A Root Cause Analysis: A Case Analysis Of Engstrom's Case

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The case study analysis of Engstrom shows that they are currently experiencing organizational issues with employee’s dissatisfaction (lack of motivation), failed incentive plans (Scanlon Plan), and major issues with production and quality issues. When a corporation is experiencing these types of organizational issues such as Engstrom, the root causes of these issues need to be analyzed. A Root Cause Analysis is a five step process to answer the question of why the problem occurred in the first place. (Mind Tools)
Engstrom was a very successful auto mirror plant since 1948. In the late 1990’s they decided to implement new technology. (Collins & Beer 2008) The implementing of this technology caused the organization to have a dysfunctional …show more content…

This model is where employees tend to judge fairness by comparing their inputs to the outcomes they receive, and comparing this to the output of others. (Newstrom 2015) Inputs are what an employee puts into the company and the outputs are what they expect in return. This theory says that when an employee feels that they are being rewarded on an equal level as what they are contributing, they will be more motivated in increasing their outputs. They also take into consideration the work of others. If they are working at their max capability and they see others who are not, they feel that the compensation should be different. This was seen in the employee’s issue with managements …show more content…

(pg.1) The Scanlon Plan is the root cause of the dissatisfaction and the employee’s lack of motivation. The Scanlon plan has also failed at maintaining the Social Equilibrium in Engstrom. Social Equilibrium is when all interdependent parts within a company are working in balance. (Newstrom 2015) When systems are in equilibrium they can also embrace changes within the organization and make necessary adjustments to maintain the balance. Hence, if the system would had been working properly when the sales decreased they would have modified the Scanlon plan to accommodate this adjustment. The current Scanlon plan did not have a contingency fund that could maintain the downfall Engstrom encountered in in the early 2000’s. While they had a percentage of the funds to account for bad months, it was not sufficient. This would have prevented the frustration with the employees and production levels and quality could have been sustained as

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