how America Latina Logistica changed its organizationalculture to remove impediments to good strategyexecution.
America Latina Logistica (ALL) is a Brazilian logistic company,mainly focused in the railway line logistics in Brazil. In 1997,ALL was losing money, struggling from decades of underinvestment,and encumbered by bureaucratic management. Half the network’sbridges required repairs, over three-quarters of its rails wereundersized for supporting standard-sized loads, and the systemstill relied on 20 steam-engine locomotives to move industrialcustomers’ cargo. CEO Alexandre Behring’s priority was to transformALL into a performance-oriented organization with the strong costdiscipline necessary to support an overdue modernization program.He decided that this would require a complete culturaltransformation for the company. His first step was to recruit a newmanagement team and fire the dozens of political appointeespreviously administering the railroad. In his first 10 days, he andhis COO interviewed the top-150 managers to evaluate theirsuitability. They selected 30 for additional responsibility andremoved those who did not embrace the new direction. The companyestablished a trainee program, and in four years hired 500 recentcollege graduates. In Behring’s first year, he introduced aperformance-based bonus program; in his second year, the companybegan comparing performance on operational indicators like carutilization and on-time delivery between divisions. The topmanagers also took symbolic steps to demonstrate their commitmentto the new culture and to reinforce the personnel and processchanges they implemented. They sold cars previously reserved forofficers’ use and fired the chauffeurs retained to drive them.Behring became certified as a train conductor and spent a week eachmonth working in the field, wearing the conductor uniform. For thefirst time, managers visited injured workers at home. The companycreated the “Diesel Cup” to recognize conductors who mosteffectively reduced fuel consumption.
Behring’s new direction energized the company’s middle managersand line employees, who had been demoralized after years ofpolitical interference and ineffectual leadership. In three years,Behring transformed a company that had not made a hire in over adecade into one of the most desirable employers in Brazil,attracting 9,000 applications for 18 trainee positions. In 2000 ALLachieved profitability, enabled by the company’s culturaltransformation.
Please answer to the following questions with no more than 100words per question:
1) Which were the main causes of the presence of an unhealthyorganizational culture before the arrival of Alexandre Behring?
2) Which steps have been taken for changing the organizationalculture of America Latina Logistica?
