MGMT.8003 Human and Resource Management Bandag Case Study
Read the case below and answer all the questions
Jim Bandag took over his family’s auto supply business in 2005, after helping his father, who founded the business, run it for about 10 years. Based in Auckland, Bandag employs about 300 people, and distributes auto supplies (replacement mufflers, bulbs, engine parts, and so on) through two divisions, one that supplies service stations and repair shops, and a second that sells retail auto supplies through five “Bandag automotive” auto supplies store.
Jim’s father, and now Jim, has always endeavoured to keep Bandag’s organization chart as simple as possible. The company has a full time-controller, managers for each of the five stores, a manager that oversees the distribution division, and Jim Bandag’s executive assistant. Jim (along with his father, working part time) handles marketing and sales.
Jim’s executive assistant administers the firm’s day-to-day human resources management tasks, but the company outsources most HR activities to others, including an employment agency that does its recruiting and screening, a benefits firm that administrates its 401(k) plan, and a payroll service that handles its pay checks. Bandag’s human resource management systems consists almost entirely of standardised HR forms purchased from an HR supplies company. These include forms such as application and performance appraisal forms, as well as an “honesty” test Bandag uses to screen the staff that works in the five stores. The company performs informal salary surveys to see what other companies in the area are paying for similar positions, and use these results for awarding annual merit increases (which in fact are more accurately rate cost-of- living adjustments).
Jim’s father took a fairly paternal approach to the business. He often walked around speaking with his employees, finding out what their problems were, and even helping them out with an occasional loan - for instance, when he discovered that one of the children was sick, or for part of a new home down payment. Jim, on the other hand, tends to be more abrupt, and does not enjoy the same warm relationship with the employees as did his father. Jim is not unfair or dictatorial. He’s just focused on improving Bandag’s financial performance, and so all his decisions, including his HR -related decisions, generally come down to cutting cost. For
example, his knee-jerk reaction usually to offer fewer days off rather than more, fewer benefits rather than more, and to be less flexible when an employee needs, for instance, a few extra days off because a child is sick.
It’s therefore perhaps not surprising that over the past few years Bandag’s sales and profits have increased markedly, but that the firm has found itself increasingly enmeshed in HR/equal employment-type issues. Indeed, Jim now finds himself spending a day or two a week addressing HR problems. For example, Henry Jacques, an employee at one of the stores, came to Jim’s executive assistant and told her he was “irate” about his recent firing and was probably going to sue. Henry’s store manager stated on his last performance appraisal that Henry did the technical aspects of his job well, but that he had “serious problems interacting with his co-workers.” He was continually arguing with them, and complaining to the store manager about working conditions. The store manager had told Jim that he had to fire Henry because he was making “the whole place poisonous,” and that (although he felt sorry because he’d heard rumours that Henry suffered from some mental illness) he felt he had to go. Jim approved the dismissal.
Gavin was another problem. Gavin had worked for Bandag for 10 years, the last two as manager of one of the company’s five stores. Right after Jim Bandag took over, Gavin told him he had to take a sick leave to have hip surgery, and Jim approved the leave. When Gavin returned from leave, Jim told him that his position had been eliminated. Bandag had decided to close his store and open a new, larger store across from a shopping centre about a mile away, and had appointed a new manager in Gavin’s absence. However, the company did give Gavin a (no managerial) position in the new store as a counter salesperson, at the same salary and with the same benefits as he had before. Even so, “This job is not similar to my old one,” Gavin insisted. “It doesn’t have nearly as much prestige.” His contention is that the Employment Relations Act 2000 requires that the company bring him back in the same or equivalent position, and that this means a supervisory position, similar to what he had before he went on leave. Jim said no, and they seem to be heading toward litigation.
In another sign of the times at Bandag, the company’s controller, Miriam, who had been with the company for about 6 years, went on pregnancy leave for 12 weeks in 2005 (also under the Parental Leave and Employment Protection Act 1987), and then received an additional 3 weeks’ leave under Bandag’s extended illness days program. Four weeks after she came back, she asked Jim Bandag if she could arrange to work fewer hours per week, and spend about a
day per week working out of her home. He refused, and about 2 months later fired her. Jim Bandag said “I’m sorry, it’s not anything to do with your pregnancy-related requests, but we’ve got ample reasons to discharge you - your monthly budgets have been several days late, and we’ve got proof you may have forged documents.” She replied “I don’t care what you say your reasons are, you’re really firing me because of my pregnancy, and that’s illegal.”
Jim felt he was on safe ground as far as defending the company for these actions, although he didn’t look forward to spending the time and money that he knew it would take to fight each.
However, what he learned over lunch from a colleague undermined his confidence about another case that Jim had been sure would be a “slam dunk” for his company. Jim was explaining to his friend that one of Bandag’s truck maintenance service people had applied for a job driving one of Bandag’s Distribution Department vehicles, and that Jim had turned him down because the worker was deaf. Jim (whose wife occasionally said of him, “No one has ever accused Jim of being politically correct”) was mentioning to his friend the apparent absurdity of a deaf person asking to be a truck delivery person. His friend, who happens to work for another company, pointed out that the NZ Court of Appeals, had recently decided that this company had violated the Employment Relations Act 2000 by refusing to consider deaf workers for jobs driving the company’s smaller vehicles.
Although Jim’s father is semi-retired, the sudden upstick in the frequency of such EEO-type issues troubled him, particularly after so many years of labour peace. However, he’s not sure what to do about it. Having handed over the reins of the company to his son, he was loath to inject himself back into the company’s operational decision making. On the other hand, he was afraid that in the short run these issues were going to drain a great deal of Jim’s time and resources, and that in the long run they might be a sign of things to come, with problems like these eventually overwhelming Bandag Auto. He comes to you, who he knows consults in human resource management, and asks you the following questions.
Using your knowledge of management theories and HR. models, explain 4 major
challenges affecting this company?------------------------------------------------
Critically analyse the management theories used by Jim and Jim’s father identifying 2
strengths and 2 weakness of each of the management theory that seem to influence
Jim and Jim’s father’s management style-----------------------------------------
In light of the challenges facing the organisation, which management theory do you
think is the best to use in this organisation as a way forward? Support your
recommendation with four clearly explained reasons----------------------------
Explain 3 reasons why Miriam has a legitimate claim? --------------------------
Give advice in the case of Garvin to avoid litigation?-----------------------------