An Analysis of the Slade Plating Department Case John Couchell Wingate University Slade Company is a small but prosperous manufacturer of metal products located in central Michigan. It employs 500 workers who are engaged in producing a large variety of clamps, inserts, knobs and similar items. Despite the success of Slade Company, the manufacturer faces problems in the plating department. The production manager, Ralph Porter, is concerned about dishonesty among employees, abusing the clocking system for logging in the work hours.
The typical workweek in the department is 60 hours, with the first 40 hours paid on a straight time basis while additional hours were paid 50% higher (100% higher for weekend work). Typical workdays are from 7. 00 to 7. 00 pm. Since the supervisors leave around 5 pm, one employee can stay late and punch-out for everyone. On the surface, the main problem faced by the company is the abuse of the time clock and the unethical behavior of the employees. However, the most significant issue that needs to be resolved in the plating department is how the employees are paid.
Pay is considered low for the central Michigan area. Employees typically start a few dollars above minimum wage, with small increases given over time based on seniority and skill. In addition to the low pay, working hours in this department are long. To keep employee training and benefit costs down, the Slade Company practice is to increase overtime rather than hire new employees. Pay is an extremely important issue not just to the Slade employees but to any employee. The low pay has created an atmosphere promoting the unethical behavior.
The employees have developed a “you owe me” attitude. They are intentionally abusing the time clock in order to get what they perceive to be a fair wage. Their actions are also accepted as the norm. The company seems to be overlooking this behavior since the supervisors are leaving before all the work is completed. This action by the company is unacceptable. Higher wages would create a competitive community wage and would reduce the number of hours worked. To further understand the problem within the company, we also need to understand the existing culture.
Different informal groups are formed, characterized by different behavior patterns and by ethnicity. The largest group is Sarto’s, which is named after Tony Sarto, an Italian and the most respected member and arbiter. The group is united, with cultural bounds and common social activities. They share the same working conditions, show solidarity and organized a punch out rotation. They operate as a coherent team to increase their productivity during the peak hours, allowing them to maintain a satisfying production output and self-manage their working hours.
Henry Clark an Anglo-Saxon acts as the informal leader on his group, which follows Sarto’s behaviors. However, Clark’s group does not have Sarto’s strong bounds, even though they aspire to. The remainder of the people in the plating department stayed mostly to themselves or associated in pairs or threesomes. The Slade Company management appears to be overlooking the role that group dynamics plays in their operation. In our textbook, the authors (Robbins and Judge) distinguish between different types of groups. They identify two main types of groups, the formal and the informal.
The groups in the Slade Company are informal because they are neither formally structured nor organizationally determined. These groups naturally form within the company because of a need for social contact. For example, the Sarto group often joined in parties and took weekend trips together. These work groups have properties that shape individual behavior and go a long way toward explaining and predicting individual behavior within the group as well as the performance of the group itself. Some of these properties are roles, norms, status, size and cohesiveness.
Roles are the expected behavior patterns attributed to someone occupying a position within the group. Norms are the acceptable behavioral standards that are shared by members of the group. Status is a socially defined position or rank given to the group or it’s members by others. The size of the group affects the group’s overall behavior. Cohesiveness is the degree to which group members are attracted to each other and are motivated to stay in the group. Both the Sarto and Clark groups shared these properties. (Robbins and Judge, pp 276-293)
Slade’s competitive market is metal product market. It can be analyzed by using Porter’s Five Forces Model: threat of new entrants/potential competitors, internal rivalry and competition among established companies, the bargaining power of buyers, bargaining power of suppliers, and threat of substitute products is high. The risk of entry by potential competitors is high. (Recklies, p1). The risk of entry by potential competitors is high. The capital requirement of small metal companies is not high, so building and establishing this kind of company does not need many resources.
In addition, brand loyal of the current existence customers is not very strong thus; new entrants are able to compete to enter the market. In addition, the competition between existing players in this industry is high. Many companies produce different kinds of metal products in the market. Besides, the bargaining power of buyers The capital requirement of small metal companies is not high, so building and establishing this kind of company does not need many resources. In addition, brand loyalty by existing customers is not very strong so new entrants are able to compete to enter the market.
In addition, the internal rivalry and competition in this industry is high. Many companies produce different kinds of metal products in the market. The bargaining power of buyers is high because product difference for the buyers of the metal products is small and the cost of switching for the buyers is low. It is not easy to differentiate the quality of one metal product from another. The number of substitutes of metal products is also high thus; the buyers have great bargaining power.
In addition, the bargaining power of the sources of inputs is high. The switching costs from one supplier to another are high because there are not many substitutes for the particular input for metal products. These five forces explain the wide fluctuation in order quantities and delivery timing priorities. The volume of orders fluctuated in response to business conditions in the primary industries that Slade served. The role of the informal leader appears to be overlooked by management within Slade Company.
An informal leader is someone within an organization or work unit who, by virtue of how he or she is perceived by his peers (or others in the organization) is seen as worthy of paying attention to, or following. The major thing that distinguishes an informal leader from a formal one is that the informal leader does NOT hold a position of power or formal authority over those that choose to follow him or her. The ability for an informal leader to influence or lead others rests on the ability of that person to evoke respect, confidence, and trust in others (McCrimmon, p1).
Informal leaders such as Tony Sarto and Harry Clark can be exceedingly valuable to their company, and to the success of formal leaders. Slade Company needs to take advantage of them and give them formal responsibilities by making one or both of them supervisors. In order to remedy the plating department’s problems, a plan has to be developed and taken to the production manager, Ralph Porter that will result in a positive shift in culture and open up more lines of communication. The plan should be very forthcoming and not try to cover up any problems. The initial part of the plan should address the pay issue.
Hourly wages should be increased and the possibility of profit sharing should be explored. At the same time, in order not to bankrupt the company, overtime should be eliminated or drastically reduced. This change in the pay system should make the employees happier and more productive. It will also go a long way toward reducing the ethical issue of punching the time clock. Another part of the plan should involve a shift in personnel. Some employees like Herman and Otto Schell, whose behavior can best be described as deviant should be either forced to retire early, take a position with less responsibility or asked to leave.
Other employees like Sarto and Clark should be promoted to supervisory positions. These new supervisors will create work teams that will compete and increase productivity. Promoting employees from within the department will create a positive atmosphere for the employees by providing opportunities for them to advance. The final part of the plan would be to explore the possibility of recommending that work hours be changed to maximize productivity. For example, could the work be divided into shifts and the plant kept open longer during the week?
In addition, would it be cost effective to shut down the plant on weekends thereby reducing overhead costs? Another aspect of the plan would address more of the social needs of the employees. This will demonstrate management’s concern for employees’ well being as people, and not just plating machines. First, the plan should recommend constructing a well-equipped lunchroom adjacent to the plating department. The cost of this lunchroom would be minimal and it would eliminate the groups congregating for lunch on the fire escape. Secondly, company social outings should include the entire Slade Plating Department and members of upper management.
This would build stronger bonds within the company and show employees that management is concerned. If these recommendations are adopted, Slade Company would be more fiscally viable, their employees would have more job security, and in the end, they would be happier. References Dagmar Recklies (2001) “Porter’s Five Forces” http://www. themanager. org/pdf/p5f. pdf McCrimmon, Mitch (2007) “What is Informal Leadership. ” http://businessmanagement. suite101. com/article. cfm Robbins, Stephen P. and Judge, Timothy A. (2009). “Organizational Behavior. ” Prentice Hall Publishers, pp. 276-293.