Root Cause Analysis of Engstrom
By: pepeol • July 2, 2017 • Case Study • 752 Words (4 Pages) • 4,318 Views
Root Cause Analysis of Engstrom
Pepe Ollor
Southern New Hampshire University
Introduction
A Root Cause Analysis (RCA) for Engstrom will be performed to figure out the underlying factors of the issues they are having and how to fix the problem. RCA will find the origin of the problem using a specific set of steps so that I would be able to find out what could be done to reduce the likelihood that the problem will happen again. Since RCA assumes that systems and events are interrelated a problem in one area prompts an effect in another (Mind Tools, 2017).
Organizational issues and root causes
Engstrom Auto Mirror Plant (EAMP) was a flourishing auto manufacturing plant until the plant started facing some trying times. Employees were laid off in 2006, the cause, decreased sales due to economic downturn in 2005. the following year (Newstrom, 2015, p.537). By 2007, another major problem: decreasing plant productivity and product quality, which lead to their financial problems. Although the root cause of the plant’s financial problem was productivity problems. There were underlying reasons for the decreased plant productivity. The two major causes for the EAMP’s productivity problem was workers’ lack of motivation and, workers’ distrust in EAMP management. According to Newstrom, work motivation is a composite mixture of internal and external influences that lead to employee behaviors or actions towards the company’s goal (Newstrom, 2015).
Another main problem at EAMP was decreased employee motivation. This was due to the Scanlon plan failing since it could no longer pay out the incentives owed to the employees. Dissatisfaction grew with this plan due to distrust in the way the company calculated the payment ratio. Some employees
were thinking that EAMP might be messing with the numbers. The real reason might be due to how complex the calculation was. Another cause of employee distrust was the question of fairness. Some of the employees felt that supervisors should be receiving a lower pay since their work did not entail the hands-on physical aspect that they worked (Newstrom, 2015, P. 541).
Snap Shot of Root Cause Analysis:
Issues | Likely Root Cause | Possible Solution | |
Description | Source | ||
Employees laid off due to economic downturn | Environment | Decrease in new car sales/ production | Reevaluate scheduling, mitigate with workers & union to get best outcome for everyone |
Decreasing plant productivity & quality | Employees, EAMP | Decreased employee motivation and trust | Build up better communication systems to increase trust between employees and EAMP |
Scanlon Plan failing | Profit loss due to economic downturn and decreased productivity & quality | Not the best ratio for plan calculation | Reevaluate entire plan taking company growth, and the environmental factors (economy) into consideration |
Summary
The human behavior perspective could be used to explain and figure out possible solution to most of the issues at EAMP. Social systems are complex human relationships that intertwine in many ways and there are also carried over to the workplace (Newstrom, 2015 p. 94).
So, companies and their employees must figure out ways to cope with changes in the environment. Looking at the issues at the EAMP you could tell that the social equilibrium (different interrelated parts of the organization working in balance) has been completely thrown off.
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