Business and Private Life. Is the Balance Possible?

Business and Private Life.  Is the Balance Possible?

A.L. Zamulin

Mikhail Petrovich, the owner of a big door production company, was thoughtfully looking through the window of his office. A long tail of cars in the street, a dull autumn sky. “I’m 45 already. I’ve given ten years to the business, founded a large company, which is well-known in the market. Yes, we're leaders in the market; but I know the real financial condition of the company. The volumes are rising, but the costs are also rising and the profits are decreasing”.  Just recently Mikhail Petrovich had decided to withdraw from business, to hire a competent manager, who would undertake the day-to-day management of the company. He is proud of his company; there are things to be left. Being a Doctor of Science, knowing technical issues, Mikhail Petrovich was always the first to introduce computer technologies, production lines, using the latest achievements in world technology.  He tried to keep up with all the innovations in the field, when they were only exhibited in Europe. All this made his company a leader and trendsetter in new technologies and bold decisions. However, now Mikhail Petrovich understood that there was something wrong with the company. A competent consultant, whom he had met in a seminar on character development, which he had frequented the previous year, told him, while giving a private consultation, that the management of the company was inefficient; many extra individuals did much unnecessary work. One of the reasons is the personality of its founder, who gets accustomed to new people with difficulty and doesn't like to change his social environment, as the consultant put it. Besides, without trying to understand, he criticized the relations within the company.  In his opinion, “everyone is on his or her own; there is no team; it doesn’t cost anything to trip each other” here. He was interested in such trifles as the absence of coffee-machines and coolers in the offices; it also bewildered Mikhail Petrovich. As if it isn’t clear that the company sticks to the rule: don’t waste money.  The salaries in our company are quite competitive.

Though this conversation made an ambivalent impression on him, it was after this conversation that Mikhail Petrovich decided that he had to change something to do business in a different way.

Mikhail Petrovich’s friends acquainted him with Elena Pavlovna, a former general director of a big distribution firm. Elena Pavlovna is 48, divorced; and her adult daughter lives in London. She's got experience of managing a trading firm, an MBA degree. Though, she doesn’t know production, and Mikhail Petrovich has a commercial/industrial company…

Elena Pavlovna had had a hard time going through a conflict and severance from the proprietor of the previous company, where she had been a co-founder; all this left its imprint on her. Elena Pavlovna is irritable, fickle; sometimes she can even lose her temper, and she is always talking about her previous job. It irritates Mikhail Petrovich. Though, all this became clear only after she began working.  At the same time she is an imperious person, who can put anyone in his place… She was born with a grip of steel. When he was thinking why he had hired this very applicant he was again sure that she was the right person. And why? The other applicants were as good as she is. 

But for Ksenia, HR director, it isn't clear if they were able to find a common language with Elena.  Mikhail Petrovich remembered that he had often wanted to dismiss Elena Pavlovna for her abruptness, and Ksenia had persuaded him to wait and to give the new director the opportunity to get accustomed. Ksenia helped both of them, but, as a result, she was among the first who had to leave the company. Elena Pavlovna didn’t need such a powerful and competent HR director; she wanted to control the system of motivation and the remuneration of labor by herself.   Elena Pavlovna needed “her” person, obedient and compliant, on this post. In Elena Pavlovna’s opinion, Ksenia communicated with Mikhail Petrovich too often; besides business relations they were connected by some strange mutual interests in intellectual development, and even mutual friends. After a number of unpleasant talks with Elena Pavlovna Ksenia left the company. Simultaneously, the director of operations, who was called “the life and soul” of the company, left the staff. In a month Mikhail Petrovich dismissed one more manager of the lines; he invited his old friend from the company of his former partner to this post.  Of course, it was unethical, but business is business. There is no place for sentiments!  Irina warned that the staff of this line would also leave the firm together with the former manager; but Mikhail Petrovich hoped to retain the specialists with money. But as it had been predicted the new manager was not able to find a common language with the subordinates and the entire staff went to a rival firm; and they are doing well, as rumor has it. So far nothing good has followed from this substitution; and Mikhail Petrovich hoped so much for the grip of young and energetic Vyacheslav!

There had been many problems with this line from the very beginning, Mikhail Petrovich thought. Mikhail Petrovich had an idea to start the production of sliding doors. But he couldn’t find a necessary person who would be at the head of this business line from the very beginning; who would collect orders, choose equipment and have it installed. People were changed and the business didn’t get moving. As Mikhail Petrovich liked to say, he needed a “leader”, a person who would “pull off” this business line. Ksenia found a necessary specialist, Aleksey, and he began working. Mikhail Petrovich didn’t like Aleksey. He was tall, head and shoulders above him, clumsy, always with uncombed hair… But there wasn’t another specialist; orders started coming in, and Mikhail Petrovich put up with him. The appetite comes with eating as they say, and Mikhail Petrovich decided to buy an extra automated line for sliding doors production. If to operate it in three shifts then the income would come to… Mikhail Petrovich already viewed the prospects and he didn’t want to listen to Aleksey’s arguments that the new line wouldn’t be full with orders; that the rent of the additional areas of 1,000 square metres, and equipment depreciation would lead to losses. As a result, the line was bought and installed and the financial results of this business line got worse. Aleksey didn’t get a bonus, which directly depended on the financial results of the line activity, and came to Mikhail Petrovich to have a talk. “How so? You’ve forced me to buy this line. I did tell you that we shouldn't do it!” Aleksey tried to prove.  “I can’t speak about bonuses, your line is unprofitable!  When we have profits then we’ll talk about bonuses. If you were so sure that you are right why haven’t you convinced me? You had to convince! To give in notice, after all!” Mikhail Petrovich said. The situation took air. Many top-managers secretly sympathized with Aleksey but, except Ksenia, none of them dared to stand up for him.   Everyone is on his or her own; everyone has his or her own problems. Aleksey didn’t want to be just a salaried employee, without any bonuses. And, having a family, he couldn’t afford to give in notice.  At last they had to sell the new line, to vacate the rented area; and Aleksey went to another firm.

In a month the construction director, with whom they had built this new building, resigned. Though, he wasn’t required any more after building had been completed.

Next the development director was fired, because "there was no development in the company". 

Mikhail Petrovich understood that the situation in the market is getting tougher; the profitability of the company is decreasing though the sales volumes are rising. There are many competitors and their prices are lower. They don't have to pay managerial staff so much. They can afford to produce faster and at lower costs. If by the year results the profitability decreases by one more percent it will be more profitable to sell everything and to deposit money in a bank at interest. He could sell his own building and equipment at any moment... The dismissal of every top-manager saves money for the company: their subordinates will do the same job but for lower salaries.  That’s why the dismissal of the former companions didn’t impress Mikhail Petrovich much. They can leave if they want...  Besides, while assuming office, Elena Pavlovna demanded that she should be the only contact person for the proprietor, and she got indignant every time she saw any of the top-managers in his office.  But Mikhail Petrovich promised to depute her and he has to keep his word.

In some time Mikhail Petrovich noticed that Elena Pavlovna's relations with men were much better than with women. “They are my admirers”, she was proud of her “favorites”, as others called them.

On the contrary, Mikhail Petrovich couldn’t establish good relations with the opposite sex.  He couldn’t understand what they want. He had left his wife for his sweet one but unsuccessfully.  It was a severe emotional trauma, which was difficult to recover from... To find himself alone, not in his own home but in a rented apartment after 20 years of the family life…  He felt so bad then that it began to adversely affect the work of the firm. Mikhail Petrovich remembered that once Ksenia entered his office and asked directly:  “What’s up with You? All the people in the firm are being agitated". He had to tell her everything…  Besides, he felt like confiding it to somebody. Of course, he was not able to think about the work. He had a great desire to leave everything and to go somewhere… His thoughts were wandering far from his office. Thank goodness, now he seems to have a woman with whom he is able to start a new life. Otherwise, why all this business? For whom, if he has neither wife nor children?  Masha is the person he was looking for a long time.  He met his new woman in the training in Cyprus. She has degree in psychology and she was full of ideas about how to make the work with the people in the company more effective. The stars were on his side, he invited her to his firm and created a corporate university specially for her.  She was delighted and immediately got absorbed in developing new programs and giving different trainings.   Yes, women. They are difficult to deal with but it is impossible to live without them. His mood was getting worse again, and he remembered a case, which he had witnessed by chance the day before. Having looked into the training center, he saw Masha and  Elena Pavlovna who were raising voice at each other. He remembered that several times Masha had spoken unkindly about Elena Pavlovna, first of all about her favoritism to young handsome men.  If they also fall out with each other what will I do? Being gentle, Masha, at the same time, is a strong-willed person, who was able to get a second degree in psychology after having made a successful career in sales.  She makes difficult decisions without hesitating.

He began reflecting upon another sore point of the company's today's life: upon Nina Vassilyevna, financial director.  He has been working with Nina Vassilyevna for many years. She is ill-tempered; a lot of employees complained of her. Her "straightforwardness” verges on unceremoniousness and rudeness very often, and her imperiousness and dogmatic statements lead to constant conflicts. But he doesn’t doubt that she is reliable and loyal to him. Mikhail Petrovich always gives prominence to Nina Vassilyevna among other managers; she is always a "standout". Nina Vassilyevna manages the bookkeeping with a heavy hand and is always on guard of his pecuniary interests. Of course, she lacks professional knowledge in finance for she worked as a chief accountant, and it always leaves its imprint.  However, she is doing an MBA degree; moreover, she pays herself for the course. In a year she will be a specialist of a different level. Though, who knows. She is over 40. What can change in the person drastically? And will she stay in the company? A conflict between the executive director and the financial director, which had arisen a few months before, changed from intrigues into open confrontation. Of course, Elena Pavlovna intentionally provoked the last clash, not having invited Nina Vassilyevna to her office to make a final decision on the company’s development strategy.   Certainly, the latter got indignant. She was not the kind of a person to ignore it! Nina Vassilyevna didn’t mince words:  it’s either me or her, that is, Elena Pavlovna.

He’ll have to choose. If to keep Nina Vassilyevna, then he’ll have to fire Elena Pavlovna and take the management of the firm into his own hands. Again to spend all his time working, and no private life… Then why has he spent so much money on the perfection of the company’s system of management, on consultants! Does it mean that he has wasted all this money? No, no... He'll have to dismiss the financial director.  Of course, the entire accounts department may follow Nina Vassilyevna and leave, and this is a big risk.  But Elena Pavlovna tried to persuade Mikhail Petrovich to change the financial director long ago, and she even suggested some other candidates for this post. Of course, she suggested men. But Nina Vassilyevna knows too much and she is deeply offended. Her subordinates in the accounts department are loyal to her and they will follow her anywhere.

This is bad and that is bad…  He got afraid of losing his business. Only a few top-managers have remained in key positions; if they can’t bear the management style of the executive director and quit, he will have to close down the firm.

Yes, the situation is difficult… It got dark outside, the short autumn day ended with drizzle.  Cars were not seen, just a string of red small lights was moving far-away. Again, a traffic jam…  What to do? 

Mikhail Petrovich realized that he became a restriction for the company’s development; his personal qualities, his inconsistency and the distance from the people which he kept, his inability to work out the strategy for the developing business demand some compensation. But what can he do? To go to Tibet? To turn to a good “Western” consultancy? They will ask such a high price! “…I used to feel myself a leader. What has changed? How can I regain my strength?”  Mikhail Petrovich sighed heavily and switched off the computer.  Tomorrow will come inevitably. What to do…?

Tasks

1. What is the problem from the angle of the exercise of leadership in the company?
2. What are the reasons for such a situation?
3. Who is responsible for the crisis? What is the role of the proprietor in it?
4. What is the influence of the sex of the characters upon the events in the company?
5. What leadership styles do the characters show?
6. How would you describe the organizational culture in the company and the particular qualities of the employees?
7. What staff policy does the executive director pursue? Does she do everything right?
8. What phase of the life cycle does the company in? And what demands does it make for the leadership style of the chief executives?
9. What forecast can you make about the further development of the situation in the company?  What variants of this development are most possible?

Summary

The case study “Business and Private Life. Is the Balance Possible?” describes a problem situation in a company, which, on the one hand, is determined by the critical phase of the company’s development, and, on the other hand, by interpersonal conflicts between the key employees.

The case study raises the issues concerning the connection between employees’ private life and behavior at work. Thereupon special attention is paid to the inner personal conflict of the company’s proprietor.

  Case Study author: A.L. Zamulin, PhD in Psychology, Associate Professor, Personnel Management Department, School of Management, St. Petersburg State University. The case study materials aim to give the ground for discussion rather than to estimate the efficiency of management tactics and strategies analyzed in the case study.