Department of Commerce, by Robert Dibie, 2010.

Department of Commerce, by Robert Dibie, 2010.

A young public management graduate student from Indiana University Kokomo called Mr Maro had applied to the state Department of Commerce for a job. Before submitting his application at the Indianapolis headquarters of the Commerce Department he had been assured by Mr Nelson the director of the Kokomo regional office that his services were required and that he was qualified for the position of assistant manager.

The executive director of the Indianapolis office, Dr Oputa, kept Mr Maro’s job application for two months and returned the application to Mr Nelson in Kokomo with the comment that he was still studying the vacancies in the entire state. Three months later, Dr Oputa recommended that Mr Nelson in Kokomo should interview Mr Maro. After the interview, Mr Nelson was very impressed and recommended to Dr Oputa that Mr Maro should be hired. But Dr Oputa’s approval was not forthcoming.

Mr Nelson was short-staffed at the Kokomo regional office, yet the Indianapolis headquarters did not deem it necessary to approve new staff for the Kokomo office, neither did the headquarters give Mr Nelson the flexibility to hire his own choice of staff. Mr Nelson visited Indianapolis one Monday and found that most of his peers in South Bend, Evansville, Terre Haute and Fort Wayne regional offices were allowed to hire new staff. He became frustrated and demanded to meet with the director of operations at Indianapolis, Dr Ajiri. He narrated his dilemma to him, as follows.
“When I first came there, I just never paid attention to titles. I worked for an executive director. We disagreed a lot, but we respected each other and could talk. Everything went fine until mid-1997, when we moved from Indianapolis to Kokomo and my boss retired. All of a sudden, the Commerce Department fell apart. We didn’t have any leadership. Other officers and our consultants recommended me for the job. But they decided to hire Dr Oputa from outside. Just after he resumed duties, Dr Oputa introduced what I call the Mafia, because he brought all these guys with him, promoted them regional directors, and posted them to Fort Wayne, Evansville, Terre Haute and so on. I found myself explaining elementary stuff to him and his cohort whenever I visited Indianapolis.
“When Dr Oputa arrived, I told him, here are the problems. But, instead of listening to me, he spent more time complaining about the past administration than cleaning up the problems we faced. From day one, he insisted upon a complete divorce from the past and, of course, I was a part of the past.
“If it weren’t for my particular expertise, he probably would have fired me. I would take early retirement today if I could live off it. I just realised that there is nothing in the future. I feel like I’ve just hit the wall. I uprooted my family for the move and so I really don’t want to leave the Kokomo area now. And I’m too old to make another move. I’m obsolete; I’m at a dead end. There’s no way up. No way down. And no way out.”

In another development in the state Department of Commerce, most women in the organisation complained about a glass ceiling. Since Dr Oputa took over as the chief executive of the department two years ago, no woman had been promoted into senior management positions. As a matter of fact, women in the department had refused to serve as protégés under their male superiors. Because of this weak mentor orientation, the Department of Commerce has been known to have a strong “old boy network”. Dr Oputa was expected to address the issue of female staff refusing to serve as protégés or mentors. But he felt that it was a problem associated with the past.

Dr Oputa arrived from Michigan two years ago to replace the retired chief executive of the State Department of Commerce. Dr Oputa is an experienced international executive, having spent most of his 20-year career with General Motors’ international divisions. He had served in Indonesia, France and Argentina and had spent several years in GM’s head office in Detroit. He was delighted with the challenge to expand the Indiana State Department of Commerce. Dr Oputa was also pleased with the progress that the department had made under his leadership and felt a sense of accomplishment in developing a smooth-running operation. However, he had become concerned in recent months with notable changes in the regional branches and lack of diversity in the department. Dr Oputa felt that the old boy network had absorbed the Commerce Department’s culture such that the socialisation process in the department had been tainted with internalized politics. According to Dr Oputa, this dent in the Commerce Department has resulted in a substantial loss of its administrative effectiveness.

Six weeks after Dr Oputa resumed duty as the chief executive of the Commerce Department, he redesigned the department without consulting with the five functional directors who report to him. According to him, the restructuring was based primarily on centralised management principles. Dr Oputa reorganised the department into six divisions. Coordination mechanisms were established so that accounting, purchasing, human resources and other functions could occur on a more centralised basis, while many aspects of service delivery functions such as career development, technology, pensions, industrial development, and management information systems were decentralised. As part of Dr Oputa’s reorganisation of the department, he retired all employees who were 55 years and older. He also removed women from all sectional head positions, because he felt they were always taking time off work. The redesigning of the department was contrary to the affirmative action and equal employment opportunity laws. It further led to a high rate of turn-over in the department. Another consequence of this reorganisation was that some regional directors could no longer hire nor promote employees working under them. It was also ironic that some regional directors, whom Dr Oputa brought with him to the Commerce Department, were allowed to perform these centralised functions in their respective regions.
Dr Ajiri, the director of operations, has a different style of management. He was Mr Nelson’s colleague for five years before he was recently promoted to the position of director of operations. Dr Ajiri has assumed many characteristics of a typical pragmatic executive. He spent a great deal of time listening to the personal problems of his subordinates, maintained close social ties with many of the men in the organisation, and had even helped arrange the marriages of some of the young employees. Consequently, many employees sought Dr Ajiri’s advice and attention to register their complaints or concern with management. For example, many employees complained to Dr Ajiri about the personnel policy that Dr Oputa had installed. This involved a move away from female and other minority promotion that was formerly based on seniority to one based on superior evaluation of subordinates. The employees asked Dr Ajiri to intercede on their behalf. He did so and insisted that their demands were fully justified in view of traditional management practice.

Although Dr Oputa found it helpful to learn the feelings of middle managers from Dr Ajiri, he, however, resented having to deal with Dr Ajiri as an adversary rather than as a colleague. Dr Oputa became reluctant to ask Dr Ajiri’s opinion because he invariably raised objections to changes that were contrary to past norms and customs. Other events had raised some doubts in Dr Oputa’s mind as to the soundness of Dr Ajiri’s judgment, which Dr Oputa had never before questioned. For, instance, when Dr Oputa wanted to dismiss a manager who, in his opinion, lacked initiative, leadership, and general competency, Dr Ajiri defended the manager, noting that the Commerce Department had never fired a manager. Dr Ajiri also argued that the manager had been loyal and honest and that the department was partially at fault for keeping him on for the last five years without spotting the incompetence and recommending further training. Dr Oputa fired him anyway, only to discover two weeks later that Dr Ajiri had interceded on behalf of the fired manager and had got Indiana State Department of Transportation to hire him. When confronted, Dr Ajiri simply said that he had done what was expected of a superior in an organisation where there is no consensus or participatory type of management.

The Indiana State Department of Commerce recently contacted you, a well-known management and organisational behaviour consultant, to help resolve the problems in the department.

1. What are the main problems identified in the case? (12 points)

2. Provide a brief outline of how you contrast the perception of Dr Ajiri and Dr Oputa concerning what constitutes a better management or leadership approach. (3 points)

3. How could policies be effectively implemented in the organisation? (3 points)

4. Recommendation on how the Department of Commerce could move forward. (12 points)