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Assignment 3 and 4

There are two case incidents. One is on teamwork, the other is on leadership. You are expected to use what we have learnt in class to answer the questions (50-100 words for each). Due on 16th Week (Dec.27), not the day of final exam.

Case Incident 1

Teamwork: One Company’s Approach to High Performance

At ICU Medical Inc., teams haven’t always been the answer. A maker of medical devices, the San Clemente, California company was founded in 1984 by current chief executive officer Dr. George Lopez. At first, most of the major decisions were made by Lopez. Business was good – so good, in fact – that the company was ready for a public offering by the early 1990s. The company’s products were in high demand, but dealing with that demand “was an overwhelming task for one entrepreneur CEO,” states Lopez.

A solution to dealing with the increasing growth came to Lopez while watching his son play hockey. During a game, the opposing team had a star player who dominated his teammates and tried to make most of the plays himself. His son’s team, however, worked together as a group and overwhelmed the star player. Lopez clearly saw that “the team was better than one player.” He decided to reorganize his company to rely on teams that would not merely share in the decision-making process, but instead would have full autonomy to make their own decisions – setting their own meeting times, assigning their own tasks, and creating their own deadlines, and even deciding whether to form a team in the first place.

At that time, his company employed around 100 employees, but they weren’t used to making decisions for themselves. Lopez put his new plan in place, telling his employees to form teams to come up with ideas to handle the increasing demand. At first, it didn’t work as expected. Angered by the new team-based approach, the chief financial officer of the company quit. The new teams weren’t faring well either. According to Lopez, “nothing was getting done, expect people were spending a lot of time talking.” Confident that teams were the answer, Lopez persisted and instructed teams to elect leaders. Team guidelines were put in place (e.g., “Challenge the issue, not the person”), and the company began using group rewards to motivate teamwork.

The new strategies paid off. Employees began to enjoy working together and making decisions for themselves, and ICU was able to easily handle the increasing demand. Since then, ICU has continued to prosper. Currently, the company employs close to 1,500 individuals. The company’s stock price is six times higher than it was when the company first went public, and in 2006, revenue increased 28% to over $200 million. Each year, nearly 60 different teams, usually comprised of five to seven members, finish projects. Those teams that are successful share in the $300,000 in team bonuses that the company allots annually.

Although teams at ICU have largely been beneficial, they are not without their problems. In particular, the team-based reward structure has sometimes created competitiveness and tension among employees. Colleen Wilder, who has worked on many teams at ICU over the years, recounts an incident where she refused to share a reward with coworkers who were not pulling their share. “You did nothing, and I propose you get nothing,” she informed them. The team members evaluated what each person had contributed to the project and agreed that those who did not contribute should not receive a bonus. In addition, although Dr. Lopez’s original vision was of teams that are completely autonomous, over the years the company has instituted more rules and policies, such as a 25-page handbook that tells teams how to operate. Although the goal of these rules is to help teams work together more smoothly, they take away some of the ability of teams to completely make their own decisions. Despite these potential downsides, Dr. Lopez isn’t about to change his reliance on teams....
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