Khoshaba Rugs, owned and operated by Salem Khoshaba, sells both very expensive Persian rugs and cheaper lines. Mr. Khoshaba employs 40 people, 11 of whom are full-time. The full-time staff includes a store manager, bookkeeper, seven salespeople, handyman and rug repairer. Mr. Khoshaba’s main functions are buying rugs in Iran, India and the Far East, hiring new employees, and when he is present, running the day-to-day operations. The manager is responsible for running the business only when Mr. Khoshaba is away. The rest of the time he works as a salesperson. He treats employees well, offers fairly good wages, and pays for dinners for those who work at night. The bookkeeper is perceived to be “in good” with Salem, who is encouraging her to improve her skills. She often tells other staff what to do, which causes resentment.

1. List the outward manifestations, in terms of organizational performance and/or employee behaviour that indicate that organizational results could be improved.

2. Under the headings of leadership, motivation, perception, and power identify the causes of the outward manifestations you identified in question 1.

3. In light of your analysis, what changes would you recommend in the way this organization is run?