This case integrates various topics from the textbook. Be sure to refer to topics including diversity (Ch 11), emotional intelligence (Ch 10), groupthink (Ch 12), organizational commitment and turnover (Ch 3), stress (Ch 5), and organizational justice (Ch 7) in the textbook while solving the case.

Questions to Answer

Extra Question A. What are the root causes of high turnover based on the information available in the case?

Extra Question B. What are the root causes of low profitability?

LEARNING GOALS performance and its long-lerm prospects. You travel to Tiger's This case will allow you to explore the challenges of managing corporate headquarters and plan to spend foar days meetcritical employees who work in demanding jobs. As the lead ing with people to gather information that will inform your management analyst emplayed by a holding company, youre recommesdations. responsible for examining management practices at a neaiy Your first meeting with the Tiger top management teamacyuired firm. More specifically, you'll be looking into some went fairly well. The first thing that struck you aas this: problems related to the retention of key employees in this Although the team members are quite different from each compary. The search for the root causes of the acquisition's ather in ohvious wiys, heneath the surfice there is remarkproblems will require consideration of severad interrelated fac- ahle similarity. Of the seven members who compose this team, tors having to do with the way the work, and the why people three have been with the company since its inception. The doing the work, are manged. After reading the cnse, you'll four newer members are much younger and came to the comprepare a report for your boss that describes your findings and pany more reokntly in response to the furm's rapid growth, due recommendations. mostly to international expansion that occurred berween 2002 and 2007. Despite the differeaces in ape, company tenure, and KEY WORDS COVERED their functional and industry backerounds, the members of this team seem to be cut from the same cloth in that each is - Organizational commitment very businesslike, analytical, hard driving, and restults-focused. - Foroed ranking In your discussion regarding the company's expansion, - Stressors tainty, and to be honest, we really didn't jell logether initially-I - Enotion thotelience - the it was a big mistake to grow so last and bring aew peo- -Teamdiversitywereverycohesive,andwesharethesamevisionofbowwedopleonboarttotanasethisship-butbowwerepestallthat, - Cohesion business. This is a qood thing because when I retire in a couple - Coliesion of years, Ill know the company's in good hands," Everyone - Groupthink in the room seemed to nod in agreement. Another faunder, Russell "Rusty" Giee, then looked squarely into your eyes and THE SITUATION Added, 'l'm not exactly sure what you're looking to do here, The Lorean Group, an international holding comparogrecentle but we weathered lots of starms logether. Yes, we've had a couple of rough years, but we're more than capable of handling been sucoessful sinee its inception in 1964. Revenues over the consider any recommendations that'll upset the apple cart." past four years have been flat, however, and costs of running Rusty made the statement in a friendly wny with a smile on his the business have been climbing steadily. Tiger was acquired in fnce, yet you could tell he was very serious. spite of this recent decline in profits hecause of its reputation Although you learnod many things during that first meet. in the industry and its extended list of loyal clients. Lorean ing, two things stood out that suggested a real problem. First, has a history of turning around troubled acquisitions, and the turnower among creative team associates at Tiger is high: 35 belief is that Tiger can be saved as well. percent eact year for the last tao years and 30 percent the year The Lorean Group iatends to let Tiger operate indepen- before that. The industry averape is less than 20 percent, and dently, though it seeks to understand the causes of the recent it is evea lower in the top firms. Creative team associates are management analyst employed by a holding company. youre responsible for examining management practices at a nealy Your first meeting with the Tiger top management team nequired firm. More specifically, you'll he looking into some weat tairly well. The first thing that struck you was this: prohlems related to the retention of key employes in this Although the team members are quite different from each compary. The search for the root causes of the acquisition's other in obvious ways, beneath the surface there is remarkproblems will require consileration of several interrelated fac- able similarity, Of the seven members who compose this team. tors having to do with the way the work, and the way people three have been with the company sinoe its inception, The doing the work, are managed. After feading the case, you'll four newer memhers are much younger and came to the com: prepare a report for your boss that describes your findings and pany more recently in response to the firm's rapid growth, due recommendations. mosily ta international expansion that occurred between 2002 and 2007. Despite the differences in age, company tenure, and their functional and industry backgrounds, the members of KEY WORDS COVERED this team seen to be cut from the same cloth in that each is - Organizational commitment very businesslike, analytical, hard drivine, and results-focused. - Forcod ranking In your discussion reparding the company's expansion. - Transactional theory of stress sion was tough for us hecause of all the pressure and uncer- - Stressors tainty, and to be honest, we really didn't jell together initially=I - Emotional intelligence throught it was a big mistake to grow sa fast and bring new peo- - Team diversity ary very colesive, and we share the same vision of bow we do - Cohesion busizess. This is a good thing because when I retire in a couple - Groupthink of years, I'il know the company's in good hands." Everyone in the room seemed to nod in agreement. Another founder. Russell "Rusty" Ges, then looked squarely into your eyes and THE SITUATION Sdded, "Tm not exactly sure what you're looking to do bere. The larean Giroup, an international halding enmpany, recently couple of rough years, hut we're more than capable of handling acquired a controlling interest in Tiger Advertising. This adver- things ourselves-this was part of the deal, wasn't it? We kncw tising agency, which employees 6,644 people worldwide, has this place betler than anyone, so I can't imagine we'll seriously been successful since its inception in 1964. Revenues aver the consider any recommendations that'll apset the apple cart." past four years have beea that, homever, and costs of runting Rasty made the statement in a frieadly way with a smile on his the business have been climbing steadily. Tiger was acquired in face, yet you could tell he was very serious. spite of this recent decline in profits because of its reputation Although you learoed many things during that first meerin the industry and its extended list of loyal client5. Lorean ing. two things stood out that suggested a real problem. First. has a history of turning around troubled ncquisitions, and the turnover among crentive team associates at Tiger is high: 35 belief is that Tiger can he saved as well. pereent each year for the last tao years and 30 percent the year The Larean Gimup intends to let Tiger operate indepen hefore that. The industry average is less than 20 percent, and dently, though it seeks to understand the causes of the recent it is even lower in the top firms. Creative team associates are poor performance of the compary. The Lorean Group recog vital to Tiger's success, so this retention issue is a big problem. nizes that, allhough poor firm performance could be attributed Because the compary's business molel centers ca advertising to isolated incideats, most oftea there are systematic problems desipn father than production or media servioss, creative tean that require changes in practioes and policies. You're a mat- associates constitute the company's tectanical core. Although agement analyst from Lorean, and your boss has given you the Tiger top management team seems aware of the problem. the responsibility of analyzing the situntion nt Tiger and offer- they seem to rationalize it. As Jamic Waggner, VP of human ing recommendations that will improve the firm's financial resources, noted, "We hire the best and the brightest, so it's only natural that they accasionally get posched by other firms. Lhis story did so with pride and remarked how it was a "lantasWe try our best to keep them, but during the last fow years Lic tesar-building experience for those who chose to tough it we haven't had the ability to compete with the salaries they're out" and that if perfectly reflects the "contany's 'work-lard, being oftered elsewhere. Once things turn around toe us, we'li play-hard' meatality." be able to solve the turnoner issue." When you inquire about how the job performance of the You also leaned the company has been sued three times crentive associates is managed. you learn that toward the end recently, The cases involved associntes who were passed over of ench calendar year, the senior client managers get together for promotion and who claimed that the work envimonent and spend an entire day on the evaluation process. The evaluwas $ filled with stress that it made them ill and unahle to ations focus on the extent to which each associate contributed work. Although you were amare of the first case because it was to the designs of the teams they worked on during the previous highly publicizet, apparently Tiger went to great lengths to year. A list of all associates, ordered by their job perlormance sethe the two subsequent cases quickly before angthing was scores, is generated. This list is thet used to deterthine three disclosed. The first case was settled out of court as well, but categories, eact of which is associated with some significant not before it became an embarrassment to the company and reward conscquences. The top 10 percent eet sizable bonuses, it5 principals. You could tell from the tooe of the conversation which typically amount to 50 percent of base pay, and are fast that the management team members are proud that they pre- tracked to senior client manager. The next 30 percent get a vented word of the other tan lawsuits from getting out, Before 25 percent bonus and are onncidered "on-track" for promoyou have a chanee to ask the question of whether anyone tion. The others get a small share of profit, hat tynically this helieves the turnover and lawsuits are related, Jamie wilunteers amounts to 2 to . 3 percent ro their salary. the following. "We were really unlucky during that periad. We Bonus checks, and a letter explaining how the bineses are hired three associates who didn't possess sulTicient capsbili- tistributed, are tailed to Lhe associates' residential adulresses ties, and each bad trouble coping in a way that would have led at the beginning of the winter holiday. When you inguire to better outcones. Most everyone is drawn here because of about why the company distributes perforthance feedback th the challenge inhereat in the work that ae do-we just have to way. Jamie told you the following: "The associates aork in do a better job in ruling out applicants who don't fit." tesms and so they're understandably sensitive to differences Your subsequent observmtions and discussions with the in their bonases, Although they're intended to send strong memhers of the creative teams did not reveal anything too fnr signals to the associates, we avoid bad feelings and onnfict, rut of the norm as compared to other advertising agencies in By the time they get hack fmom the holiday, it's not an their terms of the immediate work context. Workload and time pres- minds as much." sure are very high but not atypical for a large advertising agency. You had lunch with several senior client managers to gain The creative teams typically include three to five associates their perspective on the comparg: Although this meeting and are lod by a senior client manager, who thakes final design started ofl well, thoy became a little deferisive when the sabject decisions after receiving ainput from the nembers. Although in of the turnover and larsuits came ap. One renarked, Anound your intial meeting Jamie referred to the teams as beine self- lere. you're rewarded for payine your dues, for doine whatever managed, the senior client managers function more like tra- it takes to deal with anything that gets throwu at you. Yes, it's ditional supervisors in that they assign specific tasks to each demanding, and it requires sacrifice, but how else can we find memher during the projects. Because the support staff is kept wat whether people have what it takes? Those of us sitting at to a minimum at the firm to keep costs down, associates also this tahle with ynu are a pmoduct of this and it works-lonk at have to take care of a lot of the adiministrative duties. In return, how successful we've been. We just can't tolerate hires who houever, the members of the creative teams get to work on claim they can't take it or that it's ahusive." some highly visible projects for socne very well-known clients. You also met with a group of creative team associales, and You also note that the creative teans have autonomy to for the farst time, you're exposed to a diflierent perspotive work wherever and whenever they need to. This arrangenent regarding what Life is Like at Tiget. As an example, one asocigives employees a lot of flexibility, and working odd hours in ate said. "I kearnod a lor from dealing with the pressare at the strange locations has resulted in some stories of which every- beginning. but the work is nonstop. They say it's 'work-hard, one in the company is familiar. As an exnmple. Yoa henrd n plny-hard,' but even the plny feels like work." Anorher associstory of a creative team dinner meeting in a private mom at a ate chimed in, "The projocts are great, hut I never feel like I'm Incal restaurant. When the restaurant closed, the senive client fully invived. I'm always on the periphery chipping in where was so filled with stress that it made them ill and unahle to ations focus on the extent to which esch associate contributed work. Although you were aanre of the first case because it was to the designs of the teams they worked an during the previous highly puhlicized, apparently Tiger went to great lengths to year. A list of all associates, ordered by their job performance setle the two subsequent cases quickly belore angthing was scores, is generated. This list is then used to determine three disclosed. The lirst case was settled out of court as well, but calegories, eacto of which is associated with sount significant not betore it bocame an embarrassnuat to the company and reward consequences. The top 10 perceat pet sizable botiuses, its principals. You coald tell from the tone of the conversation which typacally ansount to 50 percent of base pey, and are fast that the management team members are proud that they pre- tracked to senior client manager. The next 30 percent get a vented word of the other tao lawsuits from getting out, Before 25 percent bonus and are considered "on-track" for promoyou have a chanee to ask the question of whether anyone tion. The others get a small share of profit, but typically this helieves the turnover and lawsuits are related, Jamie wolunteers ammunts to 2 to .3 percent of their salary. the following- "We were really unlucky during that period. We Bonus checks, and a letter explaining hoiw the bonuses are hired three associates who didn't possess sufTicient capahili- thistributed, are mailed to the associates' residential addresses ties, and each had trouble coping in a way that would have led at the beginning ol the winter holiday. When you inquire to better outcones. Most everyocie is Ulrwan here because of about wity the comapany distributes performatice leedback Lhis the challenge inluerat in the work that we do-we just have to way. Jattie told you the following." "The associates aotk in do a better job in fuline out applicants who don't fit." teans and so they're understandably sensitive to differences Your subsequent observations and discussions with the in their bonases. Although they're intended to send strong members of the creative tenms did not reveal anything too fnr signals to the associates, we avoid bnd feelings and conflict. out of the norm as compared to other advertising agencies in By the time they get back from the holiday, ir's not on their terms of the immediate work context. Worklosd and time pres. minds as much." sure are very high but not atypieal for a large advertising agency: You had lunch with several senicir client managers to gain The creative teams typically include three to Five associates their perspective on the compamy: Although this meeting and are led by a senior client manager, who makes final Jesign started on well, they became a litle deletisive when the sabyect decisions afler receiving nput from the members. Although iri of the turnover and lassuits came up. One remarked, AAround your intial meeting Janie referred to the teans as being self- lacre you'e rewarded for paying your dues, for doing whatever managed, the scnioe clicnt manapers tunction more like tra- it takes to deal with anythine that gets thrown at you. Yes, it's ditional supervisors in that they assign specific tasks to each demanding, and it requires sacrifice, but how else can we find member during the projects. Because the support scaff is kept out whether people have what it takes? Those of as sitting at to a minimum at the firm to keep coste down, associates alen this table with you are a product of this and it works-look at have to take care of a lot of the administrative duties. In return, how successful we've been. We just can't tolerate hires who however, the members of the creative teams get to aprk on claim they can't take it or that it's ahusive." some highly visible projects for some very well-known clients. You alsa met with a group or creative team associates, and You also note that the creative teamms have autonomy to for the first time, you're exposed to a diflerent perspective work wherever and whetiever they need to. This arrangentent regarding what life is like at Tiger. As an example, one associgives employees a lot of flexibility, and working odd hours in ate said. "I keartod a kot from dealing with the pressare at the strange locations has resulted in some stories of which every- beginning, but the work is nonstog. They say it's 'work-hard, one in the company is tamilar. As an example. you heard a play-hard,' but eren the play feels like work." Anocher associstory of a crestive team dinner meeting in a private room at a nte chimed in. "The projects are great, but I never feel like I'm local restaurant. When the restaurant closed, the senion client fully involved, l'm nlmays on the periphery chipping in where manager handed the cwner $1,000 to let them stay and work, I can." As a final example, a third assnciate stated, "It's defiand the team stayed until the restaurant opened for lunch the nitely sinkorswim around here, that's for sure. It's easier for next day- Although not everyone at the meeting was on-board some people who get plugged-in with a manager right away, with the idea initislly, and in lact, one member had to leave but l've never seemed to gain lavor with ary ol them rezardless because of a personal oblivation, the team members carne of low many lours I put in. To top it ofli, the crazy hrs are together and produced a very successtul deliverable for ocie creating a lot of aork-family conflict, and the strains are feally of the firm's largest clients. The senior manager who revealed adding up