Please read below case and answer following question: -
Q:- Assume that you have been asked to provide advice to Ken Vincent, what would you tell him? Why?
CASE:- It Isnât So Simple: Infrastructure Change at Royce Consulting*
The lights of the city glittered outside Ken Vincentâs twelfthfloor
office. After nine years of late nights and missed holidays,
Ken was in the executive suite with the words âAssociate
Partnerâ on the door. Things should be easier now, but the
proposed changes at Royce Consulting had been more challenging
than he had expected. âI donât understand,â he
thought. âAt Royce Consulting our clients, our people, and
our reputation are what count, so why do I feel so much tension
from the managers about the changes that are going to
be made in the office? Weâve analyzed why we have to make
the changes. Heck, we even got an outside person to help us.
The administrative support staff are pleased. So why arenât
the managers enthusiastic? We all know what the decision at
tomorrowâs meeting will beâGo! Then it will all be over. Or
will it?â Ken thought as he turned out the lights.
Background
Royce Consulting is an international consulting firm whose
clients are large corporations, usually with long-term contracts.
Royce employees spend weeks, months, and even
years working under contract at the clientâs site. Royce
consultants are employed by a wide range of industries,
from manufacturing facilities to utilities to service businesses.
The firm has over 160 consulting offices located in
65 countries. At this location Royce employees included
85 staff members, 22 site managers, 9 partners and associate
partners, 6 administrative support staff, 1 human
resource professional, and 1 financial support person.
For the most part, Royce Consulting hired entry-level
staff straight out of college and promoted from within.
New hires worked on staff for five or six years; if they
did well, they were promoted to manager. Managers were
responsible for maintaining client contracts and assisting
partners in creating proposals for future engagements.
Those who were not promoted after six or seven years
generally left the company for other jobs.
Newly promoted managers were assigned an office,
a major perquisite of their new status. During the previous
year, some new managers had been forced to share an
office because of space limitations. To minimize the friction
of sharing an office, one of the managers was usually
assigned to a long-term project out of town. Thus, practically
speaking, each manager had a private office.
Infrastructure and Proposed Changes
Royce was thinking about instituting a hoteling office
systemâalso referred to as a ânonterritorialâ or âfree- addressâ
office. A hoteling office system made offices available to
managers on a reservation or drop-in basis. Managers are
not assigned a permanent office; instead, whatever materials
and equipment the manager needs are moved into the
temporary office. These are some of the features and advantages
of a hoteling office system:
⢠No permanent office assigned
⢠Offices are scheduled by reservations
⢠Long-term scheduling of an office is feasible
⢠Storage space would be located in a separate file room
⢠Standard manuals and supplies would be maintained in
each office
⢠Hoteling coordinator is responsible for maintaining
offices
⢠A change in âpossession of spaceâ
⢠Eliminates two or more managers assigned to the same
office
⢠Allows managers to keep the same office if desired
⢠Managers would have to bring in whatever files they
needed for their stay
⢠Information available would be standardized regardless
of office
⢠Managers do not have to worry about âhousekeeping
issuesâ
The other innovation under consideration was an
upgrade to state-of-the-art electronic office technology. All
managers would receive a new notebook computer with
updated communications capability to use Royceâs integrated
and proprietary software. Also, as part of the electronic
office technology, an electronic filing system was
considered. The electronic filing system meant information
regarding proposals, client records, and promotional
materials would be electronically available on the Royce
Consulting network.
The administrative support staff had limited experience
with many of the application packages used by the managers.
While they used word processing extensively,
they had little experience with spreadsheets,
communications, or graphics packages. The
firm had a graphics department and the managers
did most of their own work, so the administrative
staff did not have to work with those
application software packages.
Work Patterns
Royce Consulting was located in a large city in the Midwest.
The office was located in the downtown area, but it was
easy to get to. Managers assigned to in-town projects often
stopped by for a few hours at various times of the day.
Managers who were not currently assigned to client projects
were expected to be in the office to assist on current
projects or work with a partner to develop proposals for
new business.
In a consulting firm, managers spend a significant
portion of their time at client sites. As a result, the office
occupancy rate at Royce Consulting was about 40 to
60 percent. This meant that the firm paid lease costs for
offices that were empty approximately half of the time.
With the planned growth over the next ten years, assigning
permanent offices to every manager, even in doubled-up
arrangements, was judged to be economically unnecessary
given the amount of time offices were empty.
The proposed changes would require managers and
administrative support staff to adjust their work patterns.
Additionally, if a hoteling office system was adopted,
managers would need to keep their files in a centralized
file room.
Organizational Culture
Royce Consulting had a strong organizational culture, and
management personnel were highly effective at communicating
it to all employees.
Stability of Culture
The culture at Royce Consulting was stable. The leadership
of the corporation had a clear picture of who they were and
what type of organization they were. Royce Consulting had
positioned itself to be a leader in all areas of large business
consulting. Royce Consultingâs CEO articulated the firmâs
commitment to being client-centered. Everything that was
done at Royce Consulting was because of the client.
Training
New hires at Royce Consulting received extensive training
in the culture of the organization and the methodology
employed in consulting projects. They began with a
structured program of classroom instruction and computer-
aided courses covering technologies used in the various
industries in which the firm was involved. Royce Consulting
recruited top young people who were aggressive and who
were willing to do whatever was necessary to get the job
done and build a common bond. Among new hires, camaraderie
was encouraged along with a level of competition.
This kind of behavior continued to be cultivated throughout
the training and promotion process.
Work Relationships
Royce Consulting employees had a remarkably similar outlook
on the organization. Accepting the culture and norms
of the organization was important for each employee. The
norms of Royce Consulting revolved around high performance
expectations and strong job involvement.
By the time people made manager, they were aware of
what types of behaviors were acceptable. Managers were
formally assigned the role of coach to younger staff people,
and they modeled acceptable behavior. Behavioral norms
included when they came into the office, how late they
stayed at the office, and the type of comments they made
about others. Managers spent time checking on staff people
and talking with them about how they were doing.
The standard for relationships was that of professionalism.
Managers knew they had to do what the partners
asked and they were to be available at all times. A norms
survey and conversations made it clear that people at
Royce Consulting were expected to help each other with
on-the-job problems, but personal problems were outside
the realm of sanctioned relationships. Personal problems
were not to interfere with performance on a job. To illustrate,
vacations were put on hold and other kinds of commitments
were set aside if something was needed at Royce
Consulting.
Organizational Values
Three things were of major importance to the organization:
its clients, its people, and its reputation. There was a
strong client-centered philosophy communicated and practiced.
Organization members sought to meet and exceed
customer expectations. Putting clients first was stressed.
The management of Royce Consulting listened to its clients
and made adjustments to satisfy the client.
The reputation of Royce Consulting was important
to those leading the organization. They protected and
enhanced it by focusing on quality services delivered by
quality people. The emphasis on clients, Royce Consulting
personnel, and the firmâs reputation was cultivated by
developing a highly motivated, cohesive, and committed
group of employees.
Management Style and Hierarchical Structure
The company organization was characterized by a directive
style of management. The partners had the final word on
all issues of importance. It was common to hear statements
like âManagers are expected to solve problems, and do
whatever it takes to finish the jobâ and âWhatever the
partners want, we do.â Partners accepted and asked for
managersâ feedback on projects, but in the final analysis,
the partners made the decisions.
Current Situation
Royce Consulting had an aggressive five-year plan that was
predicated on a continued increase in business. Increases in
the total number of partners, associate partners, managers,
and staff were forecast. Additional office space would be
required to accommodate the growth in staff; this would
increase rental costs at a time when Royceâs fixed and variable
costs were going up.
The partners, led by managing partner Donald Gray
and associate partner Ken Vincent, believed that something
had to be done to improve space utilization and the productivity
of the managers and administrative personnel.
The partners approved a feasibility study of the innovations
and their impact on the company.
The ultimate decision makers were the partner group
who had the power to approve the concepts and commit
the required financial investment. A planning committee
consisted of Ken Vincent; the human resources
person; the financial officer; and an outside consultant,
Mary Schrean.
The Feasibility Study
Within two working days of the initial meeting, all the
partners and managers received a memo announcing the
hoteling office feasibility study. The memo included a brief
description of the concept and stated that it would include
an interview with the staff. By this time, partners and managers
had already heard about the possible changes and
knew that Gray was leaning toward hoteling offices.
Interviews with the Partners
All the partners were interviewed. One similarity in the
comments was that they thought the move to hoteling
offices was necessary but they were glad it would not affect
them. Three partners expressed concern about managersâ
acceptance of the change to a hoteling system. The conclusion
of each partner was that if Royce Consulting moved
to hoteling offices, with or without electronic office technology,
the managers would accept the change. The reason
given by the partners for such acceptance was that the
managers would do what the partners wanted done.
The partners all agreed that productivity could be
improved at all levels of the organization: in their own
work as well as among the secretaries and the managers.
Partners acknowledged that current levels of information
technology at Royce Consulting would not support the
move to hoteling offices and that advances in electronic
office technology needed to be considered.
Partners viewed all filing issues as secondary to both
the office layout change and the proposed technology
improvement. What eventually emerged, however,
was that ownership and control of files
was a major concern, and most partners and
managers did not want anything centralized.
Interviews with the Managers
Personal interviews were conducted with all
ten managers who were in the office. During
the interviews, four of the managers asked Schrean whether
the change to hoteling offices was her idea. The managers
passed the question off as a joke; however, they expected
a response from her. She stated that she was there as an
adviser, that she had not generated the idea, and that she
would not make the final decision regarding the changes.
The length of time that these managers had been in
their current positions ranged from six months to five years.
None of them expressed positive feelings about the hoteling
system, and all of them referred to how hard they had
worked to make manager and gain an office of their own.
Eight managers spoke of the status that the office gave them
and the convenience of having a permanent place to keep
their information and files. Two of the managers said they
did not care so much about the status but were concerned
about the convenience. One manager said he would come in
less frequently if he did not have his own office. The managers
believed that a change to hoteling offices would decrease
their productivity. Two managers stated that they did not
care how much money Royce Consulting would save on
lease costs; they wanted to keep their offices.
However, for all the negative comments, all the managers
said that they would go along with whatever the
partners decided to do. One manager stated that if Royce
Consulting stays busy with client projects, having a permanently
assigned office was not a big issue.
During the interviews, every manager was enthusiastic
and supportive of new productivity tools, particularly the
improved electronic office technology. They believed that
new computers and integrated software and productivity
tools would definitely improve their productivity. Half the
managers stated that updated technology would make
the change to hoteling offices âa little less terrible,â and
they wanted their secretaries to have the same software
as they did.
The managersâ responses to the filing issue varied. The
volume of files managers had was in direct proportion to
their tenure in that position: The longer a person was a
manager, the more files he or she had. In all cases, managers
took care of their own files, storing them in their offices
and in whatever filing drawers were free.
As part of the process of speaking with managers, their
administrative assistants were asked about the proposed
changes. Each of the six thought that the electronic office
upgrade would benefit the managers, although they were
somewhat concerned about what would be expected of
them. Regarding the move to hoteling offices,
each said that the managers would hate the
change, but that they would agree to it if the
partners wanted to move in that direction.
Results of the Survey
A survey developed from the interviews was
sent to all partners, associate partners, and
managers two weeks after the interviews were conducted.
The completed survey was returned by 6 of the 9 partners
and associate partners and 16 of the 22 managers. This is
what the survey showed.
Work Patterns. It was âcommon knowledgeâ that managers
were out of the office a significant portion of their
time, but there were no figures to substantiate this belief, so
the respondents were asked to provide data on where they
spent their time. The survey results indicated that partners
spent 38 percent of their time in the office; 54 percent
at client sites; 5 percent at home; and 3 percent in other
places, such as airports. Managers reported spending
32 percent of their time in the office, 63 percent at client
sites, 4 percent at home, and 1 percent in other places.
For 15 workdays, the planning team also visually
checked each of the 15 managersâ offices four times each
day: at 9 a.m., 11 a.m., 2 p.m., and 4 p.m. These times
were selected because initial observations indicated that
these were the peak occupancy times. An average of six
offices (40 percent of all manager offices) were empty at
any given time; in other words, there was a 60 percent
occupancy rate.
Alternative Office Layouts. One of the alternatives
outlined by the planning committee was a continuation of
and expansion of shared offices. Eleven of the managers
responding to the survey preferred shared offices to hoteling
offices. Occasions when more than one manager was
in the shared office at the same time were infrequent. Eight
managers reported 0 to 5 office conflicts per month; three
managers reported 6 to 10 office conflicts per month. The
type of problems encountered with shared offices included
not having enough filing space, problems in directing telephone
calls, and lack of privacy.
Managers agreed that having a permanently assigned
office was an important perquisite. The survey confirmed
the information gathered in the interviews about managersâ
attitudes: All but two managers preferred shared offices
over hoteling, and managers believed their productivity
would be negatively impacted. The challenges facing Royce
Consulting if they move to hoteling offices centered around
tradition and managersâ expectations, file accessibility and
organization, security and privacy issues, unpredictable
work schedules, and high-traffic periods.
Control of Personal Files. Because of the comments
made during the face-to-face interviews, survey respondents
were asked to rank the importance of having personal
control of their files. A 5-point scale was used, with 5 being
âstrongly agreeâ and 1 being âstrongly disagree.â Here are
the responses.
Respondents Sample Rank
Partners Managers: 6 4.3
0â1 year 5 4.6
2â3 years 5 3.6
4_ years 6 4.3
Electronic Technology. Royce Consulting had a basic
network system in the office that could not accommodate
the current partners and managers working at a remote
site. The administrative support staff had a separate
network, and the managers and staff could not communicate
electronically. Of managers responding to the survey,
95 percent wanted to use the network but only 50 percent
could actually do so.
Option Analysis
A financial analysis showed that there were significant cost
differences between the options under consideration:
Option 1: Continue private offices with some office sharing
⢠Lease an additional floor in existing building; annual
cost, $360,000
⢠Build out the additional floor (i.e., construct, furnish,
and equip offices and work areas): one-time cost,
$600,000
Option 2: Move to hoteling offices with upgraded office
technology
⢠Upgrade office electronic technology: one-time cost,
$190,000
Option 1 was expensive because under the terms of
the existing lease, Royce had to commit to an entire floor
if it wanted additional space. Hoteling offices showed an
overall financial advantage of $360,000 per year and a
one-time savings of $410,000 over shared or individual
offices.
The Challenge
Vincent met with Mary Schrean to discuss the upcoming
meeting of partners and managers, where they would
present the results of the study and a proposal for action.
Included in the report were proposed layouts for both
shared and hoteling offices. Vincent and Gray were planning
to recommend a hoteling office system, which would
include storage areas, state-of-the-art electronic office technology
for managers and administrative support staff, and
centralized files. The rationale for their decision emphasized
the amount of time that managers were out of the
office and the high cost of maintaining the status quo and
was built around the following points:
1. Royceâs business is different: offices are empty from
40 to 60 percent of the time.
2. Real estate costs continue to escalate.
3. Projections indicate there will be increased need for
offices and cost-control strategies as the business
develops.
4. Royce Consulting plays a leading role in helping organizations
implement innovation.
âItâs still a go,â thought Vincent as he
and the others returned from a break. âThe
cost figures support it and the growth figures
support it. Itâs simpleâor is it? The
decision is the easy part. What is it about
Royce Consulting that will help or hinder
its acceptance? In the long run, I hope we
strengthen our internal processes and donât
hinder our effectiveness by going ahead with these simple
changes.â
