- Define the basic concept behind the management of General Motors that were seeking to standardize its production system. Also analyze how standardization of production will be worthwhile for the employees of GM in terms of performance, satisfaction, and rewards.
- Discuss the approach of unions to management’s plans for teamwork? Analyze how the policies of the company are helpful in the successful implementation of plans for teamwork and in developing global leaders.
- Evaluate the lessons for the companies seeking to introduce teamwork into new countries? Do you think by introducing teamwork to new countries will increase the pressure on the firms to adopt international HRM practices and important to maintain sustainability?
Solution
Introduction/Background
The case revolves around the General Motors and its effort of incorporating the learning gained from the joint venture with Toyota in 1980. The venture was important because NUMMI was seen by the General Motor’s Management as one way of gaining the secret sauce of their Japanese counterpart. The secret sauce was identified to be the teamwork practices which were witnessed by the General Motors managers at Toyota. They saw the workers of Toyota is working in groups and moving flexibly within these groups and taking on the shared responsibility for effective results. After being impressed by this method, the managers of the General Motors considered it to be good enough to benefit all of its operations. Thus the team managers started working on transferring the idea and its implementation in all locations in the world for making a standard production system within the company.
The subsidiary in Spain as it was faced in other as well faced potential challenges in the implementation of the teamwork philosophy from the trade unions. The two unions present in the company were the UGT and the CCOO. Then there were also working committees which have to be confronted separately by General Motors as well. The framework selected for the Spanish subsidiary was similar to the ones which were implemented across other subsidiaries of General Motors. The key characteristics of this framework included the grouping of workers in a team of 8 to 15 persons, operators to be rotated across the various jobs within the team, the regular meetings for identifying any problems and discussing improvements, and the fostering of the team spirit. The first proposal, which was proposed included the working of maintenance workers with the production workers. A team leader was to be appointed to a team having the right to promotion and appraisal of its teammates. The proposal, however, did not see complete acceptance from the unions.
Case Analysis
1-Basic Concept behind Standardization of Production System
The aim of the implementation of the new work framework was also embedded with the standardization of the production systems. Work ethic is an important factor even if a company has the most talented people in its firm. The two main players in the automotive industry; General Motors and Toyota learned this the hard way and joined hands for the collaboration of the NUMMI. The collaboration was meant to complement the strengths of both companies and provide support for each other’s weaknesses. The Fremont Plant of General Motors was specifically popular for its production of defects in vehicles. The difference in the production and management systems of the Japanese and American auto companies led General Motors to rethink its processes. The teamwork, strategy, participation of supervisors and the attention to detail given in a Toyota was lacking by General Motors. The NUMMI model aka the teamwork framework was immediately implemented at the Fremont plant which showed tremendous results with production of high-quality cars. It was led to other plants of General Motors, even though the enthusiasm in other plants for the new business models was not high. General Motors learned from the Japanese company that quality cars are to be produced in every plant of the company. Everyone has to be on the same page, and personal agendas and egos are to be left behind for working as a team.
The concept behind standardization of the production system lies behind teaching every worker the techniques of the work analysis. The next step is to get the workers to time everyone in the group. The idea is to find the best practices which suits everyone. After selection of the best practice, each work is broken down into small activities which are taken up by workers in a group, and each of them work on improving it more. It leads to the way of doing a job with which everyone agrees. The best way of doing the job is codified, and the standard is settled. This enables the workers to set their standards themselves. The Japanese company usually had their team leaders for work analysis, however, in General Motors with more conflicting teams, everyone was needed to conduct their work analysis. NUMMI employed this process and used to conduct work analysis for improving work processes every time a problem occurred or the speed of the process changes.
The results of the standardization of the work processes enabled less variability among the performance of the workers. The quality improved in each plant. The inventory control becomes better with this new well-balanced and fine-tuned approach. The rotation of the workers in different roles covered the previous quality killings resulting from the absence of a specific worker.
Analysis of standardization being Worthwhile for Employees
The analysis of the case study shows that even though the unions at the Spanish Plants criticized the new business model and standardization of the process, they also witnessed some benefits as well. The unions saw an advantage in the job rotation through the relieving of monotony and potential for repetitive strains. They oversee promotions for low-skill workers and increase in the autonomy of workers transferred from the supervisors. It has been found that the standardization even though fearing at first by the workers resulted in a tremendous performance, satisfaction and rewards for them. The interviews of the NUMMI showed a tremendous response from the employees in favor of the new business model. They do not want to go back to the Fremont days. Even with all the criticism on the NUMMI, everyone felt that the new business model was superior and far better than the previous one. However, some were found still uncomfortable with the involvement in the decision process. Then there are the ones who have never liked the change and always criticize it. These are roughly 20% of the whole.
The most important aspect was noticed regarding the self-esteem of the workers. NUMMI provided the workers with their self-esteem and self-respect by being proud of what they do at work. It encouraged them to be proud of the car they have built and how they have built it. It also helped gain strength for the union. The plants have provided a satisfaction level to the workers, and they tend to be more committed to the organization as a response. The performance of the workers improved tremendously as well. The employees at General Motors showed how their performance at the plant affected their personal lives as well. The past practices of the workers made them have a bad temper at their homes as well. The new teamwork model made them participative at their homes as well. Their good performance and inclusion in the decision-making process in the plant made them have a good approach towards their personal lives as well. The workers also responded by having much better trust and respect shown to them by the management. The management now considered supporting the workers rather than squeezing everything out of them. They listened to their concerns and acted on it which was not happening in the earlier model.
The employees not only get involved in the decision-making process; they also were rewarded for giving suggestions. The suggestion program granted points to the workers for the impact that the suggestion made by the company. $1 per point was rewarded to the workers. The reward in financial terms was not very huge but having the suggestion approved was one of the big deals among the employees giving them high peer recognition.
2-The approach of Unions towards teamwork plans
Managers started to negotiate on the new business model with the unions. Initially, the unions were skeptical. They had concerns over the teamwork model because they feared that they might lose jobs and the work might get more intensified. Then they also feared that the unions would get marginalized with the introduction of the teams. The individuals were feared to be more identified by their teams than their unions. They also feared that the workers might not get benefited from the productivity gains gained from the new business model.
Even with all the concerns that the two unions had, they both agreed on cooperating with the management and negotiating on providing some concessions. The teamwork model was fixed for a year as a pilot project. The unions excluded the maintenance workers from the teams, and the voluntarily joining of the workers was accepted.
The unions also foresee some potential advantages of the new business model. They recognized that the teamwork would enable them to have more autonomy over their work which will be transferred from their supervisors. They also looked to have more interest in the job with the job rotations relieving the repetitive strain. There was the potential for promotion of low-grade workers as well. Furthermore, they looked happy to have more information as a result of the teamwork model.
The opposition was also eroded by the high pressures and the influence of the management for standardization of the business process across all its plants. The constraints of the unions become partial and not absolute, and management was able to break through the union’s resistance. The unions also cooperated in fear of not losing it out with the management when the other union might cooperate and let them be alone and far from the management. Thus, the approach of the unions towards the new business model was appropriate enough as it did not resist the model for the cause of resistance, but the protection of the employee’s rights.
Policies helping team work plans and Development of leaders
The policies and strategies of General Motors helped implementation of the teamwork model and development of leaders in its company. The new strategy was simple; to build the best cars with the highest quality and lowest cost possible. The team concept-based policies of the labor-management were also instrumental. The policies were apparent from the same dress code, and absence of the management restricted parking and cafeterias. The NUMMi’s no-layoff policy was probably the one who made it easier for the unions and workers to trust their management. The new policy of NUMMI recognized the importance of the job security for its workers. It recognized the responsibility of the management for the well-being and stable employment for its workers. This lay-off policy came at a cost for the unions. The unions had to agree to the changes in the operational philosophy and exemption from the General Motors Supplemental Unemployment Benefits.
The managers of the General Motors found this strategy of layoffs as being critical to the success of their new business model. They argued that the commitment for no layoffs and the operating on daily basis supported the teamwork business model. All team members knew that while pitching a new idea, they were essentially not jeopardizing anyone else’s job. And this is the one thing which every industrial company wants, to have input from their workers as they are the best ones who know the process best.
The suggestion program was another good feature of the model which enabled to incorporate the suggestions of the workers and encouraged them to give more by offering rewards for points scored on suggestion’s impact. The financial rewards were small, however, are involved in the decision-making process, and recognized by management was in it considered a big deal. The attendance policy also acted as a critical factor. In older model, the categorization of the excused and unexcused absences normally raised disputes which were dragged on for days. The new system made it simpler, as the absence was notified with a warning after three occurrences in a 90-day period. There are three warnings like this, and then more occurrences make one fired. The advantage of this new model was that it was simple and equal across the board.
Thus, collectively, a powerful company can have an impact on the constraints of the business systems. The policies and strategies of the management of General Motors certainly helped them implement the Japanese teamwork model a success.
3-Lessons for Companies
The lessons for the companies who are willing to incorporate teamwork into their companies can be deduced as;
- The policy implementation needs sincere efforts of the management. Management concerned with productivity and not the listening to the concerns of the line workers cannot implement strategies which need the workers to work as a team with the company.
- It is impertinent to involve the unions and workers in the planning and implementation phase of the new teamwork model. The new model will be carried out by the workers, thus only training them and waiting for results is not enough. One needs to involve them in every part of planning to control the deviations from the plan to encourage improvement and team spirit.
- An important lesson from this case study learned is that a strategy cannot be implemented as a single activity. Smaller supportive activities and the management approach towards the strategy and the accompanying culture needs to change as well. It is witnessed in the case that smaller constituents like the Lay-off plans, attendance policy, suggestion reward system, and regular monthly meetings for overall performance review were necessarily not part of the teamwork production business model but become as instrumental in providing the layout for the actual strategy implementation.
These lessons show that introducing teamwork in the new countries need the ability of the management to recognize the actual needs of the country, its workers, and its alignment with the model. It also surely implies that firms tend to get into adopting standardized international HRM practices for maintenance of the sustainability across the board.
Conclusion
In the end, it can be concluded that the case study shows how a firm can change, the policies and its performance by learning from other experiences. It also shows how a company needs to adopt any universal business model to align with its particular needs and processes. The case shows how the implementation of the teamwork model was made successful by the overall adaptation of the basic essence of the concept and incorporation of supporting smaller policies like the no-layoff policy, standardization of processes, attendance policy, and the suggestion reward programs. It can be said that General Motors effectively break through the resistance from the workers and unions by using policies that gained their trust, improved their self-esteem, and performance.
+447462439809