Drugs Division of Multico - Case Study Example

Case Study of Multico 2008 The case study under consideration is with regard to the organization of Drugs Division of Multico. The division has recently been computerized and reps are required to enter all information on the calls to drug prescribers so that there is a systematic appraisal of their performance. The reps have also been provided with a list of target prescribers in their respective areas, the list being developed by an independent market research company. However, the reps are not happy with the new method and many have complained that the process is time-consuming, since computerization has not replaced the earlier paperwork; the program is not user-friendly; the information they enter are not coded properly and frequently disappear in the main database; and the target database is incomplete and does not take into account deaths, retirements and relocations. The reps contend that they are not averse to adopting technology or new work methods but feel that the system has been thrust upon them without consultation with actual users, and the project manager who was involved did not have technology experience. The management, however, claim that the reps’ complaint is simply because they do not want change work practices and blame the high attrition rates after the computerization on this resistance from reps. Although the management acknowledges that there are problems with the system and the database, they still do not plan to include the reps in designing the new model. At most, they plan that they will modify the system so that the reps can enter information on calls to targets not in the list and purchase a new database. Clearly, there is a conflict situation between the reps and the managers, which is affecting the reps’ performance. From the sociological perspective, the organization can be analyzed in terms of three broad theories: 1) the classical conflict theories of Marx and Weber 2) the structuralist-functionalist theories of Durkheim and Parsons, and the 3) post-modern symbolic interaction theories. In the Marxian scheme, conflict between employees and employers stems from the rift between the owners of capital (in this case, the managers) and labor (here the reps) and the conflict ultimately gives rise to a revolt by labor. However, the Marxian conflict situation applies to an entire society, and not necessarily to an organization like Multico. Also, the theory does not also explain the continuation of conflict without the eventual crisis situation as hypothesized by Marx. The situation can partly be explained by the Weberian theory, which developed on the Marxian conflict theory of stratification of the society to also include ‘mental production’, by which various levels of class divisions besides that composed of the workers and the capitalists may simultaneously coexist (Collins, 1974). In the Marxian scheme, the reps, who provide labor value to the organization, is in conflict with the managers, who are trying to extract surplus value. The conflict would eventually lead to a radical change in the organization. Weber, however, believed that the ‘status quo’ of the conflict could exist forever since the various levels of workers and capitalists would provide checks and balances to the system. The status group, or the bureaucracy of managers, could then allow the conflict situation remain without leading to any major breakdown of the system. The sustaining conflict situation can also be approached on the basis of the structural functionalist school of thought, which emerged in the Cold War era of the 1940s and 1950s in the United States, which was basically a consensus theory in which inequalities were thought to be necessary to some extent. In this theory, first propounded by Talcott Parsons apparently based on the theory of Durkheim (cited in Collins, 1974), the society is considered to be composed of several groups that are interdependent and each with a function of its own. These groups interact, maintain equilibrium and change in an evolutionary manner as the society becomes more complex and develop new institutions. According to this theory, inequality exists in a society and is rewarded through income, prestige and status differentials. Hence, the structuralists would postulate that the inequalities between the reps and the managers in Multico are necessary and are the result of the rewards system in the society. Hence, conflict situation between the reps and the managers would be seen as crucial for the success of the organization and is in fact beneficial for it. The post-modern view of the conflict situation is quite in contrast to that of the structuralists. This theory approaches the conflict on the basis of microbehavior of each individual and not on the institutions, as in the classical and structuralist schools. Therefore, the post-modern scholars would recommend a gradual and not drastic shift, as the classical and structuralists would, in the behavior pattern of the managers and the reps. According to the post-modern theory of symbolic interaction, society is in a constant change through interactions with each other. The symbolic meaning that each individual in a society attaches to events and things, the way they view morality, ethics and values determine the way they interact (Herman and Reynolds, 1994 cited in wikibooks). Like the functionalists, interactionists also think that change is continuous and evolutionary, not radical. Therefore, it would be beneficial for the managers and reps to come to terms and evolve their behavior pattern accordingly. The scientific management theory of the early 20th century, proposed by Frederick Taylor, would postulate a systematic approach to management of organizations in such a way that each organization would have a division of labor to the maximum extent so that workers are completely dehumanized and made to work in a mechanical way. Even a century later, the reps of Multico are put in nearly such a situation. Elton Mayo’s Hawthorne study (1945) at the Western Electrical Company in the US had thrown up important conclusions that refuted Taylor’s classical management theory. He found that the approach to the management’s human relation played a crucial role in determining the workers’ perception. In the experiment, Mayo found that worker’s productivity depended less on the lighting conditions at the workplace than their perception of the management’s attitude towards their well-being. Similar studies were made with relay assembly groups, mica splitting and bank wire processes (faculty, babson). In the light of these evidences, Multico’s reps could demonstrate much higher productivity if their working conditions were improved and were consulted on the change of work process was are concerned. Taylor and Fayol had not consider the situational and contingency factors that organizations like Multico faced. Management research conducted in the 1960s and 1970s emphasized on the environmental contingencies, like change and uncertainty in the business environment, technology and size of the company, affect the organizational form and performance. Hence, uncertainty and unpredictability needs to be factored into non-routine jobs, like those of the reps of Multico. For example, the attempt to dehumanize the reps’ activities by providing them with the target database has not been adapted to the contingency elements that some prescribers may not be available to the reps on account of death, retirement or relocation. Hence, Multico requires contingency leadership from the managers, as theorized by Fred Friedler (1967), Burn & Stalker (1961), Lawrence & Lorsche (1967) and Woodward (1965), who would acknowledge the changes and whom the reps would trust so that the structured task would be acceptable to them. Human psychology is an important determinant for labor relations, as was found by researchers of organizational culture through the 1960s and 1970s. In the 1980s, this stream of research was further refined as corporate organizations became diversified and managers had to handle multiple divisions, like is the case with Multico. In the 1990s, diversification was accompanied with the problems arising from globalization and new technologies affecting organizational structures and cultures, as in the case of computerization like in Multico. In the new scenario, the parameters of decision-making in the organization change dramatically. Handy (1990) and Hamel and Prahalad (1993) found that organizations that did not acknowledge these changes were faced with problems. Organizations like Multico, which adopted a new technology in an ad hoc manner without considering the effect on the organization, for example, was faced with a conflict situation, as was other dominant multi-division companies like General Motors (Bartlett & Ghoshal). According to the motivation theories that typically acknowledge factors like rewards, management support, resources including time and organizational structures to determine entrepreneurship (Matthew et al, 2007), Multico has not put in place any motivational factor for the reps. More recent research emphasize, in addition to these factors, other intrinsic motivation elements like appropriate work designs at the micro level, which are even more absent in Multico. Thus, the inability to innovate in their work design has affected the performance of Multico’s reps. In Multico, the structure of power, control and discipline has exerted an adverse influence on the organization, according to the postmodern theories of organization. The reps have been provided with laptop computers that they are supposed to carry in their cars so that they can enter the information immediately after visiting a drug prescriber. The information keyed in would reach the master computer instantly so that their performance can be judged almost simultaneously to the time that they perform the act. The company has adopted this measure so that there is a continuous monitoring of the reps. In Discipline and Punish: The Birth of the Prison (published in 1975 in France under the title Surveiller et punir: Naissance de la prison; translated into English in 1977), Foucault examined the practices of discipline and training linked with penalizing power, implying that these practices were initially nurtured in inaccessible institutional surroundings such as jails, army organizations, hospitals, factories and schools but were slowly employed more largely as systems of social control, the vital aspect of this control is that it is applied straight on the body. Disciplinary practices include a regular watch (in fact the English translation of surveiller, to be more correct, is, to watch, rather than discipline) facilitating an incessant and invasive control of individual demeanor, aiming at once best practical use of body's ability and efficiency and promoting its value and passivity. In Multico, the system of using the computer to track the reps’ movement, through the process of the reps having to enter reports immediately after the target visit, is in a sense like the concept of panopticon, Greek for all-seeing, as an architectural concept that Jeremy Bentham proposed for British prisons, workhouses, schools and mental asylums in the Eighteenth century, which Foucault applied to derive the modern social construct of organizations (Warrier). In the panopticon, the inhabitants would know that they were being watched since the tower itself signified surveillance, it was ‘unverifiable’ in the sense that they did not know by whom or when they were being watched (Foucault, 1977). Similar is the case with the Multico reps who know that each piece of information that they put into the computer system or the information that they do not enter are all under surveillance. Hence, there is an inherent lack of trust between the managers and reps that is reflected in the work environment. Like Bentham, the Multico managers believe that the uncertainty of the surveillance would have a psychological impact on the reps so that they would behave better. This would in effect reduce the cost of actual surveillance since each rep would keep a watch on the other and also work according to procedures laid out. The modality has resulted in a situation that the reps are under a constant state of consciousness and under power even when there is no direct exertion of power. The managers do not need to directly observe the reps’ work patterns and behavior, the sheer sense of being observed serves the purpose. In the process, as noted by Foucault (1977), power has depersonalized and automatized the reps. The anonymity of the observer instills greater fear in the reps’ minds since the risk of being surprised is all the more increased by the symbol of unnamed power. In Discipline and Punish, Foucault depicts the way in which the most important method of disciplinary power, that is constant watch to be snatching the mind other than disciplining the body also. This is to generate a psychological condition of 'conscious and permanent visibility' (Foucault 1977: 201), sense of self- alertness that makes the modern individual. Thus, the case of Multico shows that the managerial practices of introducing change, that is, initiating the computer system, has met with resistance from the reps because of bad planning. This has happened because the management followed the ‘scientific management’ theory prescribed by Taylor in the early 20th century, which has now been discredited for not allowing for changes in environmental and contingency factors. Besides, the change has also resulted in resistance because the reps were not involved in the process and the new system was thrust on them. Empirical research has shown that psychological factors and perceptions are often more useful to resolve conflicts than can be done by setting down rules for the workers. In current management theories, an inclusive management practice that is designed by incorporating the workers, communicating with them and accepting their suggestions are more effective than attempting to discipline workers through surveillance and making them work according to set rules, like Multico has done. Because of the lack of communication between the managers and the reps, employee relations have been adversely affected by the new system. Therefore, the managers of Multico should design the computer system in such a way that it addresses the problems and issues raised by the reps. At every stage of the design and implementation of the new system, the reps should be involved. A cooperative system, rather than a managerial system, would function better. Works Cited Collins, Randall, Conflict Sociology. New York: Academic Press, 1974, pp.56-61 retrieved from http://www2.pfeiffer.edu/~lridener/courses/COLLINR1.HTML Parsons, Talcott, Sociological Theory and Modern Society, New York, Free Press, 1967. Herman, Nancy J. and Reynolds, Larry T. Symbolic Interaction: An Introduction to Social Psychology. Altamira Press 1994 http://en.wikibooks.org/wiki/Sociological_Theory/Symbolic_Interactionism Taylor, F W., The Principles of Scientific Management, Harper and Brothers Free Books Hosted Online by Eldrich Press http://www.referenceforbusiness.com/management/Comp-De/Contingency-Approach-to-Management.html Fiedler, Fred E. A Theory of Leadership Effectiveness. New York: McGraw-Hill, 1967. Burns, Tom, and G.M. Stalker. The Management of Innovation. London: Tavistock, 1961. Woodward, Joan. Industrial Organization: Theory and Practice. London: Oxford University Press, 1965. Lawrence, Paul R., and Jay Lorsch. Organizations and Environment: Managing Differentiation and Integration. Homewood: Irwin, 1967. http://faculty.babson.edu/krollag/org_site/encyclop/human_relations.html Bartlett, Christopher and Sumantra Ghoshal, BEYOND THE M-FORM: Toward a Managerial Theory of the Firm, http://www2.tepper.cmu.edu/bosch/bart.html Matthew et al, Examining the technical corporate entrepreneurs' motivation: voices from the field, Entrepreneur, 2007 Foucault, Michel, Discipline and Punish: The Birth of the Prison, trans. A. Sheridan, Harmondsworth: Peregrine, 1977. Read More