The document discusses how withholding resources from employees can increase cooperation between them. It describes a case study of a company that was struggling to reduce costs across departments. By limiting the budget of one department, management forced employees to work more closely with another department they had been isolated from. This increased cooperation led them to meet targets without compromising quality. The document argues that smart managers can achieve better results by strategically withholding resources to encourage employee interdependence rather than self-sufficiency.

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2. Smart Management:
Holding Back Some Resources May
Actually Do You Good!
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3. Who knew that doling out more and more
resources for employees was actually bad
for them?
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4. Employees often need more resources, to get a
project done or to meet a deadline.
• Smart managers
however know that
offering many resources
to get a job done may
actually lead to high
levels of self-sufficiency
that employees would
no longer need each
other’s cooperation to
solve problems.
• This would lead to
a corporate
culture where
employees lack
co-operation
among each other
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5. …and what follows?
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6. A crippled organization with a less
competitive and less responsive task
force.
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7. Surely, bad for business!
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8. SMART AND EFFECTIVE
MANAGERS EVEN GO AS
FAR AS WITHHOLDING OR
TAKING AWAY
RESOURCES TO FORCE
THEIR EMPLOYEES TO
RELY MORE ON EACH
OTHER.
Surprisingly, this tactic has been proven
to give better results.
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9. By taking away resources, the
“reciprocity” of workers is increased.
• Reciprocity, as Yves Morieux and Peter
Tollman explain in their book – Six
Simple Rules: How to Manage
Complexity Without Getting
Complicated – is the “quality that people
have a mutual interest in cooperation,
and that to succeed, they have no choice
but to depend on one another”.
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10. Increasing employees’ reciprocity is one way
of going beyond traditional management
practices and adopting smart simplicity.
It is possible to make employees more
cooperative and autonomous so they
can find solutions to work-related
problems more efficiently.
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11. Cooperation and autonomy
are extremely crucial to
organizations if they are to
maintain a competitive edge.
Achieving real cooperation
where employees keep aside
their self-interests to achieve
a common target is difficult.
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12. When resources are removed or
withheld from them, employees tend to
rely more on each other.
Morieux and Tollman explained this
phenomenon using a real case study
of an industrial company.
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13. The company was faced with declining levels of
quality and the management decided to deal
with the problem.
• It decided to raise
investment in
R&D for which it
had to cut costs in
other areas to
generate more
funds.
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14. It experimented with various
solutions one of which was to
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reduce the costs of the
procurement department by
20% without erosion of on-time
delivery or supply quality.
The employees in the
procurement department had
two roles.
One group (strategizing group)
decided how to buy goods in a
category and the other group
(buying group) actually
executed the decision, i.e. it
did the buying.
At a point of time, the
procurement department
failed to meet the cost-cutting
targets and a blame game
ensued.
Meanwhile, the operating
department of the company,
which was also asked to work
on cost-reduction, bypassed
the procurement unit and was
doing its own buying.

15. What was lacking in this company was
cooperation.
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16. A new approach was needed here.
COOPERATION BETWEEN THE PROCUREMENT AND
OPERATIONS DEPARTMENT AND BETWEEN THE
TWO GROUPS WITHIN THE PROCUREMENT
DEPARTMENT WAS MISSING AND THEY WERE
ISOLATED FROM ONE ANOTHER BECAUSE OF
DIFFERING OBJECTIVES.
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17. The management clarified
objectives for each
department and ordered the
strategizing group in the
procurement department to
innovate buying strategies.
• As a result, a community of
practice developed where
the strategists and buyers
worked together, as the
strategists got to know
what the buyers needed
and the buyers helped the
strategists with developing
innovative buying
strategies.
The company also developed overlap
objectives where one group was
forced to take the needs of the other
group into account.
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18. The management cut the budget of the
operating department.
THE NEXT STEP IS WHERE THE
RESOURCE TACTIC WAS APPLIED.
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19. Because of limited resources, the
operating department was forced to
cooperate with the procurement
department as it did not have sufficient
funds to buy on its own.
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20. Subsequently, the departments met
their targets of cost-reduction without
affecting supply quality!
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21. Now, that’s smart
management!
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22. Centre for Innovation and Entrepreneurship
C-4, IIT-H Foundation, Gachibowli, Hyderabad
9618402751, 9000600247
Reach us at:
prabha@accuprosys.com simplify@accuprosys.com
anuradha@accuprosys.com
For more details, please visit: www.accuprosys.com
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