapids environment? Explain. 2. What external and internal forces are impacting on Australia Post? 3. How would you evaluate Australia Post’s change strategy – what is being changed when it comes to structure, technology and people? 4. Would you expect some resistance to change to occur when it comes to the introduction of these changes and the changes to the company’s culture? Could stress also be an issue at Australia Post? 17 Group 6 CASE APPLICATION Team breakdown at Swimming Australia Australia’s national swimming team has for many years enjoyed incredible success at Olympic Games and other international swimming events. But something seemed to go wrong at the 2012 London Games, with Australia winning only one gold medal in the pool, putting it far down in the rankings alongside ‘minor swimming countries’ such as Tunisia and Lithuania. This was a far cry from the swimming team’s performance just 12 years earlier at the Sydney 2000 Olympic Games. The Australian Olympic Committee ordered an investigation to be carried out after various comments from some of the participants had leaked out to the press. The Bluestone Review: A Review of Culture and Leadership in Australian Olympic Swimming, commissioned by Swimming Australia, was released in January 2013. It revealed some shocking behaviours within the Australian swimming team; behaviours that were far removed from the wholesome team ethos that had been the hallmark of the Australian swimming team for decades, where team members supported each other despite the importance of individual performances. The report revealed that inflated egos and unchecked inappropriate behaviour by ‘stars’ had resulted in a culture of drug abuse, bullying and bad behaviour among team members both before and during the Games. It also resulted in Swimming Australia losing its major sponsor, Energy Australia, one year into a five-year-deal. The withdrawal cost Swimming Australia up to $6.5 million. So, what had gone wrong? The Bluestone Review revealed that things had really started to go wrong as early as 2009, partly due to the loss of superstars such as Ian Thorpe and Grant Hackett who had been important role models, providing inspiration and guidance for the whole team through their leadership positions as well-regarded and ‘senior’ mentors on the Australian team. Instead, poor discipline, low morale and inadequate leadership within the team had started to build a ‘toxic’ culture where transgressions by certain members of the team were often overlooked by management, resulting in a fracturing of the team’s unity. Over time, this situation had gradually created a general unrest within the team, which contributed to an erosion of the team ethos. While there was, as the report suggested, ‘no single headline problem and no single bad apple in London’, a combination of events and actions over time had resulted in the team’s poor performance at the 2012 Olympic Games. For example, the report revealed that a few of the swimming stars had received too much attention, which had made many of the other swimmers on the Australian swimming team feel undervalued. This was particularly the case with the highly rated men’s 4 × 100 m freestyle relay team, which had attained a special status within the group and seemed to be able to get away with what normally would be regarded as unacceptable behaviours. For example, when the six members came up with a ‘drunken’ bonding ritual that involved taking some banned Stilnox (sleeping medication) tablets and then making obnoxious prank phone calls and knocking loudly on the doors of other team members and coaches late at night at a team event one week before the Olympics, the transgression was overlooked and no disciplinary actions were taken at that time. However, the incident created ill feeling within the 18 rest of the group, so when the men’s 4 × 100 m relay team failed to win a medal (finishing fourth) despite their heavy favouritism, some of the other swimmers admitted they felt some satisfaction at their colleagues’ misfortune. Lack of organised team get-togethers also resulted in the Australian swimmers not transforming into a team, which produced low team cohesiveness and the emergence of subgroups. Twentyfour of the 47-strong Australian swimming squad were first-time Olympians who had not been inducted sufficiently. In addition, the media environment, particularly with the growth in social media, played an important role in exposing some of the swimmers’ opinions, self-interest, relationships, egos and vanity in a new way and put the athletes under additional scrutiny. Engaging in the social media frenzy also meant that some already disconnected swimmers sought support from sources external to the team, which again diminished the former reliance of swim team members on their colleagues for support during the Olympics. Quite simply, swimmers were focusing too much on themselves individually, instead of supporting each other. Much of the focus was on the ‘the big boys and girls’ of the team, not the whole team. This meant that some of the swimmers described the 2012 Olympic Games as the ‘Lonely Olympics’, saying they felt deserted by their fellow swimmers who had not followed the long-standing tradition of being in the stands cheering on their fellow team mates during the various events. Instead, many had gone out socialising when they had finished competing in their own event, leaving their team mates, who were still in the competition, feeling unsupported. As a result, an undertone of divisions – now and then, us and them, men and women, the best and the rest – became evident. The coaches also came under heavy criticism by The Bluestone Review, which suggested that standards, discipline and accountabilities for the swim team members at the London Olympics were too loose. Instead of stepping in, the coaches had left the situation to get out of hand when a strong collective leadership response had been warranted from their side. Sources: S. Paxinos, ‘Team culture needs overhaul: Reports’, The Age, 20 February 2013, p. 28; R. Hinds, ‘A oncegreat sport sinks to new low’, The Age, 20 February 2013, pp. 28–9; Swimming Australia, The Bluestone Review: A Review of Culture and Leadership in Australian Olympic Swimming, 30 January 2013; and N. Jeffery, ‘Not part of the team: Swimming’s troubled culture exposed’, The Australian Online, 12 September 2012. Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) 2015 – 9781486006335 – Robbins/Management 7e 19 Discussion questions 1. How could concepts such as stages of group development, group structure (roles, norms, conformity, status, group size, group cohesiveness) and group processes (group decision making and conflict) be used to improve the management of the Australian swimming team? 2. Why do you think a team ethos would be important even in a largely individual sport such as swimming? 3. What role did the lack of leadership from ‘senior swimmers’, coaches and the head-coach play in the downfall of the Australian swimming team? 4. Here is your chance to be creative! Think of a team-building exercise that would help Swimming Australia achieve one of the characteristics of an effective team (see Figure 9.5, page 251). Describe the characteristic you chose, and then describe the exercise you would use to help a team develop or enhance that characteristic. 20 Group 7 CASE APPLICATION Delivery disaster at Domino’s Pizza When two Domino’s Pizza employees filmed a gross prank in the kitchen of the restaurant in Conover, North Carolina, in the US, the company suddenly had a major public relations crisis on its hands. The video ended up posted on YouTube and other sites and showed a Domino’s employee preparing ‘sandwiches for delivery while putting cheese up his nose, nasal mucus on the sandwiches, and violating other health-code standards’, with another employee providing narration. By the next d
ay, over a million disgusted people had viewed the video and discussion about Domino’s had spread throughout Twitter and Google. As Domino’s quickly realised, social media has the power to take tiny incidents and turn them into marketing crises. A company spokesperson said, ‘We got blindsided by two idiots with a video camera and an awful idea.’ When the company first learned about the video, executives decided not to respond aggressively, hoping the controversy would quieten down. What they missed, though, was the ‘perpetual mushroom effect of viral sensations’. The chief marketing officer of a social media marketing firm said, ‘If you think it’s not going to spread, that’s when it gets bigger.’ And as Domino’s discovered, it did. In just a matter of days, Domino’s reputation was damaged. Customers’ perception of its quality went from positive to negative. One brand expert said, ‘It’s graphic enough in the video, and it’s created enough of a stir, that it gives people a little pause.’ So, what happened to the two employees? Although they told Domino’s executives they never actually delivered the tainted food, they were fired and charged with a felony. And Domino’s posted its own video featuring its top manager addressing the incident on YouTube not long after it occurred. Sources: B. Levisohn and E. Gibson, ‘An unwelcome delivery’, BusinessWeek, 4 May 2009, p. 15; S. Clifford, ‘Video prank at Domino’s taints brand’, The New York Times Online, 16 April 2009; B. Horovitz, ‘Domino’s nightmare holds lessons for marketers’, USA Today, 16 April 2009, p. 3B; and E. Bryson York, ‘Employee misconduct and internet video create PR disaster for Domino’s Pizza’, Workforce Management Online, 15 April 2009. Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) 2015 – 9781486006335 – Robbins/Management 7e 21 Discussion questions 1. Beyond its being vulgar and disgusting, what do you think of this situation from the perspective of managing communications? 2. Why do you think Domino’s executives took a wait-and-see attitude? Why was this a problem? 3. How could this type of communication problem be prevented at other Domino’s Pizza restaurants? 4. Do incidents like this and the possibility of them happening anywhere, anytime, mean that all forms of social media should be banned from workplaces? What are the implications for policies regarding communication technology?

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