Case Study: Echo Electronics

Paul Sanchez is the production manager for Echo Electronics, a small company that makes and distributes communications equipment. Paul’s direct subordinates are the supervisors of the four production departments in the company’s manufacturing plant. Six months ago, the engineering manager at Echo Electronics proposed a plan to install new computerized workstations to increase productivity in the plant. It seemed to be a good idea to Paul, and he welcomed the change. The CEO also approved the plan, and the new equipment was installed immediately.

Three months later, Paul was surprised and disappointed to find that the expected increase in productivity did not occur. In fact, productivity and quality actually decreased. The marketing manager told Paul that several of their best customers complained about receiving Echo equipment that was defective. Paul does not believe that the problem lies with the new workstations. Technicians from the firm that built the workstations recently checked them and found that they were operating properly. Paul talked to someone at another company that uses the workstations, and his contact reported that they were having great success with them.

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When Paul discussed the problem with his four production supervisors, he found that they shared his concern but did not agree among themselves about the cause of the problem. Reasons given for the decline in performance included poor design of the workstations, inadequate training of the production workers who operate them, and lack of financial incentives for increasing productivity. The supervisors also told Paul that the production workers have strong feelings about the workstations. Morale declined, and two employees quit because they were upset about the changes made in the way the work is done.

This morning, Paul received a phone call from the CEO who just received the production figures for last month and was calling to express concern about them. The CEO indicated that the problem was Paul’s to solve, but he must take immediate steps to deal with it. The CEO wants to know by next week what steps Paul will take to reverse the decline in productivity and product quality.

Questions

1. What actions could Paul have taken to prevent the problem?
2. What steps should Paul take now to deal with the problem?

Essay #2: Case Study: Alvis Corporation

Kathy McCarthy was the manager of a production department in Alvis Corporation, a firm that manufactures office equipment. The workers are not unionized. After reading an article that stressed the benefits of participative management, Kathy believed that these benefits could be realized in her department if the workers were allowed to participate in making some decisions that affect them. Kathy selected two decisions for an experiment in participative management.

The first decision involved vacation schedules. Each summer the workers are given two weeks’ vacation, but no more than two workers can go on vacation at the same time. In prior years, Kathy made this decision herself. She would first ask the workers to indicate their preferred dates, then she considered how the work would be affected if different people were out at the same time. It was important to plan a vacation schedule that would ensure adequate staffing for all of the essential operations performed by the department. When more than two workers wanted the same time period, and they had similar skills, she usually gave preference to the workers with the highest productivity. Case Study: Echo Electronics

The second decision involved production standards. Sales had been increasing steadily over the past few years, and the company recently installed some new equipment to increase productivity. The new equipment would make it possible to produce more with the same number of workers. The company had a pay incentive system in which workers received a piece rate for each unit produced above a standard amount. Separate standards existed for each type of product, based on an industrial engineering study conducted a few years earlier. Top management wanted to readjust the production standards to reflect the fact that the new equipment made it possible for the workers to earn more without working any harder. The savings from higher productivity were needed to help pay for the new equipment.

Kathy called a meeting of her 15 workers an hour before the end of the work day and explained that she wanted them to discuss the two issues and make recommendations. Kathy figured that the workers might be inhibited about participating in the discussion if she were present, so she left them alone to discuss the issues. Besides, Kathy had an appointment to meet with the quality control manager. Quality problems had increased after the new equipment was installed, and the industrial engineers were studying the problem in an attempt to determine why quality had gotten worse rather than better.

When Kathy returned to her department just at quitting time, she was surprised to learn that the workers recommended keeping the standards the same. She had assumed they knew the pay incentives were no longer fair and would set a higher standard. The worker speaking for the group explained that their base pay had not kept up with inflation, and the higher incentive pay restored their real income to its prior level.

On the vacation issue, the group was deadlocked. Several of the workers wanted to take their vacations during the same two-week period and could not agree on who should go. Some workers argued that they should have priority because they had more seniority, while others argued that priority should be based on productivity, as in the past. Because it was quitting time, the group concluded that Kathy would have to resolve the dispute herself. After all, wasn’t that what she was being paid for?

Questions

1. Were the two decisions appropriate for a group decision procedure according to the Vroom–Yetton model?
2. What mistakes were made in using participation, and what could have been done to avoid the difficulties the manager encountered?
3. Where these two decisions appropriate ones for introducing participation into the department?

Essay #3: What are the potential benefits of delegation, and when is it most likely to be successful?  What are some guidelines on what to delegate? Why do some managers find it so difficult to delegate or share power?  Write an essay on Steve Jobs style of functioning? Did he delegate his job effectively? Case Study: Echo Electronics

Essay #4: Case Study: National Products

Susan Thomas is the vice president for human resources at National Products, a manufacturing company with 500 employees. The company has an opening for a general manager in one of its product divisions, and the president asked Susan to review the backgrounds of three department managers who are interested in being promoted to this position. She is expected either to recommend one of the three internal candidates or to begin recruitment of external candidates. The internal candidates are Charley Adams, Bill Stuart, and Ray Johnson. The following information about each candidate was obtained from performance records, interviews with the candidates, and discussions with the boss of each candidate.

Charley Adams

Charley Adams has been a production manager for the past eight years. He is an easygoing person who loves to swap jokes and tell stories. Charley stresses the importance of cooperation and teamwork. He is uncomfortable with conflict, and he tries to smooth it over quickly or find an acceptable compromise.

Before becoming a manager, Charley was always willing to take on extra assignments for his boss and to provide helpful advice to less experienced coworkers in his department. Charley is proud of his reputation as a “good team player” and a loyal “company man.” It is important to Charley to be liked and appreciated by people in the organization.

Charley comes from a cultural background emphasizing the importance of close family ties. He holds frequent Sunday dinners at which the entire Adams clan gathers for an afternoon of swimming, baseball, eating, and singing. On Saturdays, Charley likes to play golf with friends, including some of the other managers in the company.

Charley wants his department to have a good performance record, but he is reluctant to jeopardize relations with subordinates by pushing them to improve their performance beyond current levels, which he believes are adequate. When Charley gives out performance bonuses to subordinates, he usually tries to give something to everyone.

Bill Stuart

Bill Stuart has been the manager of an engineering department for three years. He was promoted to that position because he was the best design engineer in the company and was ambitious to further his career by going into management. At the time, Bill had little understanding of what the job would be like, but he saw it as both an opportunity and a challenge.  Bill grew up as somewhat of a loner. He still feels awkward around people he doesn’t know well, and he dislikes social functions such as cocktail parties and company picnics. As a design engineer, Bill preferred assignments where he could work alone rather than team projects. He is impatient with bureaucratic authority figures and he is critical of corporate policies that he regards as too restrictive. Bill gets along well with his present boss, because he is left alone to run his engineering group in his own way.

Bill likes challenging assignments, and he tries to save the most difficult and interesting design projects for himself. Although Bill usually performs these tasks effectively, his preoccupation with them sometimes takes time away from some of his managerial responsibilities, such as developing and mentoring subordinates. Case Study: Echo Electronics

Ray Johnson

Ray Johnson has been a corporate marketing manager for five years. He grew up in a poor ethnic neighborhood where he learned to be tough in order to survive. He has worked hard to get where he is, but for Ray, good performance has been a way to get ahead rather than something he enjoys for its own sake.

Ray lives in a large house with a big swimming pool in the best part of town, and he likes to throw big parties at his home. He wears expensive clothes, drives a luxury car, and he belongs to the best country club. Ray is married, but fancies himself as quite a playboy and has had many affairs, including some with female employees. Case Study: Echo Electronics

Ray views the organization as a political jungle, and he is quick to defend himself against any threats to his reputation, authority, or position. He tries to undermine or discredit anybody who criticizes or opposes him. He keeps a tight control over the operations of his department, and he insists that subordinates check with him before taking any action that is not routine.

Questions

1. What are the dominant motives for each candidate?
2. What are the implications of these traits for the success of each candidate if selected for the general manager position?
3. Should Susan recommend one of these candidates for the position, or look for external candidates?

Case Study: Echo Electronics