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A case analysis entitled

Accel Motors

Submitted to the

Ramon V. Del Rosario College of Business

De La Salle University - Manila

In partial fulfillment

Of the course requirements in

BUS 500M Management Principles and Dynamics

Saturday Class 1245 – 1600, Section KRG

Term 1, A.Y. 2014-2015

May 31, 2014

Submitted by:

Group 3

Anora, Maria Wilvenna

Bariuan, Dennis

Gabato, Jomar

Malibiran, Bernard

Submitted to:

Mr. Rey Lugtu

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I. SYNTHESIS Two automobile assembly-line workers William Biggs and Larry Strong, disgruntled over failing to get their supervisor transferred shut off the electric power supply to an auto-assembly line and closed it down at Accel Motors. Biggs and Strong have taken matters into their hands when the union's grievance procedure had not worked fast enough to satisfy them. Dan Brown, who supervised Biggs and Strong and who was the target of their protest, had been supervisor for only a short time. In explaining the events that led to the protest, Brown said that production on the assembly line had been chronically below quota before he took charge but production has improved markedly in the short time that he had been supervisor. Brown advised the plant manager that his transfer would only set the serious long-term precedent. The company's action to remove him would only create a situation where the operations of the plant would be subject to the whims of any employee with grudge. His contention was confirmed by the comments of a union steward, who said there were other conditions in the plant that needed improving - such as the cafeteria food and relief from more than 100-degree heat in the metal shop. Moreover, the steward said, there was at least one other supervisor who should be removed. He implied that, if successful, the power cage protest would achieve two goals - namely, employees could dictate the company's problem solving agenda and simultaneously undermine its power to determine decision-making priorities. The union steward's final comment was that two men on the unauthorized, wildcat strike might accomplish the same thing as a full-blown strike.

Each passing minute was costing the company a production loss of $360,000 per production hour. Also, the two men on the unauthorized strike might accomplish the same thing as a full-blown strike. As the plant manager began a staff meeting to resolve the dilemma, he felt pressure to accomplish two objectives: (1) to restore production on the profitless assembly line (a solution about which he was uncertain), and (2) to develop policies for preventing future interruption by assembly-line workers. Point of View The case study shall adopt the point of view of the Plant Manager which has overall responsibility

for Accel Motors.

II. STATEMENT OF THE PROBLEM Faced with a continuing loss of $360,000 per production hour, possibility of undermining the management’s power to determine decision-making priorities and allow employees to dictate the company’s problem solving agenda, what should the plant manager do to restore production on the assembly line and prevent future interruption from assembly-line workers? III. STATEMENT OF OBJECTIVES Short-Term Objective: To restore production on the profitless assembly line. Long-Term Objective: To develop policies preventing future interruption by assembly-line workers.

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IV. AREAS OF CONSIDERATION The analysis of this case begins with assessing the motivation behind the ill-behavior of the two assembly line workers through the following motivation theories focusing on needs and/or behavior: (a) Abraham Maslow’s Hierarchy of Needs Theory and (b) Herzberg’s Two-factor Theory.

Abraham Maslow’s Hierarchy of Needs Theory

Abraham Maslow states that need can create tensions that can influence a person’s work attitudes and behaviors. His premise is that only an unsatisfied need can influence behavior; a satisfied need is not a motivator. In his theory, Maslow identified five levels of human needs. Table 1 illustrates these five levels and provides suggestions for satisfying each need. For this particular case of Accel Motors, the two assembly line workers are very persistent to transfer out their supervisor which we can assume was not able to satisfy the following lower and higher level needs: (a) reasonable work hours, physical comfort on the job and rest breaks – which can likely suffer if the supervisor desire to exceed quota, (b) social needs such as pleasant supervisor and (c) esteem needs such as praise and recognition from a boss. The union steward also noted that there were “other conditions” that need to be improved, such as a cafeteria food which meets employees’ physiological needs, and the 100-degree heat in the metal shop which affects the employees’ safety needs. Herzberg’s Two-factor Theory This theory identifies two sets of factors that impact motivation in the workplace: (a) hygiene factors which do not motivate employees but can cause dissatisfaction if missing and (b) satisfiers or motivators which are the key to job satisfaction. In this case study, missing hygiene factors such working conditions, organizational policies and technical quality of supervision can explain why the two workers are dissatisfied. It is indicated that the new supervisor was able to improve production markedly in a short span of time. This can possibly suggests that he might be stretching his people too thin and overworking them just to reach his desired goal of exceeding the production quota and equally the people under him are just too lazy to adapt to this new work routine. Moreover, missing satisfiers such as missing sense of responsibility, achievement and feelings of recognition which is apparent for rank and file jobs can also explain for the ill-behavior of the two assembly-line workers. Hence, the workers are both dissatisfied and demotivated. The facts of this case show or imply that there is lack of satisfaction among the employees of Accel motors. Certain improvements need to be made eventually, if not immediately, as implied by the union steward’s final comment that Biggs and Strong would accomplish their goal if done through a full-blown strike. While Biggs and Strong need to be handled in the short-term for failing to patiently follow the union’s grievance machinery, in the long-term, the grievances of Accel’s employees need to be addressed.

Table 1 Maslow’s Hierarchy of Human Needs Higher Level Needs To Satisfy, Offer: Self-actualization needs

Creative and challenging work Participation in decision making Job flexibility and autonomy

Esteem needs Responsibility of an important job Promotion to higher status job Praise and recognition from boss

Lower Level Needs To Satisfy, Offer: Social needs Friendly coworkers

Interaction with customers Pleasant supervisor

Safety needs Safe working conditions Job security Base compensation and benefits

Physiological needs Rest and refreshment breaks Physical comfort on the job Reasonable work hours

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V. ALTERNATIVE COURSES OF ACTION The upper management has the option of choosing the best solution to their current problem and short-term objective among the following alternatives: ACA 1: Transfer of Supervisor to another Section The supervisor can be transferred to another section to prevent the existing conflict. Pros: This will immediately solve the conflict problem between the two parties involved without having to engage in a long process. Moreover, production on the assembly line will be restored immediately. Cons: This would create a situation where the operations of the plant would be subject to the whims of any employee with grudge. Employees could dictate the company's problem solving agenda and simultaneously undermine its power to determine decision-making priorities. Further, this course of action does not address the already existing grievances of Accel Motors’ employees, which can later on result to a full-blown strike. ACA 2: Ignoring the Behavior The management can practice extinction which is basically ignoring the behavior of the two workers who are “acting out” to get attention and not providing either positive of negative reinforcement. Pros: This can possibly tire-out the two assembly-line workers since nobody from the management side is paying attention which can eventually die down their protest. They would then get back to their individual responsibilities soon and production in the assembly line can finally start. No need to do organization changes and additional action plans to resolve. Cons: Start of production depends when the workers at protest will stop which can take a long-time and can result to high-cost for production loss. Protest may have stopped as of the moment but recurrence of similar events in the near future can likely occur since core problem was not addressed. ACA 3: Imposing Reasonable Punishment Management can immediately cause the removal of Biggs and Strong, and impose punishment in an attempt to decrease the likelihood of a behavior recurrence by applying reasonable negative consequences to the two assembly-line workers. Thereafter, the human needs of all the workers of Accel Motors should be satisfied, particularly their physiological, safety and social needs. The “other conditions in the plant that needed improving” must be improved, such as cafeteria food and the 100-degree heat in the metal workshop. Also, the conflict between the supervisor and the two workers need to be addressed through one-on-one discussions, workshops and team buildings. Pros: This can restore production immediately and would instill in the consciousness of the other witnessing workers that employees could not dictate the company's problem solving agenda and undermine its power to determine decision-making priorities. This can decrease the recurrence of similar events in the future since employees now know the consequences. Further improvements in the plant will address the physiological, safety, and social needs of the employees, and at the same time avert a full-blown strike, thereby preventing future interruption by assembly-line workers. Cons: This course of action may take time, since conflicts between the supervisor and the workers may not be resolved without having to undergo a long-process of employee empowerment, team building, one-on-one’s, trainings and workshops.

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VI. RECOMMENDATION

Decision Criteria Weight ACA 1 ACA 2 ACA 3

Restore production on the assembly line immediately. 30% 30% 10% 30%

Address efficiency problem of production line 20% 15% 10% 15%

Prevent future interruption by assembly-line workers. 30% 10% 10% 30%

Enhance and boost worker-supervisor working relationship and collaboration.

20% 10% 10% 10%

Total 100% 65% 40% 85%

Based on the criteria considered, ACA 3 best meets and address the needs of Accel Motors. After short-term objective has been solved, long-term objective of developing policies to prevent future interruption by assembly-line workers can be addressed through: (a) improvements in the plant and work environment, (b) trainings and workshops for mid-level managers and supervisors, (c) redesigning jobs for rank and file employees, (d) empowering workers and (e) one-on-one between workers and supervisors. VII. IMPLEMENTATION PLAN After determining that ACA 3 will be the most beneficial for the organization in terms of achieving their restoring production and preventing future interruption from assembly-line workers, the management should gather for a meeting again where the plant manager will discuss with the mid-level managers and supervisors how to resolve the problem at hand. Management will come up with solutions to address these problems as soon as possible in order to meet both short-term and long-term objective.

ACTION PLAN (What will be done?)

PERSON RESPONSIBLE (Who will do it?)

PERSON AFFECTED

TIMELINE (When)

RESOURCES

Planning: Gather for a meeting to discuss how to implement ACA 3, identify reasonable punishment to impose and identify action plans to address long-term objective.

Plant manager, department heads, section heads, human resources and supervisors

All employees in Accel Motors, from assembly line workers to top management

Immediately Top management

Impose reasonable and legal punishment to the two workers.

Plant manager and human resources

Assembly-line workers Biggs and Strong

Immediately Top Management and HR

Dialogue: Discuss with the union their grievances so that management may properly address these grievances.

Management All union employees.

Immediately Top management, human resources, legal, internal communications.

Create a rewards system within the organization for those who excel in their job. Either by monetary incentive or in a form of recognition either monthly or quarterly.

Management All employees Immediately Top management, all management heads, human resource

Consult with the finance department regarding allotted budget and costs that will be incurred

Plant manager and department heads

Finance / Accounting department

2nd week Top management, finance department

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Execution of Improvements: Execute plant improvements to address union grievances, such as change of cafeteria food, increase ventilation and installation of fans in the metal shop, etc.

Management All employees 3rd week onwards (Right after dialogue and consultation with finance department)

Top management, industrial department, purchasing, human resources

Organizing: Realize and execute action plans to address long-term objective of developing policies to prevent future interruption by assembly-line workers and address efficiency problems on the production line.

Manufacturing manager and all department managers

All employees in Accel Motors that will be affected for training

4th week onwards

Top management, all department heads

Leading: Conduct one-on-one, trainings, workshops and team building for each department involved (from technical to supervisorial) by schedule that will solve their particular problems on efficiency and working relationship.

Manufacturing manager and all department managers

All employees in each particular department affected in the trainings

5th week onwards

Top management, all department heads, human resources

Controlling: Assessment of action plans implemented to address future interruption, improve production efficiency and improve working relationship between supervisors and workers.

Manufacturing manager and all department managers

All employees in each particular department affected

15th week onwards

Top management, all department heads, human resources

LEARNING POINTS

1. Corporations must address the needs of employees to prevent grievances from going out of hand. As provided by the Behavioral Management Theory, “employees are individuals, resources, and assets to be developed and worked with—not as machines, as in the past.” (Benowitz, 2001)

2. Organizations needs employees who are committed, motivated, who wants to do their jobs well, work efficiently and are in harmonious working relationship with co-employees and management. To create this environment, managers must understand human behavior. They must structure the work environment to encourage motivation and commitment.

3. Reinforcement whether through punishment, extinction or rewards must be administered as

closely as possible to the occurrence of the behavior to achieve the most satisfactory result.

4. To develop motivated employees, a manager must treat people as individuals, empower workers, provide an effective feedback system and create a good working relationship and environment. This can be accomplished through determining individual needs of the employees through one-on-one and proper escalation of concerns.

Bibliography Benowitz, E.A. (2001). Principles of Management. NY 10022: Hungry Minds, Inc.