MGT613 GDB # 2 (2012) Solution

Sunday, January 15, 2012

MGT613 GDB # 2 (2012) Solution

Gaining Competitive Advantage: Productivity ; Quality in Action

Workers and management at Haier appliance’s Lahore plant have set an example of how to achieve competitive advantage and productivity gains over competitors. Resultantly all stakeholders have benefited from this development.

Things weren’t always good at the plant. Productivity and quality weren’t good; there was no bench mark for measuring the productivity and quality. The relationship between the labor and management was very poor. Workers hid defective parts so management wouldn’t find them. When machines broke down, workers would sit idle until someone came to fix it. All that changed in late 1990s. Faced with the possibility that the plant would be shut down, management and labor worked together to find a way to keep the plant running. Resultantly things improved and Haier set the new example.

In your opinion what must have been done by the management and labor to improve the situation? Discuss with logical reasons.

Solution

Productivity poor
Quality poor

Lack of integrity from workers as well as lack of value of work or pride in work

Loss of company money and further degredation of quality through bad workmanship.

Loss of productivity through downtime.

Then the turn around - Potential for plant shut down which would result in the loss of work for workers and management.

If there was no mission or fundamental goal for workers to strive for than everyone starts doing just enough to not get fired. Managers do not manage because the sales do not matter. Whether or not there is efficiency on the plant floor does not concern them because there is no incentive for them to deal with the workers' problems. On the flip side of that the workers have no goals to work towards. Their only concern is to not get caught doing something blatantly wrong. As long as they show up and work when they are suppose to then everyone gets along with the "hey, what does it matter to me- I am getting paid by the hour" type attitude. All of that changes when a person realizes that their performance makes a difference in the outcome of whether or not they company makes money. If the company doesn't make money - I don't have a job.

Once the managers and workers had a reason to "work for it" people would care if the quality of the product was better. A better quality sells better and has less of a chance for return. A worker and manager would care if a machine is down. That worker knows that in order to produce more parts- that machine has to be running. The manager knows its up to them to make sure a maintenance technician gets to work on it. Integrity naturally goes up because now instead of hiding a broken part to not get in trouble a worker wants parts to be done correctly and managers are supervising to ensure that it happens. Or taking necessary steps to ensure that a worker who does not care changes their mind or is let go accordingly. Now they care about efficiency so the weak link may be in risk of not being part of the team if they don't get on board.

In essence every employee went from working for a company with no direction for them, to working for themselves to save their job which gave each direction and meaning in their jobs and reason to care for eachother and work together. It created the environment or "culture" that encourages growth and competition thus production and pride.

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