The Vidsoft Triangle case study Summary of situation at Vidsoft and how to best resolve it How does transformational leadership create a higher level of moral aspiration for followers and leaders alike?

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Date: 28.02.2010�


31 Overall Assessment �

52 Resolving the current Situation �

52.1 Rational Decision Making applied on the current situation �

82.2 Things that Babatunde could have done to avoid the current situation �

92.3 Things that the Vidsoft should do now to avoid re-occurrence of the current situation �

103 Transformation and Transactional Leadership �

103.1 Principal differences �

103.2 How transformational leadership create higher moral aspiration �

114 References �


Overall Assessment

Vidsoft Technologies is a software development company (mainly Internet solutions) that has experienced enormous growth in the past 18 months since going public in June 1999. According to the case study timelines; from June 1999 to December 2000 the company has grown from 500 to 2000 employees while multiplying its revenue by five. This, within 18 months can be considered a huge growth by any standards, considering that it happened without any company acquisitions.

The section below details general observations regarding the current organizational challenges (as a result of such rapid growth) that represent the environmental contributors to Babatunde's current decision situation.

Teams or Groups Sizes and Dynamics Changes

The team sizes have become too big for the teams to remain effective high performing teams that historically represented the organisational culture. The organisation was made up of 'high performance' teams which were easy to maintain due to size and assimilation management of diversity.

Changing leadership and levels have impacted the team dynamics that are well established. Babatunde's team is bound to regress in its level of effectiveness due to the effectiveness component changes, namely: Context - leadership, performance and rewards; Composition - personality, roles, diversity and size; and Work design - skill variety.

Reward and Motivation

The organization was previously very flat and encouraged team work and team accountability for best output. Previously position levels in the organization were not significant to individual status and rewards.

The increase in management levels may be an indicator some employees who are generally not team players that the organisation is now attaching status and better rewards to higher position levels. This could lead to resentment and internal team competition and politics regarding internal promotions. The change of the team leader from Babatunde to Li in Hsu's case destroys his motivation to belong to this team, as he claims he joined the team for affiliation.

Individual Personality and Organisational Culture

The organisation has always prided itself on attracting and employing highly motivated and intelligent people who have no intellectual inferiority issues. This culture was long entrenched by management, with White leading the living of these values from the front.

The decrease of skills in the IT industry due to the internet industry growth has led to Vidsoft's relaxation of the recruitment requirements regarding personality and organizational fit as well as position and competency fit. This means that the employees that have now entered the organisation will require more active and integrated diversity management in order to maintain team effectiveness and high organisational productivity5 (Thomas, et al. 2002). Focused interventions are required to define and transform the organisational culture to accommodate the OLD and NEW employees. This has not happened yet.

Communication and Change Management

Vidsoft seems to have been able to handle communication better when it was small and could resolve work problems by close hands on management effective.

This leadership method of micro management to resolve problems is not effective in big organizations. Vidsoft has to establish processes for management of employee relationships that will provide guidelines and boundaries for Babatunde to deal with Hsu's request.

Resolving the current Situation

This situation can only be resolved by removing emotion and applying rationale to the situation. There is evidence of much emotion already. This is seen with the tears and the emotion overcame Li when Babatunde consulted her about Alex's request. Alex showed a lot of emotion in his request when he explained why he is not prepared to work under Li. In Babatunde's quiet deliberation on what to do, there are also some emotional questions at play.

Although it is hard to divorce all work situations from emotions, Babatunde can reach the best resolution by applying the Rational Decision Making Model explained by Robbins (2005)1. The qualifying assumptions for simple application suitability of the model are: The decision maker is clear what the problem is and can find out more information where required; there are clear solution alternatives; it will be easy to set a preference criteria to evaluate solution alternatives; a simple preference criteria weight can be set and made constant over time in line with organizational principles; Babatunde has reasonable time and has zero costs requirements to gather information to base his decision on and the alternative that has most positives will be selected as the best solution.

This approach will assist Babatunde make the best decision because although the situation does not meet all the required assumptions noted above, it does meet the majority. The model steps and details of what Babatunde should do now to resolve this situation area is detailed in the next section.

Rational Decision Making applied on the current situation

The model steps are depicted with a simple application (minus weights) and results in figure1.

Figure1: Rational Decision Making Process: Vidsoft situation application summary

Problem Statement Definition

Alex Hsu formally requested Babatunde, (his second line manager) to authorise his transfer from the current team reporting to Jennah Li to the second team under the unit that currently has no manager and temporarily reporting directly to Babatunde. Alex approached Babatunde directly and Babatunde requested a three way meeting with both parties that ended with two different wishes requesting a decision from Babatunde.

Alex wants to be transferred from Li's team to another team that has no middle manager.

Li want Alex to remain in her team and work through the problems as he had not raised these with her till now.

Babatunde has been asked to make a ruling on this matter.

Preference Criteria to evaluate alternatives against

The alternative selected should uphold the following principles:

1. Discourage deviant workplace behavior that might impact the productivity of the team negatively. Daniel2 et al. says; "The presence of a deviant employee amongst a business unit impinges upon the performance of the business unit as a whole", therefore it is important that such behavior is managed proactively before it spreads.

2. Establish first line management authority and responsibility by giving Li the authourity to resolve this situation and offering her support on her decisions regarding her team. She is responsible for the performance of her team, so she should be given authority to make decision that affect the team's performance as well. Responsibility without authority to make decisions is meaningless.

3. The organization flourished and grew because if its team work values and recognition of group performance above individual performance, while strongly discouraging satisfaction of personal egos from all employees (top down). The solution should uphold this organizational culture of organizational ambition instead of destroying it.

4. Recruitment principles of Vidsoft have always promoted recruitment of employees that are 'better' than their managers. Li represents this specific type of employee which Babatunde should motivate, develop and work hard to retain; therefore he cannot make a decision that undermines his own effort towards her development, motivation and retention.

Analysis of the alternatives

Authorise transfer

If Babatunde authorizes the transfer he will be setting precedence creating an expectation that similar request from other team members will be accepted. Processing this request from Alex and making a decision will also disregard Li's new position indicating that the new structure is ineffective or not yet operational since he is still making decision himself. Reasons supporting Alex's transfer request are based on his individual ambitions and ego and not group performance and team work principle therefore saying yes to such a request may incite others to behave in a similar fashion as destructive as the claims made by Alex about Li as an individual.

Score: Upholds principle/criteria 0 Yes, 4 No

Disallow transfer

Processing this request from Alex and making a decision will also disregard Li's new position indicating that the new structure is ineffective or not yet operational since he is still making decision himself. Keeping Alex in this team may lead to a spread of his negative emotions and deviant back stabbing behavior to other team members and finally affect productivity. Taking a decision on Li's behalf will also undermine her development, as she will miss an opportunity to learn how to make difficult management decisions.

Score: Upholds principle/criteria 2 Yes, 2 No

Leave the decision to Jennah Li

This will uphold all the principles listed in the criteria, but upset Alex as he clearly does not see himself as Li's subordinate that should be communicating directly with Li to resolve any work issues that might be at stake. This alternative will also require that Babatunde supports whatever decision that Li makes or guide her through coaching to the best resolution.

Score: Upholds principle/criteria 4 Yes, 0 No

Ask Alex to resign (Result Ranking: 2)

Processing this request from Alex and making a decision will also disregard Li's new position indicating that the new structure is ineffective or not yet operational since he is still making decision himself. This might also backfire especially in a unionized environment, where this request might be misinterpreted as an unfair indirect dismissal. This is my personal preference (personal preference acknowledged to be emotional not rational) of an outcome since nothing is mentioned about Alex's contribution to high team productivity.

Score: Upholds principle/criteria 3 Yes, 1 No

The best solution

The best resolution to this situation when applying the rational model is to leave the decision to Li and to guide her through this same process of sorting out and weighting up alternatives. This decision will establish the type of authority allocated to the middle management position.

Things that Babatunde should have done to avoid the current situation

The current tension could have been avoided by using communication effectively to support the change of the team leadership structure. Babatunde treated the change as a one day (the day of the announcement) event instead of a process where his whole team can participate and take personal responsibility for the change in their environment.

Structure changes and promotions are one of those difficult changes that require a focused communication plan to make change as smooth as possible for the affected employees. The goals for an effective communication plan and the communication activities that Babatunde could have executed to avoid this situation are depicted on the figure below:

Figure2: Change Commitment Level and Suggested Communication activities for Babatunde

Babatunde's Communication Plan Activities should have included the blocks below to facilitate his team commitment to the new structure. Above that he should have handled the promotion differently by:

Opening the new positions to everybody in the team to apply

Communicated openly what the job description is and the evaluation criteria for evaluating candidates for the position

Interviewed internal applicants with other objective parties from the human resources department and managers from other units.

Ensuring that the two teams get managers at the same time instead of staggering the appointments and temporarily maintaining the status quo for one team.

Things that Vidsoft should do now to avoid re-occurrence of the current situation

Vidsoft should establish and communicate policies and standards and develop programs to address:

Organisational restructuring to accommodate the growth from 500 to 2000;

Employee relationship management procedures and allocate experts to assist management with employee relationship issues that Babatunde had to deal with;

Internal promotion and transfers;

Recruitment and talent management practices; and

Organisational culture and values.

Formal communication of the items listed above will establish the guidelines for all Vidsoft employees to work within and assist the organisation manage similar conflicts.

Transformation and Transactional Leadership

Transformational leadership according to Robbins3 is not charismatic leadership but is beyond that and is built on the foundation of transactional leadership that is why it produces better performances from followers than any singular type of leadership. Transformational leaders differentiates themselves from any other leadership style by motivating their followers to introspectively find answers to questions on their own and find personal meaning to the goals of the group.

Principal differences

The characteristic differences between transformational and transactional leaders are outlined below:

Transactional Leader

Transformational Leader

A supervisor or manager: Provides role clarity and process to achieve already defined goals

A charismatic leader: Defines vision and help followers define their own vision and mission that are common goals with the organisation so they can take pride in what they do, whilst earning their trust and respect.

Reward dependant: Reward are used to motivate followers to deliver more effort and deliver on objectives.

Effort Inspired from within: Communicates and motivates followers effectively to focus their effort by explaining common purpose simply and effortlessly.

Actively manage by exception: Continuously look for deviant behaviour to organisational policies, processes, procedures and standards in order to take corrective actions.

Provides Intellectual stimulation: Encourages intelligence and methodical problem solving and group decision making.

Passively manage by exception: when things are going well, nothing happens. Leader intervenes only when the work standards are not met.

Exhibits level 5 leadership attributes: Individual capability, team work skills, manager skills, humility and professional will. Zero personal ego, but ambitious for the organisational success.

Laissez-Faire: Followers are delegated all the responsibility and leader takes no responsibility and makes delegation an excuse for lack of delivery.

Individual Consideration: Listens to and values each employee contribution, attends to their individual issues through coaching and mentorship.

Table1. Source: Adapted from Stephen P. Robins (2005), 'Organisational Behaviour', 11th Edition, page 367

How transformational leadership create higher moral aspiration

Transformational leaders create higher moral aspiration for their followers and other leader, changing their attitudes and behaviour through their own behaviour. They set good example and establish an ethical culture in their organisations by:

Trusting their employees incrementally over time and giving them a change to reciprocate with trust exhibited by openness and disclosure or true intensions at all times.

Ensuring that the means ('the way they do business') or manner in which the goals of the organisation are achieved are ethical no matter what the environment dictates.

Keeping the content of those business goals within good morals.

Robins4 (2005) expresses in his summation of the topic of ethics that before any leader is judged as effective and successful we should consider the means applied to gain the success and the moral content of that success.


Stephen P. Robins. (2005) Organisational Behavior. 11th Edition. New Jersey: Pearson Prentice Hall. P.144-145 [Accessed 28 February 2010]

Stephen P. Robins. (2005) Organisational Behavior. 11th Edition. New Jersey: Pearson Prentice Hall. P.365-368

Stephen P. Robins. (2005) Organisational Behavior. 11th Edition. New Jersey: Pearson Prentice Hall. P.373-374

David A. Thomas, Robin J. Ely. (2002) 'Making Differences Matter: A New Paradigm for managing Diversity' Harvard Business Review. Reprint 96510.

Establish the need for change by communicating the challenges he is facing managing the growing team and inviting the team to come up with solutions.

When the appointments are done and the new structure is effective the team would have had enough time to question and deal with the change.

Communicate Li as the only candidate internally that met the criteria and explain reasons for going outside for the second management position

Create feedback channel to listen to and respond to concerns about new role and gain further role clarity.

Evaluating and discussing implication of suggested solutions and changes through impact analysis of each solution.

Change Communication Timeline

Level of commitment to change

Test readiness for the structure change before communicating the list of candidates he is considering for the promotions and the criteria he is planning to use to select.

Communication of the extra management level as the best solution early allowing it time to sink before discussing promotion issues.

Communicate the recruitment time length and delay effective date of the new structure. The structure will only be effective when both positions are filled