Western Agencies Ltd

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Western Agencies Ltd.
by
Steven L. McShane University of Western
Australia Perth, Australia
Copyright © 1991 Steven L. McShane. This case is based on
actual events described in a Canadian court case. Only the dates and names of the main parties have been changed.
This case may be used by current adopters of: S. L. McShane
Canadian Organizational Behaviour, 5th ed. (Toronto: McGraw- Hill Ryerson, 2004); S. L. McShane & M. A. von Glinow,
Organizational Behavior, 3rd ed. (Boston: McGraw-Hill, 2005); S. L. McShane & T. Travaglione, Organisational Behaviour on the Pacific Rim, 1st ed. (Sydney: McGraw-Hill Australia, 2003)
Western Agencies Ltd.
By Steven L. McShane, The University of Western Australia
Western Agencies Ltd. is a manufacturers' agent representing Stanfields, McGregors, and several other men's fashion manufacturers in Western Canada and the Pacific Northwest of the United States. Jack Arthurs began his employment at Western as a warehouse worker in 1962. In 1965, he became a sales representative and was given responsibility for the company's business in the interior region of British Columbia. In 1973, he was transferred back to Vancouver and assigned several large accounts, including all Eaton's stores in the Lower Mainland.

Over the years, Arthurs bought shares in the company and, by 1979, held nearly one-third of the company's issued nonvoting shares. He also enjoyed a special status with the company founder and president, Mr. A. B. Jackson. Arthurs was generally considered Jackson's "number 1 man" and the president frequently sought Arthurs's ideas on various company policies and practices.

In 1980, the senior Mr. Jackson retired as president of Western Agencies and his son, C. D. Jackson, became president. C. D. Jackson was seven years younger than Arthurs and had begun his career in the warehouse under Arthurs's direct supervision. Arthurs had no illusions of becoming president of Western, saying that he had neither the education nor the skills for the job. However, he did expect to continue his special position as the top salesperson in the company, although this was not directly discussed with the new president.

Until 1987, Arthurs had an unblemished performance record as a sales representative. He had built up numerous accounts and was able to service these clients effectively. But Arthurs's performance began to change for the worse when Eaton's changed its buying procedures and hired a new buyer for Western Canada. Arthurs disliked Eaton's new procedures and openly complained to the retailer's new buyer and to her superiors. The Eaton's buyer resented Arthurs's behaviour and finally asked her boss to call Western Agencies to have Arthurs replaced. The Eaton's manager advised Jackson of the problem and suggested that another salesperson should be assigned to the Eaton's account. Jackson was aware of the conflict and had advised Arthurs a few months earlier that he should be more cooperative with the Eaton's buyer. Following the formal complaint, Jackson assigned another salesperson to Eaton's and gave Arthurs the Hudson Bay account in exchange. Jackson did not mention the formal complaint from Eaton's and, in fact, ! Copyright © 1991 Steven L. McShane. This case is based on actual events described in a Canadian court case. Only the dates and names of the main parties have been changed. Copyright © 2004 McGraw-Hill Ryerson Limited Page 2

Arthurs believed that the account switch was due to an internal reorganization for the benefit of other salespeople employed at Western Agencies Ltd. At about this time, several employees noticed that Arthurs was developing a negative attitude toward his clients and Jackson. He was increasingly irritable and rude to customers, and was making derogatory comments to Jackson. Arthurs even advised some of the younger employees that they should leave Western Agencies Ltd. and get into a sensible business. A phenomenon known as "pulling an Arthurs" became a topic of...
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