I.Facts of case: a.Brikerhoff International, Inc. is currently in an economic boom following 8 years of economic depression b.President Tom Brikerhoff wants to expand company efforts & revenues, and also relieve tension around Safety Supervisor, Kurt Mannheim i.Kurt Mannheim concerned about safety of Rig #1-E, however, he had also recently accused Rig #1-Es rig manager, Rick Kopulos of allowing alcohol into their base 1.concern for rig safety might have risen from personal tensions rather than actual safety issues 2.Brikerhoff considering promotion of Mannheim ii.Actually concerned w/safety of Rig #20 under Tom Rossick c.Drilling IndustryXhigh risk & high uncertainties i.Rig activity could go from 60% utilization to 20% in 2 weeks b/c of fluctuating demand ii.Rig operates 24 hours a day w/2 12hour crew shifts iii.Working , isolated life for 2 of 3 weeks most of the year; only shared w/other workers; far from other cities & towns iv.Harsh environmental conditions v.Alcohol & drugs were not permitted 1.Mannheim violatef Rig #1-Ed company rules by allowing, although small & controlled amounts, of alcohol onto the base camp d.Company history i.Brikerhoff continued to buy additional rigs after f Rig v#1-ECanadian gov. introduced the National Energy Program, which gave a large portion of Canadas oil & gas to another company called Petro-Canada; also charged remaining companief f Rig #1-f Rig #1-ERig #1-Ef Rig #1-Es 25% royalties on output, which led to the decline in drilling activities 1.caused additional debt to company when a year later, oil prices fell to less than $10/barrel; if had purchased less, perhaps would have been in less debt 2.BII took drastic steps to cut overhead from $2 million plus to less than $500,000 3.cost reduction not enough, which led to buyout & stock swap between Tom & his father & brother, giving him sole operation e.Turning point i.Business began to boom again in 1992 when Albertas gov. granted a royalty holiday til June 93 & other environmental forces gave further incentive to gas exploration & drilling ii.However, serious labor shortage & high turnover rates caused problems iii.BII had problem in 1993Xnot large enough to cover total customer demands w/its small inventory of rigs 1.However, regardless of small size, BII could charge higher per diem rates for some rigs b/c of company reputation for good work, excellent safety record & low maintenance costs a.Proves that safety directly affects the rates of oil, which is why current safety concerns are not a miniscule issue.
b.Good rig record = fewer delays & shorter completion times i.Horizontal drilling assisted in the efficiency of a wells production ii.If drilling could be cut by 10 days, could save a customer $200,000-$250,000 on a job which costs between $20-25,000/wwerday f.Uncertainties of the Business Recovery i.Government & customers had imposed though environmental & safety standards ii.Brikerhoff made failed attempts tor4twr4 arrange joint ven6564542ture agreements w/other drilling companies (other companies not willing to explore new organizational combinations) iii.Brikerhoff went against his hesitation &w4tr45 put Rig #22 back into operation 1.more rigs into operation could lead to low quality, low performance, unsafe practices, & high drilling costs w/unskilled workers, which could hurt more th32626315an help the company 2.Introduced a Quality Assurangce Mission Statement a.Safety of each employee is the first priority of the company. Required employee involvement w/quality assurance program will lead to improved attitudes to produce better work practices, reduce accidents, reduce days on the job to improve cost efficiency for customers. Will lead to reduced operation costs & a more cooperative environment. Higher efficiency will lead to more projects & the company morale will increase. W/good quality policy, turnover will be reduced , team environment. iv.Kurt Mannheim responsible for implementing & monitoring rig safety (See exhibit 5 for job description) 1.Mannheims description of seen problems a.Problems due to: lack of training, understanding, knowledge; also feel threatened, which leads to tunnel visionXit is their business not to know things.
2.believes in addressing problems directly & discussing them a.hypocritical in that avoids direct discussion w/Kopulos regarding alcohol incident 3.believed that his instance upon honesty posed a threat to some people 4.believed in following the manual, to understand it & live by it 5.called a dictator by some, but feels that economics demand that people be dictated to 6.feels that the director of a company has to set policies & goals or else company will suffer a.his job description does not include setting policies & goals; only to review Safety policies 7.believes that other people are avoiding responsibility in company; thinks that his job is to do initial training, set goals & be involved & that the actual training goes to the rig managers a.Mannheims job description does not involve setting goals & confirming orientation of new f Rf f Rig #1-Ef Rig #1-ERig #1-Ef Rig #1-Ef Rig #1-Ef Rig #1-Ef Rig #1-Eig #1-Ef Rig #1-E.f Rig #1-ERif Rig #1-E maf Rig #1-Evnagers do not have training in their job description. g.The Rigs i.Tom RossickXmanager of Rig #20 1.ignored by crew members 2.conversation betweenf Rf Rig #1-Eig #1-Ecrew members & Rossick akward a.akward conversation is a sign of poor communication & tension 3.one crew member commented that they would say more if Rossick werent attending the meeting a.shows dislike & discomfort betwf Rig #1-Eeen Rossick & his crew members 4.Crew members complained about the uncertainty and the unpleasant crew life as members are shifted from rig to rig a.If members are being shifted constantly, there is no time for them to become adjusted to their peers. It also creates an environment of fearXbeing moved. They dont want to get to comfortable b/c might get moved again.
5.Mannheim compliments Rig #20 about safety & maintenance situation ii.Mannheims view of good rig operations 1.its the politics that keeps the company down. 2.believes top management to be good, but problems at lower levels 3.Parallels Safety supervisor job to king 4.competition & rivalry is expensive for the company 5.the whole thing starts at the bottom w/the roughnecks. If those guys dont do things right, then its usually true of every position. Vbef Rig #1-E Rig #1-Elieves problems start from the bottom iii.Kopulos & driller Vander Heides vision of a good rig 1.depends on how well crew members worked w/each other, other crews on rig, & w/the rig manf Rig #1-Eager 2.Vander Heide: It all starts w/Rick. .
. . if he doesnt come around & show an interest in the rig & how its ruf Rig #1-Evnning, then nobody else will. Vbelieves problems start at top a.Differences in good rig operations & personal views can cause problems w/in the company and hinder communication 3.steady hands make rig run best.
The longer the same people work together, the better the rig runs & the better it looks. a.Currently, people change rigs frequently, which can lead to poor quality and efficiency of company 4.Understands the importance of teamwork a.Concurrent w/Brikerhoffs vision of a team oriented company 5.Drillers who are self-oriented & dont get along w/others cause problems; try to impress a.Differences in personalities traits, like being self oriented rather than team oriented can cause problems as well. 6.believes the first thing a rig manager has to do is to get the crew to like you a.Mannheim is more goal oriented as opposed to being relationship oriented. iv.Vander Heide on Crew norms (similar to group norms) 1.crew members usually take care of those who are not working along w/group norm 2.They count on self-motivation and self-uuh7pride. Vpersonality traits h.Incident between Mannheim & Kopulos i.Mannheim told Don Noakes in Calgary that Kopuloss group had a drinking problem. ii.Kopulos heard through others of this; Mannheim told others w/o validation; going by hearsay iii.Mannheim told Don that he was going to talk to Kopulos but never did 1.goes against Mannheims personal beliefs of addressing a problem directly 2.communication problems!…method of communicationK iv.Kopulos tries to justify alcohol incident by saying that he has trust in his team that they wouldnt abuse their privilege if allowed to drink.
8578ii.Group Member Resources 1.Industry lost many of its experienced workers, with higher skills and abilities. Now forced to pay for training for new workers. iii.Group Process 1.Groupthink: excessive conformity to norms 2.Groupshift: a change in decisional risk between group & individual decision iv.BII relies mainly on self-managed teams (each rig) that work for a common purpose/goal, and have control over their own methods. 1.However, b/c of this, it does not work well during downsizing. 2.there is a higher absenteeism & higher turnover rates h.Leadership Styles i.BII takes a the Behavioral Approach: leaders can be trained 1.Problem: Effective behaviors do not generalize across situations a.Mannheims dictating leadership style does not fit w/some of the crew members 2.Initiating Structure: the extent to which a leader is likely to define & structure his/her role & those subordinates in search of goal attainment a.Mannheim tries to create a strong structure 3.Consideration: the extent to which a leader is likely to have job relationships characterized by mutual trust, respect, & regard to feelings a.Kopulos has strong consideration for his crew members.
4.Mannheim is a production-oriented leader & places emphasis on technical & tasks 5.Kopulos is employee-oriented by emphasizing interpersonal relationships, and sensitive to the needs of employees and accepting individual differences 6.Brinkerhoff wants to be development oriented: one who values experimentation, seeks new ideas & generates & implements change, by creating a new Quality Assurance Mission Statement, but is having a difficult time due to differences i876 n management ii.According to the Fiedler Contingency Model, Mannheims and Kopuloss leadership styles will work in different situations 1.Mannheims task oriented style w7orks best in high and low control situations 2.Kopuloss relationship oriented style works best in moderate control situations iii.According to the Hershey & Blanchard Situational 89i47262Model, which focuses on the readiness of followers, it is assumed that leaders can change styles and that style must fit the situation. Its goal is to train leaders to fit style to situation. iv.Mannheims behavior seems to follow the Leader-Member Exchange Theory: leaders create ingroups and outgroups. Rig 20 seems to be in the ingroup & Rig 1-E in the outgroup, due to their reports.
III.Identify Alternative Courses of Action a.Change leadership styleXcan be done according to the Hershey & Blanchard Situational ModelXdependent on readiness & ability of followers i.If follower is unable & unwilling , give clear & specific directions ii.Unable & willing , high task orientation & high relationship orientation iii.*Able & unwilling , supportive & participative iv.Able & willing , no need to do much v.*crew members seem to be able, b7ut unwilling768876876876 b.Brinkerhoff must be a transactional leader: guide & motivate his followers in the direction of established goals by clarifying role and task requirem876876ents b/c many of the problems 7 rather than individuals, which will lead to less conflict and less coordination costs. e.Ensure that Equity theory is fulfilled f.Address Learning Theory g.Goal Setting Theory: specific & diffic8ult goals w/feedback , high performance h.Increase employee involvement: a participative process that uses the entire capacity of employees & is designed to encourage increased commitment 684678768767to the organizations success i.Right now workers do not feel committed to mission statement i.Perhaps start gainsharing: a type of variable pay program; an incentive plan in which improvements in group productivity determine the total amount of money allocated i.Reward specific behavior less influenced by external factors ii.Can receive rewards even when not profitable iii.Increased motivation & productivity iv.Downside = unpredictable
