LAHORE SCHOOL OF ECONOMICS

Management: Policy & Practice

CASE STUDY: 1

SHAKE UP AT SAFE CARD SERVICES

Apply the managerial role (MR)/functions (MF), managerial roles and managerial skills
(MS) to Kahn.

In the early 1990s, Florida-based SafeCard Services specialized in offering loss-notification services
for credit-card holders. When a client s credit card was lost or stolen, SafeCard notified the issuing
company. SafeCard was doing fine until 1993 when it began losing business to more nimble and
aggressive competitors. SafeCard’s sales performance fell as competitors developed better
products and additional services. SafeCard’s management had concentrated on controlling costs
and had delayed the creation and introduction of new products. Its records were recorded on
microfilm rather than in computer data banks.

To boost the company s growth, the board of directors recruited Paul Kahn, a financial services
expert and now chairman, to become its new CEO. He had hoisted AT&T into the big time in the
U.S. credit-card industry, creating a $1.4 billion business with 16 million cardholders (AT&T s
Universal MasterCard)(Fins and Tanner, 1995). MR planning and organizing because hiring of
CEO in order to grow the company. MR is Figurehead because Paul has high profile before joining.
MS are conceptual and political because Paul has mental ability and has power.
After spending a few weeks observing, talking, and analyzing, Kahn took the following actions:
MF is planning because by observing and analyzing would help for accurate data which will help
in developing in planning. MR monitoring and disseminator because here CEO is observing and
analyzing. On the contrary, by talking the information is being shared (sending and receiving). MS
is political because using position to get accurate position.

 A number of top-level executives who had resisted the changes designed by Kahn were
dismissed and replaced with experienced people from some top credit-card companies
including American Express, AT&T Universal, and MasterCard. MF are organizing and
leading. Because hiring of new team and downsizing of top level executive. The Kahn
hired them because they are experienced which will help organization to grow. MR are
disturbance handler (firing top level executive isn’t easy so there will be disturbance.),
Laison (new employees are from where Kahn came.). The MS are conceptual (Kahn is
fully aware of his decision of downsizing in order to stabilize firm he is hiring potential
candidates.), Political (MR. Kahn has power to make decision and establish right
connection.).

 New products and business partnerships were unveiled such as a co-branded credit card with
the Professional Golf Association. MF is planning because of new product and organizing
because business partnership). The MR is Entrepreneurial because of new product and
negotiator because in business the business partners always negotiate. MS are conceptual
because we want business partner not for short term but for long term. The Partners card
lures golfers with ProAm clinics and t o u r n a m e n t s .
 A program of acquisitions was launched bringing in such operations as Wright Express
(acredit-card service for trucking fleet owners) and the National Leisure Group (a company
 specializing in packaged tours). MF is planning because they have acquired a firm in order
to reduce their input cost. MR is negotiator because before acquiring there are certain terms
and condition which are to be fulfilled. MS are technical because are certain are like we
technical employees to operate the machineries. And political skill also because we are going
to need people who are going to help us to achieve our long term goals.
 The company s extensive customer data was computerized and the company was renamed
the Ideon Group. MF are planning and organizing because they have saved data on computer
so that it can be use in future which will help them to find data on fingertip. And first the
operations were done manually now they are easy to manage. MR are monitoring and
disseminator because the information is being transfer from manually to digital and being
monitored. And this information can be share within the organization to support customers.
MR are conceptual and technical because the data can be used for long term and technical
skills are required to operate it.

Kahn instituted open forums to be held every 90 days, regular breakfast and luncheon meetings, and
a daily newsletter. Kahn uses these to announce new products, keep people informed about changes,
and allow employees to raise any concerns they might have. MF are controlling and leading, here
Mr. Kahn is checking short term goals, on the contrary, new product is announced and he might be
leading or someone else. MR are disseminator (transfer information of new product) and figurehead
(the CEO is representing the product,). MS are Interpersonal and political skill Mr. Kahn is using his
power to announce product which will motivate employee to listen him.
Employees soon found that they could raise any issue and get an honest answer from both Kahn and
his team. MF is leading, because he is resolving quarries of employees. MR is disturbance handler
because employees are facing issues and they know Mr. Kahn will give them accurate information.
MS are interpersonal and political skills because Kahn is directly resolving issues of employees and
his power allowed him to clarify their doubts.

A gain-sharing program was developed by Kahn to enlist the talents of all employees. MF is leading
because the program is developed by Kahn which will motivate employees. MR are monitoring (he
is making list of all the employee) and recourse allocator (selected talented employees). MS is
political because he used his power to check the potential employees and offer them training
program.
Any employee making a suggestion that saves or makes money for the company shares in the
results. Top performers are now recognized and rewarded as well. The insecurities created by
Kahn’s changes have gradually been overcome, and the company has seen its profits reach a record
high. MF is controlling because when goals are compared the top performer received rewards and
the firm earned profit. MR is monitoring because top performer were rewarded. MS is interpersonal
because those employees who had work hard were given monetary rewards in order to motivate
them.