two case study(1st- ppt, 2nd- questions)

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timer Asked: Nov 12th, 2016

Question description

The Case has two (2) parts.

Part 1 requires you to prepare a short powerpoint presentstion.

Part 2 requires you to write a short paper (5+ pages) in response to the questions at the end of the Case.

Attach both the powerpoint and the paper in the drop box for this assignment.

The Case - Bank Loan Department Case is attached.

Case Study: Bank Loan Department Part One: Launching a Change The Organization – A Loan Department in Bank The Loan Department in a large commercial bank had 47 employees organized into functional units (i.e., credit section, risk analysis.) Each section had a manager and each had their own office areas on the 7th and 8th floors of the main bank building downtown. Employees in each section had job descriptions related to the technical skills needed to perform their function. There were six job classifications in the Department. There were two classifications in the Loan Processing Section. Each section had measures they tracked related to the productivity and quality of their function. The Department processed applications for a wide variety of loans such as auto loans, home equity loans, commercial real estate, business credit lines, etc. Deregulation of the industry brought increased competition for banks. Everyone was getting into the finance business. This bank clearly felt the need to increase customer satisfaction. While the bank had a solid reputation in the community it was also perceived as slow and bureaucratic. Customers, seeking a loan, cared about speed, cost, and user friendly processes. The Department tended to be slow (high average close times), bogged down in red tape, rework, and paperwork, and had a high cost per loan processed. The New Vice President Pat Miller, was assigned to be the new V.P. of the Loan Department. Pat was expected to significantly improve performance. Pat wanted to dramatically improve cycle time (from loan application to closing); improve the overall quality of the whole loan package; and reduce the red tape for customers. Pat’s assessment was that the functional organizational structure (See chart above) was getting in the way. In that structure, each section had tunnel vision focused on their part of the loan process. If a loan was taking too long to process, each section would point fingers at and blame the other sections. No one was responsible for speed or cycle time. The same was true with total quality … each section just focused on their small part. Associates had specialized jobs and narrow skill sets. This limited flexibility. When someone was out sick, the loans they were working on just sat waiting. When customers called to ask questions about their loan, they were often bounced around between sections to find answers. Pat wanted to initiate a major organizational change. Pat wanted to redesign the entire Department. Pat’s vision was to change to process oriented team-based structure instead of organizing around functional groups (i.e. Credit; Loan Prep, etc.), The Figure below shows how she would like to organize the Department. Pat wanted to organize around the whole loan process. Employees would be organized around specific types of loans, such as Auto Loans, Home Mortgage Loans etc. Each team would control the whole process from the customer’s application to closing. Each team would have a specific type of customer to serve. Each team could take total responsibility for their processing time, quality, and costs because no one would touch the loan but them. Each team would initially have specialists from each function, and employees would eventually be cross trained to improve flexibility. Instead of supervising functional groups focused only on a small part of the process, managers would have a team focused on the whole process. Pat felt this change to a process oriented team structure would make a significant contribution to the Departments success. Pat’s first challenge was to initiate this change by proposing it to her section managers and then to employees. Case Activity: Put yourself into Pat’s shoes …. You need to communicate this change to your staff and employees in a way that wins their support. Prepare a powerpoint presentation that: 1. Makes the Business Case for the Need to Change (Remember: try to make it compelling and urgent) 2. Describes the Current Reality. (Remember: Contrast what exists now with the desired state …. emphasize the problems of the current state vs. the benefits of the desired state) 3. Outlines Your Vision of the Desired State (you might want to do some research on high performance teams and their characteristics) (Remember: Help them picture in their minds the desired state) _____________________________________________________________________ Specifications: Your powerpoint presentation should between 5 and 10 slides. Remember, make it professional …. 3 to 5 lines per slide …. Readable 20-24 point type … good contrast meaning dark type on light background or white type on dark background. Case Study: Bank Loan Department Part Two: Resistance to Change The Loan Department in Bank Remember the Loan Department Case in which Pat Miller, was assigned to be the new V.P. of the Department. (You may need to re-read Part 1 of this. Pat was expected to significantly improve performance. Pat wanted to dramatically improve cycle time (from loan application to closing); improve the overall quality of the whole loan package; and reduce the red tape for customers. Pat wanted to initiate a major organizational change. The change would entail moving from functional groups (i.e. Credit; Loan Prep, etc.) to a process oriented team-based, organization structure. Employees would be assigned to multifunctional teams organized around loan types (i.e an Auto Loan Team, A Home Mortgage Team, etc.) Each team would control the whole process from receiving the application for the loan to the closing paperwork. Each team would have a specific type of customer to serve. Each team could take total responsibility for their processing time, quality, and costs because no one would touch the loan but them. Each team would initially have specialists from each function, and employees would eventually be cross trained to improve flexibility. Instead of supervising functional groups focused only on a small part of the process, managers would have a team focused on the whole process. This would be a major change for the Department that would entail learning new skills, working in new groups, having new goals and measures, and adopting new roles. Pat’s first step was to communicate this change to the Section Managers and win their support. The presentation: outlined the need to change, described the current reality, and communicated Pat’s vision of the desired state (multi-skilled employees; organized in process oriented teams, each with clear responsibility for specific loan type) See Figure Below. This would be a major change for the Department that would entail learning new skills, working in new groups, having new goals and measures, and adopting new roles. Pat’s first step was to communicate this change to the Section Managers and win their support. The presentation: outlined the need to change, described the current reality, and communicated Pat’s vision of the desired state (multi-skilled employees; organized in process oriented teams, each with clear responsibility for specific loan type) The meeting sparked a lot of discussion most of the reactions were favorable but there was one key staff member who was clearly not “on-board”. Meet Lanny – Manager of the Credit Section Lanny is the Manager of the Credit Section of the Loan Department. He has been with the bank for 25 years and in his management position for 15 years. Lanny joined the bank right out of high school and worked his way up to his current position. Throughout his career, he has seen many people come and go in the Loan Department. He has stayed because he enjoys the work and being an expert in the area. He also knows that he brings his many years of experiences in credit to the table when solving problems. He is called “the Guru of Credit”. His personality fits the working environment of a bank; he likes working with the familiarity of details, rules and procedures. Lanny is proud of his service, but he is really looking forward to his retirement, which, for him, is not coming soon enough. Within the last few years, lots of changes have occurred in the bank. These changes have altered many of the familiar procedures, rules, and norms that Lanny has been accustomed to during his 25 years in the Loan Department. Some of these changes included: hiring younger, college educated, staff; reorganization of job responsibilities; performance management plans to increase staff competencies and skills in new areas; and recent layoffs to help balance the budget. A new VP, Pat Miller has just taken over the Loan Department and has called a meeting of the staff to discuss some new ideas for change. “What now? Lanny is thinking on the way to the meeting. The Meeting At the meeting, Pat presented the need for change, and the outlined how the Loan Department would be re-organized. Pat realizes this would be a big change for everyone. Then, Pat opens the meeting up for reactions and discussion. The following occurs: Steve, one of the new college educated Managers (Risk Analysis Section), seems to really like the idea and talks about the benefits for customers. Rona, and Helen, two other managers also seem to be supportive. Stella, the Loan Preparation Section Manager, also seems excited and begins to start asking about the plan and the schedule for implementation of the idea. Lanny is frustrated and it shows in his body language. He says: “I don’t know about this team thing. I can’t see how this will work. I’ve worked hard to become an expert in credit, you all know that. My people are always coming to me with questions. If they are split up on other teams, where will they go to get help? And, I will be supervising a multi-functional team that has people doing tasks that I know nothing about. This makes me real nervous.” Steve responds: “Lanny you’re always negative. This will work, you will see.” Lanny gets defensive and replies in a raised voice: “Hey, I am not against change. There have been lots of changes around here the last few years. But, this change makes me nervous. Where will people go to get technical help? …. You tell me, Steve. And you and I will have people doing tasks we are not experts in.” Rona, a new young manager says: “I’m not worried about supervising a multifunctional team and you have more experience than me.” Lanny, clearly frustrated, says: “ You don’t know enough to be worried about young lady.” After this exchange the meeting moves on, but Lanny, pushes back from the table clearly frustrated. He remains silent for the rest of the meeting. The meeting ends with Pat setting up a visit to a local insurance company that uses high performance teams. They are asked to report their findings back to the whole staff next week. Pat is concerned with Lanny’s attitude toward the change. He is a long term, well respected employee of the bank. Hopefully he will come around and get on-board. Questions 1. How would you explain Lanny’s response to the change proposed by Pat? What, in your view, are the reasons or causes for his reluctance? 2. What could Pat have done during the meeting to respond to Lanny’s concerns about the change? 3. If you were Pat and wanted to meet with Lanny privately to discuss the change, what would you do? NOTE: Your responses to these 3 questions need to be comprehensive and thoughtful. I am not looking for short answers but rather answers that show me you can apply what we learned about leading change and dealing with resistance.

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