Engstrom Auto Mirror Plant: Ups and Downs of Business

Categories: BusinessCompany

A complex set of forces affects the nature of organizations today. A wide array of issues and trends in these forces can be classified into four areas—people, structure, technology, and the environment in which the organization operates (Newstrom 2015). To further explore these forces, I will be analyzing the case study of Enstrom Auto Mirror Plant and how the company managed during the ups and downs of business.

Engstrom Auto Mirror Plant is a privately-owned manufacturing company that supplies mirrors for trucks and cars.

The Plant is in Richmond, Indiana and has been operating since 1948. Engstrom Auto Mirror Plant remained effective for approximately 50 years up until the late 1990s as a result to high cost-effectiveness, however, that began to decline as the decade ended. Throughout this period, Engstrom experienced many trials due to issues with production. It became obvious in 1998 that production lines needed to be reshaped to integrate new technology. The transition was not smooth and proved rather difficult resulting in alienating customers and leaving them angry (Beer & Collins 2008).

The plant manager at that time did not have the familiarity and skills of the new technology needed to find resolutions to problems and increase production. The union was changing, becoming more forceful and he wasn’t willing to become accustomed to working with them. In addition, low employee morale and productivity spread throughout the plant. Ron Bent was then hired as the new plant manager assigned to improve Engstrom and save the plant. To do so, Bent executed the Scanlon Plan, an organization-wide incentive program, which was the main reason for the plant’s improved morale, increased productivity and profitability, making the organization successful again.

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In May 2007, Bent was faced with similar issues. Production and sales were decreasing for the second year in a row since 2005. A year later, Bent laid off 46 of his employees. Bent dealt with matters with the workers who remained as production declined and fears of quality production arose. Bent feared of losing one of the plant’s top accounts with Sam Martinez, manager of the assembly line at the Toyota plant if his employees didn’t increase their pace and guarantee the quality of all products were on target. In addition, employees started to complain, growing hostile and becoming tired of the Scanlon Plan. Over time their passion and contentment started to decline. Suggestion rates dropped quickly from hundreds to 50 a year. And two consistent themes were heard in worker complaints: distrust of bonus calculations and question of fairness (Beer et. al., 2008).

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Engstrom Auto Mirror Plant: Ups and Downs of Business. (2021, Mar 17). Retrieved from http://studymoose.com/engstrom-auto-mirror-plant-ups-and-downs-of-business-essay

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