Organizational Environment – Case Study

When Bosses Rush In

Helen Demarco arrived in her office to discover a clipping from the local paper. The headline read, “Osborne Announces Plan.” Paul Osborne had arrived two months earlier as Amtran’s new chief executive. His mandate was to “revitalize, cut costs, and improve efficiency.”

After twenty years, Demarco had achieved a senior management position at the agency. She had little contact with Osborne, but her boss reported to him. Along with long-term colleagues, Demarco had been waiting apprehensively to learn what the new chief had in mind. She was startled as she read the newspaper account.

Osborne’s plan made technical assumptions directly related to her area of expertise. “He might be a change agent,” she thought, “but he doesn’t know much about our technology.” She immediately saw the new plan’s fatal flaws. “If he tries to implement this, it’ll be the worst management mistake since the Edsel.” Two days later, Demarco and her colleagues received a memo instructing them to form a committee to work on the revitalization plan. When the group convened, everyone agreed the plan was crazy. “What do we do?” someone asked. “Why don’t we just tell him it won’t work?” said one hopeful soul. “He’s already gone public! You want to tell him his baby is ugly?” “Not me. Besides, he already thinks a lot of us are deadwood. If we tell him it’s no good, he’ll just think we’re defensive.” “Well, we can’t just go ahead with it. We’d be throwing away money and it’ll never work!” “That’s true,” said Demarco thoughtfully. “But what if we tell him we’re conducting a study of how to implement the plan?” Her suggestion was approved overwhelmingly.

The group informed Osborne that a study was under way. They even got a substantial budget to support their “research.” No one mentioned the study’s real purpose: buy time and find a way to minimize the damage without alienating the boss. Over time, the group developed a strategy. Members assembled a lengthy technical report, filled with graphs, tables, and impenetrable jargon. The report offered Osborne two options. Option A, his original plan, was presented as technically feasible but expensive—well beyond anything Amtran could afford. Option B, billed as a “modest downscaling” of the original plan, was projected as a more cost-effective alternative.

When Osborne pressed the group on the huge cost disparity between the two proposals, he received a barrage of technical language and complicated cost-benefit projections. No one mentioned that even Option B offered few benefits at a very high cost. Osborne argued and pressed for more information. But given the apparent facts, he agreed to proceed with Option B.

The plan required several years to implement, and Osborne had moved on before it became operational. Even so, the “Osborne plan” was widely heralded as another instance of Paul Osborne’s talent for revitalizing ailing organizations.

Helen Demarco came away with deep feelings of frustration and failure. The Osborne plan, in her view, was a wasteful mistake, and she had knowingly participated in a charade. But, she rationalized to herself, I really didn’t have much choice. Osborne was determined to go ahead. It would have been career suicide to try to stop him.