CASE STUDY ANALYSIS
Engstrom Auto Mirror Plant: A Case Study Analysis
Shamyia J. B. Williamson
Southern New Hampshire University
OL-500-X5082 Human Behavior in Organization
August 23, 2020
CASE STUDY ANALYSIS
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Introduction
In Richmond, Indian lies Engstrom Auto Mirror Plant, a privately-owned business that
manufactures mirrors for automobiles and trucks. Having been in operation since 1948,
Engstrom Auto Mirror "enjoyed considerable success much of its lifetime" until being hit by
unprofitability in the late 1990s (Beer & Collins, 2008). Ron Bent, the current plant manager,
was hired in 1998 after the former manager resigned due to his inability to keep up with the fast-
paced changes in technology taking place in the plant to increase productivity. Bent, a successful
manager who had experience with different types of incentive programs, "believed strongly in
the power of worker incentive programs and wanted to establish one at Engstrom" (Beer &
Collins, 2008).
Initially, Bent was successful and correct in his assessment that a Scanlon Plan would be
the best fit for Engstrom based upon the challenges the plant previously faced. Sales had
quadrupled over seven years, conflict and tension lessened, productivity and profits increased,
and employees had overall better job satisfaction as evidenced in statements from Jim Lutz and
Dori Andrew, a 10-year veteran with the organization. Additionally, the plant had consistent
quality standards and was achieving growth. The Scanlon Plan, "the oldest organization-wide
plan still in use in the United States", was developed in 1930 by Joseph Scanlon; and at its core,
encourages participative management (Beer & Collins, 2008). The Scanlon Plan consists of three
primary components: (i.) the submission of suggestions for improvements by employers at all
levels, (ii.) the structure of the company committees that evaluate the suggestions, and (iii.) the
sharing of the fruits of increased productivity through monthly bonuses.
Because the newly implemented incentive Scanlon Plan was working so well, employees
soon grew accustomed to the consistent, substantial bonuses received monthly. Consequently
CASE STUDY ANALYSIS
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when a downturn hit the industry in 2005, forcing Bent to layoff 46 of his 255 employees the
following year, the remaining 209 employees, who had not received a Scanlon bonus in seven
months, grew angry and suspicious (Beer & Collins, 2008). Perhaps inadvertently, the plant
workers began to view these bonuses as part of their base compensation rather than what they
were: incentives and motivation to perform exceptionally well. Now that the monetary
motivation has been removed, Ron Bent, along with the aid of his newly appointed assistant Joe
Hadley, must find a solution to sustaining productivity, ensure quality, and increase employee
morale as he did in 1998.
The organizational issues Engstrom Auto Mirror Plant are now facing include low
employee morale, subpar productivity, lack of trust in management by employees, a decrease in
employee participation in meetings and providing suggestions, and an all but failed incentive
plan (Beer & Collins, 2008). This case study analysis will examine the root causes of the
aforementioned organizational issues, specifically, employee motivation outside o