ORGANIZATIONAL BEHAVIOR

Case 4:

THE SUPERIOR INSURANCE COMPANY

The superior Insurance Company was experiencing phenomenal growth. Operations were being expanded to other states and territories, and sales efforts had been increased. As a result of the major client expansion, the physical plant facilities at the home offices were enlarged. On a space of land adjoining the existing offices of superior, a large addition was constructed  and  passageways  were opened  to connect  the new and  old  buildings.  The claims  office was  one of  the areas  that  needed  expansion. The claims  office in the old building was housed on the third floor in a very conventional setting. Private offices for

executive and supervisory personnel were provided. Computer terminals and printers were located in a room that was off-limits to everyone except statistical and computer personnel. Small groups of clerks and typists were located in spaces throughout the floor and were partitioned from other groups by room dividers.

When the new part of the building was constructed alongside the existing structure, a new office on the third floor was established for the expansion of the claims department. The old and the new claims offices were connected by a hallway. The design of the new claims office (a room with more than 18,000 square feet) was quite different from that of the old office. The new office was developed using an open floor plan in which no permanent partitions were constructed, and only a few five-foot dividers were placed to hide some filing cabinets. Supervisors sat surrounded by those for whom they were responsible. Flowers and other plants  were  sprinkled  liberally  throughout  the  new  area.  The  lighting  was  bright  and colorful. It was decided that the old part of the building would be remodeled in a couple of years and would be reconstructed in the same type of design used in the new building. Since the workers in each part of the building were performing similar types of duties, it was decided to take some of the more experienced workers from the old building and disperse them among newly hired and trained workers so that the ratio of old-to-new employees in each of the claims department areas would be about the same.

At the end of the first three months of operation in the new arrangement, some interesting statistics were beginning to take shape. Errors and mistakes in the handing of forms and other records were up noticeably. Absenteeism had increased over the prechange pattern. At the end of the second three-month period, the data were the same, and a turnover rate higher than in any previous period was noted. When the error-absenteeism-turnover figures were isolated by work area, it was discovered that it was the employees in the new room that were making the errors and otherwise showing less desirable performances. A morale survey was taken: workers in the new room were found to be less satisfied with their jobs and working conditions than the personnel in the older, more conventional workspace.

Questions:

1. From the brief facts provided here, what would you expect to be the causes of low levels of accuracy in performance and the high rates of absenteeism, turnover, and job dissatisfaction?

2. What truths about the workplace should we be able to draw from this situation?

3. What are the advantages of the open-space plan? What are the disadvantages?

4. What are the advantages of the more conventional, closed-off kind of office desing? What are the disadvantages?

5. What should the people at superior do about their newly identified problem?