Organizational Behavior John Watson Company Overview Dynatronics

Organizational Behavior

John Watson

Company Overview

Dynatronics Corporation (formerly Dynatronics Laser Corporation) was started in 1979 with the initial intent of developing laser technology for use in medical procedures. Unable to acquire the necessary FDA approval required to market the technology the company turned to other areas within the medical rehabilitation market. Seeing an opening in the market for ultrasound electrotherapy technology the company soon found a distribution channel that could support the new product offerings. Subsequent years led to the company developing additional products that have been used to treat chronic pain, test physical ability with computer software and to provide other forms of therapy. In addition, the company has ventured into the aesthetic market and has patented and distributed microdermabrasion technology for use by both aestheticians and plastic surgeons. Dynatronics has made several acquisitions over the years that have met with mixed results. The purchase of a rehabilitation manufacturing plant in Columbia, South Carolina proved to be a drain on both management skills as well as financial resources. Other acquisitions include the purchase of RME in College Station, TN which has provided a staple of reliable income and a wealth of existing and new customers for the company. In the years that have passed, Dynatronics Corporation has become well-known in the physical rehabilitation market and manufacturers and ships more than $16 million dollars a year in rehabilitation and aesthetic equipment and supplies.

Although Dynatronics is a public company, it is owned primarily by family and friends of the Chairman of the Board Kelvyn H. Cullimore, Sr. In fact, the son of the chairman, Kelvyn H. Cullimore, Jr. is the President and CEO of the company. Additional company officers include Larry K. Beardall who is the Executive Vice President of Sales and Marketing. Ronald J. Hatch, Senior Vice President of Operations and Robert J. Cardon, Corporate Secretary.

Component Analysis

Work-group productivity: Productivity within individual work groups is difficult to improve given the high turnover in the various positions within the company. As a small company with fewer than 500 employees, the work groups frequently consist of only two or three people. The largest work groups in the company are within the manufacturing, sewing and customer service areas. Many of these jobs are repetitive and unpleasant causing significant turnover as a natural function of the job but turnover is also caused by other problems within the company that have been included in later sections. Beyond that, the fact that the company is small and uses nepotism as its primary system for hiring and promotions, there is little incentive for employees to work harder and increase overall productivity. Recommendation: Dynatronics could limit the amount of turnover by creating a reward structure for tenure. This would cut down on the costs connected with retraining and help reduce the problems caused by production errors that naturally result at the beginning of the learning curve for new employees. The reward system could be as simple as cash bonuses or as complex as affording more tenured employees with additional opportunities to learn skills that will help them advance in the company although that would require additional structural changes.

Social influence: Dynatronics is not a promotion seeking company nor does it engage in actively marketing its own name since it is a manufacturer and not a direct retailer for most of its products. In addition, the mixed nature of the influences are difficult to assess since some of the products are geared specifically to help people recover from injury and some of the products are designed to appeal to the vanity in human kind. However, the company did provide gratis treatments with its electrotherapy and ultrasound equipment to the Olympic athletes staying at the Olympic village in Salt Lake City during the 2002 games. Recommendation: Depending on whether the company sees its obligation to the greater social structure they could do many things to impact the larger society. For example, the company could donate a number of devices to hospitals in low income areas so that the treatment costs associated with rehabilitation could be reduced.

Individual differences and personality: As president and CEO, Cullimore, Jr. is a charismatic and highly intelligent leader. His knowledge about the operations and details of the organization gives him a unique insight into the business. However, his ties to his friends whom he hires with great frequency give him a serious weakness of which he may be wholly unaware. Nevertheless, the company has demonstrated that it has potential with him at the helm. Recommendation: Cullimore, Jr. should take strides to assure that hiring decisions are based solely on merit. It would be difficult for him to eliminate the hiring of family by company policy since his father is the Chairman of the Board and he is CEO but strides could be made to improve the practice such as creating interview panels that include various individuals in management who are not connected with the applicants.

The habits of effective people: The individuals that work in the organization and have lasted for any length of time exhibit the ability to refrain from bringing up controversial issues. As a rule, they also have well developed communication and interpersonal skills thereby helping the company maintain the status quo rather than searching for ways to be innovative. Recommendation: There is an inherent difficulty in proposing the kind of cultural change that would allow employees to become more open with their opinions but it could be done over time. Allowing employees to submit ideas anonymously and having management view each idea honestly could be a good start in that direction. Management could then encourage further participation by sharing valued ideas at general meetings with the employee population.

Perception and attribution: The perception of the company is one of high quality and a willingness to stand behind the product. This is a function of the company's willingness to listen to each individual retailer and to honor the long warrantees that are supplied on so many of the products manufactured by Dynatronics. Recommendation: Dynatronics has a bad reputation for handling credits and returns in a prompt manner. Improved technology and established procedures would go a long way toward replacing the paper and pencil system used.

Motivation: With little opportunity for upward movement and modest income for the company, there appear to be few intrinsic motivators within Dynatronics. Therefore, individual team leaders probably need to rely on charisma and leadership techniques to inspire their work groups to perform at higher levels. Without those skills, the only motivation that will inspire the workforce is termination of employment. Recommendation: Allocating money from the company budget toward training and development for employees is an ideal motivator. Employees that demonstrate success in a particular area could be rewarded with the chance to attend additional training courses for other positions within the organization.

High-performance teams: The teams within the company that are responsible for assembling and repairing the complex circuitry and mechanics of many of the devices are comprised of engineers and electrical/electronics technicians. These teams work turn out sophisticated, high quality equipment that is used in physical therapy offices all over the world. Given the reputation of the organization these workers have found a way to perform at a high level but it is difficult to assess if they are at capacity or simply doing the minimum. Recommendation: Dynatronics has done a good job of creating high performance teams in the technical areas of the company but the less skilled teams in customer service are not working at the same level. One reason for the failure of less skilled teams to perform at the same level is the lack of cohesion resulting from a failure to meet and plan. The company should create a schedule for incoming calls that allows for team meetings and proper planning within this area.

Effective and ineffective team roles: Because the company is small, few roles on the teams are capable of being ineffective if any. The responsibility of each member of such small groups even in groups that are as large as ten, is closely monitored by co-workers thereby preventing ineffectiveness. On the other hand, there is a risk of group-think and the development of teams that have made a tacit agreement to work at a specific level but no more. Recommendation: There are no set metrics for certain groups within the company the drill down to the performance of individuals on a team. As a result, it is difficult to assess the individual's performance. Dynatronics should develop specific metrics for each job in the organization against which employee effectiveness can be measured. There are a number of technological resources that Dynatronics can use to achieve this objective. "Improvements in computer and communications technologies have made possible a new class of application systems intended to support group work. The objective of these systems is to support meetings, coordination, project management, co-authoring, decision making, and collaboration on a variety of activities. (Olson & Symposium on Technological Support for Work Group Collaboration New York University, Graduate School of Business, 1989, p. 167)

Quality management and teamwork: As a company that ships internationally and makes medical devices, Dynatronics maintains an elaborate quality and problem reporting system. ISO 9000 procedures are used to assure consistency in work and in the way that development is completed. Further, central databases are maintained that can be used to track problems so that problems can be identified and solutions developed. Coordination at the level required to maintain FDA cooperation necessarily indicates that teamwork is involved and is in relatively good working order. Recommendation: One area of the quality management process within the organization that should be examined is the training and development of internal auditors. The auditors within the company are poorly trained and frequently fail to provide the kind of preparation that the company needs to assure external audits work more smoothly. Additional training and development should be provided for internal auditors so that their efforts more closely match the work done by external auditors.

Group decision-making techniques: Very few of the decisions made by this small company are reached by consensus. Because the field of opportunity in many of the situations is narrow, the choices for action are often dictated by fixed inputs. The decisions are therefore more likely programmed rather than involving team discussions. Recommendation: The value of multiple inputs is currently not accepted by management so a major shift in this dynamic will need to take place. Senior management should evaluate the ways in which employee input is managed and critically analyze what benefits could be gleaned from simply sharing some of the decision making authority.

Leadership, management, and followership: Leadership is difficult to assess given the track record of the Chairman of the Board. Cullimore, Sr. has been involved in several ventures of which only Dynatronics has been successful. Other companies that the elder Cullimore has led have ended in bankruptcy. The difference with Dynatronics is that Cullimore, Sr. is not at the helm directly. The management decisions are made and implemented by Cullimore, Jr. who has placed around him key people that have affiliations beyond the company from which they follow his lead. Recommendation: Although drastic, the contributions of Cullimore, Sr. seem to be less related to ability than they do to ownership. It would be beneficial for the company to rely more heavily on the other members of the Board of Directors who have a proven track record of success.

Employees managing their managers: With significant numbers of employees this dynamic is dramatically different than with a manager that has only two or three people reporting to him/her. However, there is still room for this aspect at even small companies like Dynatronics. It is most likely that employees find that developing a relationship with their managers is most easily influenced by cooperation and taking the time to understand the manager's overall objective and where possible, helping the manager to achieve that objective. Recommendation: Many of the employees at Dynatronics are at the entry level and may be completely unaware of the approaches that can be employed to effectively manage a supervisor. In fact, most employees may find this concept wholly unfamiliar. Again, training can be done to improve the methods by which employees use to better manage the relationship with the person they report to directly.

Power and politics: The power and politics in the organization are almost non-existent. Either the employee has an established relationship with the company officers or they do not. Nepotism drives hiring decisions at the upper levels leaving few opportunities to jockey for position. Recommendation: Major changes within the senior management group are unlikely but would be a significant benefit to the company. Assessing the contributions of senior management and making changes where appropriate is radical but could provide the stimulus and improved performance that the company could use. In particular, the continued presence of the Executive Vice President, Larry K. Beardall is a case that is worthy of examination. Beardall established his relationship with Cullimore, Jr. while serving a religious mission in Canada. The friendship of the two men eventually led to employment within the organization seeing Beardall rise to the position of vice president. In fact, Beardall challenged Cullimore, Jr. For the position of president/CEO when the position was vacated by Cullimore, Sr. A vote of the Board of Directors who are friends of the Cullimore family secured the position for Cullimore, Jr. Whether the challenge was legitimate or simply presented to make Cullimore, Jr.'s ascension appear legitimate, the situation reveals the unfortunate makeup of both the senior management and the Board of Directors. For more than a decade the Sales Department which Beardall led after that point provided virtually no stimulus to the company. Weak sales and failed marketing ventures were the hallmarks of Beardall's tenure. Nevertheless, his friendship with Cullimore, Jr. assured his position. If this were the only issue relating to the misuse of power and politics within Dynatronics it might be said that companies are allowed a certain degree of latitude and idiosyncratic behavior is expected at every company. However, this type of thinking is systemic and should be modified to prevent further problems from occurring.

The communication process giving and receiving feedback: Unlike many organizations, Dynatronics does not have a formal feedback process that includes documentation and a progressive disciplinary structure. The exception to this rule is in matters related to sexual harassment. The feedback employees receive comes from their performance evaluations which are given on a loose annual basis. Frequently employees receive no feedback for as much as fifteen months regarding their work. Recommendation: Regularly scheduled feedback that ties directly to goals that the employees should be working to meet should be established. This feedback could be part of a larger developmental program that enhances overall performance and identifies training gaps.

Sources of conflict: Each organization has unique sources of conflict that are difficult to understand outside of their context. However, Dynatronics does have several areas of conflict that could be considered major. One such conflict rises as a function of the long period that elapses between performance evaluations. Employee evaluations are frequently postponed and since Dynatronics has attached the merit increase to the evaluation the raises that employees want are late. Making the matter worse is that the employees are not paid the merit increase retroactively once management does administer the performance evaluation. Another source of conflict in the organization results from the disjointed nature of the two customer service centers that attempt to service customers without adequate coordination. Recommendation: Empower the Human Resource official within the company and establish a metric of performance to assure that performance evaluations and feedback are given at the required intervals.

Conflict resolution: The method employed by the company to resolve conflict is a matter of expediency. Since there is no formal progressive disciplinary structure, employees that do not appear to be able to fit into the culture are fired. Other conflicts are resolved by evaluating the seniority of the individuals involved. In most cases, the individual with the more senior position in the company is allowed to save face and the other individual(s) involved in the conflict are considered at fault. Recommendation: Conflicts that exist should be managed through a regular grievance procedure that enables the issues to be aired in a non-threatening way. "[T]he grievance procedure is an important channel of communication that can identify problem areas in the organization " (Duane, 1993, p. 30) Conflicts resolved in this manner could be arbitrated by Human Resources or the management of the specific area that is impacted by the conflict.

Negotiation: Exchange of ideas and making trade-offs as a natural course of give and take within the organization are more than likely nonexistent. An authoritarian structure like the one used at Dynatronics places such emphasis on expediency that it is not likely to attempt to find ways to assure that time is spent working out equally beneficial arrangements for employees. Recommendation: Negotiation skills should be more closely valued. After all, the company works to sell products to retailers so the better skilled at negotiations the better off the company will be. However, this is not a simple change and would require deep and significant shifts the overall organizational paradigm.