Lewis & Lewis, P.C. is a small, Jackson-based accounting firm that employs thirty-five
people and was founded by Phil Willis in 1968. It exhibits many interesting aspects of
organizational behavior, which we will examine below from several perspectives. After
examining the company's current policies and practices, we will evaluate its status in
the transition from the "old" to the "new" model of organization, and recommend some
changes that may improve the way Lewis & Lewis operates.
From a Strategic Perspective
Physical Description
Lewis & Lewis, P.C. is located in a quiet suburb of Jackson, Michigan. It is a
forty-five minute drive from Lansing. The two-storied building is built on a slightly
elevated hill with spacious parking lots in the back and to one side. The outer walls
are of a pleasant beige brick which is in keeping with the calm atmosphere of the
community and of the landscape. Right in front of the building there are columns and the
large main entrance is toward the rear off the parking lot.
The appearance of the building is well harmonized with the surroundings. However, it
gives guests the impression of dignity and openness.
Directly inside the main entrance to Lewis & Lewis is a small but welcoming lobby,
with a natural stone floor, stylish but difficult to walk on in heels. There is a narrow
open closet for guests to hang their coats, and several chairs arranged around a table on
which are placed the company newsletter and other publications. The receptionist's desk
is facing the entrance door, and behind it sits a friendly young woman. The partners'
offices are found against the two farthest external walls, noticeably removed from the
rest of office. The other external walls are lined with the offices of the
professionals, with large windows overlooking the pleasant exterior. The remainder of
the office space is segmented with partitioning walls, forming a sort of cubicle
labyrinth. In the center of this maze is a small kitchen where employees gather and
converse informally. Adjacent to the kitchen is a small work area with copy machines and
office supplies. In a corner of this floor is a set of uninviting stairs leading to the
ground level, where the conference room is located. The conference room itself is
spacious and handsomely decorated, with a large table and comfortable chairs, a video
center with television and VCR. The seating is limited to fourteen people.
Task and Job Description
Tasks are distributed on the basis of specialization: auditing, tax, government and
consulting. Very few tasks are performed by routine; each day may include new procedures
for each employee.
Jobs in this accounting firm are created by the customers' needs, and therefore vary
greatly from client to client. Each employee does most of his work based on experience,
not according to standard procedure. This individual-style process replaces clearly
defined tasks in the firm. However, there is no job rotation between specialties.
Coordination Systems
Information flows very informally and on a personal basis. While this may create
problems that will be discussed later, there are many positive aspects to this
arrangement; it contributes to the family-like atmosphere that is very evident to the
casual observer. The lack of a formally defined flow of information is in part caused by
the many client contacts within the firm, but there is imbalance in the quality and
quantity of information that each employee receives.
Formal information flow is undefined between the vaguely defined divisions of the firm
in part due to the nature of the accounting industry. Therefore, information flow is
very vertical. Information is handed down to each department from the top (Phil, Brian
and other partners), and from each professional to the shared administrative staff. Data
from each individual professional division flowing back up to Phil and Brian goes through
David.
There are no general staff meetings at Lewis & Lewis. The only formally coordinated
data-sharing medium are the partner meetings. In a busy month (those preceding April 15)
the partners may meet two or three times, but throughout the rest of the year there may
only be two meetings scheduled. Therefore, even among the partners, information flow is
on a need-to-know basis only.
There are very few task forces formed where people from different divisions work
together on a project. The exception is an auditing team, created when the company
embarks on an external auditing job and sends four or five people to the company being
audited.
The firm believes relationships with clients are of the utmost importance. They stress
frequent contact with customers, but it is conducted at the discretion of individual
responsible for the client's file, and with little or no coordination among other
employees.
Control System
Lewis & Lewis is controlled almost exclusively by personal authority. Phil is the
founder and principal partner, and is responsible for most important decisions within
the firm. His control over the company is perceived as firm, and his conduct and
demeanor influence all the employees. He is viewed as an authoritative figure, and
employees regard his approval as crucial to their job performance.
From a Political Perspective
Power Structure
Lewis & Lewis has five key stakeholders; the partners. Each of the five partners has
one area of expertise and they deal with any questions that arise in this area. However,
aside from this, the five partners all have very different roles within the organization
and we see an unequal distribution of power among them. Management duties are divided
between two of the partners, Phil and Brian. These two supervise all of the staff,
generate most of the new business, manage the dispersal of accounts and take care of any
problems that may arise within the organization. The founding partner, Phil, has the
ultimate decision making authority, and can therefore override any decisions made by
Brian or the other partners. The other three partners all stay out of the management
aspects of the business, and defer all problems concerning it to Phil or Brian. Phil's
efforts to involve other partners in management issues have been met half-heartedly; the
partners seem content in their current roles.
This power structure has never been verbalized, nor has it been written. It is implied
through practice, and therefore not known or understood by employees. Most of the
employees believe that all five partners participate equally in the management process.
This causes confusion for the employees who aren't sure who to address with particular
concerns. It also limits the time employees have to speak with a managing principal.
Conflict Resolution
The area of conflict resolution within the company is rather gray. As noted above, Phil
and Brian are the two who directly manage the personnel at Lewis & Lewis, but this is not
always the case. According to staff interviews, it is very difficult to actually have
either Phil or Brian resolve an issue. Phil is always out of the office and when he is
in the office he does not have the time to deal with employee problems. Brian is always
willing to take the time to listen to employee problems and he seems to sincerely want to
help, but he prefers to wait until the issue blows over before addressing it.
There is no set procedure for how a problem is solved once either Phil or Brian gets
involved. One partner is apt to give one possible solution to the problem only to have
the other turn around and contradict what has been suggested. This sends mixed signals
to the employees who are not sure which path of resolution to follow. In addition,
conflicts are not resolved in the same manner for all employees. Some experience more
favorable outcomes that others, and the people who are lower on the totem pole do not
always see their interests being protected.
Employee Interests
The support staff is basically at the mercy of the partners, and don't have much say in
how the company is run or what might work better in certain areas. All of the employees
agree that Lewis & Lewis tries to be flexible where work schedules and time off are
concerned. Unfortunately, however, there is tension among the employees because of
perceived favoritism when it comes to approving flexible work schedules. Some people are
allowed to work part time, others are not. Some part-timers receive benefits, some do
not. In an office as small as Lewis & Lewis, this can be a source of contention between
employees.
Employees do not always know where they stand in regard to job performance. The limited
feedback they do get from the partners is inconsistent. At times they are criticized for
the same performance on which they were previously complimented. This causes worry among
the employees, who fear that duties will be taken away and leave their job in jeopardy.
From a Cultural Perspective
Artifacts
Some of the artifacts we identified at Lewis & Lewis include its recruitment practices,
its highly rigid job descriptions, and the physical office itself. The recruitment
practices at Lewis & Lewis are consistent with the informality of the company. Lewis &
Lewis usually does not advertise its job openings; instead, most of its new employees
are hired through its clients. For example, one employee had applied for a secretarial
position with a client of Lewis & Lewis. The client passed on her resume to Lewis &
Lewis. The company uses the same strategy for attracting new clients. It does not
market its services conventionally; instead, existing clients tell business associates
about the firm and its services.
While there are no written job descriptions, the specific tasks that each employee must
complete imply a rigid definition of their position at Lewis & Lewis.
The building itself is an artifact. First, the building is very identifiable to the
Jackson community. On our first visit to Lewis & Lewis, we got lost and asked a gas
station attendant if he knew how to get to Lewis & Lewis. He not only know where it was,
he gave us an exact description of the building. Lewis & Lewis is a long-standing
business in the Jackson community, and almost eighty percent of its clients are based in
the greater Jackson area.
During our visits to Lewis & Lewis, we conducted our interviews in the Antique Room, a
small office filled with antiques accumulated over the years. The Antique Room is a
microcosm of the history of the company.
Values
The company places great value on the individual and the home. Within the company's
facility itself, one sees many clearly evident proofs of these values; family photos
adorn the desks of most employees, spouses and children are invited to all company
functions. The offices within the building are strategically placed to limit the
interaction among employees. There is very little open office space and, with the
exception of a conference room, there is no area conducive to team interaction. This
value placed on individualism can best be summed up by a partner who stated "there are
plenty of opportunities for people to succeed at Lewis & Lewis. It is up to each
individual to take advantage of them."
While team interaction is limited at Lewis & Lewis, subcultures are prevalent. Examples
of subcultures are the secretarial staff, the "old guard," and the newly hired CPA's.
The secretarial staff subculture seems to have been created as a support mechanism for
the secretaries. Our interviews with these employees indicated that they feel
unappreciated and thus seek encouragement and support from each other. The company's
most recently-formed subculture is the group of new CPA's who were hired at approximately
the same time and are expected to take over the leadership of the firm in the next
decade. In general, subcultures are formed to provide support and to create a system of
reward mechanisms for employees within them. Employees crave support and recognition
because they feel they are not receiving it from the partners.
Despite the lack of support from management cited above, productivity does not seem to
be a problem at Lewis & Lewis. What are the motivational factors for employees? First,
employees seem to be largely self-motivated. Self-motivation is consistent with
motivational posters displayed throughout the office. For example, one poster states
that "success is what you make of it." To a lesser extent, employees seem motivated by
the independence given to them by their supervisors. Even given the small size of Lewis
& Lewis, some employees claimed that they may not communicate with any of the partners
for as long as a week at a time. Finally, employees are somewhat motivated by the lack
of communication from management itself. Employees work hard and try to cover all
aspects of their assignments because it is not always clear to them what management
expects.
Underlying Assumptions
The most obvious underlying assumption is that employees should be loyal and
self-motivated. The company provides a good salary and benefits package but it provides
little support in terms of the daily responsibilities of its employees. Instead,
management believes that if it provides its employees with good pay and a comfortable
working environment, employees will be productive.
Another underlying assumption is that if you provide a good service, businesses will
come to you, and the clients' concerns are always top priority. As stated above, Lewis &
Lewis does very little if any marketing of its services. It believes, instead, in the
word-of-mouth philosophy that satisfied clients will recommend its services to others.
In the same way, the company opts to develop good relationships with the banks of
Jackson, in order to benefits from their referrals.
In short, analyzing Lewis & Lewis from the cultural perspective reveals, among other
things, the management philosophy of the partners and the impact that philosophy has on
Lewis & Lewis employees. Management places great value on individualism and expects its
employees to perform their jobs with little support from management. However, there is a
major inconsistency. Although the company values individual responsibility, the
employees themselves do not feel empowered enough to make all of their own decisions.
One employee had a problem with a small project and asked Phil for help. Phil responded,
"I don't have time for your problems. I'm trying to run this company."
Moving Toward the New Organization
Networked
A networked company uses cross-functional teams that bring people together from
different departments to accomplish tasks. In the new model of organization, customers
are served more efficiently because they can speak to specific departments instead of
boundary spanning personnel. Horizontal information sharing eliminates redundant tasks
and speeds completion of projects. Lewis & Lewis still harbors many of the beliefs
inherent to the old model. While an employee working on a company's file may at times
feel free to call that company with specific questions regarding their business, the
partners prefer to handle most interaction with the clients. Because of the nature of the
accounting firm and the relatively small size of the organization, the partners alone are
normally able to handle these responsibilities. Although this method of interacting with
clients does not utilize team functions, the quality of the product does not seem to have
suffered.
Although Phil feels that the firm is flat and informal, his subordinates and the other
partners claim that Lewis & Lewis is still very hierarchical. Phil commented that he was
trying to manage as little as possible and empower lower employees to make decisions on
their own. This follows the definition of a leaner firm that is trying to reduce
management levels so it can better respond to changes in the environment. Unfortunately,
the employees feel that they can make decisions as long as they are the some ones that
Phil would have made. Although empowerment of the employees has not yet proven very
effective, Lewis & Lewis is making use of technology to remove layers of personnel.
During the 1980's, many paraprofessional employees were used for bookkeeping, payroll,
and other basic tasks. As computer software increasingly simplifies bookkeeping, the
firm's need for paraprofessionals decreases, and Lewis & Lewis is able to shift toward
hiring more professionals. Therefore, the average employee at Lewis & Lewis is gradually
becoming more knowledgeable and expert. This not only increases the amount of revenue
that each employee brings to the firm and but provides better service to the customer.
Flexible
As Lewis & Lewis attempts to create a more flexible workforce, they are encountering new
obstacles. All the employees and partners at Lewis & Lewis feel that the firm is very
flexible on most issues that are important to the staff. Employees are able to schedule
dentist appointments during the day and make up time on the weekends or after hours.
Several members of the staff are currently enrolled in classes that meet during the day.
While Lewis & Lewis attempts to be flexible on these matters, they are not willing to
allow the clients' work to suffer; employees are expected to maintain specified work
loads. This same flexibility has created some problems for the firm; some questions have
been raised about who will get benefits and why some employees are granted part time
status and others are not. Some of the staff feel that favoritism occurs when deciding
these issues and because the firm is so small, it affects employee relationships. In one
case, one part-time employee was receiving full time benefits while another part-time
employee was not. This caused friction among the employees who felt that management was
not being fair and honest.
Diverse
With very few exceptions, Lewis & Lewis is a white male dominated accounting firm with a
white female support staff. The partners seem to hire people who think like them, to
minimize conflicts within the firm. Of the six new professionals that were hired last
month, none of them were women. This does bring into question the diversity within the
firm. Many of the issues that create stress and problems in a diverse work force simply
do not exist because men and women are not working together at the same status level as
in larger firms. One wonders, though, what benefits are being missed through this same
lack of diversity. Although there do not seem to be many efforts being made to increase
diversity in the firm's demographics, Lewis & Lewis does predict a different educational
background for many of its future employees. The firm would like to provide a wider
range of financial services to its clients, and will therefore be looking for employees
with educational experiences other than uniquely accounting.
Diagnosis and Problem Definition
Most of the problems with the organizational aspects of Lewis & Lewis stem from
ambiguities in the formal structure of the company and from the inconsistencies they
cause. The conscious effort at creating a comfortable work environment through
flexibility and informality causes many communication and managerial problems. In
addition, there is a noticeable contradiction between the partners' views of the
organization and those of the other employees.
First, one remarks that even at the partner level, there are few shared norms and
values. While the company is technically owned by the five partners collectively, there
is an uneven distribution of interest among them. Financially and otherwise, it is
obvious that Phil and Brian are far above the others. One partner remarked that while
everyone is given the impression that their ideas are being heard and considered,
ultimately they have little or no effect on Phil's decisions. Brian runs day-to-day
operations and seems to share most, if not all, of Phil's opinions, but there is no
policy in place to guide them if there were a dispute or disagreement. The lack of a
mission statement is the physical manifestation of the less obvious but equally
significant lack of common goals and plans to reach them.
A brief survey was given to the partners assessing their views of the company's present
situation. When asked to rate Lewis & Lewis as flat or hierarchical (1 to 10), the
results revealed that four of the partners viewed the company as a 3 or 4 on the scale,
while Phil himself gave the firm an 8. This represents the deliberate effort he is
making at giving his colleagues and employees the ability to make decisions themselves
and essentially manage themselves, but it also points out the fact that at this point he
doesn't seem to have succeeded. The other partners still view Phil to some extent as a
dictator, handing down responsibilities where he sees fit. They seemed, after
questioning, to accept their inferior roles in decision-making and managing, but their
positions are nowhere formally defined in this way. They seemed to have expected to have
more say in matters of importance to the firm when they became partners, but now have
bowed to Phil's authority and greater stake in the future of Lewis & Lewis. This is not
to say that they resent the way that Phil runs things, or that they would change anything
if they had the power to do so, it simply points out the inherent vague descriptions of
each partner's function and leads to some confusion that prevents optimum participation
in goal achievements. The partners do not meet often; during the busy months, they might
meet 2-3 times per month, but the rest of the year there are few, if any, scheduled
meetings.
At the CPA level, we noticed that there are differing views of the company. Most of the
new employees, hired within the last year, have a positive outlook on Lewis & Lewis.
This may be in part due to the attention they get from the partners. Phil and Brian
consider it top priority to "check up" on new employees to ensure that they are not only
performing in a satisfactory fashion, but that they are happy and challenged. The new
hires, therefore, seem to have more interaction with the partners, and therefore better
personal relationships with them. Alternatively, the employees who have been with the
firm for greater lengths of time feel slighted by Phil and Brian. They comment that the
partners are never available to give help when needed, are always out of the office, and
seem too busy to be bothered with their comparatively small problems. Since it is these
employees who have shown the most loyalty to the company, and have obviously shown they
can perform well, it seems likely that the partners take advantage of the fact that they
require less supervision. On the other hand, it is precisely those employees who have
been there longest (and therefore gained the most experience and knowledge) that the
partners should be most concerned with keeping happy. While Phil thinks of the "freedom"
he gives his trusted employees as a sign of his confidence in them, they seem to regard
it as a lack of concern or interest in their contributions to the company.
Some of the support staff seem distantly removed from the vision of the company that
Phil and Brian and the other partners describe. Most of the partners describe the firm
as providing superior quality products and excellent customer service. The partners feel
that the most valuable time they spend is when they are actually with their clients. In
contrast, the employees at lower levels in the company rarely, if ever, mentioned clients
or their relationships with them. They never alluded to contact with customers, and were
under the impression that Phil and the others spent too much time out of the office
"instead of working." Naturally, these employees focus on the small tasks with which
they are presented at work, but they showed little understanding of the end product of
their work; that is, the customer's satisfaction. They seemed more concerned with the
fact that they were receiving no attention from their superiors.
Lewis & Lewis seems determined to provide a flexible work environment for their
employees. Their experiences with telecommuting and flextime, though, have caused them
to set limits on the flexibility they are willing to practice, and this has caused some
resentment among employees. Add to that the inconsistencies which almost always
accompany workforce flexibility, and you see some very unhappy and jealous employees.
Because the office is small, each employee knows almost everything about the others'
benefits and hours, etc.... and is likely to consider certain arrangements unfair if they
were denied the same request and were not told the reasons.
It is obvious that the company needs to introduce some changes. This will present not
only the initial problem of identifying the needed changes, but the difficulty of
instituting them. Phil is very conservative in his ideas; some of the partners even used
the phrase "old-fashioned." He is reluctant to make immediate changes to some aspects of
the company, and in addition, he thinks that in most respects it is operating well at
present. He is, however, preparing things for his exit, at which point presumably Brian
will take over. Brian is much more apt to introduce change.
Suggested Plan of Action
? Hold a company-wide meeting to collectively compose a mission statement. This process
will promote team unity and the statement will allow the employees at all levels to see
the "big picture;" to understand how their job contributes to the success of the whole
company.
? Formally define the company's operating structure. The partners' roles should be
better defined; both to improve the way in which they perform their jobs and to provide
predictability for the other employees.
? Create the position of Office Manager. The employee filling this position should be a
non-partner and will serve as an ambassador between the partners and the rest of the
staff. The Office Manager should meet regularly with the partners on an informal basis
when they can spare the time, and in turn conduct regularly scheduled staff meetings for
the rest of the office. The Office Manager should be able to answer most questions that
would normally be addressed to the partners.
? Provide incentive for employees to bring in new business. This will not only create
more business through new clients, but cause the employees to project a certain pride in
their company that will affect their performance on the job.
? Establish a clear set of standards for benefit eligibility. This document should state
in objective terms the hours necessary to qualify an employee to receive benefits and
other means of compensation, in order to avoid discrepancy between workers that has
resulted in conflict.
? Formulate a specific and objective evaluation procedure. Employees are currently being
reviewed annually, but Lewis & Lewis should standardize the criteria involved and perhaps
perform the evaluations more regularly. This will eliminate suspicions that management
has been playing favorites, as well as provide the partners with a better understanding
of their employees' progress and concerns.
? Create a common lunchroom. Lewis & Lewis is currently constructing an addition to the
back of the building to provide needed office and storage space. Some of the new wing
will be occupied by other firms currently in the same building. The inclusion of a
common cafeteria would foster relations not only between Lewis & Lewis employees but
with employees of the other firms, all of which provide financial services to Jackson
companies and are to play a crucial role in Lewis & Lewis's expansion plans.
? Implement an "Employee of the Month" award. The honored employee may enjoy a special
parking spot, announcement in the company newsletter and other privileges, and will
appreciate the recognition. This provides management with an opportunity to encourage
employees using non-financial incentive.
? Formalize procedures for conflict resolution. Among the partners, conflicts seem few
and far between, but a procedure to follow in the event of a difference in opinion should
be developed. As new partners emerge, consistency of opinion may not be as prevalent,
and a standard procedure for conflict resolution will minimize tension between the new
partners.
? Lastly, we suggest that Lewis & Lewis seek external consulting services. The
implementation of many beneficial changes may require a long-term commitment and periodic
input from an objective group. If finances are a concern, may we suggest a now highly
qualified group of MBA students after their completion of Management 806 at Michigan
State University.
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