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The management culture is a very important factor in the imprinting of a company: it shapes the relationship between working environment and employee satisfaction. I will answer a few questions regarding the SAS's particular strategy of running the business in which the employees are unbelievably loyal, thanks to the benefits and cares that they receive from the employer.
1. One critic calls SAS "a big brother approach to managing people." Is the company too paternalistic? Can a company be too paternalistic?
I do believe that SAS's approach to managing people is the result of an accurate analysis performed by the management staff. Therefore, when the management discusses improving employee retention rates, the initial topic is often higher salaries and bonuses. That is partly valid, because money is a key element; as SAS can attest, retention efforts can be very effective if they focus on more ways to spend the money than just increasing salary levels. With its strategy to boost employee retention, the company has created a culture and programs that encourage and drive employee loyalty. According to Pfeffer (2001), "Your profits come from loyal customers who do business with you for reasons other than just price. Customer loyalty is a consequence of loyalty from employees who produce great products and offer great service. In the short run, with enough venture money and enough product demand, any business model may appear feasible. In the long run, those companies that actually run their businesses efficiently and produce sustainable results will be the ones you keep reading about." ( 18).
I do not think that this is a "big brother approach" at all; at the end, it is just a way to achieve a better business result. The top management prefers to spend money on the employees rather than spending money on recruiters to find new employees, and this is why the organization is following this employee politics. The retention program expenses are more than justified by the overall cost savings, and so it is not paternalism, but smart business in place.
2. When, if ever, do family-friendly practices become too paternalistic?
Family-friendly practices are just a different approach to strengthen the link between the employees and the company; there is not any evidence of relationship between this kind of approach and a paternalistic behavior. This is especially true if the big part of the company value is the workforce's expertise.
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3. What negatives, if any, would you find working for SAS?
I do not see any specific negative aspect working for this organization. I think it depends a lot on the expectation a person has about work and lifestyle.
4. Are progressive HR practices such as those at SAS a cause or result of high profits? Discuss.
I think that focused HR practices have been the cause of high profits in the past, but right now are the results of them. Marketing studies on the company's organization have brought the evidence of how important the Human Resources department in the development of a healthy and effective company is. The results of these successful organizations are the demonstration that, to reach high profits with a company, the role played by the HR department is indispensable, as Robbins (2001) states, "An organization's human resources polices and practices represent important forces for shaping employee behavior and attitudes." (p. 261). This has become more evident since the managers understood the importance of the human factor in the company's performance: this is the motivation to the organizational behavior concept.
5. Microsoft is an unbelievably successful software company. But no one would ever call its culture relaxed. It is frantic. Employees regularly put in 12, 14-hour days, six and seven days a week. How does Microsoft keep people? Do you think SAS and Microsoft attract different types of employees? Explain.
I think that not all the people are attracted by the same benefits, and actually it depends on the employee's specific personality and work expectations. It is like the difference between aggressive investors who like to buy high-risk stocks or even call/put stocks, or family oriented investors who prefer to invest their money in mutual funds or equities. SAS is not the company where an individual can double his/her paycheck in less than one year, but this characteristic is compensated by different kinds of benefits, less money-related, but more social-oriented. Another important factor played by companies like Microsoft is the worldwide popularity they reached during the years. Being a "famous" company is an attractive psychological factor for employees. Many people trust Microsoft because of its popularity, and prefer to work for a well known company rather then working for a less famous one.
This case study is the evidence of how important the management culture is in conditioning the way the company approaches the business and the personnel relationships. In the industrial market there is the evidence of a new and different way to run a business, the approach is a more people-centric attitude toward workers than money-rewarding, but not for this reason less effective. SAS Institute is the testimonial of a management using this type of approach attracting people for a range of benefits, including flexible work schedules, career growth opportunities, and fringe benefits, such as on-campus childcare and a gym, rather than money bonus or stock options, ant it is the demonstration that it can be successful as well.
Pfeffer, J. (Spring 2001). What's wrong with management practices in Silicon Valley? A lot Mit Sloan Management Review, Cambridge 42(3) 101-103. Retrieved November 14th, 2003, from ProQuest Information and Learning Company website: http://gateway.proquest.com/openurl?ctx_ver=z39.88-2003&res_id=xri:pqd&rft_val_fmt=ori:fmt:kev:mtx:journal&genre=article&rft_id=xri:pqd:did=000000072189466&svc_dat=xri:pqil:fmt=text&req_dat=xri:pqil:pq_clntid=2606
University of Phoenix. (Ed.). (2001). Organizational behavior [University of Phoenix Custom Edition e-text]. Boston: Pearson Custom Publishing. Retrieved October 16th, 2003, from University of Phoenix, Resource, ORG/502-Organizational Behavior Web site: https://mycampus.phoenix.edu/secure/resource/resource.asp