Detailed Case Study on Echo Electronics & Alvis Corporation

Question: 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. 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. 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 holiday schedules. Each summer the workers are given two weeks holiday, but no more than two workers can go on holiday 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 holiday 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. 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 that 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. What actions could Paul have taken to prevent the problem? What steps should Paul take now to deal with the problem? Answer: 1. What actions could Paul have taken to prevent the problem? As the production manager; Paul should have communicated the plan of the implementation of the new computer work stations to his subordinates who are the supervisors of the four production departments. When the announcement for the implementation was done, Paul should have given the instruction to train them with the new technology. On the contrary he did not provide any training to the staffs (Quinn, Amer and Lonie, 2015). As the technology was new, it was up to him to motivate the staffs and provide them with incentives to that they are influenced to work hard to meet the quality of the products. More over the workers were not made adaptive to work in the new work stations, thus their morale declined, which could have been improved if some training was provided to them. 2. What steps should Paul take now to deal with the problem? Paul should immediately arrange for trainers who could train the employees on the workings of the new work stations. He must supervise the quality of the training that is being provided to them. The remaining employees should be motivated so that they feel associated with the workings of the new workstations (Spiro, 2015). He must provide financial incentives to the employees so that they work hard. It must be kept in mind that motivation, performance appraisal, benefits, incentives, etc can make the employees feel motivated to work hard for the development of the organization. Moreover Paul must communicate with the worker of the company and coordinate the workings of the production department with the marketing department. Summary of the case study Echo Electronics is a small company that makes and distributes communication equipments, has faced a serious problem recently. The companys production manager is given to task to sort out the problem with in a weeks time. The problem was such that the company has implemented new computerized workstations with the consultation of Paul, when he gladly accepted the change. Even the CEO of the company also accepted the proposition. The problem arose three months later when the productivity and the quality of the products declined. It was reported by the marketing manager that the production as well the quality declined and complaints were coming that Echos products were defective. The complaints came from the old customers of the company; it was seen that instead of increasing, the production declined and there was not one specific reason behind it. Paul has talked with other businesses who uses th e same instruments, but no faults in the equipments were found. Then he discussed the problem with the four supervisors and found that the staffs of the productions heard his problem but they were not in terms with him. He found that the people were reluctant and were not comfortable with the new workstations. They had no proper training to operate the new machines. Thus the productivity declined. Moreover there were no financial incentives given to the workers. Matter got worse when Paul got a call from the CEO about the decline in the figures of the sales and he was asked to solve the problem with in a weak and he has to sort it within a weak. He has to reverse the decline of the production and the quality of the products. References Quinn, D., Amer, Y. and Lonie, A. (2015).Leading change: Applying change management approaches to engage students in blended learning. 1st ed. [ebook] Available at: https://www.ascilite.org.au/ajet/ajet28/quinn.pdf [Accessed 14 Mar. 2015]. Spiro, J. (2015).LEADING CHANGE HANDBOOK. 1st ed. [ebook] Available at: https://www.wallacefoundation.org/knowledge-center/school-leadership/district-policy-and-practice/Documents/leading-change-handbook.pdf [Accessed 14 Mar. 2015].