Kaakbay Inc.

Case Study
Analysis
The lack of formal planning could result in
unclear corporate direction and lead to
dysfunctional organization

A case study analysis of a non-stock, non-profit private foundation operating as a social welfare agency
for the development of families and communities.

9/30/2017

[Type text]
KM Johnson / GB Palasigue / EP Opulencia / GJ Raras / CE Talaban
bvbvgfgfgfcdddd
 Kaakbay Inc. Case Study Analysis 2017

I. Overview of the Case

Kaakbay Inc. is a social welfare foundation working for the development of families and
communities, led by the founder and Executive Director (ED), Mrs. Elena Gomez. It is operating in
three (3) major provinces; Cavite, Laguna and Batangas with a full-time staff of 95, supervised by
five (5) Supervisors. The Foundation is a non-stock and non-profit organization, which started as a
loan provider initially funded by the Belgian friends of the founder for common livelihood projects
such as hog raising, day care center services, family planning and community organizing.

The organization has a structure that is relatively revolving around the autocratic leadership of
Mrs. Gomez. She is managing singlehandedly the Foundation without recognizing other personnels
contribution, which means that she command decisions from appointing the Board of Trustees
(BOT), setting the organizational design, hiring and even up to the scheduling of office vehicle use.
Further, she has control in every function of the organization (i.e. policy making, budget monitoring,
payment processing) even though personnel were hired to do the function. This structure and style
have found success in the past but begins to experience difficulties and problems as the organization
starts to expand. Supervisors under her starts to feel frustrated whenever she bypassed the chain of
command. Her continued and unguarded irrational decisions on some policies lead to loss of rapport
and morale in their group. Likewise, personnel who questioned her actions were dealt strongly and
even withdrawn privileges from them. In effect, Sarah (Program Coordinator) found-out that the
founder was charging unauthorized expenses, thus resulted in opposition and eventual resignation
of Sarah and two (2) other Supervisors.

II. Identification and Evaluation of Specific Problems

Kaakbay Inc. is slowly falling apart from its operations, relationship of staff and internal controls
that if not acted immediately will have a more devastating result. Analysis of the case proved that
different problems arose from different sources; and were classified as to management, methods,
people and money.

1. Management/Leaders

a. Unclear Organizational Direction (Vision and Mission)

Analysis of the case showed that the organization has an unclear organizational goals and
objectives that originated from lack or poor formal planning. This is exhibited in meetings, wherein
personnel are questioning the founders arbitrary decisions on certain policies, thus a clear
indication of misunderstood corporate direction. When goals and objectives are properly cascaded
down the line, each member should know their part in the strategies implemented and become
coordinated. Likewise, another sign of dysfunction is their lack of consensus on the projects
identified by the Founder. It appears that the staff doubt the Directors programs, which they
believe, are not really the needs of the people.

1
 Kaakbay Inc. Case Study Analysis 2017

b. Lack of Environmental Scanning

Another observation in the case is the lack of environmental scanning that could have
determined the internal weaknesses of the Foundation. This could have earlier detected their
problematic interaction, questionable organizational communication, unempowered and unsatisfied
employees.

c. Founders Autocratic and Micromanagement Leadership Style

Additional problem observed is the Directors micromanagement leadership style, who gives
excessive supervision to employees (i.e. insisting on overseeing all operations, both program and
administrative functions). In normal situations, Directors are expected to focus on the long-term
plans of the organization, not on the daily activities. Further, her autocratic style that immediately
turn-down suggestions and point-out shortcomings prove ineffective, this is making her Supervisors
feel incompetent and demoralized. Demoralization affects employees self-esteem and productivity.
Employees need to be trusted and appreciated by their leaders to be empowered and motivated.

2. Methods/Systems

a. Undefined Organizational Structure and No Delineation of Responsibilities

Organizational structure should describe the way tasks are divided, supervised and coordinated
(Boddy, 2002). However, in Kaakbay Inc., there is no defined structure; personnel tasks are vague as
to who is in charge to a specific function, who reports to whom, what are the tasks of the ED, what
are the roles of the BOT and as to what extent are their duties and responsibilities. The BOT that is
supposed to be the authority to oversee the Directors decisions is dysfunctional because they were
all selected by Mrs. Gomez herself. Her flat communication scheme that made her accessible to all
employees proved to be ineffective in a growing organization because Supervisors under her felt
bypassed and frustrated when subordinates do not follow proper channels.

b. Poor Delegation of Authority

An owner of an organization understandably wants to control every aspect of the operations;

however, this may pose threat in growing organizations. Relating to the case, Mrs. Gomez did not
transfer her authority through delegation; she continues to be on top of everything, even if
personnel were hired to do the job. It did not only overburden her but also deny subordinates the
opportunity to learn and develop new skills. This poor delegation causes oversight of important
functions (lesser time in visiting projects), duplication of tasks and demotivation of staff.

3. Men/Personnel

a. Passive Employees

Due to the retributive style of the ED, workers became so passive in pointing out the loopholes
in the Foundation. Although, it is not easy to oppose a boss the employees could have collectively

2
 Kaakbay Inc. Case Study Analysis 2017

planned on how to tell their Director her flaws and problems in their organization. This passiveness
breeds frustration in the employees and eventually lackluster in their performance.

b. Unempowered Employees

It can be also inferred in the case study that employees of Kaakbay Inc. are not empowered.
Their ideas are not heard and they have no part in the organizations decision-making activity. The
Foundation indeed revolves around Mrs. Gomez, hence justified her well-known phrase the
Foundation and I are one. The non-empowerment has a negative implication in the employees
satisfaction and retention that explains the resignation of personnel.

4. Money

Mismanagement of Disbursements and Operations

Additional impending problem is the mismanagement of disbursements and operations, which

was recognized in the charging of the unauthorized expense of Mrs. Gomez without the knowledge
of the Program Coordinator; and offering a lucrative salary package to the newly hired employee.
Further, the lower loan repayment and increasing delinquency rate are also mismanagement
problems that need to be addressed immediately.

III. Identification of Main Problem/Issue

What lies at the heat of the various problems within Kaakbay Inc. is a fundamental lack of formal
long-term planning that has persisted since its inception in 1979. Initially, the organization had
started out with just three (3) members, including Mrs. Elena Gomez herself, expanding into three
provinces and growing in size into an organization with 95 full-time staff. During this transition, the
foundation had structured itself in a largely improvisational manner for the sake of adapting to
short-term needs, and largely without much consideration for future contingencies. This, in turn
resulted in an organizational structure that was inherently compromised by a lack of clear direction.

As the Foundation incorporated and expanded, it ultimately failed to appropriately organize

itself in a manner that was either effective or efficient. Rather, the Foundation was totally marred by
a failure to properly delegate power and authority to the additional staff the Foundation had
acquired. Although employees were qualified and competent, the lack of formal planning created a
repressive work environment where Mrs. Gomez had continually insisted on observing and
micromanaging at every level, thereby restricting the personnels ability to work optimally. To
further complicate matters, when the foundation had incorporated, Mrs. Gomez had appointed
close friends as the board of trustees, effectively turning the board into little more than a rubber
stamp of approval for any initiatives and projects she desired, which in turn allowed her to
arbitrarily run the Foundation by fiat, and thus without any need to listen to dissenting opinions
from other members of the foundation.

In short, because of a lack of formal planning, Kaakbay, Inc. failed to organize itself in a
functional and harmonious manner, resulting in Mrs. Gomez attempting to manage the Foundation
of 95 members in much the same way she ran it when it only had three (3) members.

3
 Kaakbay Inc. Case Study Analysis 2017

IV. Alternative Courses of Action

Based on the analysis of the situation, the following alternative courses of action were
developed to solve the identified problems above.

1. Management/Leaders

a. Initiate an Internal Strategic Planning Workshop

Initiate an internal strategic planning workshop represented by key personnel from all functions
where they can scan, discuss and evaluate the current workplace environment. Through this
exercise, they will be able to develop the organizations vision and mission. Strengths, Weaknesses,
Opportunities and Threats (SWOT) analysis will also be helpful in generating meaningful information
that can be used in organizational objectives and goal setting. While this will be very time and
energy consuming, the effectiveness of the leaders in providing a vision to their people will give
them a sense of empowerment. Employees with a good sense of the overall mission of the group
they belong are more likely motivated and committed to their work.

b. Shift from Autocratic to a Democratic Type of Leadership

A shift from autocratic to a democratic type of leadership must be done where employees take
part in the decision-making. This is strategic particularly during complex decision-making situations
that require a range of specialized skills (e.g. financial, technical, scientific etc.).

The founder needs to allow her employees to take their own initiatives, especially those issues
that can be resolved at their level. This can be achieved via hands-off approach where the Founder
gives her employees the opportunity to function without any perceived interference or pressure.
The Founder needs to trust her people that they can perform their jobs even with minimal
supervision.

Advantage: If implemented successfully, job satisfaction will increase.

Disadvantage: If no streamlined process, this will hamper the decision-making.

2. Methods/Systems

Define the Organizational Structure

Define the organizational structure to ensure coordination between units. Group the foundation
based on the major functions (HR, Finance, Operations Marketing and Administrative) then specify
the reporting relationships (who reports to whom). The span of control should be flat to enhance
supervision. Likewise, to ensure the independence of the BOT, at least one member should be
independent (not chosen by the Director). Well-defined duties and responsibilities and clear
reporting relationships will help employees better understand their role in the organization and
improve communication; hence, employees will be more effective in their jobs. However, since the
positions will be specifically identified, employees might work in silos. Their flexibility to perform
tasks out of their job description will decrease.

4
 Kaakbay Inc. Case Study Analysis 2017

Aside from the clear and distinct roles, one of the advantages of having a defined organizational
structure is that, it will guide the management to decide on the strategic distribution of tasks across
the organization base on the desired goals and objectives.

3. Men/Personnel

Encourage Open and Informal Communication

Encourage the employees to share their thoughts, sentiments and suggestions through; a)
informal discussions over work breaks to crack the gap between management and staff and; b)
weekly discussion and one-on-one meeting with employees to share ideas and arrest problems.
With consistent and open communication, employees will develop trust to management, bring
people together and will create a greater sense of transparency.

4. Money

a. Industry Benchmarking on Salary Package

Human Resource handling employee package should base salary on industry average or
organizations standards to ensure that salary and benefits are fair and reasonable. This might be
costly, but will likely attract qualified applicants and will avoid resentment of other personnel in the
Foundation.

b. Implement Stricter Parameters on Loan Approval

Kaakbay Inc. should implement stricter parameters during loan approval. A proper background
check must be done and if needed, hire a validation officer who will conduct further assessment.
There are third party agencies also that can be tapped during the collection process. While this
entails cost, delinquent payments will be reduced if not eliminated.

c. Create a Policy/Guidelines on Fund Disbursement

The stakeholders and founder must create a fund disbursement guideline to avoid financial
mismanagement. This procedure should be established to strengthen weak internal controls and
prevent future financial breakdown. A regular financial reporting should be done to monitor cash
flows and promote transparency in the organization.

V. Recommended Course of Action

The main problem is believed to be the lack of formal planning that eventually leads to the
dysfunctionality in the organization. If only there is a participative planning that involves the BOTs,
functional heads and key personnel; problems and strategic solutions could have been determined
beforehand. It is understood that the problems of the Foundation is deeply seated and cannot be
solved by merely restructuring the organization. Therefore, it is recommended that a 4R Program
should be implemented; to Rebuild, Restructure, Reboot and Reinforce the Foundation

It should start in the rebuilding process, wherein the Foundation should employ an external
facilitator to initiate strategic planning and environmental scanning workshop as a basis in creating

5
 Kaakbay Inc. Case Study Analysis 2017

vision and mission and common goals and objectives. The agreed organizational direction would be
the guide in restructuring the organizational design of the Foundation. After restructuring, rebooting
of the policies and guidelines, creating a reward system, implementing team and individual
performance measures and conducting training and development should follow. Then lastly, the
reinforcement of the operations should come next by actively engaging in external marketing to
attract new sponsors. The detailed procedure in implementing the recommendations is outlined in
the Plan of Action.

VI. Plan of Action

The action plan that will be implemented is called the 4R Program. It goes around the rebuild,
restructure, reboot and reinforce processes as follows:

Strategic Goal Objective Activity Responsible Timeline Duration

A. Rebuild
External
To understand
Do environmental Resource /
the current
scanning to evaluate Functional 1 week
SWOT of the
current situation Management
organization
Team
Create a Vision,
To provide Mission and Values 1st month
1. Strategic
employees a of the organization of the
organizational External
clear vision of respective
planning Resource /
what and where Set objectives and year
Functional
they want to be targets for every 3 weeks
Management
Department
Team / Key
To align goals
Rank & File
and objectives of Implement a goal
the organization setting for every
employee
B. Restructure
To guide the
employees about
the proper
channels and
Redesign the
authority in the
organizational External
2. Revamp the foundation 2nd month
structure of Kaakbay Resource /
current of the
Inc. Functional 1 week
organizational To provide respective
Management
structure distinction of year
Design the Team
work with other
organizational chart
departments

6
 Kaakbay Inc. Case Study Analysis 2017

C. Reboot
External
3. Policy To have a Establish a standard 2nd month
Resource /
Formulation/o consistent and operating of the
Functional 3 weeks
rganizational formal way of procedures for all respective
Management
guidelines doing business business processes year
Team
Develop a rewards
and recognition
HR /
To stabilize program (e.g. 3rd month
Functional
employees' employee of the of the
Management 1 week
commitment and month, corporate respective
Team/ Key
motivation discounts on fitness year
Rank & File
centers or spa and
wellness clinics)
4. Establish a
To commend a
Total Rewards Develop an HR /
more effective
System individual Functional
way in attracting,
development plan Management 1 week
retaining, and 3rd month
to serve as a basis Team/ All
motivating of the
for promotion Employees
employees respective
To categorized Create a grading HR / year
the employees structure based on Functional
2 weeks
job, salary, the current market Management
benefit scenario Team
Implement a
performance
To encourage development and
and motivate review for all HR /
employees to employees ( Sample Functional
perform at their Process: Setting Management
highest potential objectives, Mid-year Team
level Review of the work
5. Develop progress and Year-
organizational, end appraisal) 2Q and 3Q 2 weeks
team and To be able to of the (1 week
individual understand the respective per
performance standing of the year quarter)
measures organization External
Conduct a 360
both in the Resource /
degree feedback
external and Functional
survey on the
internal Management
performance of the
environment Team / Key
organization
(clients, Rank & File
employees,
stakeholders)

7
 Kaakbay Inc. Case Study Analysis 2017

Conduct an
evaluation of the External
To identify the results through Resource /
4Q of the
area where group meetings with Functional
respective 2 weeks
improvement is every functional Management
year
required department with Team / Key
the director Rank & File
management
To identify the HR /
2Q of the
training required Create a Training Functional
respective 1 week
by the Needs Analysis Management
year
employees Team
To boost
6. Promote employees self- Ensure the effective
Training & confidence and learning between
Development morale the manager and
External
Programs in subordinate through Q2, Q3 &
Resource /
the To build a various internal Q4 of the
Functional 1 day
Organization harmonious training/developme respective
Management
working nt sessions (e.g. year
Team
relationship one-on-one
between the coaching, group
employer and discussions)
employee
Using Technology as
To widen the
a tool in recruiting Maximu
source of the
qualified pool of HR / As required m of 45
talent pool
candidates (e.g. Functional (maximum days
social medias, Management of 45 day- (depends
To attract best
professional Team process) on the
talents in the
7. Staffing/ networking sites, vacancy)
market
Recruitment online job portals)
and selection Promote internal
hiring by HR / As required
referring to the To boost employee Functional (more or
Employees IDP motivation and Management less 45 1 month
(Individual career growth Team / Key days
Development Rank & File process)
Plan)
D. Reinforce Operations
To promote the Involve the HR /
8. Execute brand image of organization to Functional 2Q and 4Q
Internal and the company in different social Manageme of the 1 to 2
External the market activities (e.g. nt Team/ respective days
Programs Corporate Social Key Rank & year
Responsibility, File

8
 Kaakbay Inc. Case Study Analysis 2017

To attract Internal Wellness Day

possible Programs, Internal
sponsors/clients Sports Day / Family
for the Day)
organization

To motivate and
boost the morale
of the employees
To explain to the
clients about the
product/service
as well as the
Functional Depends
benefit of the Conduct
Manageme on the
product/services Product/Services 1 to 3
nt Team / clients'
offered by the Seminar with the days
Key Rank & requireme
organization prospect clients
File nt
To satisfy the
needs of the
clients

9
 Kaakbay Inc. Case Study Analysis 2017

References:

1. Robbins, S. P., & Coulter, M. K. (2005). Management. Upper Saddle River, NJ: Pearson Prentice Hall.
2. Kreitner, R. (2004). Management. Boston, Mass.: Houghton Mifflin.
3. Boddy, D. (2002). Management an introduction. Harlow: Pearson Education.
4. Learning, L. (n.d.). Reading: The Organization Chart and Reporting Structure. Retrieved September
28, 2017, from https://courses.lumenlearning.com/introbusinesswmopen/chapter/the-
organization-chart-and-reporting-structure/
5. What Is the Meaning of Organizational Structure? (n.d.). Retrieved September 28, 2017, from
http://smallbusiness.chron.com/meaning-organizational-structure-3803.html
6. Morgan, J. (2015, July 20). The 5 Types Of Organizational Structures: Part 1, The Hierarchy. Retrieved
September 28, 2017, from https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-
organizational-structures-part-1-the-hierarchy/#49fc1f735252
7. Why Strong Employee/Employer Relationship is Important and How to Achieve This? (n.d.).
Retrieved September 28, 2017, from http://www.business2community.com/strategy/strong-
employeeemployer-relationship-important-achieve-0876781#TJ3e58U2UCIzMCQg.97
8. Brearley, B. (2017, September 17). The danger of unclear roles and responsibilities. Retrieved
September 28, 2017, from https://www.thoughtfulleader.com/the-danger-of-unclear-roles-and-
responsibilities/
9. MSG Management Study Guide. (n.d.). Retrieved September 28, 2017, from
http://managementstudyguide.com/environmental-scanning.htm
10. Emerson, A. L. (2012, February 15). The Benefits of Employee Empowerment. Retrieved September
28, 2017, from http://www.cutimes.com/2012/02/15/the-benefits-of-employee-empowerment
11. Habito, C. F. (n.d.). Blurred visions and misguided missions. Retrieved September 28, 2017, from
http://opinion.inquirer.net/90599/blurred-visions-and-misguided-missions
12. Free Essay Examples, Research Papers and Writing Tips. (n.d.). Retrieved September 28, 2017, from
http://Studymode.com/
13. Advantages of Open Communication Lines at Work | HR & Hiring Tips. (2014, February 07).
Retrieved September 28, 2017, from http://www.marqueestaffing.com/2014/02/07/six-advantages-
open-communication-lines-workplace

10