Case 2 Boots Contract Manufacturing (BCM)

Case 2 – Boots Contract Manufacturing (BCM)

BCM is the manufacturing department of the Boots Company. The organization is known for its strong, safe brands and traditional paternalistic leadership and management structures. In 2000 it decided to shake up its leadership style. 160 managers were taken to an exclusive resort in the Swiss Alps as part of the Chamonix leadership development programme. The business was adamant that the change in style should be radical and genuinely change the leadership of the company. It aimed to break down functional boundaries and develop a more flexible and creative approach for the 21st century.

The Chamonix leadership development programme was created by training consultancy Apter. Commentators have suggested that ‘Traditional structures and processes cannot keep up with the level of change that companies like Boots are going through’ and that ‘There’s this immense sense that they’re chasing the light on the horizon and it’s moving away from them.’

In 2000, BCM made 3000 staff redundant as a result of trading difficulties. The Organization Development Manager at BCM said “The executive knew that we were going to have to get the business back up and running again. And yes it was partly about morale. But it was also about bringing something new to the way people worked.”

Part of the leadership course in the Alps involved responding to risk and changing what was thought to be possible. The company wanted leaders to take more responsibility for their actions rather than hide in a culture of permission.

A study by David Burnham from the Burnham Rosen Group which supports business leaders looked at the relationship between leadership style and employee morale. The figure below shows the results. It shows the extent to which employees feel that they take responsibility, they have team spirit, there is organizational clarity and are effectively rewarded under different leadership styles. These include:

o Institutional leaders who see themselves as the source of power – leadership was something they do to others; o Interactive leaders who derive power from others such as the teams, groups and organizations which they lead.

e Leadership Styles & Employee Morale l a r o m

90 h 80 g i 70

h Other 60 h

t 50 i 40 Institutional w 30 s Interactive e 20 e

o 0 l p m e

f o a. Outline the features of the leadership style traditionally found at BCM. b. Examine the reasons for the change in leadership style at BCM. c. Using examples from the information, suggest a possible leadership style that BCM might use. d. Discuss whether the benefits of this style will outweigh the costs.