RELY Cleaning Services, Inc., was started a number of years ago by Rick Ely to provide cleaning services to both large and small businesses in their home city. Over the years, as local businesses reduced underutilized building maintenance staffs, more and more cleaning services were subcontracted to RELY. RELY also expanded into other building services, such as painting and local moving.
RELY maintains a pool of skilled workers who are contracted to perform the noncleaning services because these services do not recur on a day-to-day basis for the individual buildings. Many of RELY’s full-time employees have been with the firm for a number of years. Five zone managers are each responsible for furnishing recurring nightly cleaning services to several businesses. In addition, the zone manager sells and schedules noncleaning service jobs for the company’s central pool of skilled employees. Informal meetings are held periodically to discuss RELY’s performance, personnel allocations, and scheduling problems. RELY’s budgeting and planning have been done by Ely, who also manages variations from budgets.
Ely recently decided to retire and sold the business to Commercial Maintenance, Inc. (CMI), which provides similar services in a number of metropolitan locations that surround RELY’s business area. After news of the sale, several of RELY’s long-term employees appeared resentful of the change in ownership and did not know what to expect.
CMI’s senior management met with RELY’s managers and announced that George Fowler would become president of RELY and that RELY would continue to operate as a separate subsidiary of CMI. Furthermore, in accordance with CMI’s management philosophy, a responsibility-accounting system is to be implemented at RELY. Also, in line with other CMI subsidiaries, a participatory budgeting process is being considered. However, no decision will be made until an evaluation of RELY’s existing policies, operational culture, and management is completed. In view of the significant change in management philosophy, CMI has taken considerable time in explaining how each system operates and assuring RELY’s managers that they are expected and encouraged to participate in both the planning and implementation of any of the systems that are to be adopted.
Two new initiatives are being considered at RELY Cleaning Services, Inc.
• Responsibility-accounting system
• Participatory budgeting system
For each of these new approaches:
1. Identify at least two behavioral advantages that could arise.
2. Identify at least two potential problems that could arise.
3. Discuss the likelihood that the new approach will contribute to the alignment of organizational and personal goals.