OB case study for Shelton student Apr 2014
Assignment:
Case study
Team
Productivity at A. E. Leeson’s Ltd.
Allister
McPherson is the general manager of A. E. Leeson’s, a small UK-based electronic
sub-component
assembly facility. It is a part of a larger conglomerate which imports a
variety of computer hardware and software. Reporting to Allister are three key managers
of the facility: a production manager who oversees three work shifts; an office
manager who oversees 15 specialists including two marketing staff members; and
a manager in charge of human resources and plant safety.
The
production facility is designed for work teams. Team members have very clear expectations
about the extent of team authority to make production-related decisions. For
instance, members make their own decisions about work scheduling and production
planning. The teams understand their work assignments and managers leave the
teams alone so that they can get their jobs done. At times a team may refuse to
follow the orders of a supervisor if they think he is impeding team performance
or decision making. A team might also complain if a supervisor is using
discipline unfairly or is trying to force employees to obey the wishes of
management.
An
informal ‘tradition’ at the facility is ‘job-bidding’ in which a worker applies
for an unstaffed position in the facility. Some managers view the process as a
cop-out: a way for workers to avoid certain bosses. Employees think of job
bidding as a way to get a better work schedule, e.g., moving from the night
shift to the day work shift. Supervisors resent this system because they feel
that they should have the right to choose their subordinates rather than having
a system which allows employees to circumvent their requirements.
As
an informal job benefit,
employees were allowed to use company tools and materials
for
personal use. Employees have grown used to the fact that the company will
provide
hardware
and software to them at cost and they have come to expect the company to let
them use tools for fixing personal equipment and for home repairs. In turn, the
company enjoyed a very low rate of pilferage and generally all company tools
and equipment are returned in good shape.
The
company has just decided to buy $15m worth of new production equipment and Allister
will integrate it into the assembly facility. Allister had found a replacement,
Rudy Washington, for his production manager who was retiring soon. Rudy had
served with distinction in the Royal Navy during the Falklands War and he had
excelled in two industrial positions before joining Leeson’s two years ago.
Allister believed that facility productivity and profitability could rise significantly with new equipment and a
new production manager who was familiar with all the latest management
techniques.
Soon
after his arrival, Rudy began to leave his mark on the facility and its
production
practices.
He scrapped the practice of allowing employees to borrow company tools
for
personal use. He reasoned that a few unethical employees could steal the tools
and
resell
them because the control process governing their use was extremely lax. He also
replaced
the job-bidding system with a military-like seniority system. Managers and
supervisors
throughout the facility avidly supported the system, but it soon became
evident
that it has led to resentment and frustration among the facility’s production
workers.
Workers have been overheard saying ‘Rudy is still in the Navy and he thinks
we
are all new recruits’. Rudy, of course, believed that management should not be
questioned
and workers had a duty to obey legitimate orders from supervisors.
Rudy
was fond of making ‘rounds’ through the production facility on an hourly basis.
During his first four
months, he reduced labour-hours for assembly and increased product quality and
dependability. During this period, five employees
left and in exit interviews they cited the termination of the job-bidding
system for their decisions. Three employees who resigned had obtained excellent
job performance ratings on a regular basis.
The
installation of the new equipment had gone smoothly, but it was clear that
employees
were
unhappy because their productivity had generated more profits for the company
but
no wage increases for them. Rudy began to notice that losses of company
equipment
and tools began to rise above historical averages. He decided to install
metal
detectors and a system for random employee locker inspections to deter any
further
theft of company equipment and tools.
After
a year on the job, Rudy was called back to company headquarters for a month long seminar on leadership
and organisational quality improvement. During his absence,
Allister
decided not to fill his
position with a temporary production manager. Instead,
he
told all shift supervisors that they were each responsible for their shifts
with no
further
direct supervision. Shortly after Rudy left, Allister learned from the third
shift
supervisor
that night employees wanted a slightly longer break at 3 a.m. because
humid
work conditions were causing some employees to experience drowsiness. To
avoid
defective assemblies Allister granted the request and he told the three shift
supervisors
to use their own judgement to handle minor employee requests. He later
learned
that several other changes had been made, but none of Rudy’s major management
decisions
had been altered.
Two
weeks later, employees complained loudly about the company’s policy of
mandatory
overtime
to meet production output requirements. Demand for sub-assemblies had been so
robust that workers were regularly working 15–18 overtime hours each week.
Allister considered the problem and announced that if the work shifts could boost
production by 15 per cent, then he would suspend the mandatory overtime requirement.
Within two days, production rose to the required level and Allister kept his
promise. Much to his surprise, the company received several large orders which once
again put his facility under a back-order requirement and he reluctantly had to
reactivate the mandatory overtime rule. Within a week the work-force had
eliminated the back-order problem and Allister, once again, dropped the
overtime rule.
Employees
were soon complaining about the metal detectors and random employee locker
searches because they thought management did not trust them. They called the policies
‘unjust’ because the majority of honest workers should not have to submit to these
humiliations just to root out a few bad apples’.
Allister
agreed and he proposed a ‘four-week trial period’ in which the detectors and
searchers
would be suspended while tool and equipment numbers were closely monitored
by
designated employees. With little debate, workers accepted this offer as a realistic
compromise.
Two
days before Rudy’s return, Allister was studying his monthly report and he was
startled
to see that production was up 20 per cent and product defect rates had fallen
five
per cent below the running six-month averages. In effect, production output and
product
quality had increased without the presence of a production manager. Allister
knew
that he faced a dilemma. He could report these findings to corporate officials
and
he could make a strong case for eliminating the production manager’s position.
This
would cost Rudy his job and Allister was genuinely concerned by this because he
considered
Rudy to be his friend. Or he could show Rudy these results and work with
him
to change his management style. He knew that his ‘Navy man’ would be hard
pressed
to change.
Source: Adapted
from R. Steers and J. Black, 1994. Organizational
Behavior, 5th edn. New York: Harper Collins, pg 276–7.
Answer
the following questions:
1)
Why
was production output up 20 per cent and product defect rates down five
percent? (40 marks)
2)
Once
Rudy returns, what should Allister tell him and what actions should he take
with respect to Rudy’s position and
management style? (50 marks)
Presentation
format and Harvard reference style (10 marks)
Total [100 marks]
posted by SmartYInvestor @ 5:51 PM
2 comments
