An Analysis of the Dick Spencer Case

The career of Dick Spencer presented in the assigned case offers several opportunities for the business student to examine principles of management using a realistic example of the modern business environment. This paper undertakes to perform an analysis of Mr. Spencer’s career in order to identify and explore those factors that contributed to his early career success as a sales person as well as those factors that contributed to significant challenges experienced by Mr. Spencer as he transitioned into the operations side of his company’s business and began to progress in his career up through the ranks of middle management. The paper concludes by offering recommendations that could have helped Mr. Spencer be more successful in his various management roles. Dick Spencer joined the Tri-American Corporation as a salesperson upon graduating at the age of 22 with a master’s degree in business administration. Mr. Spencer experienced almost immediate success during his first year with the company, primarily through successfully landing a single, large contract. His success, although not as spectacular, extended into his second and third years with the company and his sales performance remained near the top among his peers.

Several of Mr. Spencer’s peers attributed his success during his first year with Tri-American as much to his appearance, personality and skills on the golf course as to his knowledge of the company’s business or his ability to sell its products. However, this does not appear to be a satisfactory explanation. A close reading of the case, coupled with a review of the literature surrounding research into salesperson performance reveals a number of factors that appear to have contributed to Mr. Spencer’s success during his time as a salesperson with Tri-American. A substantial body of research into the determinants of good sales performance has been accumulated over the last century (Shannahan, Bush & Shannahan, 2013; Churchill, Ford, Hartley & Walker, 1977). One of the most widely recognized and respected studies (Leigh, Pullins & Comer, 2001), published by Churchill, Ford, Hartley and Walker (1985), performed a meta-analysis of the findings from 393 research studies and 36 dissertations published between 1918 and 1982, analyzing them to quantify the common factors that could be used to predict sales performance. The authors of this study identified six categories that were predictive of sales performance, including role
perception, skill levels, aptitude, motivation, personal characteristics and organizational/environmental variables.

The authors found that these determinants were individually not predictive of sales performance. Rather they must be considered more as a whole. They also found that personal characteristics such as physical appearance and personality were less important to sales performance than those factors that can be influenced, such as by training and motivational programs. Prior research into sales performance tended to focus on more classical personal traits, such as physical size and appearance and personality, as determinants of sales performance, but the Churchill et al. study inspired a plethora of new research (Verbeke, Dietz & Verwaal, 2011) leading to more comprehensive approaches and subsequent research delved deeper into how personality affects performance. Barrick and Mount (1991) performed a meta-analysis of recent (at the time) research that had converged upon a more comprehensive view of personality, called the Five Factor Model, evaluating its effectiveness in predicting job performance across several occupational groups, including sales. The authors of the study found that the Five Factor Model, which explained personality in terms of the dimensions of extraversion, emotional stability, agreeableness, conscientiousness and openness to experience was a valid framework for predicting job performance. More recent research into sales performance seems to focus more on how personality feeds into and drives other factors. One such study (Barrick, Stewart & Piotrowski, 2002) examines the relationships between personality and motivation using the Five Factor Model as a framework.

The authors found that the motivating factors of striving for status and accomplishment were mediated by the dimensions of extraversion and conscientiousness. It seems clear from the preceding discussion that, although definitely a factor, personality and physical appearance and abilities alone did not adequately account for Mr. Spencer’s success in his role as a salesperson. It seems his dedication and apparent drive to excel, as witnessed by his willingness to sacrifice family relationships, was perhaps a greater factor. There is also some evidence of a motivational and training element within the Tri-American Corporation, as evidenced by the annual company sales conferences, feeding into the findings by Churchill et al. (1985) that influenceable factors had a greater effect on salesperson performance. Finally, one cannot discount the presence of sheer luck in contributing to Mr. Spencer’s success, especially early on in his first year. The seemingly almost effortless success experienced by Dick Spencer in his sales role with the Tri-American Corporation did not follow him as he transferred over into the operations side of the business and began to work his way up the management ladder. Although he continued to experience success, it came only with extreme effort, personal frustration, and strained relationships, both within the company and in his personal life.

Analyzing the account of Mr. Spencer’s progression through his management career, several areas presenting challenges to his success begin to stand out. Among these are; an inauthentic and meddling management style that came across as bordering upon micromanaging (White, 2010), difficulty building trusting relationships with his subordinates, and issues with work-life balance. These will be explored in the following paragraphs. The Tri-American Corporation, with over 22000 employees distributed world-wide through subsidiaries within the United States and fifteen foreign countries, would be categorized as a multi-domestic corporation (Robbins, Cenzo & Coulter, 2013). With its decentralized corporate governance structure in which the individual branches and subsidiaries operated as independent units, Tri-American was operating in an environment that both required a large amount of resources and presented a significant level of risk (Robbins et al., 2013). A large portion of the responsibility for successfully managing the business and ensuring profitability rested upon the local management at each of the subsidiaries.

After fourteen years with the company and various positions with steadily increasing responsibility, Mr. Spencer was promoted to junior vice president and appointed as the plant manager at the Modrow branch, a Canadian Subsidiary of the Tri-American Corporation. He inherited a complex management situation. The plant was in the middle of a major renovation and expansion project that was running behind schedule and with mounting costs. Employees were upset and frustrated by the changes and morale was low. Added to this, Mr. Spencer’s reputation as a corporate headhunter preceded him and his arrival was met with skepticism by his new employees. Mr. Spencer later recalled feeling “constantly pressured and badgered” and it appeared to come from all sides; his management at the home office, the personnel at the plant and even his family. There is no doubt that Mr. Spencer, in taking up
the reins, at the Modrow plant entered into a very challenging situation with many complex problems in need of solutions. However, solving complex business problems is what managers get paid to do. Unfortunately, Mr. Spencer seems to have made his job much tougher than it needed to be due to deficiencies in his management style.

Through the various vignettes of Mr. Spencer’s interactions with Modrow employees, the picture develops of a manager who felt insecure in his standing with company management, was unable to connect with his employees and who was seemingly singlehandedly trying to restore the plant to profitability through his own heroic efforts. Instead of partnering with and leading his employees to accomplish the task he seemed to view his employees more as tools to take up and put away as needed. Much of Mr. Spencer management behavior seemed to fit the pattern of the symptoms exhibited by the micromanager, as enumerated by White (2010). These include things such as closely managing employees, getting involved in the minute details of certain projects, telling employees exactly how to do their jobs and working long hours. According to White (2010), one cause of micromanaging behavior is “people who micromanage generally do so because they feel unsure and self-doubting.” Mr. Spencer’s recollection of his feeling that the company president and his friends at the home office were waiting for him to prove himself seems to support self-doubt as a contributing factor.

His need to prove himself seemed to be a theme running throughout his career with Tri-American. Another symptom of the micromanager exhibited by Mr. Spencer was an unwillingness, or inability, to delegate tasks to subordinates. Micromanagers find it difficult to delegate due to a lack of confidence in the abilities of their subordinates (White, 2010). This is frequently due to underlying assumptions about employees of which they may not even be aware (Kopelman, Protas & Falk, 2012). Managers having a pessimistic view of their employees; that they are basically lazy, incapable of performing self-directed work on their own and have little to offer to the company in terms of solving problems (Kopelman, Protas & Davis, 2008) find it difficult to delegate responsibility for meaningful work to their employees (White, 2010). Instead, they tend to “manage in such a controlling and commanding fashion that these beliefs are “brought to life” by employee behaviors.” (Kopelman, Protas & Falk, 2010). This tendency to view employee motivations through pessimistic assumptions was labeled by
Douglas McGregor as Theory X in his influential 1960 book on management, The Human Side of Enterprise (Kopelman, Protas & Falk, 2012).

The opposite of Theory X is Theory Y, based on the assumption of managers that employees are industrious, capable of valuable contributions to corporate problem solving, responsible and basically trustworthy (Kopelman, Protas & Falk, 2012). It seems evident that Dick Spencer’s underlying assumptions about his employees motivations slanted toward the Theory X side of the equation, as illustrated vividly through the Siding Department Incident. The self-fulfilling nature of Theory X and Theory Y management assumptions (Kopelman, Protas & Falk, 2010) may have contributed to Mr. Spencer’s difficulty in gaining the trust and cooperation of the employees at Modrow. In bypassing his managers and foremen, he demonstrated his lack of confidence in their abilities to achieve his cost cutting goals and may have demotivated them from even making the attempt (White, 2010). Another aspect of Mr. Spencer’s failure to gain trust and cooperation from the Modrow employees was his prior reputation as a corporate head-hunter.

Trust is a vital element of professional relationships at all levels of the organization, both horizontally between employees and vertically between employees and their managers (Krot & Lewicka, 2012). Mayer, David and Shoorman (1995) defined trust as: The willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party. Mayer et al. (1995) developed a model for how interpersonal trust develops between the trustor and the trustee in the organizational setting and accounts for both the perceived characteristics of the trustee and the disposition of the trustor (Knoll & Gill, 2011). Characteristics of the trustee that lead to perceived trustworthiness by the trustor include ability, defined as a belief that the trustee possesses the required skills, competencies or characteristics for the area of interest; benevolence, or the perception that the trustor has the best interests of the trustee at heart; and integrity, the perception that the trustor will behave ethically (Knoll and Gill (2011).

Mr. Spencer went into the situation at Modrow carrying the baggage of his past activities at the company. Employees were clearly skeptical about his intentions and perhaps and integrity from the beginning and it is not
evident that Mr. Spencer made any significant attempt to overcome that their distrust. In fact, his constant walking around the plant watching the activities of workers without really interacting with them seemed to cause more concern from his managers, foreman and the employees. Even though the fear seemed to dissipate with time, there was no visible development of trust between Mr. Spencer and the Modrow employees. A thread that runs throughout Mr. Spencer’s career at Tri-American is the personal cost to his family relationships caused by his extreme devotion to his work. Mr. Spencer’s first marriage failed due to his “constant involvement in business affairs”. He subsequently remarried and had children, but we see throughout that his family seems to come in a distant second to his work. One study (Doby & Caplan, 1995) found that employees experiencing high stress in their jobs, especially that resulting from concerns about their reputation with their manager were particularly likely to carry that stress over into their home life and experience conflict there as well. As discussed previously, Mr. Spencer seemed to have an inner sense of insecurity and a need to prove himself to his management.

Recommendations

The preceding paragraphs explored several of the factors that contributed to Dick Spencer’s trials in his career progression through the tiers of middle-management within the Tri-American Corporation. Many of the challenges he experienced stemmed from the environment in which he operated and were beyond his direct control. The failures he experienced, however, had less to do with his environment and far more to do with the ways in which he responded to the challenges presented by that environment. The following paragraphs present recommendations for how Mr. Spencer could have improved. The greatest improvement Mr. Spencer could have made as a manager would be to realize that he had a team of 1000 people under his authority with untold potential for working with him instead of just for him in helping him to achieve the goals he had for improving the operations of the Modrow plant and bringing it back to profitability. Richard D. White, Jr. (2010) quoted President Theodore Roosevelt as observing, “The best executive is one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.” Instead of viewing his employees as mere minions to be directed as he saw fit, Mr. Spencer could have learned to involve them in finding solutions to the many problems being faced by the Modrow plant.

By laying out specific problems, delegating them to his senior managers and encouraging them, in turn, to delegate down to the lowest level where the employee has the necessary authority, skill and information to solve it effectively (White, 2010), Mr. Spencer could have been freed up to become a true leader focused on guiding, motivating and developing his employees to achieve the goals of the organization. At the same time, he could have stopped neglecting his personal life and begun to restore damaged relationships. The first step in solving every problem is to step back and analyze the situation to understand the issues and available alternatives. In this case, Mr. Spencer should step back and take time out from the situation. He should examine his underlying assumptions about himself and his employees. If he continues to persist in his pessimistic Theory X assumptions about his employees, things will likely continue as they are. Even if he attempts to implement some management practices more associated with Theory Y assumptions, such as participative leadership and delegation, he will likely see only limited success (Kopelman et al., 2008).

When he starts to understand that most people have a need to find meaning in life and that meaning can be achieved through creating something of value in service of worthwhile purposes, he may start to awaken the innate energy, creativity and commitment (Badarraco & Ellsworth, 1992) he needs from his employees. Once he comes to grip with his assumptions about employees, the next step for Mr. Spencer would be to start experimenting with delegation. Research (Leana, 1987) has shown that a manager’s willingness to delegate is related to both their level of confidence in the ability of the subordinate and the importance of the decision or task being delegated. In this light, Mr. Spencer should begin with delegating smaller, less important tasks, and should primarily involve his more senior managers.

Huffmire (1984) stressed that delegating is not giving up control or abdicating responsibility; rather it is a way to allow decision making to occur at the lowest level in the organization where information for making the decision is available. Effective delegation benefits the company by allowing the manager to focus on more important planning and organizing and more important responsibilities while allowing subordinates to exercise their creating skills in solving problems. By learning to involve his employees in solving problems, Mr. Spencer could become a more effective leader as well as improving his work-life balance.

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