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A Case Study Using the Hersey-Blanchard and Vroom-Jago Models

A case study on leadership and decision-making models at Alvis Corporation.

Benjamin Clark
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Analyzing Leadership Styles and Decision-Making in Alvis Corporation: ACase Study Using the Hersey-Blanchard and Vroom-Jago ModelsAlvis CorporationKevin McCarthy is a manager of a production department in Alvis Corporation, a firm thatmanufactures office equipment. After reading an article that stressed the benefits of participativemanagement, Kevin believes that these benefits could be realized in his department if theworkers are allowed to participate in making some decisions that affect them. The workers arenot unionized. Kevin selected two decisions for his experiment in participative management.The first decision involved vacation schedules. Each summer the workers were given two weeks-vacation, but no more than two workers can go on vacation at the same time. In prior years,Kevin made this decision himself. He would first ask the workers to indicate their preferencedates, and then he considered how the work would be affected if different people were out at thesame time. It was important to plan a vacation schedule that would ensure adequate staffing forall the essential operations performed by the department. When more than two workers wantedthe same time period, and they had similar skills, he usually gave preference to the worker withhighest productivity.The second decision involved production standards. Sales had been increasing steadily over thepast few years, and the company recently installed some new equipment to increase productivity.The new equipment would allow Kevin’s department to produce more with the same number ofworkers. The company had a pay incentive system in which workers received a piece rate foreach unit produced above the standard amount. Separate standards existed for each type ofproduct, based on industrial engineering study conducted a few years earlier. Top managementwanted to readjust the production standards to reflect the fact that the new equipment made itpossible for the workers to earn without working any harder. The savings from higherproductivity were needed to help pay for the new equipment.Kevincalledameetingofhis15workersanhourbeforetheendoftheworkday.Heexplainedthathewantedthemtodiscussthetwoissuesandmakerecommendations.Kevinfiguredthattheworkersmightbeinhibitedaboutparticipatinginthediscussionifhewerepresent,soheleftthemalonetodiscusstheissues.Besides,Kevinhadanappointmenttomeetwithqualitycontrolmanager.Qualityproblemshadincreasedafterthenewequipmentwasinstalled,andtheindustrialengineerswerestudyingtheprobleminanattempttodeterminewhyqualityhadgottenworseratherthanbetter.WhenKevinreturnedtohisdepartmentjustatquittingtime,hewassurprisedtolearnthattheworkersrecommendedkeepingthestandardssame.Hehadassumedtheyknowthepayincentiveswerenolongerfairandwouldsetahigherstandard.Thespokesmanforthegroupexplainedthattheirbasepayhadnotkeptupwithinflationandthehigherincentivepayrestoredtheirrealincometoitspriorlevel.

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