AB201

BBA (Hons) Human Resource Management

MGT302 - Organizational Behavior

CASE STUDY (15%)

Learning Outcomes

1. Interpret the relevant problems and issues in the context of organizational behavior
concepts.

Student’s compulsory to discuss the questions based on the case studies given.

Case 1

AssetOne Bank

AssetOne Bank is one of Asia’s largest financial institutions, but it had difficulty entering the
personal investment business, where several other companies dominate the market. To gain entry
to this market, AssetOne decided to acquire TaurusBank, a much smaller financial institution
that had aggressively developed investment funds (mutual funds) and online banking in the
region.
Taurus was owned by the European conglomerate that wanted to exit the financial sector, so the
company was quietly put up for sale. The opportunity to acquire Taurus seed like a perfect fit to
Assetone’s executives, who saw the purchase as an opportunity to personal investment market.
In particular, the acquisition would give AssetOne valuable talent in online banking and
investment fund businesses.
Negotiations between AssetOne and TaurusBank occurred secretly, except for communication
with government regulatory agencies, and took several months as AssetOne’s executive team
deliberated over the purchase. When AssetOne finally decided in favor of the acquisition,
employees of both companies were notified only a few minutes before the merger was
announced publicly. During the public statement, AssetOne’s CEO boldly announced that
TaurusBank would become a “seamless extension of AssetOne”. He explained that, like

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AssetOne, Taurus employees would learn the value of detailed analysis and cautious decision
making.
The comments by AssetOne’s CEO shocked many employees at Taurus, which was an
aggressive and entrepreneurial competitor in online banking and personal investments. Taurus
was well known for its edgy marketing, innovative products, and tendency to involve employees
to generate creative ideas. The company didn’t hesitate to hire people from other industries who
would bring different ideas to the investment and online banking business. AssetOne, on the
other hand, almost completely promoted its executive from within the ranks. Everyone on the
senior executive team had started at AssetOne. The company also emphasized decision making
at the top to maintain better control and consistency.
Frustration was apparent within a few months after the merger. Several Taurus executives quit
after repeated failure of AssetOne’s executive team to decide quickly on critical online banking
initiatives. For example, at the time of the acquisition, Taurus was in the process of forming
affinity alliances with several companies. Yet, six months later, AssetOne’s executive team still
had not decided whether to proceed with these partnerships.
The biggest concerns occurred in the investment fund business, where 20 of TaurusBank’s 60
fund managers were lured away by competitors within the first year. Some left for better
opportunities. Six fund managers left with the Taurus executive in charge of the investment fund
business, who joined and investment firm that specialized in investment funds. Several
employees left Taurus after AssetOne executives insisted that all new investment fund must be
approved by AssetOne’s executive group. Previously, Taurus had given the investment fund
division enough freedom to launch new products without approval of the entire executive team.
Two years later, AssetOne’s CEO admitted that acquisition of TaurusBank did not provide the
opportunities that the company had originally hoped for. AssetOne had more business in
investment funds and online banking, but many of the more talented people in these are had left
the firm. Overall, the merged company had not kept pace with other innovative financial
institutions in the market.

Questions.

1.On the basis of your understanding of the mergers and organizational culture, discuss the
problems that occurred in this case.

2.What strategies would you recommend to AssetOne’s executives to avoid these corporate
culture clashes in future mergers and acquisitions?

copyright @ 2002. Steven L. McShane

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Case 2

Nupath Food, Inc.

James Ornath read the latest sales figures with a great deal of satisfaction. The vice president of
marketing at Nupath Food, Inc., was pleased to see that the marketing campaign to improve
sagging sales of Prowess cat food was working. Sales volume of the product had increased 20
percent in the past quarter compared with the previous year, and market share was up.
The improved sales of Prowess could be credited to Denise Washington, the brand manager
responsible for cat food at Nupath. Washington had joined Nupath less than two years ago as an
assistant brand manager after leaving a similar job at a consumer products firm. She was one of
the few women in marketing management at Nupath and had a promising career with the
company. Ornath was pleased with Washington work and tried to let her know this is the annual
performance reviews. He now had an excellency opportunity to reward her by offering the
recently vacated position of market research coordinator. Although technically only a lateral
transfer with a modest salary increase, the marketing research coordinator job would give
Washington broader experience in some high-profile work, which would enhance her career with
Nupath. Few people were aware that Ornath’s own career had been boosted by working as
marketing research coordinator at Nupath several years before.
Denise Washington has also seen the latest sales figures on Prowess cat food as was expecting
Ornath’s call to meet with her that morning. Ornath’s began the conversation by briefly
mentioning the favorable sales figures, and then explained that he wanted Washington to take the
marketing research coordinator job. Washington was shocked by the news. She enjoyed brand
management and particularly the challenge involved with controlling a product that directly
affected the company’s profitability. Marketing research coordinator was a technical support
position – a “backroom” job – far removed from the company’s bottom-line activities. Marketing
research was not he route to top management in most organizations, Washington thought. She
had been sidelined.
After a long silence, Washington managed a weak “Thank you, Mr. Ornath. “She was too wilder
to protest. She wanted to collect her thoughts and reflect on what she had done wrong. Also, she
did not know her boss well enough to be openly critical. Ornath recognized Washington’s
surprise, which he naturally assumed was her positive response to hearing of this wonderful
career opportunity. He, too, had been delighted several years earlier about his temporary transfer
to marketing research to round out his marketing experience. “This move will be good for both
you and Nupath, “said Ornath as he escorted Washington from his office.
Washington had several tasks to complete that afternoon but was able to consider the day’s
events that evening. She was one of the top women in brand management at Nupath and feared
that she being sidelined because the company didn’t want women in top management. Her
previous employer had made it quite clear that women “couldn’t take the heat” in marketing
management and tended to place women in technical support positions after a brief tern in lower
brand management jobs. Obviously, Nupath’s comments that the coordinator job would be good
for her was just nice way of saying that Washington couldn’t go any further in brand
management at Nupath. Washington was now faced with the difficult decision of confronting
Ornath and trying to change Nupath’s sexist practices or submitting he resignation.

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Questions

1.What symptom (s) exit in this case to suggest that something has gone wrong?

2.Diagnose the underlying problems that have led to these symptoms?

3. What actions should the organization take to correct these problems?

copyright @ 2000. Steven L. McShane

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