Course Notes Analysis

The focus of Case 4 is how poor communication can effect an organization. Communication is essential to the survival of any organization. A lack of effective communication will result in little to no coordination and cooperation, resulting in decreased performance. In assessing Strayhorn’s communication effectiveness, one can see the negative impacts EI experienced because of his approach. Two of the biggest factors dampened by his style were morale and productivity. In addition, failure to address rumors circulating in the grapevine increased anxiety, stress, and crises among employees.
With EI’s contract with Ocean Point coming to an end, the big question for EI employees was whether or not the contract would be renewed. Mr. Strayhorn failed to directly address the situation. It seems as though Strayhorn was more concerned with saving-face than the needs of his employees. One can then reason employees developed mistrust in management because of their lack of information. This in turn caused many employees to develop personal barriers in the form of psychological distance. The lack of proper open and downward communication led employees to utilize the grapevine.
From the case, one can easily see the grapevine was a product of the situation EI faced. One can also reason the desire for information and insecurity were additional factors that encouraged employees to become part of the grapevine. Unfortunately in this case rumors began to circulate through the grapevine. Since each employee possessed interest and ambiguity with the situation, it is easy to see why rumors formed. Consequently the accepted rumor was Ocean Point would not renew EI’s contract and EI employees would not be eligible for hire with Ocean Point.

Although this was not factual, the rumor caused dramatic increases in stress, anxiety, and crises among EI employees. In addition, Strayhorn failed to recognize how the rumors would affect organizational culture. The uncertainty in the situation caused the organizational culture to become unstable. Since the causes of the rumors were not removed, Strayhorn should have addressed employees with a face-to-face to attempt to control the rumors. However, Strayhorn’s lack of action suggests he had little concern with restoring social equilibrium.
By failing to effectively communicate, provide insufficient information, control rumors, and restore social equilibrium, Strayhorn caused employee morale and productivity to dramatically decrease. Evidence of these dysfunctional effects can be seen through the fact that potential sales were reaching their peak while actual sales were declining. If Strayhorn would have openly communicated EI’s problems and disclosed management’s efforts to get the contract renewed, he would have also conveyed his concern for employee needs.
The employees would have most likely responded positively because the elements of trust would still be present. However, as this was not the case Strayhorn should have realized EI’s environment had changed and adapted his results-oriented approach accordingly. In this situation the system model would have been appropriate for a few reasons. First the basis of the system model is trust and community. Although failing to communicate developed mistrust, by showing sincere care and compassion for each employee Strayhorn could have reestablished trust.
Secondly, this model could have allowed positive organizational behavior to grow, which would in turn have boosted morale. In conjunction with the system model, Strayhorn could have strived to achieve a fun work environment to aide in combating the stress stemming from uncertainty. By combining these methods and theories, EI could have increased actual sales and its chances of contract renewal. However, because of their lack of profitability Ocean Point may now be unwilling to do so.