The summary of the document is:
1. John Roberts, senior vice-president of Tower Foods' strategic partnership sector, received a call from Mike Collins saying he planned to terminate Tower's contract with North Cove University in 30 days due to lack of profits.
2. North Cove University is an elite educational institute with over 40,000 students that offers a voluntary meal plan. Their previous 5-year contract with Tower generated modest returns.
3. Tower Foods is a leading foodservice and facility management provider. Their focus is on efficient client service and partnerships.
10. contributes to the report
one person to redraft the report to ensure
consistent style, flow, persuasion and presentation
group members receive the samegrade
that your report is not being graded based
on the number of hours that you spent writing it;; it is
being marked on the final product
WESTERN UNIVERSITY CANADA
IVEY BUSINESS SCHOOL
BUSINESS 1220E
ORGANIZATIONAL BEHAVIOUR MANAGEMENT
GROUP REPORT
ASSIGNED: Monday, February 5, 2018
11. DUE: Wednesday, March 7, 2018 at 4:00 p.m.
NORTH COVE UNIVERSITY
Cover page – 1 page
Report Rules – 1 page
Case – 6 pages
ASSIGNMENT:
As a c o n s u l t a n t t o John Roberts, perform whatever
analysis and make whatever
recommendations you deem appropriate. Support your
recommendations with a detailed
action plan.
RULES FOR THE ORGANIZATIONAL BEHAVIOUR GROUP
REPORT
2017/18
12. 1. Maximum report length: 8 pages (8.5x11), plus a maximum
of 3 pages of exhibits, as appropriate. All pages
in the report should be formatted with 1-inch margins on all
sides, double-spaced, Times New Roman, 12 pt
font. The report should be written in concise and complete
sentences, and may include bullets and headings.
• Page Penalty: Ten (10) marks (out of 100) per page will be
deducted from the final report grade for any
pages exceeding the stated page limit. If the report is not
formatted according to the guidelines, instructors
may choose to reformat the report and/or apply the appropriate
deduction.
2. Reports should include a one-page executive summary, which
will not be included in the stated page limit.
This summary should also be formatted with 1-inch margins on
all sides, single-spaced, Times New Roman,
12 pt font. This summary should appear at the beginning of the
report and should include a complete
statement of the major issue(s) in the case and a summary of
major recommendations from the report.
3. All reports must be typewritten. Lecturers reserve the right to
request an electronic copy of the report. The
preferred software for all soft copies requested is MS Word.
Each group must submit one hard copy of the
report. Clearly indicate the following on the front of the report
(title page not included in stated page limit):
• The name of your instructor
• The course section number
13. • The names of all group members (include team name if
applicable)
4. Groups contain SIX members. Every student in the group will
receive the same grade. Therefore, it is the
group’s responsibility to ensure that each member contributes to
the report.
5. STUDENTS AT MAIN CAMPUS (SOMERVILLE):
The hard copy of the report must be deposited in the green
“Report Box” inside Room 2315, Somerville
House by 4:00 p.m. EST, Wednesday, March 7, 2018. Any hard
copy received after 4:00 p.m. EST will be
penalized. Five per cent will be deducted from the final report
mark for any hard copy received between
4:01 p.m. and 5:00 p.m., Wednesday, March 7, 2018. An
additional 5 per cent of the final report mark will
be deducted for any hard copy received after 5:00 p.m.,
Wednesday, March 7 and before 4:00 p.m.,
Thursday, March 8, 2018. Another ten marks will be deducted
for each additional 24-hour period. All late
reports must be received and recorded by a lecturer or staff
member to verify submission times. Contact
your lecturer if no one is in the office to accept your report.
Students enrolled at the Colleges: Consult your instructor for
required submission times, location and
applicable penalties.
6. Turnitin.com –Each group must submit one electronic copy of
the report to turnitin.com by 11:59 p.m.,
14. Wednesday, March 7, 2018. Any reports submitted after this
time will be penalized. Please see submission
instructions on OWL.
Both the hard copy and the turnitin.com copy must be
submitted to receive a mark for the
Organizational Behaviour (OB) group report.
7. Plagiarism is the submission of work that is in whole or in
part someone else’s work, which you claim as
your own. Groups must write their organizational behaviour
reports in their own words and use their own
exhibits. Whenever students take an idea or a passage from
another author, they must acknowledge their
debt both by using quotation marks where appropriate and by
using proper references such as footnotes or
citations. Plagiarism is a major academic offence (see
Scholastic Offence Policy in the Western Academic
Calendar). Refer to the Business 1220E/1299E Course Outline
for a definition of plagiarism and the course
plagiarism policy. Groups may not pay for consultation or
advice in the preparation of the OB report.
7. This case contains all the information that the principals are
willing or able to disclose. For the purposes
of this report, DO NOT CONTACT ANY PERSONS RELATED
TO THE CASE OR INVOLVED WITH
THE COMPANY FOR ANY ADDITIONAL INFORMATION.
THIS WILL BE CONSIDERED AN
ACADEMIC OFFENCE.
16. Limited (Tower), hung up the phone. He could not believe what
he had just heard. Mike Collins, Tower’s
sector president of sales for educational institutions, had just
called. Roberts had expected the call to be a
typical sector review, in which he received updates on the
current status of clients from Collins.
Instead, Collins informed Roberts that he would be sending a
termination notice to North Cove University
(NCU), stating that NCU’s contract with Tower would end in 30
days. Collins told Roberts: “We’re not
making money there, and the client is acting unreasonably! We
need to get out, and we need to get out
now.” Although Collins had agreed to give Roberts some time
to look into the contract to see if Tower
could find any middle ground with NCU, his closing comment
was: “It would take a miracle for that to
happen!” It was mid-August, and Roberts had until the end of
the month to see what he could do before
Collins issued the termination notice.
NORTH COVE UNIVERSITY (NCU)
NCU promoted itself as an elite educational institute, with a
student population of more than 40,000. When
polled, approximately 90 per cent of students indicated that they
were satisfied with their educational
experience. The university offered a voluntary meal plan for all
students living in residence.1
Last year, NCU renewed its foodservice and facility
management contract with Tower. Tower had just
finished a five-year contract with NCU, and the new contract
was set to last for another five years. The
previous contract had generated modest returns for Tower, and
17. the contract was viewed by management
primarily as a revenue generator although the contract’s
margins were extremely small.
During negotiations of the new contract, Patrick Leeland, the
director of student services for NCU (and a
former Tower employee), had emphasized that partnership and
collaboration between the two organizations
would lead to greater returns for both. The new contract was
negotiated in the summer (July and August)
and the employees at NCU were relieved when Tower signed
this second contract. Roberts commented:
1 NCU had approximately 4,000 students living in residence
each year.
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It was the start of August when we signed the new contract, and
it was lucky for NCU that we did.
With only a month before classes started, it would have been
nearly impossible for the university
to find a new provider, negotiate a contract, and get them
operating in time for the school year. We
really saved them by entering this new contract.
22. TOWER FOODS LIMITED
Background
Tower was a foodservice and facility management provider
founded in the 1970s. Tower’s business
entailed providing foodservices (employees, equipment, and
management) to businesses and institutions,
including leisure facilities, prisons, and schools. Large
companies subcontracted this work to providers
such as Tower because they lacked either the resources or the
knowledge to manage their own facilities.
Tower was the leading foodservice and facility management
provider in the industry, posting revenue of
CA$1.8 billion2 in the previous fiscal year. The company’s
organizational chart is provided in Exhibit 1.
Tower’s focus on efficient client service, and its emphasis on
partnerships and shared value for all
stakeholders, had made it an attractive option for companies in
need of a foodservice provider. Tower
management used a number of performance indicators to
evaluate its foodservice operations. The
company’s most important indicator was client satisfaction,
exemplified by its focus on partnership and
client service.
Tower had recently opened a new head office with an open-
concept design. The new space included a
billiards table and a video game station. Painted on the walls
throughout the building were inspirational
quotes. Roberts described the new building as: “The perfect
space for Tower employees to put their best
23. work forward. This building was designed in the hopes of
attracting the best talent and pushing forward
Tower’s vision of great people, great results.”
Strategic Partnership Sector
SPS was Tower’s arm’s-length, client relations department. The
primary function of SPS was client
retention. Both Roberts and Moreen Bishop, the account
director, had been involved in the contract
negotiations between Tower and NCU. SPS employees operated
under a different bonus structure than
other employees of Tower. SPS bonuses were based heavily on
top-line metrics,3 the most important of
which was revenue growth. At the beginning of the year, Tower
set expectations for growth that were
agreed to by SPS employees. If those expectations were not met,
SPS employees did not receive their
bonuses. Due to this bonus structure, SPS employees strove to
increase revenues. Employees in the sales
and operations sector, managed by Mike Collins, earned
bonuses based on profit margins. Employees in
the sales and operations sector were rewarded if they met a
minimum acceptable profit margin with their
clients. These bonuses increased as the profit margins increased
on the contracts managed by sales and
operations employees.
At times, these differing financial incentives created conflict
between the sales and operations team and
SPS, and the two teams could be at odds over which clients to
pursue. Roberts appreciated that Collins had
accepted the previous NCU contract with its low margin, but, in
negotiations for the new contract, Roberts
24. 2 All currency in Canadian dollars unless specified otherwise.
3 Top line metrics refer to the lines at the top of the income
statement, such as revenue or gross sales.
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assured Collins that he would only sign a contract with more
acceptable margins. Roberts had thought that
the new contract with NCU would be more lucrative, so it was a
shock to hear that Tower had not made a
profit. For NCU to have become unprofitable, either Tower was
putting more money into the account than
originally agreed in the contract or NCU was paying less for
services than was negotiated. Either way, it
appeared the contract that Roberts had helped negotiate was not
being upheld.
THE CONTRACT
During negotiations, Leeland had emphasized maintaining and
continuing to build upon the partnership
and collaboration between NCU and Tower. Given Tower’s
corporate focus on partnership and client
satisfaction, Roberts thought that the values Leeland identified
29. as the pillars of his offer were appealing.
Roberts, nevertheless, had to ensure the new contract would be
profitable enough for Collins. In the spirit
of collaboration, Roberts and Leeland negotiated a contract
wherein Tower would earn marginal profits
early on and then, over the course of the contract, the two
parties would work together to increase revenues
and profits for both NCU and Tower.
The deal that had been agreed upon was that Tower would
provide the services specified in the contract,
and, each year, NCU would increase the price of the student
meal plan by 5 per cent, with the extra revenue
going to Tower. This would allow Tower to break even in the
first year, and then earn growing profits in
subsequent years. The provision for the meal plan price increase
was crucial to making the deal work, but
Leeland said that he was unable to put these specifics in
writing. Roberts described the situation as follows:
Leeland told us that he couldn’t put the meal plan increase in
the written contract because he would
not be able to gain permission for that increase each year so far
in advance. He explained to us that
a 5 per cent increase would be very attainable each year and he
would ensure that we got the
increase we needed, but he would just have to do it on a year-
by-year basis. We were both in a
hurry to sign the contract and, with Leeland’s continued focus
on collaboration and partnership, all
of us at Tower Foods felt okay with allowing the meal plan
increase to be a verbal commitment. We
believed that enough people at both NCU and Tower knew about
the verbal commitment NCU had
made, so it would be difficult for NCU to deny it if they did try
30. to get out of raising the meal plan
prices.
CHANGES AT NCU
Months after negotiations had ended and the university term had
started, NCU hired a new vice-president
of the board (academics), Mark Byrd, and a new partnership
administrator, Michelle Hardy. Byrd’s and
Hardy’s predecessors, who were Leeland’s former bosses, had
been influential during negotiations, and
had assured Tower that the verbal commitments they had made
on behalf of NCU would be upheld. Byrd
and Hardy, however, were unaware of these verbal
commitments. To Roberts’ surprise, Leeland had not
passed along this information to them. Collins believed Leeland
had purposely not told his superiors so that
he could make the deal more profitable for NCU and take
advantage of Tower’s trust.
TENSIONS BUILDING
First Year of the New Contract
In addition to the meal plan price increase, there were a number
of other verbal commitments made by
NCU that directly affected Tower. NCU had made commitments
pending the final student enrolment and
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meal plan changes. The most important of these commitments
was that NCU would move to a mandatory
meal plan for all students living in residence. Additional verbal
commitments that had been made included
NCU allowing Tower to reduce service during exams, as well as
to close cafeteria areas on weekends and
during holidays in order to lower costs during times of low
student traffic. Although not specified in the
contract, it was understood that these commitments would be
upheld. Tower had based all of its projections
and budgeting on these commitments during negotiations. When
the school year started, Tower began
operating at a loss, and it soon became obvious that NCU
management did not intend to honour the
promises made during negotiations. After months of losses,
Collins decided to take action and scheduled a
phone call with Mark Byrd.
Collins: Hi Mark, I’m afraid we need to discuss our contract
with you. There were certain commitments
your predecessor made that I’m afraid are not being upheld and
it’s putting us at Tower Foods in
a bad position.
Byrd: I’m sorry Mike but I’m not sure I follow. Verbal
commitments? I’m just following what was
36. outlined in the contract you signed.
Collins: I understand that, but, during negotiations we were told
you were just waiting on information
regarding student population and meal plan rights before you
could make anything official.
We only signed that contract under the impression that once
you had that information you
would fulfill your other commitments!
Byrd: I don’t want to accuse you of anything, but it sounds like
you’re just trying to get more money out
of us. I’ve talked to our director of student services, Patrick,
and he seems to believe you should be
making a fine profit! With his history working at Tower Foods,
I’m sure he can’t be far off.
Collins: A lot has changed since Patrick left us for NCU, Mark.
Listen, if you won’t make good on
what you promised, we won’t be able to offer the same level of
service that you’ve come to
expect.
Byrd: I’m sorry you signed a contract that you aren’t happy
with now but it’s too bad, you signed
it. I expect everything that was promised in writing.
Byrd hung up and Collins wondered what he could do. He
decided to do exactly what he had promised and
lowered the level of service Tower provided at NCU. Eager to
meet his budget requirement, Collins began
reducing the cost of Tower’s operations at NCU. He decreased
services, labour, and hours of operation.
This drop in quality was drastic and, in Collins’s estimation, it
37. needed to be. He had projected that Tower
would suffer a net loss of $1 million, while paying an additional
$1 million in commissions to NCU.4
It did not take long for student complaints to reach Byrd, which
alerted him to the overall lower quality of
foodservices provided by Tower. When he realized that Tower
had not fulfilled its contractual obligations,
Byrd immediately phoned Collins.
Byrd: Mike! I’ve had a number of complaints about your
services. What’s going on?
Collins: I did exactly what I said I’d do. I’m trying to save any
money I can out of this deal.
4 Tower operated in NCU’s facilities. Since Tower received its
revenue directly from the students through meal plans, Tower
paid NCU a commission as its contribution to the facilities’
overhead costs.
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42. contractually obligated to or else I’m
terminating the contract and letting other companies bid on the
business!
Collins: Sure, that sounds great.
Byrd: I’m not kidding!
Collins: Neither am I. If we don’t have this contract, I hit my
annual budget expectations. NCU is
dragging Tower’s margins down, Mark. If you were to
terminate the contract, you’d be doing me
a huge favour. Let me know what you decide.
Collins hung up, and hoped that Byrd would make good on his
promise to terminate the contract. However,
as the months passed and Tower received no notice of
termination, it became apparent to Collins that Byrd
had made an empty threat. Collins thought that Byrd must have
realized how unappealing NCU’s business
would be to any other provider and that it would be nearly
impossible to get another company to take on a
contract similar to the one with Tower, even at the poor service
level that was currently being provided.
After months of tension between NCU and Tower, the school
year came to an end.
Second Year of the Contract
Collins held out hope that, over the summer, NCU might
attempt to get the promised meal plan price
increase to ease the working relationship between NCU and
Tower. When it became apparent that the meal
43. plan price increase was not going to happen, Collins phoned
Roberts and let him know his intentions to
terminate the contract: “We’re not making money there, and the
client is acting unreasonably! We need to
get out and we need to get out now.”
CONCLUSION
Having originally been involved in the negotiations with NCU,
Roberts felt compelled to try to salvage the
deal. NCU was a $12 million revenue generator. Not only was
this revenue critical for meeting his annual
bonus expectations, but Roberts also had to ensure that the
contract was profitable for Tower (and Collins).
Roberts had a tough task ahead of him and only a few weeks
available to do it.
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53. ideas?
! Does the writer seem to be knowledgeable about
the topic?
VOICE
! Does the writer clearly express their thoughts?
! Is the writer’s point of view clear?
! Does the writer address their intended audience
clearly?
! Has the writer added a unique, personal touch to
the piece?
ORGANIZATION
! Does the beginning grab the reader’s attention?
! Are there transitions to connect ideas and details?
! Does the writing follow a logical sequence?
! Does the ending sum up the main ideas?
ARGUMENTS
! Have you shown that findings from analysis have
informed your recommendation(s)?
! Are you merely observing or are you actually
55. ! Do sentences vary in length and structure?
! Can the reader move easily from one sentence to
the next?
! Does the writing have a convincing tone when read
aloud?
WORDS
! Does the writer use everyday words well?
! Do the words create detailed pictures in the
reader’s mind?
! Does the writer avoid repetition?
! Are ideas expressed with strong and precise
language?
CONVENTIONS
! Has the writing been proofread and edited?
! Is each word spelled correctly?
! Are capitalization, grammar and punctuation used
properly?
! Does each paragraph explain, justify and
56. rationalize one thought or idea?
PRESENTATION
! Is the writing neatly presented to a professional,
“publishable” standard?
! Does the appearance of the piece make it easier,
more inviting to read?
! Do the graphics, tables and numbers support the
writing?
! Are graphics, tables and numbers fully explained
within the piece?
! Is the piece ready to be shared with others?
POLISH
! Use justified margins
! Use page numbers
! Centre graphics, numbers, tables on the page
! Don’t be sloppy with anything
! Have someone read your report out load to you
and listen to the impact of every sentence – this is a
great way to truly test the quality of your work