De La Salle University - Manila

Master of Business Administration

A Case Study on Bader Industries
In Partial Fulfillment of the Requirements
in Human Resource Management with Organizational Behavior (HRM535M)

Submitted By:
Austria, Kristofferson
Cua, Raymond Gerald
Reyes, Bernadette
Vital, Jhona Jane

Submitted To:
Dr. Mary Margaret Que
A Case Study on Bader Industries 2

Summary / Synthesis
Bader Industries is a company founded and headed by Mr. Bader, the current CEO. Like
any other organization, it is composed of different departments including the production
planning department. The said unit is headed by Don, under him are Leo, Mike, Raffy and
production planning assistant, Suzanne. All is well between the management and the said unit
until one event changes everything.
One morning, Suzanne received a phone call from Mr. Bader asking if she can adjust the
production planning schedule for the following to accommodate a new job that Mr. Bader is
trying to secure. Suzanne adjusted the schedule and then forwarded the same to Don for
approval. Later in the afternoon, Suzanne received another call from the CEO, asking for an
update on his request. Suzanne informed the CEO that the new production planning schedule is
in process. Mr. Bader, felt as if his orders were not being followed, exploded and shouted
expletives at Suzanne. Upon arrival in the office, he called the entire production planning
department and went on the same tirade that he had over the phone. Suzzane, feeling humiliated
and upset, then tendered her resignation a couple of days later. Leo and Raffy, after witnessing
the CEOs tirade and fearing that the same might happen to them in the future, are seriously
considering resignation as well. Mike relayed the situation to Don and shared that he might also
tender his resignation because he is concerned about the added workload that will likely be
assigned to him if majority of the team leave. Don, then shared with Mrs. Patty, the VP for HR,
CEOs sister, and also a member of the board of directors and a major shareholder that he too is
thinking about leaving Bader Industries because he felt responsible for what happened. The
potential mass resignation on the production planning team has Mrs. Patty worried and
devastated as it will likely result to possible disruption in their business operations and will
definitely impact their production in the coming peak season.
Point of View
The group will take the point of view of Mrs. Patty, Vice President for Human Resources,
as she is overall in charge of directing all people-related functions of the organization. As VP for
HR, Mrs. Patty is also responsible for ensuring that the organization has an effective employee-
A Case Study on Bader Industries 3

relations strategy that would ensure retention of key employees. Mrs. Patty is also a member of
the board directors as well as a shareholder at Bader Industries.
Statement of the Problem
What should Bader Industries do to control the potential staffing crisis in the production
planning department which would severely impact the firms ability to supply the expected
demands on their product?
Statement of Objectives
The context and purpose of this study aims to elaborate the following:
Achieve good reputation for the company
Perception of the employees, customers and other members of the community are
very important in the success of a firm. In order to avoid failure, members of the top
management down to the rank and file employees must be oriented of the importance of
unity to produce and offer only the finest. With these, good status and reputation will
follow and will have a huge impact on the companys longevity in the market.
Achieve and maintain good management relationships
The top management is the body of the organization responsible in overseeing
everything and setting the direction of the company. They must display a good example
to their employees and be completely aligned and consistent in implementing their
practices, so that the rest of the organization will join them in unity.
Ensure profitability of the company
In order to achieve profitability, the management must be well equipped not only
with the knowledge and expertise in handling and controlling finances but also with good
governance. The management must know the art of treating employees properly because
they will bring about financial income for the company.
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Ensure the continuity of business operations
Attrition in companies is normal, as long as the rate is within the ranges typical
for its industry. When people leave the company, certain replacements are usually put
into place to make sure that work is not hampered. What is difficult for companies is
when attrition happens all at once (or close to each other), or concentrated in one
department.
Leverage the moods and emotions of employees
You cant divorce emotions from the workplace because you cant divorce
emotions from people (Nelton, as cited in Robbins & Judge, 2011, p. 156). Some
emotions can be advantageous to the goals of the company, while some are disruptive.
Unless business owners work purely with machines, they will have to deal with the
emotions of the people. With these, management must consider the emotions that the
employees will feel in a given task or situation. The context and purpose of this study
aims to elaborate the following:
Areas of Consideration
In order to understand the primary subject and dilemma of the case and be able to provide
viable alternative courses of action, the group used the following theories and frameworks.






A Case Study on Bader Industries 5

Affective Events Theory

The affective events theory can be used to explain the effect of the CEOs
outburst to Suzanne and on the other members of the production planning department.
According to (Robbins & Judge, 2011), The affective events theory demonstrates that
employees react emotionally to things that happen to them at work, and this reaction
influences their job performance and satisfaction. In the work environment and work
events components, employees perceptions of the demands of the job were severely
affected. Both Leo and Raffy are worried that the same thing might happen to them if
they commit even the slightest mistake, Mike thinks that losing key members of the team
would mean he would have to take on a major bulk of the workload which he doesnt
think he can absorb, and Don, the manager, feels responsible for what had happened. It
can be said that the employees have a negative emotional response to what had transpired
which ultimately affected their job satisfaction. The emotions that the employees are
feeling are fueling their desire to leave Bader Industries.
Choice of Communication Channel
The CEO un-fittingly chose to re-express his disappointment over the perceived
lack of sense of urgency on the part of Suzanne via a department meeting. The tirade that
A Case Study on Bader Industries 6

the CEO displayed not only humiliated Suzanne in front of the production planning staff,
but also gave the impression of how management deals with mistakes. Basing from the
reactions of the remaining employees, they took the lack of respect for the individual
showed by the CEO to heart. It is also possible that the employees could have noticed
that their manager, Don, was not able to defend Suzanne despite knowing that she
actually managed to complete what the CEO was requesting. Perhaps Suzanne would still
have tendered her resignation simply on the basis of the unjustifiable scolding she got
from the CEO over the phone but the organization could have avoided the looming
staffing crisis had the CEO chose the appropriate communication channel to deliver his
frustrations.
Maslows Hierarchy of Needs

Maslows hierarchy of needs can be used as an application framework in
identifying a course of action for the job dissatisfaction issue. The theory states that there
exists a hierarchy of five needs for every human being starting at the physiological level,
followed by the safety level, the social level, the esteem level and lastly, the self-
actualization level (Robbins & Judge, 2011). The employees of the production
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department could already be at different levels but because of the issue, satisfaction of
their safety level has been threatened by their feelings of vulnerability to potential
emotional harm. Security or safety as defined by Maslow is knowing that an individual is
out of danger; it is knowing that an individual is taken care of, no matter what (Bronstein,
2013). To motivate the employees, under the theory of Maslows, the HR VP would need
to shift its focus to satisfying employees needs at the safety level.
Alternative Courses of Action
ACA 1 Persuade the remaining employees of the production planning department to
stay with Bader Industries by highlighting potential monetary and position-related gains.
The HR VP can offer cash incentives or a salary adjustment to those who will stay and
handle an increased workload. The opportunity for a promotion can also be presented.
Pros
Operations will be at status quo. The firm will be in a good position to support
the market demand as per normal, even during the peak season.
Certain individuals are motivated by monetary rewards and opportunity for
career advancement. If HR is successful in retaining the employees, the company
wont need to bear as much costs in hiring and training new employees.
This is a quick way to resolve the staffing issue assuming the employees accept
the offer.
Cons
Money as a motivation tool usually has a short-term effect. Based on anecdotal
and empirical evidence, monetary incentives have widely varying effects on effort
and, consequently, oftentimes do not improve performance (Bonner et al., 2000;
Camerer & Hogarth, 1999; Gerhart & Milkovich, 1992; Jenkins, 1986; Jenkins,
Mitra, Gupta, & Shaw, 1998; Kohn, 1993; Young & Lewis, 1995, as cited in
Bonner & Sprinkle, 2002). As such, employees who choose to stay because of
monetary reasons might eventually leave the organization if the monetary gain is
A Case Study on Bader Industries 8

no longer sufficient to keep them motivated or if their preferred motivation
instrument changes.
As mentioned above, not all employees are motivated with monetary incentives.
If another person resigns, the logic of giving incentives to cover additional work,
will be tested. Will the company then give additional incentives to those who
remained? It adds a complexity to the situation.
There is a risk that if employees from other departments / units hear a word of
monetary adjustments given in the production planning department, they too may
threaten the company to resign if Bader Industries will not provide similar
monetary benefits.
The emotional component of job satisfaction might carry a heavier weight on the
employees over the promise of monetary rewards. Thus, there is a possibility that
the employees might still be unwilling to stay with the company.
There is a high probability that a similar incident might occur again in the future
as the issue with the CEOs behavior was not really addressed.
The production planning staff will lose trust on their manager as he was not able
to stand-up for them and he did not show any willingness to take a hit for his team
members.

ACA 2 Encourage the remaining employees of the production planning department to
stay with Bader Industries by reassuring them that the matter will not be taken lightly by
the HR VP and that an investigation will be instigated. If necessary, the HR VP, as a
board member will bring forward the matter to be discussed by the board of directors so
they can decide as the primary decision makers of the organization on how to prevent a
similar situation from occurring going forward.
Pros
Employees will feel that the top leaders of the organization have genuine concern
over their welfare.
A Case Study on Bader Industries 9

If the company is successful in persuading the employees to stay, the firm will be
in a good position to support the market demand without incurring additional
costs.
Future occurrences of a similar issue will be significantly reduced if not avoided
at all with a creation of company guidelines on communication and issue
escalation.
If the company is successful in persuading the employees to work them in
resolving the problem, the company would have better control over rumors that
might go around the grapevine.
Through the investigation and the discussion within the board of directors, the
CEO and the rest of the members of the top level management will be able to
realize that employees are also human with feelings that must be considered to
achieve good governance.
Cons
Conflict may arise between the CEO and certain members of the board,
particularly the VP for HR because the CEO might feel betrayed and see it as an
attack on his leadership.
It is possible that the CEO might have enough political power in the board
causing the efforts of the HR VP to be in vain.
Similarly, the employees may receive retaliation from the CEO, with him
knowing that the action taken by the HR VP is partly to ensure that the production
planning staff remains motivated.
Just like the first ACA, this may not fly with the other production planning staff
members. The pressure from additional work, the emotional damage, and
management tension may still push them to resign.

ACA 3 Accept that the employees will likely not be persuaded to stay. The focus of HR
will be in backfilling the expected job vacancies by hiring new employees even if it
A Case Study on Bader Industries 10

means going to the extent of pirating from other companies people who are experienced
in production planning and in possibly outsourcing a portion of their planning operations.
HR will also work on ensuring that resigning employees conduct proper transitioning of
their responsibilities before being cleared to leave the organization.
Pros
The company is able to act fast in resolving the expected staffing issue even while
some employees are still in the midst of deciding whether or not to leave the
company.
Pirating experienced employees from another firm will allow Bader Industry to
better cope with the issue of lack of skill in supporting their operations. This
would also allow them to strike a blow to their competitors as the burden of
minimized workforce is passed on to them.
Potential conflict between the CEO and the HR VP and other board members can
be avoided.
Cons
The company will need to incur recruitment, hiring and training costs. Pirating
experienced employees from another firm and outsourcing could also prove to be
financially costly.
The companys reputation will take a big hit internally. If employees from other
departments get word of what transpired, they might also feel the same anxiety
about their own jobs.
The company might have a difficulty in recruiting new employees if the situation
in the company will be known to the whole market/industry. Potential applicants
might hesitate to transfer because they might think that the company does not care
about its current employees' welfare.
This might not be a very sustainable option because if another emotional outburst
from the CEO (or other managers) occurs, the company might have to look for
A Case Study on Bader Industries 11

new employees and incur new HR-related costs to replace the resigning
employees.
Recommendation
A set of decision criteria was formulated to properly identify the best alternative that
Bader Industries should take. Weights were given to each factor, based on how the company
would perceive its importance.
1. Management Reputation
Weight: 25%
Definition: This criterion focuses on the reputation of the organization both
internally and externally.
Rationale: An organization can have all the resources available at its disposal but
without qualified people, accomplishing the goals to achieve profitability and
sustainability is hard. Treating employees well is critical to a business because it
can possibly de-motivate the workforce. The fact is a lot of individuals put a
premium on the type of leadership that they get from top management. An
organization that practices a culture of respect for the individual would find it
easier to retain and recruit employees.
2. Top Management Rapport
Weight: 15%
Definition: This criterion represents the importance of having a conflict free board
of directors and senior management team.
Rationale: As discussed in the objectives section of this paper, there needs to be
unity among the members of the top management and the board of directors as
their relationship with each other is crucial in setting the sails of the company.
Disagreements may surface, but as long as they can come into an agreement at the
end of the day, the organization will have a clear direction to follow.
3. Cost Implication
Weight: 25%
A Case Study on Bader Industries 12

Definition: This criterion represents the importance that cost plays in decision
making.
Rationale: As with any company decision, the bottom line needs to be put into
consideration. Whatever the company chooses to do, it should have the lowest
cost implications possible. In a damage-control situation, the only direction of
profit is to go down because costs will be incurred. It is therefore crucial for
Bader Industries to find a solution that will have the least impact on their
expenses.
4. Sustainability
Weight: 35%
Definition: This criterion focuses on the long term impact of a business decision
which is one way to measure the stability of the solution.
Rationale: With all these combined, the ideal alternative should have a lasting
impact over the company. When we talk about sustainability, we aim to ensure
that the occurrence of similar unfortunate events is minimized, if not removed.
The solution should cover all stakeholders of the company, and not just those who
were directly affected by the problem.
Evaluation of the Alternative Courses of Action
Based on the decision criteria, we can tabulate the scores of each ACA as the following:
Table 1
Decision Criteria % ACA 1 ACA 2 ACA 3
Management Reputation 25% 15% 22% 5%
Top Management Rapport 15% 10% 3% 15%
Cost Implication 25% 15% 25% 8%
Sustainability 35% 20% 30% 10%
TOTAL 100% 60% 80% 38%
A Case Study on Bader Industries 13

Through this tabulation, it is ACA 2 that got the highest score. The company should deal
with the problem by resolving it at the top management level, and informing the staff that actions
are being done to avoid it from happening again.
The root cause of issue is when there was a miscommunication between the CEO and
Suzanne. Unfortunately, instead of the CEO clearing things with Suzanne, he exploded and even
continued to express his anger to Suzanne in front of her colleagues. The case didnt provide any
information if this is a consistent behavior from Mr. Bader, but the fact that the other staff
members are considering resigning because of it means somebody has to do something about it.
Not doing so is tantamount to allowing it to happen to another employee. And the employees
will continue to feel unprotected from emotional harm (from Maslows 2nd level of need -
safety).
The other two ACAs would entail additional expenses, which are not ideal, considering
the production planning department is now in a vulnerable state. With Suzanne, leaving the
company, and the threat of other following suit, efficiency will suffer since the workload will be
handled by the fewer staff.
Lastly, ACA 2 would threaten the harmony between the management, thus it scored the
lowest in that criteria. However, true leaders should stand up for what they think is right for the
company and what is fair to their employees, even if it means taking full accountability for their
teams actions.
Implementation
Since the company acknowledges that it will not be able to persuade Suzanne to return to
the company, its action plan should focus on how to encourage the remaining employees to stay
in the organization. In this manner, the company will avoid disruption in its operations as well
as show concern on the welfare of its employees. HR shall execute all the initiatives of the
company and the participation of all the members of the organization is needed to succeed in this
endeavor.
The following are the two main programs that the HR should perform:
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I. Immediate Information Dissemination:
1. At the onset, HR should formally notify the employees that the company
acknowledges the issue in the production planning team and this will be
properly investigated and the necessary actions will be taken to address the
concern. Robbins and Judge (2011) note that grapevine occurs in the
organization if relevant news are not cascaded properly in the organization.
Because of the reassurance from the HR, the employees will feel that the
company does not take the issue lightly. This will also serve as a venue for
the HR to do some damage control to stop the employees from further
spreading the news of potential resignation of all the members of production
team in the industry because of the issue with the CEO.
Potential Barrier: The CEO might feel that the HR is actually putting
the blame on him on the issue in the production planning department.
However, Mr. Bader should realize that the company shall try to
control the potential resignation in the production planning team to
continue its operations to be able to meet the market demands.
2. Since CEO is the one involved in issue, the HR VP should discuss the concern
first with the CEO, then escalate with the Board of Directors if necessary, to
come up with possible actions to prevent this from happening again. The
Board of Directors plays a major role in the company, thus, its opinion on the
issue highly matters.
Potential Barrier: Again, the CEO might think that the members of the
Board of Directors assume that he did the wrong thing. However,
being the CEO of the company, he should be held accountable for all
his actions and show responsibility, both to the Board of Directors and
to the whole organization.
II. Improve communication and relationship within the organization:
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1. HR should create a training program which focuses on executive coaching and
mentoring. Both top officers and middle managers (with direct reports under
them) should undergo the said program. Better relationship between the
manager and the employee results to improved productivity and performance.
The managers mood generally affects their subordinates. Robbins & Judge
2011 note that when leaders themselves are in good moods, group members
are more positive, and as a result they cooperate more.
Potential Barrier: The company may incur additional cost in
performing the executive coaching and mentoring program. HR could
opt to hire either an internal or external resource speaker to conduct
the training and consider which one will save the company more cost
and achieve better results.
2. Aside from providing training to the managers and executives, the HR should
also provide training programs on efficient communication among its regular
employees. To avoid Suzannes case (wherein Suzanne directly handled the
CEOs requests), the employees should be well-aware on how to properly use
the various communication networks and channels in the organization. The
employee, at all times, should notify his or her manager of all the concerns
and issues in the workplace. This affirms the importance of the role of the
manager in the team as the manager should encourage feedback and healthy
communication flow among its subordinates (the way to perform this should
have been addressed in the executive coaching and mentoring). Robbins and
Judge (2011) noted that poor communication is probably the most cited source
of interpersonal conflict.
Potential Barrier: The company may incur additional costs. However,
the company should invest on this to ensure effective and efficient
communication in the workplace. HR can opt to hire internal
managers as speakers so that the employees feel that their managers
A Case Study on Bader Industries 16

encourage them to openly communicate with them. The company can
also save on costs by hiring internal speakers.
Learning Points
In order to achieve profitability and sustainable operations, the organization should
ensure that there exists a proper working environment which includes not only physically-safe
conditions but also emotionally-healthy circumstances. As emotion is an inseparable form of
life, it plays an important role in how employees behave at the workplace. Thus, it is the
managers role to ensure that positive emotions are exhibited within the team and the negative
emotions are immediately addressed. The research conducted by Kruml and Geddes as cited by
Robbins and Judge (2011) showed that the actions of an employees colleagues and management
cause more negative emotions at 37% and 22%, respectively, compared to the actions of
customers at 7%. To deal with this concern, the manager should be able to promote an efficient
and effective communication within the team. By covering this issue, the company addresses the
safety level in Maslows hierarchy of needs. Thus, proper communication flow reduces
uncertainty in the workplace and increase job satisfaction.
Moreover, the CEO, president, owner and all members of the top level management
must understand that employees are important assets of the company. However, unlike other
assets, employees have feelings that must be respected. Managers must keep morale high,
especially during economic downturns, when layoffs or firings may require greater efforts from
the remaining workers. Companies must find the right combination of management style,
employee treatment and motivation to ensure the greatest levels of productivity (Suttle, n.d.).
References
Bonner, S. and Sprinkle, G (2002). The effects of monetary incentives on effort and task
performance: theories, evidence, and a framework for research. Accounting, Organizations
and Society. 27, 303345.

Bronstein, S. (2013). Maslows Hierarchy - Safety Needs. Super Change Your Life.com
Retrieved November 10, 2013 from http://superchangeyourlife.com/maslows-hierarchy-
safety-needs/.

A Case Study on Bader Industries 17

Robbins, S. B. and Judge, T. (2011). Emotions and Moods. In Organizational Behavior (14
th
ed.,
Chap 4, pp. 132-165). Jurong, Singapore: Pearson Education South Asia Pte. Ltd.

Suttle, R (n.d.). How to treat employees with respect to increase productivity.
Small Business by Demand Media. Retrieved November 11, 2013 from
http://smallbusiness.chron.com/treat-employees-respect-increase-productivity-
31072.html.