Vector (A) (B) (C) - The Emotional Undercurrents of Organisational Change

By late 2000, professional matters were to come to a head for the harbour and railway installations director at Vector's French operations. Losses at the company's shipping platform were mounting. Tough bottom-line decisions could not be delayed. But as Associate Professor of Strategy and Management Quy N. Huy describes, the director managed to modify his own operational style in accordance with specific and intense local feelings. The final result was a win-win situation after lengthy and emotional negotiations involving many internal and external parties.

by Quy Huy, Marc Avanzo,Ramina Samii
Last Updated: 23 Jul 2013

By late 2000, Adrien Hamilton might have been forgiven for hoping that his toughest days in charge of his division were behind him. The harbour and railway installations director at Vector's French operations had become a "local hero" when his fast thinking during a 1998 flood saved a vital bridge from being destroyed. This would have crippled the company's Maxime Platform, its primary shipping facility for wood and paper products.

Hamilton's fast thinking and disregard for personal danger had earned him kudos from many in the region. This helped him greatly in overcoming his frequent sense of alienation. He had not grown up in anything like the tight-knit community where the platform was based, one where families had often worked for generations.

But as Associate Professor of Strategy and Management Quy N. Huy describes, professional matters were to come to a head for Hamilton, two years after the deluge. Losses due to the platform were mounting. Tough bottom-line decisions could not be delayed.

The director was soon to find, however, that his ignorance of certain critical factors was a very major hindrance. Namely, local management styles; the depth of emotion set against changing work practices for many of the company's rank and file, and the awesome powers and strategic vagaries of the various French unions who claimed to be keeping their best interests at heart.

After a wave of very costly strikes in 1997, Vector had managed to forge new conventions with the five unions representing the harbour. (The company paid well, and was one of the most popular work sites in the region.) By the end of 2000, the only thing saving the Maxime Platform from closure was a large contract with a Swedish supplier. But a sharp downturn in the European market soon led management to tell the Maxime workforce that their current jobs could no longer be guaranteed.

While many Vector workers were innately suspicious of management claims, however, they were on the whole often even more displeased at their union representatives. The remainder of the "A" case is given over to describing management's decision to proceed with a worker relocation scheme to other Vector sites in the area. Hamilton initially found that the local representatives shared his position that job security was more important than saving the platform. But as he was soon to learn to his prolonged chagrin, local and regional unions were not consulting each other much.

The latter were dead set against relocation, and were threatening region-wide strikes. Negotiating only with regional representatives had clearly been too restrictive. But which set of "representatives" actually best represented the feelings of the majority of workers?

Talks held in early 2001 to avoid a strike soon proved fruitless. Union negotiators then sought to bring in a controversial outside arbitrator. But this expert's proposals were soon rejected by the rank and file, thereby boosting Hamilton's credibility. Not that this helped him greatly in building a consensus for how to proceed.

The "B" case describes the Hamilton-led team's change in negotiation tactics, and how he attempted to build new relationships with the various stakeholders with interests in the dispute's outcome. Remarkably, as the "C" case reveals in fuller detail, Vector management was able in time to come up with a "win-win" solution, thereby saving the platform as activities continue through a third party.

Taken together, the cases illustrate some of the complexities - and in this all-too rare instance, rewards - inherent to balancing financial and emotional considerations when negotiating with both internal and external parties with mutual interests, but markedly different constituencies and strategic styles.

They also highlight the vital importance of attuning strategy in accordance with local sensitivities, in circumstances where one's adversaries can easily fan the flames of emotions, regardless of the possibly very negative long-term consequences for all concerned.

INSEAD 2003

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