Case Study Engstrom free essay sample

Most recent plant manager, Ron Bent, is looking to find resolutions to theses problems. The Engstrom Auto Mirror plant is a privately owned business that manufactures mirrors for trucks and automobiles. The organization is located in Richmond, Indiana and employs 209 people. Because the Engstrom Auto Mirror company has been operating since 1948, they have managed to experience some achievements and eventually troubles by the 1990s. The company was confronting a transition of redesigning its production lines to incorporate new technology. This was not a smooth process and was unsupported by plant manager who, â€Å"Lacked the sophistication with technology necessary to find solutions quickly and was inept at working with an increasingly militant union† (Beer and Collins, p. 3). By 1998, the manager resigned and Ron Bent was hired to endeavor a turnaround for the company. Bent had great faith in the power of worker incentive programs therefore felt the necessity to implement the Scanlon Plan. The Scanlon Plan is an incentive plan comprised of three components. The first is the submission of suggestions for improvement by employees at all levels. The second, is the structure of the company committees that evaluate the suggestions. Lastly, is the sharing of the benefits of increased productivity through monthly bonuses. Due to the issues that the plant faced, Bent felt the best for Engstrom’s redemption was the Scanlon Plan. He notes, â€Å"With Scanlon, workers are receptive to new methods and new machinery because they feel they are a part of the company-wide program† (Beer and Collins, p. 3). Information about the Scanlon idea was posted on bulletin boards and assumed opinion leaders were coaxed about the plan. There relayed a consistent message: if a substantial majority vote that they want the Scanlon Plan, only then would it be adopted. The workers voted a 81% in which was for the plan, and therefore signed the Scanlon Bonus Plan Agreement. The agreement detailed the provisions and the complex part of the plan which was calculation of the plant’s base Scanlon ratio. At first the plant had an increase in productivity in accordance to the bonus ratio. Michael Beer and Elizabeth Collins explain, â€Å"Over time, however enthusiasm waned and dissatisfaction grew with certain aspects of Scanlon† (Beer and Collins, p. 5). Besides suggestions significantly dropping, there were two prevalent complaints heard by workers. The first is the distrust of bonus calculations. Despite the monthly communication meetings, some employees thought due to the complex the nature of calculation the numbers appeared as jargon and it therefore created distrust. The second complaint was the question of fairness, where some employees thought their supervisors should receive a lesser bonus in comparison to the effort put forth. Before these issues could be addressed, an industry downturn began to negatively affect the workforce’s morale as well as sales and production. It was clear that the lack of monthly bonuses not only impaired labor-management relations but contributed to dissatisfaction. Now Bent is forced to seek changes for Engstrom and find an alternative or create revisions to their incentive plan. Although the managers at this company put forth a great deal of effort, there still lies many issues that have areas for improvement. For instance the managers lacked the opportunity to identify the organizational culture. There was an indefinite environment in which the employees were only represented with a vague framework of the culture. The importance of recognizing this is pertinent to both the employees and managers. Without establishing the organizational culture people cannot hold one another accountable, and performance begins to slip. In the same context, the quality of the product begins to slip as well. Engstrom could have attempted to distinguish this when the new plant manager, Ron Bent, came into his position. Although he strived to create a turnaround, he put too much emphasis on extrinsic rewards to validate employee appraisal verses instilling and identifying a culture that fosters it. Another issue that left an area for improvement is the managers lack of emotional intelligence. In this scenario the managers need to develop a stronger leadership role and thus better develop their emotional intelligence. In James Bourey and Athena Miller article, â€Å"Do You Know What Your Emotional IQ Is? †, they state â€Å" emotionally intelligent leaders and organizations are receptive to new ideas and ways of doing things: resist falling into old, familiar patterns of thinking and behaving; tolerate uncertainty and ambiguity; and are more resilient in the face of setbacks, than their peers† (Bourey and Miller, p. 5). Because Engstrom is struggling to motivate in both the good times and especially the bad, it is essential that the managers possess this skill. The article â€Å"Do You Know What Your Emotional IQ Is? †, acknowledges the important lesson of instilling an emotional intelligence coaching program where they note, â€Å"The top-down, cascading implementation strategy is respectful of the organization’s culture and results in managements support for the program† (Bourey and Miller, p. 10). The execution of emotional intelligence is fundamental to the organization and must be exhibited by managers so that the organizational culture can illuminate. This was not apparent in Engstrom’s plant and therefore there arose a need to resolve this issue. Because the company lacked this there became a high degree of stress and a need to better manage it. Overall it seems that feel that Engstrom has paved way for change and should implement its provisions while it is available. They should analyze their organizational culture and identify whether they want to be more controlled, collaborative, competence, or cultivation. Because of what they are trying to achieve I believe that a controlled culture would be more aligned with the companies goals. Therefore if they were to emphasize a controlled organizational culture the company will have a better grip on managing time and delegating duties. This should create better efficiency, productivity, and product-quality within the workforce. As well Bent should look at revising the incentive program to promote broader opportunities within the organization. Because there is a want to continue the success of Engstrom, their should be thoughts for the long term. The Scanlon plan only provides extrinsic rewards in the short term and does not create a great sense of orale. By instituting a culture where there is opportunities to be promoted and excel within the company there is a greater personal value behind this type of motivation. At the same time the company reaps the benefits when their employee attempts to achieve or produce more. This is something Engstrom has yet to take initiative on but would greatly benefit from. Engstrom should strive to revise a consistent incentive program t hat highlights positive contributions and addresses negative or no contributions. Those who are performing at unacceptable levels will be able to recognize there faults and correct their inefficiencies. As well, managers will benefit from being able to delegate their time more appropriately and better support their staff. Engstrom has organizational factors that contribute to the company’s inefficient production and development, and face the issue of motivation in correlation to incentive standards the company, therefore, would benefit from implementing these strategies. References: Engstrà ¶m, Maria, and Birgitta Sà ¶derfeldt. Brain activation during compassion meditation: a case study. The Journal of Alternative and Complementary Medicine 16.5 (2010): 597-599. Meier, Paula P., et al. Supporting breastfeeding in the neonatal intensive care unit: Rush Mother’s Milk Club as a case study of evidence-based care. Pediatric clinics of North America 60.1 (2013): 209-226. Kadefors, Roland, et al. Ergonomics in parallelized car assembly: a case study, with reference also to productivity aspects. Applied Ergonomics 27.2 (1996): 101-110. Engstrà ¶m, I., et al. Eating disorders in adolescent girls with insulin†dependent diabetes mellitus: a population†based case†control study. Acta paediatrica 88.2 (1999): 175-180. Engstrà ¶m, Emelie, and Per Runeson. Software product line testing–a systematic mapping study. Information and Software Technology 53.1 (2011): 2-13.