ORGANIZATIONAL BEHAVIOR

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CASE 1: INTRODUCING WORK-LIFE BALANCE AT OXFORD MANUFACTURING

Fiona McQuarrie, University College of the Fraser Valley

Oxford Manufacturing is a company with 350 employees in a large Midwestern city. It specializes in producing custom plastic products, although it also manufacturers a range of small plastic items (such as storage boxes and water bottles) that it sells to wholesale distributors. Because of the variety of products the firm produces, its workers have a wide range of skill levels and qualifications: engineers with university degrees work on design and production specifications for customized products, and assembly line workers, some of whom did not finish high school, operate machines in the production facility. The company’s plant operates 12 hours a day, seven days a week – although if a large order cannot be produced during regular hours may be added to meet that demand.

Over the last few years, where Oxford is located, the demand for workers has begun to exceed the supply. Oxford’s owners have realized that the company can no longer afford to sit back and let potential employees find them, as was the case in the past. They also realize that the company is now increasingly competing for employees, especially skilled ones, with other manufacturing firms in the same area. These realities have led Oxford’s owners to decide that Oxford needs to be seen as a “preferred employer” if it is going to attract and retain the best employees. They have decided to make Oxford a preferred employer by emphasizing how much the company cares about employees’ work-life balance. The message communicated to potential and current employees is that Oxford wants to help them achieve a lifestyle in which work and nonwork commitments are important. The company has adopted a policy giving each employee five “free days” off per year to use for whatever purpose the employee desires, in addition to generous vacation and sick leave benefits. The company also has encouraged department managers to schedule workers’ shift to accommodate the workers’ outside commitments as much as possible. The company managers feel that offering such benefit will not only attract good workers to Oxford but also help retain the ones already working there.

Peter MacNee is a manager of one of the production areas. He has received requests from two of his employees to accommodate their work schedules to their nonwork commitments.

·         John Mason is an engineer whose marriage has recently ended. He is now a single parent to a daughter, age 9, and a son, age 6. His parents are helping him with child care, but they are not always available to take care of children during the day when John is at work. In addition, John’s daughter was badly affected by her parents’ divorce; occasionally she has temper tantrums and refuses to go to school or stay with her grandparents, insisting that only her father can take of her. These situations have occasionally resulted in John having to miss work on short notice. Peter has allowed John to use three of his five annual free days to cover these situations, even though company policy states that employees wishing to take free days must notify their superior two weeks before the date of the absence. John is asking to work only in the evenings because his parents regularly available to supervise his children then. He is also offering to work overtime in exchange for formally being allowed to take his two remaining free days as needed without the required period of notification. He is willing to continue to be available for unpaid overtime if the company gives him a yearly allocation of five additional free days.

·         Jane Collier is a supervisor on the production line. She also participates in curling at the local recreation center. When a friend encouraged her to take up curling for fun a few years ago, she was having problems with her health and was also somewhat shy. Because she has been curling regularly, her fitness level has increased, and her health problems are on longer affecting her attendance at work. In addition, because success in curling requires working effectively as part of a team, her social and supervisory skills at work have noticeably improved. Jane’s curling team has an opportunity to join a new curling league that is more competitive than the one they currently belong to, but this will allow them to compete at regional, national, and possibly even international levels. Jane’s team has decided not only to join this league but also to start working with a coach to improve their technique. Jane is asking to be scheduled for day shifts only because of the time demands of this new level of participation and because most of her curling related activities will take place in the evenings. She is also for two weeklong unpaid leaves per year to attend curling bonspiels (competitions) out of town.

Peter is not sure what to do with these requests. He knows that the company encourages employee work-life balance and expects its management to support employees trying to manage both work and nonwork activities. He realizes that John and Jane would not have made their requests unless they felt the requested accommodations were the only way they could successfully balance their work lives with their nonwork commitments. However, there is no way he can grant both requests: The products John helps design are manufactured by the production line Jane supervises, and both of them need to be at work at the same time at least twice a week to share information about the products they are working on. He is also aware that John and Jane are talented and experienced employees, and if he turns down these requests, they will have no trouble finding comparable jobs with any of Oxford’s competitors.

As Peter is considering this dilemma, he shuffles through the pile of mail that arrived on his desk that morning. An interoffice memo catches his eye, and he pulls it out of the pile and opens it. The memo is from the three administrators in his area. The administrators complain that they are becoming increasingly upset with their co-workers, most of whom are married and have families, “dumping” work on them because of family crises. The memo describes several recent incidents in which co-workers received phone calls about family problems and then left for the rest of the day, asking the office administrators to cover for them and complete their work. After dealing with their co-workers’ unfinished tasks, the administrators often had to stay beyond the end of their scheduled shifts to finish their own work. The last paragraph of the memo states, “We don’t mind helping out once in a while, but not having kids or elderly parents to take care of doesn’t mean we don’t have anything to do besides work. If we have to stay late on short notice, we often have to cancel activities that are important to us. This is unfair; and if other people can't manage their family responsibilities, they should be the ones making the adjustments, not us. We want you to address this problem immediately because it is occurring more and more frequently.”

Questions:

1. How should Peter deal with John’s and Jane’s requests and the complaint from the administrators?

2. What can the organization as a whole do to address problems like these?

3. What organizational behavior can you identify in this case?

Case 2: COX-2 INHIBITOR DRUGS

Christine Stamper, University of Western Michigan

Treating chronic pain conditions associated with growing older, such as arthritis, has become more important (and more profitable) with the aging of the baby boomers, the largest generation in U.S. society. Pain medications produced by pharmaceutical companies take many forms, including both over-the-counter (aspirin, Tylenol, Motrin, Aleve, and the like) and prescription types of medicine. Investment in the research and development of new drugs costs pharmaceutical companies billions of dollars each year, with approximately 4-6 percent of all researched drugs actually receiving the approval of the Food and Drug Administration (FDA), the watchdog government agency tasked with maintaining public safety pertaining to medicines. Given this low “to-market” rate, top managers in pharmaceutical companies try to protect the drugs that are on the market at all costs.

The last few years have witnessed much concern over a class of drugs called Cox-2 inhibitors, such as Vioxx (manufactured by Merck) and Celebrex and Bextra (both produced by Pfizer). Despite the fact that all of these drugs were approved by the FDA (Celebrex in 1998, Vioxx in 1999, and Bextra in 2001), recent independently conducted research has shown significant negative health effects in people who have taken these medicines long-term (for more than three months). Specifically, all three drugs have been found to increase the risk of heart attack and stroke in patients, and Bextra also may cause fatal skin reactions. Subsequently, Vioxx was taken off the market by Merck in September 2004, and Pfizer stopped selling Bextra in April 2005 at the request of the FDA. However, Celebrex remains in the market.

When first introduced, Cox-2 inhibitors were hailed as a type of “super-aspirin,” alleviating the suffering of the patient while causing little risk. They were also viewed as a preferred alternative to existing NSAIDs, which are nonsteroidal anti-inflammatory drugs like aspirin, naproxen (sold as Aleve and Naprosyn), and ibuprofen (sold as Advil and Motrin). When taken for three months or longer, these NSAIDs pose a risk of internal bleeding in the stomach and small intestine areas (approximately 16,000 people die from these effects each year). Vioxx, Celebrex, and Bextra were produced to provide pain relief while protecting the lining of the gastrointestinal tract.

Even knowing that Cox-2 inhibitors carry a potentially large cardiovascular health risk, there are chronic pain sufferers who would voluntarily (and happily) continue to take these drugs. For example, it was reported that one man who suffers from chronic knee, hip, and shoulder pain thought, “…whom do I know who has some but isn't taking it? How can I get as much of it as possible before it disappears from the shelves?” He, and many others, would willingly tolerate the health risks of these medicines instead of living with chronic pain. The acting director of the FDA’s Center for Drug Evaluation and Research has recognized, in light of new information about health risks, that it is important to balance these risks with the potential benefits of the medicines before deciding whether to remove them from the market. However, the associate director for science and medicine at the FDA’s Office of Drug Safety has argued strongly that the health risks associated with Cox-2 drugs vastly outweigh any potential benefits.

In December 2004 (prior to its request to pull Bextra off the market) the FDA recommended that doctors limit their prescriptions of all Cox-2 inhibitors, including Celebrex, to only those patients at risk for gastrointestinal bleeding. Researchers at Stanford and the University of Chicago argued that millions of patients who did not face this risk were prescribed either Vioxx or Celebrex by their doctors. Each of these drugs can cost 10-15 times as much as the NSAIDs available to treat the same pain symptoms, and critics of big pharmaceutical companies argue that the Cox-2 inhibitors were marketed too aggressively and deceptively to potential patients. It is not clear whether the increase in prescription for the Cox-2 inhibitors in lieu of NSAIDs was due to patients asking their doctors specifically for either Vioxx or Celebrex, or to recommendations by physicians that the patients change their medications.

Both Pfizer and Merck still assert the relative safeness of the Cox-2 inhibitors. In February 2005 and FDA advisory panel recommended that Vioxx, Celebrex, and Bextra should continue to be sold despite their health risks because the potential benefits of the drugs outweigh the risks for some patients. The doctors on the panel stated that they felt Vioxx posted the greatest risk to consumers and that Celebrex had the fewest side effects. Research estimates show that Celebrex increases the risk for heart problems by 1 percent, but only for individuals who routinely take double the normal dosage of 200 milligrams. Also, another recent study indicated that Celebrex may suppress the typical immune function of the body, which may benefit some arthritis sufferers.

The FDA does not always follow the recommendations of its advisory groups, and it subsequently decided to request Pfizer put Bextra from the market. A statement released by Pfizer said the company “…respectfully disagreed with the FDA’s decision on Bextra and that it would work with the agency on Celebrex’s label.” The FDA has requested that a “black box” warning label be placed on Celebrex, which is the strongest warning procedure available in product labeling. However, the FDA also requested “black box” warning on NSAIDs like Motrin, Advil, and Aleve. Pfizer has also stopped public advertising of Celebrex, but still argues that it should be available to patients who need it, according to a doctor’s recommendation. Two additional Cox-2 drugs are now waiting for the FDA’s approval, one of which (Arcoxia) is produced by Merck. Arcoxia has been approved for use in 51 countries worldwide.

As this case was written, Pfizer had just finished a widely publicized strategic planning meeting addressing the future of the company. In the press releases from this meeting, and prior to the FDA asking Pfizer to remove Bextra from the market, corporate representatives expressed their desire to revitalize the sales of both Celebrex and Bextra in the coming months. With the removal of Bextra form the market, financial analysts predicted that Pfizer’s earnings would continue to decline for 2005, and the recent predictions for double-digit earnings growth for 2006 and 2007 would have to be revised. In 2004 sales associated with Bextra were $1.3 billion, and Celebrex’s sales were estimated at $3.3 billion. Together Bextra, Celebrex, and Vioxx totaled more than 50 million prescriptions in the United States in 2004 (Bextra = 13 million, Vioxx = 14 million, and Celebrex = 24 million).

Questions:

1. Should Pfizer voluntarily pull Celebrex off the market, given that the other two drugs in its class have been withdrawn? What factors are the most important in making this decision? What should the FDA do about Arcoxia?

2. What are the responsibilities (if any) of Merck, Pfizer, and the FDA for the deaths of individuals who took the Cox-2 inhibitors? Who holds primary responsibility?

3. How many deaths per 100,000 people pose an acceptable risk for a drug to be viewed as marketable? Should individual patients have the right to determine if the risk is too great for them? What roles do organizations and consumers play in maintaining consumer safety?