Precista Tools AG

The main story of the case Precista Tool AG is about the conflict in a family business, which showed in the following areas: (1) Parent-child conflicts & family dynamics; (2) Management succession problems; (3) Business-family complications and (4) The plight of women managers. Mr. Huebel and his daughter Greta have different insights in several aspects in the management of the business after Greta was appointed as the manager of financial and administrator of the company in 1983. During this period of time, Mr. Heubel’s strong sense of attachment, reluctance to give up control and power and unwillingness to delegate interfered with Greta’s management method.

Differences in values, vision and management styles causes conflict, which leads to strained relationships, rivalry and power struggle. In the flowing several years, the father and daughter’s conflict became severe as Mr. Huebel’s son joined the company. Mr. Huebel played off offspring against one another and wanted his only son Peter to be the successor of the company. An emotional involvement with his son greatly harmed Greta’s feeling and working attitude. On the other hand, as a woman minority with no engineering backgrounds, Greta felt the pressure coming from the tradition that men should be the decision maker of the company in engineering area. There is also some conflict between Mr. Heubel’s family and the Non-family management member in the company. The insufficient communication severe the conflict and finally Greta decided to resign from the company.

The conflict in the case is complex. I will analyze the case from multiple perspective in the following pages.

Analysis of the case from multiple perspectives

1. The Structural Frame is about how to organize and structure groups and teams to get results. The “structural” manager tries to design and implement a process or structure appropriate to the problem and the circumstances. This includes:

*to clarify organizational goals

*manage the external environment

*develop a clear structure appropriate to task, and environment

*clarify lines of authority

*Focus on task, facts, logic, not personality and emotions

This approach is useful when goals and information are clear, when cause-effect relations are well understood, when technologies are strong and there is little conflict, low ambiguity, low uncertainty, and a stable legitimate authority.

In this case, we can see that Mr. Heubel does not develop a clear structure appropriate to task and environment and does not clarify lines of authority. On the other hand, he does not focus on the task, fact and logic, instead, he focus on emotions. He wanted his only son to be the successor of the company. He does not stand from the point of the development of the company but from her personal emotion and preference. He tried to interest Peter to the company and want him to be the decision maker but he neglected that Peter may lack of management experience with engineering background. From the structural frame standpoint, Mr. Heubel made two big mistakes: (1). Not focus on work and the development of the company itself, but focus on the personnel – who was the “better” successor in his mind. (2) He does not have the clear idea about what is the appropriate structure of the company, what is the definite goal and how to manage the company and the external environment.

Recommendation for Mr. Heubel from structural frame standpoint: (1) set objectives and coordinate resources. Recruit high qualified person to plan for the appropriate structure for the company and focus on the task and goal of the company. (2) Make rational decision; (3) reorganize the company and realign roles and responsibilities to fit tasks; (4) keep organization leaded in right direction.

2. The Human Resource Framework tells us how to tailor organizations to satisfy human needs, improve human resource management, and build positive interpersonal and group dynamics. The human resource manager views people as the heart of any organization and attempts to be responsive to needs and goals to gain commitment and loyalty. The emphasis is on support and empowerment. The HR manager listens well and communicates personal warmth and openness. This leader empowers people through participation and attempts to gain the resources people need to do a job well. HR managers confront when appropriate but try to do so in a supportive climate

This approach is appropriate when employee is high or increasing or when employee morale is low or declining. In this approach resources should be relatively abundant; there should be relatively low conflict and low diversity.

In my opinion, one of the main conflicts existing in the company is caused by the lack of communication and the human resource management. In order for the development of the company, Mr. Heubel should promote participation, open process to produce commitment, maintain a balance between human needs and formal roles , develop relationships and keep people involved. He should also strengthen the communications and exchange information, needs, and feelings for involvement. Greta should also communicate with his father and brother effectively to solve the conflict and helped to create a free environment for cooperation and communication.

3. Political Framework is about how to cope with power and conflict, build coalitions, hone political skills, and deal with internal and external politics.

The political leader understands the political reality of organizations and can deal with it. He or she understands how important interest groups are, each with a separate agenda. This leader understands conflict and limited resources. This leader recognizes major constituencies and develops ties to their leadership. Conflict is managed as this leader builds power bases and uses power carefully. The leader creates arenas for negotiating differences and coming up with reasonable compromises. This leader also works at articulating what different groups have in common and helps to identify external “enemies” for groups to fight together. This approach is appropriate where resources are scarce or declining, where there is goal and value conflict and where diversity is high.

In this case, we can see that Mr. Heubel did not create an environment of negotiating and compromise. In the family business her owned, he should use his power more carefully thus make a healthy environment for the development of the company. Also, he should pay attention to the conflict existing in the company and build a coalition to fight the competitor together.

4. Symbolic Framework is about how to shape a culture that gives purpose and meaning to work, stage organizational drama for internal and external audiences, and build team spirit through ritual, ceremony, and story.

This leader views vision and inspiration as critical; people need something to believe in. People will give loyalty to an organization that has a unique identity and makes them feel that what they do is really important. Symbolism is important as is ceremony and ritual to communicate a sense of organizational mission. These leaders tend to be very visible and energetic and manage by walking around. Often these leaders rely heavily on organizational traditions and values as a base for building a common vision and culture that provides cohesiveness and meaning.

This approach seems to work best when goals and information are unclear and ambiguous, where cause-effect relations are poorly understood and where there is high cultural diversity.

We can see from this case that Mr. Heubel should adopt some policies to inspire their employees and to maintain an image of accountability and responsiveness, he should give employees something that they can believe in, thus make employees to give their loyalty to the company that has a unique identity and make them feel that what they do is really important. I recommend Mr. Heubel use dramatic, visible symbols that give employees a sense of organizational mission. He should create slogans, tell stories, hold rallies and give awards to effectively manage the company.

Recommendation for Greta:

According to the above analysis, I have some recommendation for Greta.

Self-development

1.Earning trust and credibility.

2.Developing management, family and ownership skills.

Managing Conflict

1.Communication

a.The Weekly Family Supper

i.Relaxed atmosphere

ii.Family members freely express feelings

iii.Discuss working relationships

iv.Share points of view

v.Resolve personal issues

b.Other Weekly Meetings to accommodate non-family members

2.Introducing Professional Management

a.Provide objectivity

b.Encourage professional attitudes in family members

3.Smoothing: minimize differences, focus on sharing, provide reassurance;

4.Compromise

a.win-win situations

b.parties make concessions

5.Redesigning the Structure of the Business

c.Introduce a reporting hierarchy

d.Separation of roles and responsibilities

e.Clear delineation of mandates