Please Analyze the information below and thoroughly perform a problem-solving process formatted as: A. Define the problems B. Determine the cause of the problems C. Systems Affected D. Alternatives E. Recommendations

CASE: VALLEY WIDE UTILITIES COMPANY Valley Wide Utilities Company, a privately owned utility company, is faced with financial inefficiencies resulting from an ex- pansion of its facilities. President Robert Delgado has requested a review of the firm's operating standards. He has asked John Givens and Hilda Hirsh to provide a broad outline of MBO performance standards that would identify key standards with which to control performance. Three years ago, Valley Wide Utilities, under the direction of a management consulting firm, implemented a system of MBO for the purpose of evaluating department managers, sales engineers, and consumer service employees. The advantage of such a system of controls is that top management can very rapidly scan a printout and detect any trou- ble spots in the department. Givens and Hirsh attempted to set the standards as if the personnel were working at a normal pace. After review, Givens and Hirsh raised the performance level on several items, reasoning that a standard is probably too low if it can be achieved without a challenge. Delgado had specifically asked for goals that were not easily attainable. There was a certain amount of negative reaction, but in the end, the departments agreed. a The Situation During the past year, however, a significant amount of dissatisfaction has emerged. In the first year, participation was encour- aged and rewards were obtained. The employees set their goals high and productivity increased. Now, however, problems are being reported in the evaluation of performance, and many managers are claiming that the standards set by Hirsh were too tight or unfair. The president said, Yes, we have had a few operating problems, but no sys- tem is perfect. Hirsh noted that the consumer department had exceeded its monthly labor cost standards, so she called Bill Walton and red-lined his performance report. Walton hit the roof. He called Givens and said, The system is grossly unfair and inaccurate as a measure of performance. The real objective is to control total costs. My department has done this, even though we were over in labor costs. There was a heavy snowstorm last month with lots of frozen lines, and we had to get peo- ple out there on overtime. The real need is to maximize customer service and keep costs to a minimum, which we have done. Two other department managers complained that the system was unfair, and several engineers are threatening to resign. In their complaints to Givens, they pointed out that Hirsh was apparently only looking for failures to report, under the cover of the MBO system. Robert Delgado thought: We may need to take another look at our system; maybe MBO doesn't work in a utility. (Use the Case Analysis Form on the following page.)