Problem Case Study Final Project

Group members: Drew Tornquist, Amanda Carmichael,

Hannah Olson, Brett Tonz, Yi Wang

Learning objectives:
1. To show how decision-making traps come up in an organization  
2. Good integration is important in order for an organization to thrive
3. How listening to group members and the interactional design of an office space
and meetings are important

Introduction
It was 5:45 on a crisp, cold, Midwestern fall morning. Ray Robinson, the newly
hired social media coordinator for The Chicago Local newspaper, was up and moving
already, frantically gathering her things together for a day at her new job. Being early
was always important to Ray because it showed initiative and competence and today was
exceptionally significant. It was Ray’s second time reporting to work, and she wanted to
continue to make a good impression on the many long tenured employees that are now
working for her. At only 27 years old, Ray was going to have to prove herself, and she
would do anything she could to accomplish her goals at the Chicago Local. Being one the
youngest employee at the company was one thing; however, she was not only an
employee. She was on the executive board. Ray definitely had experience in the media
industry, for she had just resigned from her job at Google in Mountain View, California
to move to the bustling city of Chicago. It was a great opportunity, but she was also
nervous to take on such a huge responsibility. She threw her cereal bowl sloppily into the
sink, grabbed her backpack, her keys. She made sure not to forget her phone and her
computer, both of which she could not do without. Ray smiled at her clumsiness, and
then took a deep breath after she closed her front door. “I hope I don’t feel this rushed at
work,” she thought jokingly to herself, even though she knew that her statement was
laced with wishful thinking.
Taking on the role of “social media coordinator” at a newspaper is actually a more
challenging job than it may sound like. With many old style newspapers struggling in the
21st century, Ray was tasked with revolutionizing the presentation platform of the
Chicago Local, to go along with the trend of growing interest in online news. Since her
generation had adapted to getting all of their information on tablets and smartphones, it
was more than important to grab ahold of this demographic. Her responsibilities,
unfortunately, didn’t end at turning the Chicago Local into a social media accessible
newspaper. The CEO who hired her, Bob Chapman, is afraid that if the newspaper
continues in only print, it wouldn’t be making enough profit by next year and will be shut
down like many of the other local newspaper companies. Over a matter of just a few
months, Ray has to apply all she knows about media advertising, and online platforms to
come up with a plan that benefits the company, by enabling the newspaper to be read
digitally.
Over the course of her first week, Ray will be having daily meetings with the
CEO and head writers from all sections of the newspaper to collaborate, but mostly
inform them about her new plan. Yesterday was more of just an introduction meeting, as
Ray met with the team that consisted of: Mack(the head sports writer), Jennie and
Paul(who cover politics), David (who covers local news), and Blane(from international
news). The team is made up of almost all men, with the exception of Jennie, and
everybody on the team is over 35 years old, with Paul being the oldest at 55. Each
member of the team had been working for the Local for at least 10 years, and even the
confident Ray could admit that she felt a bit nervous bringing change upon several
tenured employees. Ray felt strongly that if The Chicago Local did not go online and
advertised through social media than it would surely go out of business and she truly
wanted this hard-working company to thrive.
Ray pulled into the parking lot at 7:30, and as she got out of her car, she let out a
sigh of relief; she could finally relax for a bit, work didn’t start until 8:45.
She noticed Paul locking up his car. “Good Morning Paul, How’s the morning
going?”
Paul managed a small grin, gave a tiny awkward nod, and just began walking
quickly towards the door.
Not the best encounter I guess, Ray noted. Even if she wasn’t going to get along
with these people she knew that she at least had faith in her skills to save this newspaper.

The First Meeting

Ray entered the office of The Chicago Local shaking-off the awkward interaction she had
with Paul in the parking lot. Today was going to be the first meeting with her new team
members and she was anxious, yet excited to present her ideas. She hoped they would be
as enthusiastic and attentive as Bob was when he first heard her social media and
advertising platform for the newspaper. The meeting was set to start at 9:30am so
naturally Ray showed up at 9:15am to set up her presentation. She was pleased to see
Jennie and Mack awaiting her arrival in the conference room with notepads and pens
ready looking eager for the meeting to begin. She made some small talk with Mack and
Jennie before the meeting, and it definitely helped her forget about her unfortunate,
awkward exchange earlier with Paul.
The clock turned to 9:25 the rest of the employees began to trickle in. As Ray
observed her coworkers she noticed the look of disinterest and agitation on most of their
faces. With a deep breath and a smile she looked at Bob and started the meeting.

“Hello, as many of you may know my name is Ray Robinson and I am excited to
be working with you guys. In the course of these next few months we will be making big
progress at The Chicago Local, in order to increase subscriber numbers and gain more
traction in the social media field! My plan is to bring the newspaper fully online to keep
up with the trend of smart phone accessibility and Internet use.”
Over the next 25 minutes Ray explained in detail her plan of action to transform the print
newspaper into an organization based upon social media and online advertising.
Throughout the presentation, she noticed mixed reactions among the crowd, a few
gloomy, faces, but also some looks or intrigue.
Ray exclaimed enthusiastically, “What do you guys think I would like to hear
your feedback?”
Ray’s heart dropped as she realized Paul was standing up to speak. “Well, isn’t a
newspaper a printed piece of paper, I mean it seems like we can’t even call ourselves a
newspaper anymore with all this online ‘mumbo jumbo.”
Ray was nervous as she began to speak, but tried to keep her confidence, “While I
understand your viewpoint, the data does show that the majority of viewers would like to
access their information at the tip of their fingers. The numbers of internet readers are
expected to increase drastically over the next few years, and printed newspaper readers
are expected to become obsolete.”
David chimed in before she could get in her next sentence, “I just do not
understand. I have been here over ten years and print newspapers are still enjoyed by
many of our subscribers. Its classic and classy. Why are we changing this now?”
Ray could really feel the situation getting heated.
“Exactly!” exclaimed Paul, I’ve given practically my life’s work to this
newspaper, and in 30 years, I’ve never seen a change this big or hell, this ridiculous. Why
should I completely adjust everything that I have been doing my entire career after so
long.” Paul’s rant continued, “We’ve spent a lot of money making this an appealing, and
one of the last remaining, print newspapers in the city. I think we have to stick with that,
or at least give it some credibility.
Just as Ray felt her power completely being stripped away, Bob finally
intervened.
“Now listen up guys, I know that this is a huge change to our company and it was
hard for me to face at first as well. This plan is open for change and is not set in stone;
however, as CEO and I have decided that we need to implement social media into our
company in order to survive. Ray is here to help and I trust her decision. We will pick
this meeting up in two days to let all of you cool off and consider the future of this
company.”

An Exchange with the CEO

As the meeting came to a close, Ray thanked everybody as they walked out the door.
Once everybody had lad left, Bob stopped to talk to Ray. “Listen, I know this meeting
didn’t go well, and it got a little hectic, so I think we should have a one-on-one talk about
what we think went wrong.”
Ray sat down across from Bob and Bob continued. “It worries me that some of
our top employees are struggling with this transition, but at the same time, I know what
this company needs to do to survive, and that’s why I hired you, you know the ins and
outs of making money online.” Ray nodded and smiled at Bob’s compliment, but his tone
shifted. “It’s not my area of expertise, but I think we should consider some possible
compromise, maybe we keep need to put some of our budget towards print still.”
Ray responded, “It would be hard to fund both, and our profit margins would rise
much more slowly if we did this transition gradually. With all due respect, time is against
us here.”
Bob retorted,“Ok. and I apologize for Paul and some of our employees, they have
been here a long time and just don’t understand this digital transition, just try not to take
it personally.”
“It’s just amazing to me how they don’t get what the numbers show. Digital news is the
only way we can save this company. I’ll try to ignore it next time.”
Taking what Ray said into consideration Bob closed off the meeting, “We can
pick up from here tomorrow at the meeting with the entire staff to finalize what path we
decide to choose. See you tomorrow and get some rest.”

The Third Meeting

By Thursday, a new meeting had been scheduled with the head writers about the final
verdict, or a possible compromise, for the new presentation platform of the company. Ray
was really just hoping to get these meetings over with, so she could move on with
digitizing the newspaper. She wasn’t pleased with the drama that all the meetings had
caused. Ray went into the meeting on Thursday hoping everybody would finally see the
benefits of her proposal.
Ray showed up in the conference room fifteen minutes before the meeting, as per
usual. This time, Ray could tell that enthusiasm was much lower, as people didn’t show
up until a few minutes before the meeting started.
Ray was surprised and relieved to see Jennie come up and say something.
“Listen, Ray I appreciate what you’re trying to do with the company and I have
felt that there needs to be some change around here too for awhile. It can be difficult to
speak up around all these pretentious men who think they wear the pants around here.”
“Well it is nice to have someone on my side,” Ray laughed, it hasn’t been easy.”
With the meeting about to start, Ray was hopeful that maybe following their
conversation, Jennie might come to Ray’s defense.
Bob began the meeting with an announcement, “I know talk about this transition
has created a lot of tension in the office, but Ray and I discussed this, and today we are
finally going to come to a good consensus on this.”
After a short period of silence, Ray began to speak. “The last thing I want to do is
step on anybody’s toes here. I want what is best for this company and I truly believe that
my action plan will make this company thrive and survive. I will do whatever it takes to
have you guys see eye to eye with me.”
David spoke up first, “Well that’s exactly, it, I know most of us don’t see eye to
eye with this in the first place.”
 Ray felt panicked, but she pulled her confidence together, “Well… listen, this
could really have benefits in the long run for our employees, especially with job security
and general profits.”
“You still haven’t addressed the fact that we still have a massive number of print
readers and subscribers,” Paul interjected. “What about those customers, maybe we still
need to be loyal to them.”
Ray began to feel defensive again and had to hold herself back from losing it
completely. She was disappointed that Jennie and Bob hadn’t come to her defense, and in
all the stress, Bob’s idea of compromise slipped out of her mind. Instead, she did what
she knew best, and explained, in detail, her proposal, and the benefits she saw with it.
The discussion went on, and although some members didn’t support her plan, Ray
actually felt more understood that before. Mack pointed out that digital platforms are
good for sports, and Blane seemed open minded and agreed on the financial aspects.
Overall, Ray framed the situation as more of a choice between print or online. When
opposing arguments came up, Ray just made sure to continue sighting the data that
pointed towards the decline of print news. As the polarizing discussion came to an end,
Ray felt better support than she had last meeting, but in actuality, the group was still
divided. There were still many unanswered questions and the group had not come to a
final decision.

Conclusion
As the course of the months went by The Chicago Local still continued to print their
newspaper, which in Ray’s perspective was still a waste of time and money. The number
of subscribers continued to decline and they lost some loyal employees overtime that did
not agree with the change. The paper did end up going online; however, since the budget
was still supporting the printing of newspaper Ray did not nearly get the support to
complete half her aspirations. Throughout her career at the Local, Ray struggled to
maintain good relationships with co-workers, and continued to deny the importance of
print news and gave overwhelming encouragement to a completely online platform.
TEACHING NOTE
~Key Terms:
1. Integration: Incorporating a new member into a group environment.
-Application: Ray struggling to become accepted as a part of The Chicago Local
newspaper board and having to adapt to the group dynamics.
2. Social Identity: One’s characteristics in relation to others. Involves relational
terms: old, young, professor, boss, manager etc.
-Application: Because Ray was much younger than some of her colleagues, Ray had a
different opinion about technology and news than her older co-workers. She could have
also experienced lack of understanding as a woman in charge among males.
3. Socialization: The process by which people’s social identities are developed.
This happens through culture and how one communicates on a daily basis.
-Application: Paul grew up working in a news environment where print dominated, and
he experienced very little change across his career, which made him against new changes
to the newspaper.
4. Decision Making Traps: Distortions and biases that can hinder people’s abilities
to make a clear and well thought out decision.
-Application: Ray became close minded and too devoted to her presentation platform in
the third meeting, caught in decision making traps from “estimating and forecasting”.
Other writers, like David and Paul, supported their points in meeting two under “status
quo” and “sunk cost” traps.
5. Status quo: favoring alternatives that perpetuate the existing situation, sticking
with the comfort of the current state, possibly out of fear about damaging one’s ego.
-Application: Many of the older coworkers wanted to keep print newspaper because that
was the way it had always been.
6. Estimating and forecasting: being overly influenced by vivid memories when
estimating.
-Application: Ray was devoted to the statistical predictions that backed up her proposal.
She looked at them as unquestionable facts, which prevented her from ever understanding
the other side of the issue.
7. Sunk costs: making choices in a way that justifies flawed decisions of the past or
letting failed projects continue out of fear for the consequences of failure
-Application: Paul argued that they had already put so much time and money into the
print newspaper that it would be ridiculous to throw it all away on making the newspaper
online.
8. Social skill: building rapport with others to move them in desired directions
-Application: Ray talked to Bob originally to share her idea and to build support for her
plan of action. Having this understanding, Ray hoped that Bob could help to sway the
team in her direction. I'm
9. Self-regulation: controlling or redirecting disruptive impulses and moods
-Application: Ray felt at times when people did not agree that she wanted to lose it and
was bias towards her own plan, but she had to stay professional and calm.
10. Compromise: individual commitment to a group effort that makes a team work, a
company work, a society work, and a civilization work
-Application: Bob wanted to compromise by still printing the newspaper and also making
it online to accommodate both sides.
DISCUSSION QUESTIONS

1. What decision-making traps did Ray and her coworkers fall into?
2. How much success did Ray have integrating into the group meetings and
how could she have done better?
3. What contributed to Ray’s reluctance to compromise?
4. How did everybody’s social identities contribute to the way the meetings
unfolded?
5. How did Ray’s bias towards her own action plan negatively affect the rest
of the company?
6. What communication strategies would have helped Ray communicate
more effectively?

Further Readings
Goleman, D. (1999). What Makes a Leader? Harvard Business Review, 1-11.
Hammond, J. S., Keeney, R. L., & Raiffa, H. (n.d.). The Hidden Traps in Decision
Making. Harvard Business Review, 1-11. Retrieved 1998.
Integrating New Employees to the Workplace. (2016, March 28). Center for
Learning & Organizational Development, 1-11. Retrieved from
hr.oregonstate.edu/training.
Baldoni, J. (2014). Compromising When Compromise Is Hard. Retrieved
December 07, 2016, from https://hbr.org/2012/10/compromising-when-
compromise-i
Garvin, D. A., & Roberto, M. A. (2001). What You Don't Know About Making
Decisions. Harvard Business Review, 31(2), 1-10.
Interaction Design Basics. (n.d.). Retrieved December 07, 2016, from
https://www.usability.gov/what-and-why/interaction-design.html

 
David Wambolt has always considered himself to be a fair and honest businessman. He started
working in financial advising firms immediately after graduating with a business degree. He
became so successful through these jobs that he decided to create his own wealth management
company. He founded Wambolt and Associates in Denver, Colorado in 2000 and ever since then
it has been a small-staffed, but very successful company.

Although David takes pride in having a small, close-knit professional staff, he decided that he
needs to hire an additional secretary. He felt that Greg, his current secretary, had been
overworked with the amount that he had to complete on his own. After months of searching and
interviewing candidates for this position, he found Karen, a seemingly perfect fit for the job.

Karen was a 30-year-old woman living in Denver. She graduated from the University of
Colorado with a bachelor’s degree in Business. Karen also had years of experience with a few
different secretary positions. Her resume proved that she had many qualities ideal for the
position, therefore David was very interested in adding her to the staff. She enjoyed the secretary
position she was previously in, however, the commute was an hour away (without traffic). She
was getting tired of doing this twice a day, so she decided to look for a job closer to her. With the
company building being a short 15 minute drive away from her home, she was thrilled to see that
David had contacted her for an interview. The interview went well, and she was offered the
position in person immediately after it had ended.

The first few weeks of the position went very well for Karen. She was pleasantly surprised to see
how close all of the employees were with one another. She felt that these close relationships
created a great amount of trust and comfort within the workplace, which resulted in the best
treatment for not only employees, but clients as well. The other employee that she spent the most
time with was obviously her fellow secretary, Greg. He did an excellent job of explaining the job
requirements and teaching her how to do everything. They developed a great friendship during
their time spent working with one another. David was also able to see how well Karen had
already bonded with the rest of the staff. He was glad to see that she seemed to be a great
addition to the company.

It was after about a month of Karen’s time working there, when she started to develop an issue
with her boss, David. Karen’s days consisted of sitting at the front desk with Greg, carrying on
some casual conversation while they both worked on whatever needed to be completed on that
day. One particular conversation they had involved their hourly pay. In many workplaces, it
could be considered unprofessional or rude to ask another employee about their salary. However,
Karen bringing this up to Greg was not unprofessional or rude at all, since they were very good
friends and could talk about topics like this without any conflict happening. The conversation
started when Greg asked Karen about how and why she decided to come into this type of career.

“Did you start out in college with this type of career in mind?” Greg asked.

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“Yes, I did! My older sister’s first job was a business secretary, so the career has always been in
mind,” Karen answered.

“That’s great,” said Greg, “Where did you attend to get your degree?”

“I graduated from the University of Colorado with a bachelor’s degree in Business,” Karen
answered.

Surprised, Greg said, “No way, me too! What a small world.”

After further discussion about attending the same university for the same degree, Greg explained
to Karen that this was his first real job position, at Wambolt and Associates. She then explained
that she had several secretary positions before this one.

“I’ve worked at several other companies, but to be honest, Wambolt and Associates has by far
been the best company I’ve been at,” Karen said.

“That’s great to hear! Even though I haven’t really had any other experience at another company,
I have no doubt this has been the best for you. The staff is wonderful, and not to mention the pay
is too!” Greg said enthusiastically.

This confused Karen a little bit because even though she enjoyed this position, she had been
payed more at two of her previous occupations. She wondered if Greg considered it a good pay
because he had not had any other experience in this job position.

With this confusion in mind, she asked, “Not to be nosy, but are you getting paid $14 an hour
too?”

“I’m getting paid $15 an hour actually,” Greg answered, “Is that how much you’re getting paid?”

“Yeah it is,” answered Karen upsettingly.

Karen was greatly confused when she realized that she was being paid less than Greg.
Understanding that she did spend less time at this particular company than Greg has, she kept in
mind that this could be why. However, she felt that she should be paid equal to what he’s being
paid, since she had a greater amount of experience. She had been here for a less amount of time,
but the time that she had spent here went smoothly, and she truly felt that she deserved equal pay.

Not wanting to cause any conflict while confronting her boss about this, she decided to calmly
step into his office during a quiet period of the day where she knew he wouldn’t be as busy.

“David, I’d like to discuss something that confused me,” stated Karen. 


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She then explained to him her confusion about the amount of pay she was getting compared to
Greg. David assured her that the only reason for this difference was the difference in amount of
experience she had at this company. David acknowledged that even though she had great reviews
from her previous employers and she had proved that so far here, he wanted to make it as fair as
possible for all employees to only raise pay if they took the time at this particular company to
prove that they deserve a pay increase.

“I have no doubt that you’ll continue to do great here,” explained David, “however it wouldn’t
be fair to raise the pay until you’ve spent more time with this specific company.”

Understanding that this might have upset Karen, David explained his position in the most
respectful way as possible. He didn’t want any conflict caused in the workplace from this,
however he felt that he needed to be as fair as possible to all employees.

Despite David’s attempt to be fair and respectful with Karen, she was not satisfied with the
outcome of their discussion. She felt that his way of being fair actually wasn’t at all towards her.
Over the next couple of days, this started to upset Karen even more. Acknowledging that she was
the only woman in this staff, she started to come to the conclusion that this unequal amount of
pay could have to do with the fact that she’s a woman. It is a fact that on average, women in the
United States get paid less than men, even for the exact same job positions. However, she knew
David had a good reputation of being a fair, honest businessman and she didn’t want to accuse
him of anything as serious as this, unless she had a better reason to. She decided to let this
situation simmer down and move on from it. For the next few weeks, there were no other issues
in the workplace. Karen continued to get along well with all of her coworkers.

Wambolt and Associates has a large, very important meeting every 6 months to address how the
company is doing overall. Being an experienced business secretary, Karen had planned many
meetings like this one. She had been used to scheduling, creating the agenda, and taking minutes
for most meetings in the workplace. Being in charge of these things for the 6-month meeting
would have been no issue for her at all, so she was very upset after discovering she had barely
any part in this process.

Greg knew the importance of this meeting, as he had dealt with many of them since he started
working there. He scheduled the meeting weeks before Karen was even hired, so that everyone
in the office would have a set date to mark their calendars. A few weeks before the meeting was
scheduled to happen, David assigned Greg to create the agenda and take minutes for it. David
knew that Karen would be capable of doing this with her level of experience, however David
thought it’d be a good idea for Karen to first see how Greg went through the entire process for
her first 6-month meeting, rather than rushing her into something that still might have been a
little new.



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Karen wasn't aware that she’d only be shadowing Greg through this process, and when she found
out she was pretty offended by it. It started when Greg asked her if she’d like to see how he was
creating the agenda.

“Karen, if you’re not busy, I’m making the 6-month meeting agenda and would like to go
through it with you,” stated Greg.

Confused, Karen asked, “It’s already been done? What part of it do I have to complete?”

“You don’t have to worry about creating anything for this meeting, David and I figured that we
would not overburden you since it’s the first one you’ll be attending. So I’m just going to review
everything with you beforehand,” said Greg.

“Well I have created several agendas on my own, I know how to create one, but okay,”
defensively stated Karen.

Greg wasn’t aware that this decision would offend Karen, but it was far too late to give her any
major role in creating the meeting, so he continued to try his best to include Karen in the
reviewing process.

The day of the meeting came, and although Karen did attend it, she barely spoke, making it clear
that she wasn’t happy with her exclusion from the process of making the meeting. David could
sense that there was clearly something upsetting her, so he decided to speak with her after the
meeting.

“Is everything alright, Karen? You seemed quiet for your first 6-month meeting here,” said
David.

“Well, I’m a bit offended that I got barely any part in the creation of this meeting,” admitted
Karen.

Not realizing that this would have offended her, David went on to explain that he did not want to
overburden her with setting up the meeting, considering it was very large and this was her first 6-
month meeting with the company. He continued to explain that for the next meeting, she will
have a large responsibility in it, as an attempt to resolve the issue. However, this promise made
no difference in how Karen felt.

Karen connected this issue with the other issue of unequal pay. She thought that this further
proved that her boss is treating her unequally due to her gender. She thought to herself, “He
probably assumes that since I’m a woman, not only should I be paid less, but also given less
responsibility in the same position as a man because I might be too ‘fragile’ to handle much.”
Karen let this assumption continue to anger her for several weeks. She showed this anger in the
workplace. She was very hostile towards Greg and David, and didn’t communicate as much with 

!4
the other employees. David noticed how different she was acting towards everyone, and knew
that she was upset, but he believed that he had already tried to resolve any issues she had. He
wasn’t sure what to do to fix her attitude in the workplace.

A few weeks later, Wambolt and Associates had their annual holiday party. Surprisingly, Karen
attended it. She still continued her hostility towards the entire staff. David went around to each
employee to ask if they’d like anything to drink.

“Karen, would you like me to grab you something to drink? We have water, soda, beer, wine, and
a few different types of juices,” David offered, nicely.

“Wow!” Karen exclaimed, “I’m shocked you’re offering a woman a beer, isn’t that more of a
‘man’s’ drink?”

In complete shock of Karen’s disrespectful comment, David was not even sure how to respond.
He took pride in being a fair businessman ever since starting his career, and having someone
accuse him of being sexist was extremely out of line.

After hesitation, David said, “Karen, I’m not sure why you’d think I treat any gender unequally.”

“My unequal pay and unequal amount of responsibility within this company are enough to show
how you treat a woman differently,” Karen said, defensively.

These comments left David extremely confused and upset. He was only paying her fairly, and
trying to give her less responsibility as a beginner, not because of her gender. However, he had
already tried to explain that and she wouldn't take his explanation into consideration. He felt that
he did everything he could to fix her issues within the workplace, but she simply wouldn't be
satisfied with it. He also didn't want her conflict to ruin the close community within the
company. He knew that if he kept her employed, it would only cause more drama within the
workplace. However, if he had already been accused of treated her unequally because of her
gender, how would she react after being fired?

David has to make a choice of whether to keep her in the workplace and attempt to resolve her
issues, or fire her and rid of all the unnecessary conflict in the workplace, but face more conflict
from her being fired.

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 Teaching Note
Elaine Jenkins, Jordan VanNote, Tracy Conlan, Grant Davis, Parker Helm

This case study is a decision case.

Learning Objectives:
1. This case study exposes how difference and diversity (specifically in gender) in the
workplace can cause conflict.
2. This case study shows the importance of proper planning, coordination, and meetings.
3. This case study emphasizes how role morality, a concept associated with behavioral ethics,
impacts judgment.

Key Terms:
1. Professional group: A group that meets out of necessity with a common goal.
2. Meeting preparation: Creating a purpose, agenda, audience, and interaction design for a
meeting.
3. Agenda: The necessary material, topics, and time limits that are sent before the meeting
starts.
4. Gender differences: How and why men are different, and how this influences interaction.
5. Neuroplasticity: Changes in neural pathways and synapses due to changes in environment,
behavior, thinking, and emotions.
6. Managing group conflict: Strategies for managing interpersonal conflict.
7. Emotional intelligence: The ability to recognize/understand emotions in yourself and others.
8. Ethics: Working through dilemmas to decide what is right.

Discussion Questions:
1. What was the main problem in this situation? How could it be avoided in the future?
2. What would have been a more appropriate way for Karen to express her discontent with
Greg and David? What group conflict management skills could she use?
3. Could David have done more on his part to clearly define his expectations of Karen during
her first few months as a new employee?
4. What reasons did Karen have to believe she was being discriminated against? What reason
did David have to support his claim that he was treating everyone equal?
5. How does each character's role in the company affect the way they view the situation? What
is each character’s perspective on the conflict?
6. How did Greg and Karen’s experience working in that position influence the way David
treated them? Why?
7. How is Karen and David’s conflict impacting the rest of the company?
8. What could Greg have done to make Karen feel like an equal member of the team?

Citations:
1. Loscocco, K. A., Robinson, J., Hall, R. H., & Allen, J. K. (1991). Gender and small business
success: an inquiry into women's relative disadvantage. Social forces, 70(1), 65-85.
2. Benokraitis, N. V. E. (1997). Subtle sexism: Current practice and prospects for change. Sage
Publications, Inc.
3. Springer, V. (1992). Gender, interaction, and inequality.

!6
 Teaching Note

4. Fonow, M., Benokraitis, N., & Rhode, D. (n.d.). Subtle Sexism: Current Practice and
Prospects for Change. Contemporary Sociology, 146-146.
5. Doyle, M., & Straus, D. (1976). How to make meetings work. New York: Jove Books.
6. Boss, R. W. (1979). Essentials for successful organization development efforts. Group &
Organization Management, 4(4), 496-504.

!7
 MEASURING ORGANIZATIONAL
EFFECTIVENESS IN THE
NONPROFIT SECTOR
The Case of the
Community Action Network
MATT KOSCHMANN

Learning Objectives

• To help you understand the complicated issue of measuring organizational effec-

tiveness in the nonprofit sector.
• To recognize the tensions in the nonprofit sector between "businesslike" approaches
to organization development and more holistic approaches to service provision.
• To learn more about the role of communication and the "social construction" of
organizational effectiveness.

I t was a sunny Friday morning in Austin, Texas, the summer heat and humidity already
making their presence felt at 9:00 a.m. I stepped into a coffee shop on Congress Avenue,
welcoming the air-conditioned contrast and quickly scanning the room for an open seat.
It had been a long week working with my various consulting clients, so it was nice to get
out of the office for a change of scenery as I embarked on a new project. After ordering
a drink, I settled into a comfortable armchair near the window and placed a manila folder
full of papers on the coffee table in front of me.
The folder was given to me by Luke Sorenson, l an old college friend who now worked
in the nonprofit community. Luke was the director of the Community Action Network
(CAN), a large collaboration of nonprofit organizations and government agencies that

150
 Case 16. Measuring Organizational Effectiveness in the Nonprofit Sector 151

work on social services and community development in the city of Austin. Recently
I agreed to offer my consulting services to the CAN after Luke told me about their need
for some organizational expertise.
Last month Luke and I met for lunch, and he explained how a lot of changes were hap-
pening in the nonprofit community in response to the economic downturn, and people
were starting to get nervous. There was more demand on the system because of un employ-
ment, but less money and services available because of budget cuts and decreased tax
revenues. Many of the CAN's partner organizations had to rethink their relationships with
various funding sources-like private foundations and government grants-and competi-
tion for resources was getting fierce. In particular, there was more pressure from funders
for nonprofits to measure and demonstrate the effectiveness of their organizations.
Since the CAN operated as somewhat of a hub or clearinghouse for the nonprofit com-
munity, they thought it would be valuable to do some research and create a report about
measuring organizational effectiveness in the nonprofit sector, something official and
authoritative their partners could use to inform their decisions and that they could share
with various funding agencies, Luke explained to me. But they needed someone from
outside the nonprofit community for the report to be credible. That's where I came in.
After some negotiation, I agreed to work on the project. What they needed was an
executive report about measuring organizational effectiveness in the nonprofit sector.
They needed to know how best to think about this issue, with recommendations for both
nonprofit organizations and funding agencies. I had about 4 months to work on this proj-
ect. The CAN had one of their semiannual meetings of all their partner organizations
coming up toward the end of the year, and we decided that would be a good time to pres-
ent the report.
Yesterday, Luke had stopped by my office to drop off the folder that I was now paging
through. He had done some preliminary research to help me get started, a loose collection
of newspaper clippings, photocopies of articles from academic journals, and a contact list
of various people in the Austin nonprofit community.
I decided to start with a little background reading to get acquainted with some of the
main issues. I began with the stack of research articles Luke compiled. The first two were
from a couple of professors at the University of Missouri-Kansas City, Robert Herman
and David Renz. Their most recent publication was a compilation of "theses" about non-
profit organizational effectiveness they developed during the past I 0 years of researching
this topic.
First, they concluded, nonprofit effectiveness is always a matter of comparison,
although it is important to differentiate among different types of nonprofit organizations.
Effectiveness is also multidimensional-nonprofits should use many different criteria to
measure their effectiveness. Additionally, nonprofit effectiveness is related to the organi-
zation's board of directors and the use of "correct" management practices, like strategic
planning and financial forecasting. However, it is doubtful that there are any universally
applicable best practices that are aPiJropriate for all nonprofit managers and boards of
directors. Next, nonprofit effectiveness is a "social construction," meaning that effectiveness
is only "real" in the sense that people believe and act "as if' effectiveness was real;
152 PART I. CASES IN THE ORGANIZATION DEVELOPMENT PROCESS

effectiveness does not exist apart from the beliefs and actions of other people. This
doesn't mean that effectiveness is arbitrary or doesn't have material consequences, but it
does mean that effectiveness is best thought of as an "achievement" of organizational
members and other stakeholders who convince each other that an organization is pursu-
ing the right objectives in the right way. Also, "organizational responsiveness" is a useful
way to measure effectiveness in the nonprofit sector. Finally, the level of analysis (i.e.,
interpersonal, group, or organizational) makes a difference when assessing nonprofit
organizational effectiveness.
"Lots to consider here," I thought to myself. But at least this gave me a good founda-
tion for thinking about organizational effectiveness in the nonprofit sector.
I paged through the rest of the folder to scan the other materials. The list of personal
contacts caught my attention. The first name on the list was Dr. Laurie Lewis, a professor
in the Communication Studies Department at the University of Texas. Luke's notes said
she was an expert in organizational communication, with an emphasis on the nonprofit
sector. Seemed like someone I should talk to. And since she was right here in Austin, I
called her office and made an appointment for the following day.
I stepped off the elevator on the seventh floor of the Jesse H. Jones Communication
Center and made my way down the hall to Professor Lewis' office. I was greeted warmly
by Professor Lewis and settled into her office. I reiterated a few things I mentioned on
the phone about my project, and then asked her to share her thoughts about organizational
effectiveness in the nonprofit sector.
"The first thing you need to know is that nonprofit effectiveness is intimately con-
nected to the mission of the organization. Missions are at the heart of a nonprofit organi-
zation's identity, and nonprofits are effective to the extent they are fulfilling their
missions. But that's the challenge, because nonprofit missions are notoriously difficult to
measure," she explained.
"Why is that?" I asked.
"The problem is things that are easy to measure are not always the most important
things for nonprofit organizations. You can easily measure your budget or material
resources; you can even measure the number of clients you help or services you provide.
But for many nonprofits the concern is more about the quality of those services and
interactions with clients. Is it more 'effective' to serve 200 clients in a month, or have
very trans formative and productive meetings with only a dozen clients in the same
month? Probably some combination of both, but that is very difficult to measure. In the
for-profit world it's pretty straightforward to focus on the financial metrics of profits or
return on investment. But a lot of those concepts don't translate well to the nonprofit
sector. And nonprofit organizations are interested in impacting things that are difficult
to quantify, like social improvement or personal well-being. Plus, many nonprofits have
ambitious missions that are difficult to measure. If a nonprofit's mission is to end racism
and discrimination, have they failed if racism still exists in our society? Of course not.
But it still begs the question, how do we know this organization is effective and achiev-
ing its mission?"
 Case 16. Measuring Organizational Effectiveness in the Nonprofit Sector 153

We talked for a while about nonprofit organizations she worked with in her research
and how they measured the effectiveness of their work It sounded like there were many
divergent perspectives, so I knew I'd have to keep.digging.
As we wrapped up our conversation, there was still one question on my mind.
"One more thing before I go. You're a professor of communication. How does com~
munication relate to this concept of organizational effectiveness, especially in the non-
profit sector?"
"Oh, I'm glad you asked. Too often we think about communication as a simple process
of message exchange between senders and receivers, But communication is much more
dynamic than that. Communication actually plays a role in constituting the very relation-
ships and organizational realities we take for granted."
"Does this have to do with the 'social construction' of organizational effectiveness?"
I asked, thinking back to Herman and Renz's research.
"Absolutely. A concept like organizational effectiveness is not just some objective
standard we try to live up to, but rather an understanding we create together through
interactions with various stakeholders of the organization. It is through communication
that organizational members develop notions of effectiveness, success, or failure, and
these understandings continue to exist-or not-in our interactions with other people. So
from my perspective, you can't fully understand organizational effectiveness without a
good understanding of how communication creates and sustains this concept in organized
systems of collective activity."
"So you're not saying that organizational effectiveness in the nonprofit sector is just
about talk," I said.
''No, no ... not at all. What I mean is that any concept, such as organizational effec-
tiveness, exists in the ongoing negotiations and interactions of organizational members
and stakeholders who are relevant to the organization. There are different perspectives
and opinions about what makes a particular nonprofit effective; there aren't some obvi-
ous objective criteria that we all agree on. Therefore whatever constitutes effectiveness
for a particular nonprofit organization will result from various interactions and agree-
ments, all of which can change over time and become more (or less) stable. It doesn't
mean that there aren't real material influences or consequences related to effectiveness,
but only to say that any notion of effectiveness for nonprofit organizations exists within
communication. That's why I think communication scholars have so much to add to our
understanding of organizational effectiveness in the nonprofit sector."
This idea of organizational effectiveness being socially constructed was still a bit con-
fusing to me, but the communicative aspect of organizational effectiveness was starting
to make sense, especially as I thought back to Luke's comments about nonprofits having
to establish and justify the effectiveness of their organizations in relation to various
groups, like funding agencies, volunteers, individual donors, and even clients. This all
happened through communication.
At this point I knew I needed to learn more about what was going on in the Community
Action Network, and what their collaborative partners thought about measuring
154 PART I. CASES IN THE ORGANIZATION DEVELOPMENT PROCESS

organizational effectiveness. Over the next month and a half I set up several meetings
with various people who worked for the CAN's partner organizations.
One ofthose people was Lucinda Beckett, the director of the local United Way chapter.
We met one afternoon in her office in East Austin. As a member of the executive team
for the CAN, she was already familiar with the work I was doing and was anxious to talk
with me.
"This is such an important topic," she began, "because it cuts to the heart of the work
we do and our ability to sustain our work into the future. All nonprofits want to do good
work, but we must demonstrate to others that we are actually doing good work and that
our organizations are effective. Nonprofits usually don't generate their own revenue and
there are many legal restrictions about how they can invest financial profits back into their
operations, so they are dependent on others for the very resources they need to survive.
Therefore we have to be able to measure and demonstrate our organizational effectiveness
to other stakeholders, especially funding agencies. But how to do that is the million-dollar
question. Many in the business community want us to identifY objective measures and
quantifY our activities. You can do that with things like operations management and finan-
cial accounting, and we do. But when you try to measure the overall impact of services on
someone's life, then you have a very different measurement factor than most business are
used to. It's hard to quantifY much of the work we do. I can tell you how many people we
have in each program, how many meals or services we provide in a given week, or how
many dollars we allocate per client. But that doesn't really tell you much about the quality
or impact of our work. It gives us some tangible numbers that look good in a report, but
it doesn't get to the heart of the issue: life transformation for people who need our help."
"So what's the alternative?" I asked.
"Well, if the business community has a tendency to be overly practical, many in the
nonprofit sector have a tendency to be overly idealistic. They think we should focus on
doing quality work, regardless of how the numbers play out. If we have to spend more
money on a particular client, so be it. If we have to spend more time on a particular prob-
lem in a given week, then that's what we should do. We shouldn't have to answer to
number crunchers who keep their hands clean from a safe distance. We're in there doing
the hard work and we should be supported regardless. Now, I think the answer is some-
where in the middle. Somehow we need to be able to measure certain aspects of our work,
but we also need to demonstrate the quality of our work apart from quantitative metrics.
Part of me thinks that's not totally fair, that we shouldn't have to make all the adjustments
and concessions. But the reality today is that the funding agencies are writing the checks
that we need to operate, so the burden is on us to demonstrate our effectiveness."
"You mentioned the answer being somewhere in the middle. Do you have a sense of
what that could look like?" I asked.
"Kind of. Like I said before, it's important for nonprofits to quantifY and measure
those things that are quantifiable: finances, material resources, personnel, certain aspects
of service delivery, etc. But for other things, I think it has more to do with creating a
relevant process and evaluating the overall quality of that process."
"What do you mean by that?" I asked.
 Case 16. Measuring Organizational Effectiveness in the Nonprofit Sector 155

"Think about it like this," she said as she reached for a little prop on her desk, one of
those Newton's Cradles that has five suspended metal balls that swing back and forth. "If
I swing the first ball it hits the others and makes the ball on the end move. The first ball
has no contact with the last ball, but the momentum and energy of the first ball passes
through the system and eventually impacts the last ball. So we can't say that the first ball
has a direct influence on the last ball-they never touch. But we can say the first ball has
an indirect influence, especially if the balls in the middle are lined up in such a way as to
capture the energy of the first ball and transfer it to the last ball. I think a lot of things we
do in the nonprofit sector work the same way. It's very difficult to measure the direct
impact of many things we do. How do we know that the extra time we spend with a kid
in an after-school program directly impacts his grades or relationship with his parents?
How do we know that a literacy program at the homeless shelter was directly related to
a client getting a job at a particular organization? We don't. But we do know many of the
important factors that relate to the outcomes we're trying to influence. For example, we
know that learning in school is influenced by things like parental support, nutrition, lit-
eracy, and access to technology. We don't know exactly how each one directly contrib-
utes to learning, but we do know that kids who learn well have all of these. So our job is
to line up all those things-the balls-and put some energy and momentum into the
system. If we are doing that, then we can make a good argument that the positive out-
comes on the other end are a result of our work, or that our efforts eventually will lead
to positive outcomes. So in terms of demonstrating our organizational effectiveness, our
job is to explain the processes needed to influence the important outcomes, and then
show how our work is facilitating and supporting those processes."
I wrapped up my conversation with Lucinda and headed back to my office to start
summarizing my notes. Lucinda mentioned one key person she thought I should contact:
Larry Schell, the director of the Austin Foundation, a large private foundation that sup-
ported many of the social service and community development initiatives in the Austin
area. Larry was the chief financial officer at a large technology corporation for 20 years
before he left to direct the Austin Foundation. I called his secretary and made an appoint-
ment for later that week.
"I always wanted to be involved in philanthropy and foundation work, and my experi-
ence and success in the business world enabled me to do that at this point in my career,"
Larry explained as we sat down in his office on the 21st floor of the Frost Building in
downtown Austin.
"With all your experience you must have some opinions about measuring effective-
ness in the nonprofit sector," I said, inviting him to share his thoughts.
"Honestly, I'd like to see the CAN and many of its partners move more toward a busi-
ness model of operations. I know people pooh-pooh that and think the big bad business
people are trying to take over the nonprofit sector. 'Where's the compassion? Where's the
service?' they say. Well, if you're out of money and you have to close your doors, then
who are you helping? I know it sounds harsh to some people to talk about nonprofit work
in terms of efficiency and productivity, but the truth is at the end of the day we're talking
about finances and resources, and you need to have an effective way to manage these
156 PART I. CASES IN THE ORGANIZATION DEVELOPMENT PROCESS

things. I care about children and the homeless as much as the next guy, that's why I
believe so strongly about the need to run a good organization-so we can serve more
people. Our foundation has a limited amount of money we can devote to various projects,
and we want that money to go to good use. Of course you can't quantifY everything, but
that doesn't mean you don't have standards and hold people accountable."
Larry explained more about his perspective, providing examples of nonprofit organi-
zations that had to shut down because of their inability to measure their impact and secure
funding from donors and foundations. He also talked about "successful" nonprofits that
could show a clear "return on investment" and consistently demonstrate their ability to
"move the needle" on important community indicators, like high school graduation rates
or incidents of domestic violence.
"At the end of the day, these are the types of organizations we as a foundation like to
support, and they are the organizations that survive in today's economic environment,"
Larry explained.
Larry had another meeting with a city official in a few minutes, so we finished our
conversation. I quickly asked him if there was anyone else he thought I should talk to
about these issues. "You really should meet with Roderick Bufkin. He runs the big home-
less shelter downtown. He and I don't always see eye-to-eye on everything, but he's an
important voice in this community and his perspectives should be part of your report."
He offered a quick handshake as we left his office.
I stopped at a cafe after my meeting with Larry to grab a quick bite to eat and organize
my notes from our conversation. Since I was downtown and near the homeless shelter, I
thought I'd get in contact with Roderick right away and see if he was available.
"Good timing," Roderick said. "One of my afternoon appointments was cancelled, so
I've got a free hour if you want to meet."
I took a final bite of my lunch, left some money on the table for the waitress and
hurried off to the homeless shelter a few blocks away.
"I've been working in the nonprofit sector a long time," Roderick began after a quick
introduction.
"One of the trends I'm seeing that I don't like is this continual push for nonprofits to
become more 'businesslike.' It's not that I don't think we need to be financially respon-
sible and make good use of our resources. Of course we need to; that's just common
sense. But in my experience the phrase 'businesslike' is usually code for efficiency and
competition, and it's used to talk about money and resources in ways that favors certain
interests above others. Take for example the work we do at the homeless shelter. One of
the biggest problems related to homelessness is mental illness. People who can't function
at a normal mental capacity are going to have a much more difficult time holding down
a job and being responsible for a place to live. But people with mental illnesses are
incredibly difficult to work with. There are no easy solutions, and progress is very slow
and incremental. That means we need to spend more time and resources working with
people who are mentally ill. And we should; that's what our organization is all about. But
we're getting more pressure from our board and some of our funders to make our dollars
go further. That means we can't devote the resources we need to people with mental
 Case 16. Measuring Olganizational Effectiveness in the Nonprofit Sector 157

illnesses. Sure, it would be easier and more 'efficient' to send people with mental
illnesses away from our shelter to the overcrowded state mental facility. That would
certainly free up a lot more of our time and resources, and we could show a better 'return
on investment' because our staff could spend more time with more clients. But we aren't
here to just be an efficient organization; we're here to 'serve the least of these' in our
society. Funders need to believe in the value of our mission and trust that we are doing
good, important-and yes, sometimes inefficient-work; not hold us to 'meeting our
numbers,' 'hitting our metrics,' or any other business buzz word you can think of So the
challenge for us is to continually communicate with our funders and other stakeholders
about the quality of our work and our contribution to society."
Hearing that reminded me of what Professor Lewis said about communication and
organizational effectiveness, that nonprofits need constant interactions with key stake-
holders in order to establish and maintain perceptions about the effectiveness of their
organizations. I thought this was related also to what Herman and Renz meant by the
"social construction" of organizational effectiveness.
I wrapped up my conversation with Roderick, and he gave me a brief tour of the home-
less shelter before I left. "What you're doing is very significant," Roderick said as we
shook hands in the front lobby of the homeless shelter. "This report is going to be valu-
able for all the nonprofits and funding agencies in this community. Just remember the
important work we're doing here at the shelter and the need to think about organizational
effectiveness in a more holistic way."
Over the next couple of weeks I had many other similar conversations with various
members of the CAN's partner organizations, as well as representatives from funding
agencies and others supporting the nonprofit community. Definitely lots of perspectives
to balance.
By now my research was starting to converge around several key ideas. The CAN
partner meeting was a week away and I was excited to talk about all the interesting and
valuable things I learned about organizational effectiveness in the nonprofit sector. I sat
down at my computer and began writing my report.

1. If you w~re the consultant in this case, what five recommendations would you
develop for your report about organizational effectiveness in the nonprofit sector?
Consider notjusfexplanatlons about what organizational effectiveness is, but spe-
dficthingsnonprofits and funding agencies should do as a result of your analysis.
2 .. What exactly does itmean for organizational effectiveness·to be a "social construc-
tion"? As the consultant in this case, how would you explain this in your report?
Can you think of other relevant organizational concepts that are socially
constructed?
(Continued)
158 PART I. CASES IN THE ORGANIZATION DEVELOPMENT PROCESS

(Continued)
3. In general, who are the important stakeholders in the nonprofit sector? How do
these stakeholders relate to understandlhgthe<;:onteptoforganizationaleffective~
ness? What do nonprofit organIzations need to db t6bepercelveclas effective by
these various stakeholders?
4. One of the biggest challenges for organizational practitioners. is to de\ielop process
and outcome metrics (numerical meast,lrementslto.eyaluate the s.uccess of anyprga.;;
nizational program or intervention. Whatso$ .of performance metrics are relevant
for nonprofit organizations? If an important aspect of a nonprofit organization's wprk
cannot be quantified, how else can this work be measured and evaluated?
5. Think of a nonprofit organization you are familiar with (maybe a homeless shelter,
a religious organization, an environmental group, or a political association). If you
provided financial support to this organitatlon;;;,....asanindiddual or an institutional
funder-what do you want to see accomplished . with your money? What aspe<:ts
of this organization's work should be measured and evaluated? How will you know
if the processes and outcomes of this organization are successful?

NOTE

1. This case is based on research conducted by the author. Pseudonyms are used to protect
anonymity, but all the organizations, events, and places are real. Some situations have been com-
bined or adapted for educational purposes.

FOR FURTHER READING

Balser, D., & McClusky, 1. (2005). Managing stakeholder relationships and nonprofit organization
effectiveness. Nonprofit Management & Leadership, 15(3),295-315.
Frumkin, P. (2002). On being nonprofit: A conceptual and policy primer. Cambridge, MA:
Harvard University Press.
Herman, R., & Renz, D. (1999). Theses on nonprofit organizational effectiveness. Nonprofit and
Voluntary Sector Quarterly, 28(2), 107-126.
Herman, R., & Renz, D. (2008). Advancing nonprofit organizational effectiveness research and
theory: Nine theses. Nonprofit Management & Leadership, 18(4),399-415.
Lewis, L. K. (2005). The civil society sector: A review of critical issues and research agenda
for organizational communication scholars. Management Communication Quarterly, 19(2),
238-267.