MBAX 6005 Week 4 Two-Reading Case Analysis Example

Territories or Bargaining Power? Weighing a Structural and a Political Reading of Why Acquired Accounts Drifted Away From a Regional Janitorial Supply Distributor

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Walden University

MBAX 6005: Organizational Perspectives and Implications for Leaders

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Month Day, Year

Territories or Bargaining Power? Weighing a Structural and a Political Reading of Why Acquired Accounts Drifted Away From a Regional Janitorial Supply Distributor

The Case in Brief

The supplied case concerns Northgate Supply, an invented regional distributor of janitorial and sanitation products to schools, offices and hospitals. Last year Northgate acquired Benton Chemical, a smaller rival with strong accounts in two counties. Within two quarters of the acquisition, about a fifth of Benton's former accounts had moved some or all of their business to competitors. Four facts are given that any reading must explain. Northgate merged the two sales forces' territories. It reassigned accounts by zip code, so many Benton customers received a Northgate representative they had never met. It moved Benton's six representatives onto Northgate's commission plan, which pays on new accounts more than on renewals. And the drift began within weeks of the reassignment, concentrated among accounts whose representative changed. Northgate's managers read the problem as structural. This analysis gives that reading its best case, then sets a political reading beside it.

The Structural Case, Argued Fully

The structural reading holds that the drift came from poor design of the merged sales organization. Overlapping territories left some accounts with two representatives calling and others with none for several weeks. Reassigning accounts by zip code ignored the knowledge Benton's representatives held about each customer's ordering habits, delivery windows and contract terms. The commission plan rewarded new accounts, so representatives had little reason to work hard on inherited renewals. Each of these is a real feature of the case. Bolman and Deal (2017) note that the structural frame looks first at whether roles and rules fit the task, and the merged design fit the task poorly: it treated accounts as interchangeable when they were not. On this reading the remedy is to redraw territories by account history, return key accounts to their original representatives and change the commission plan to pay on retention.

Relationships as a Power Base

The political reading starts from a different question: what did Benton's representatives have to lose, and what could they still control? After the acquisition they lost their company, their territories and their commission terms. What they still held was their customers' trust. Pfeffer (1992) describes control over relationships and information as a source of power in organizations, and for the acquired representatives it was the only source left. On this reading, the drift was not simply a failure of design but, in part, a defense of that hold on customers. Several facts support it. The case reports that two Benton representatives told long-standing customers they could no longer "guarantee the same service," a phrase that invited customers to look elsewhere. And three of the six Benton representatives left Northgate within a year, two of them for a competitor that later won many of the drifted accounts.

Comparing the Readings

Both readings explain the timing and the concentration among reassigned accounts. They part ways on two facts. The structural reading does not explain why some representatives actively signaled to customers that service would decline, since a design flaw does not require anyone to act. The political reading does explain it, as protection of a relationship that was the representatives' only remaining asset. On the other hand, the political reading has trouble explaining the drift among accounts whose Benton representative stayed loyal to Northgate and kept calling; about a third of drifted accounts fall into that group, and there the double coverage and missed calls the structural reading identifies seem the better explanation.

A simple test would separate the two groups further. If Northgate compared drift rates for accounts whose Benton representative stayed, left for a competitor or left the industry, the political reading predicts the highest drift where the representative went to a competitor, while the structural reading predicts similar drift in all three groups as long as coverage was poor. The case gives enough detail to suggest the first pattern but not to confirm it.

Allison's Lesson on Models

Allison (1969) showed that one event can be explained through different conceptual models, each of which directs attention to different facts and produces a different account. He did not argue that one model was right and the others wrong, but that each revealed something the others missed. The Northgate case benefits from the same treatment. The structural model draws attention to territories, assignments and pay; the political model draws attention to what people stood to lose and what they did about it. Neither alone explains all four facts and the two that divide them.

Verdict and Implication

The stronger reading is political for the accounts whose representatives left or signaled decline, and structural for the rest. That matters for the remedy. Redrawing territories and changing commissions, the structural fix, would help with the accounts lost to missed calls. It would do little for accounts held by representatives who saw their relationships as their bargaining power, unless Northgate also gave those representatives something to protect inside the company, such as guaranteed retention of their key accounts and a commission on renewals. Kotter and Schlesinger (1979) observe that the fiercest resistance comes from those who stand to lose something they prize, and that negotiation, not redesign alone, is the response such resistance calls for.

References

Allison, G. T. (1969). Conceptual models and the Cuban missile crisis. American Political Science Review, 63(3), 689-718. https://doi.org/10.2307/1954423

Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership (6th ed.). Jossey-Bass.

Kotter, J. P., & Schlesinger, L. A. (1979). Choosing strategies for change. Harvard Business Review, 57(2), 106-114.

Pfeffer, J. (1992). Managing with power: Politics and influence in organizations. Harvard Business School Press.