Reference no: EM132233729

Case Study : Struggling Operations in a Manufacturing Organization.

Struggling Operations in a Manufacturing Organization

You are the Chief Operations Officer of a mid-sized window frame, aluminum siding, and tire recycling equipment manufacturing company located in the northeast. Your company is organized along product lines, and you directly supervise the three people in charge of each of these product lines. The plants for these products are geographically dispersed over a two state area; the nearest plant is located only ten minutes away but the farthest plant is a two hour drive from the company headquarters. Although your company has been financially sound over the past ten years, over the past four months your company has been experiencing a serious cash flow problem. You believe part of this problem stems from the recent downturn in the local, regional, and national economy. However, you also believe this problem may be due to inefficient plant operations. You have called in the heads of the three product lines to determine whether plant operations can be improved to help alleviate the cash flow problem. The following is a more complete description of the three product lines and the people responsible for running these operations.

Betty started with the company 20 years ago assembling window frames and has been in charge of the window frame plant for a little over two years. Betty is in charge of 12 full time employees, and this is the first formal supervisory position she has ever held. Because she started at the plant immediately upon graduating from high school, Betty does not have a college education nor has she had any formal leadership training. However, as a worker Betty proved to be far superior to everyone else at the plant. She would often come to work early, leave late, and because of her expertise would be given many of the special window frame orders the plant received. When the plant supervisor job came open, you selected Betty to fill this position because of her expertise and outstanding work performance.

Although Betty was an excellent worker on the shop floor, her performance as the plant supervisor has been barely adequate. A recent organizational climate survey showed a majority of the workers were dissatisfied with Betty's performance as the plant supervisor. When you talk to Betty about the survey results, she stated that the workers did not know what they were talking about and they were angry because she makes them put in an honest day's work for their pay. Betty has worked with many of her employees for more than five years and feels a majority of them are lazy, and says she must closely watch over shop floor operations if the plant is to meet its production goals. So far, the plant has met its production goals, but a higher percentage of workers have been calling in sick or reporting to work late. When you talk to Betty about this problem, she says her workers are just trying to get out of work.

Chuck is in charge of a 20 person plant which manufactures aluminum siding for houses. Chuck has 15 years of management experience and has been the plant supervisor for four years. Although Chuck's plant has been unable to fill all of the aluminum siding orders it has received, Chuck believes equipment problems and the lack of skilled workers are the reasons behind these production problems. The aluminum siding extruding equipment is over five years old but has had a pretty good maintenance record so far. Chuck states the reason why the equipment has such a good track record is because he has dedicated two of his workers to keep the equipment operating. The equipment manufacturer has gone out of business and the only way he can get maintenance support is to take his two most capable workers out of production and dedicate them to equipment maintenance. He has been hounding you for new equipment for the past year, but the company's financial situation precludes you from buying any new equipment in the foreseeable future. In addition, Chuck states he is having a hard time keeping skilled workers at the plant. This appears to be true, as the average worker has only been at the plant for three years. Chuck states he cannot pay his workers enough to keep them, and as soon as they are fully trained in aluminum extrusion and siding production they leave to go to companies willing to pay higher wages. In talking with a few of Chuck's workers, you find out equipment and pay problems may only be part of the problem; these workers also tell you they have no idea what the production goals of the plant are. Chuck only seems to interact with them when they have a problem, and they feel he is unaware of some of other issues within the plant. These other issues concern perceived pay imbalances, a lack of incentives for good work, poor working conditions, and rumors that the plant may be sold to solve the company's cash flow problems (which is not true).

Jay is in charge of the plant manufacturing tire recycling equipment, and recent environmental laws passed by the federal and state governments makes you believe this plant will play an important role in the future of the company. Jay has completed graduate degrees in both organizational behavior and marketing and has six years of management experience, but he has only been in charge of the tire recycling equipment plant for a month. The tire recycling plant consists of 30 full time employees, many of whom have been with the company for over ten years and are some of the most skilled workers in the company. Because they are both the most senior and the most skilled, the workers at the tire recycling equipment plant make the best wages. You had to fire the previous plant manager for "running the plant into the ground." Although the previous manager met his production goals, he did this by promising his workers financial rewards for working extra hours. Unfortunately, he failed to come through with the bonuses, and told his workers he could not give them their extra money due to orders from you. You were unaware of these arrangements, and fired the previous manager as soon as you found out about them. You believe the plant has the resources and personnel to meet production goals without these incentives and have hired Jay to make this happen. However, the workers' trust in management is at an all time low, and you are uncertain whether anyone can turn the situation around.

You get along pretty well with all three of your plant managers, but the CEO of the company is beginning to express concern about your ability to turn the company's operations around. What will you do? In analyzing the above situations, use the concepts of leadership discuss in class to support your argument.

Given the scenario, how would you apply the Path-Goal Theory to each of the plant managers in the case study. More specifically, answer the following questions for Betty, Chuck, and Jay:

1. What, if anything, do the three plant managers need to do in order to clarify the effort-to-performance expectations at each plant?

2. What, if anything, do the three plant managers need to do in order to clarify the performance-to-reward expectations at each plant?