Running head: ENGSTROM AUTO MIRROR CASE STUDY
Final
Sonja Thompson
SNHU
ENGSTROM AUTO MIRROR CASE STUDY
Engstrom Auto Mirror Plant is currently suffering from low productivity related to
employee dissatisfaction which is affecting company profits. This paper will analyze two specific
issues that if resolved, could improve profitability and increase employee satisfaction.
Engstrom Auto Mirror Plant began in 1948 and was successful until the 1990's. At that
time, changes in production and the addition of new technology led to decreased productivity
and a loss of customers. In 1998 the existing manager, suspicious of the union and inept in terms
of utilizing technology, retired and was replaced by Ron Bent. After some study, Bent decided to
utilize a bonus plan -- the Scanlon Plan-with which he had experienced some short-term success
at another plant. By modifying the plan, he gained its acceptance and was able to turn the
Engstrom plant around for several years. In 2006, the company suffered a downturn that resulted
in layoffs which began a downward spiral (Human Behavior in Organizations, p. 541).
Issues Identified
Although multiple issues were identified, some specific issues identified are as follows.
Issue one is that low employee morale is affecting both productivity and the quality of the
product. Research has shown that the stress from multiple areas that Engstrom employees are
likely feeling has a correlation to lower productivity. Productivity is not only affected by how
fast or slow employees work, it is also a result of absences, tardiness, mistakes, and inability to
concentrate. These stressors can be the result of work or personal circumstances. Sometimes one
creates the other. Decreased productivity can further lead to loss of customers which in turn
affects profits. (Osho, Ashe, & Wickramatunge,2006). Expenses typically also increase as
disgruntled employees leave and new ones have to be trained, lack of concentration can lead to
accidents resulting in time off of work and medical expenses, if employees have to work longer
ENGSTROM AUTO MIRROR CASE STUDY
hours to make quotas there is additional payroll and overhead expense incurred. One can clearly
see how important employee morale is to a successful company.
Also factoring in is issue two which is Bent's unsuccessful attempt at being transparent
about the overall state of the company and the factors that had created the issues. Transparency is
about being open and honest not only about good things but about the issues as well. This keeps
employees from being taken off guard when things such as layoffs or decreases in profit sharing
occur as well as it keeps the morale up when things are going well (Newstrom,2015). An article
from Forbes magazine states that transparency not only increases employee happiness but also
helps facilitate the exchange of ideas and makes employees feel that they are on a more even
ground with superiors (Craig,2018).
These areas of disconnect will continue to be analyzed by performing a root cause
analysis. A root cause analysis has various approaches but all of them seek to identify the tru