Essay About Engstrom Auto Mirror Plant And Poor Management

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad
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Engstrom Auto Mirror Plant: Motivating in Good Times and BadEngstrom Auto Mirror plant in Richmond, Indiana is a privately owned company that manufactures mirrors for automobiles.  Founded in 1948, the company experienced an abundant amount of success employing 255 employees at its peak, but not without its share of problems at two separate occasions, 1998 and 2007 (Beer, Collins, 2008, p. 2-3).  The first cycle of problems arose during the 1990s when the company lost valuable customers due to long production delays due to a rough transition period of technology onto its production lines, and management that lacked the skills to find quick solutions (Beer, Collins, 2008, p. 3).  Second wave of problems began in 2005 when the industry overall faced a downturn, forcing Ron Bent, plant manager, to lay off 46 of 255 employees in June 2006 (Beer, Collins, 2008, p. 2).  These two events, however, are a result of many movements in between; poor management, lack of morale, poor communication within management and employees, decline in production, absence of trust for company and its leadership, disgruntled employees who feel betrayed, and finally an eager manager who had a fix to it all, but not without its long-term implications.  In 1998, an inept plant manager retires and Ron Bent joins Engstrom with a successful career behind him in the auto industry at a camshaft production plant (Beer, Collins, 2008, p. 3), facing average worker productivity at a low of only 40% (Beer, Collins, 2008, p. 2).  In order to raise the productivity to expectation and turnaround Engstrom, employee morale needed a boost and rewards put in place that would motivate the employees to do just that.  Bent advocated worker incentive programs, after seeing their success at two other plants in Indiana, including the camshaft plant, and wanted to establish the same at Engstrom (Beer, Collins, 2008, p. 3).  While Bent was eager to bring Engstrom back to its optimal productivity, his own paradigms would prevent him from solving the problem at its core. Bent strongly felt that a Scanlon Plan would the best fit Engstrom (Beer, Collins, 2008, p. 3) rather than following evidence-based management that required him to put aside is pre-conceived notions and collect new research data (Newstrom, 2015, P. 7) specific to Engstrom.

Implementation of Scanlon Plan at Engstrom would quickly lead to increased productivity, employee morale and participation, enthusiasm amongst the employees and cross functional collaboration, monetary gains for both the organization and all employees – frontline and managerial, and positive organization behavior overall. This growth lasted for 7 years before the company culture falling back into the tracks of 1998. What had changed?  In this analysis, we will review the issues discussed in the introduction. How a company that was once again experiencing growth did fell back into the same issues it once resolved, or so it seemed.Outline:History & GrowthBackground1998Low employee morale Decline in ProductivityNew Management Paradigms – Impact (Theory X and Y)Evidence Based Management Implementation of Scanlon PlanWhat is Scanlon PlanTwo way communication processGrowth period2005-2007Industry DownturnReverse behaviorStrengths & WeaknessStrengthsEmployee Participation – Open Door PolicySocial Support – Employees feel valued and heardFinancial Rewards for allUpward Communication (Policy adaptations)Positive Organization behaviorWeaknessBehavior Bias – overzealous need to keep frontline happyOrganization purpose lostLaw of Diminishing ReturnsOveruse of committees“Moving Carrot” – changing target numbersDistrust of managementFairness – Managers do not deserve the same share as frontlineExternal Environment2005 DownturnCertified Supplier Status – ToyotaProduction DelaysCredibilityCost impactCompetitionQuality controlStrategizeWhere does the company stand?Unhappy employeesNo bonus payoutAlienated customersTrue cost of low productionCompetition opportunityMoving ForwardEstablishing ValuesVision, Mission, and GoalsScanlon PlanChange or eliminateWorking through the 3 components Bonus payout changesRecommendationsConclusionReferences:Newstrom, J. W. (2015). Organizational behavior: human behavior at work (14th Ed.). New         York, NY: McGraw-Hill Education.Beer, M. & Collins, E. (2008). Engstrom auto mirror plant: motivating in good times and bad. In J.W. Newstrom (Ed.), Organizational behavior: human behavior at work (14th Ed.).(pp. 536-543). New York, NY: McGraw-Hill Education.