Page 380 - Business Principles and Management

Chapter 14 • Implementing and Controlling

Focus On...

Teamwork–Changing the Face of Manufacturing

You can’t make a mistake when building airplane engines. The jet
engines produced by the General Electric Aircraft Engines plant in
Durham, North Carolina, have over 10,000 parts. When completely
assembled, they weigh more than eight tons. Yet a bolt not tight-
ened, a tool left inside the engine, or a safety procedure not followed
can cost hundreds of lives.
Approximately 200 people assemble the huge engines. But there is
only one boss, the plant manager, and one instruction to guide the
work of the plant—the date each engine needs to be finished. Beyond
that instruction, employees make every decision about how the work
will be completed. They hold a record for delivering every engine
ordered on schedule for over three years. During that time, they were
able to reduce the cost of producing the engine by nearly one-third.
How does this GE plant achieve its amazing record with only one
manager? Here are some unique characteristics of the organization:
• Employees are organized into nine teams that make almost all
decisions. Everyone is on a team, and team meetings are sched-
uled when all employees are available.
• There are three pay levels for employees, based on skill levels.
As employees increase their skills, they can advance into a higher
pay level.
• There is no time clock. If someone has a doctor’s appointment
or needs to go to their child’s school activities, they work with
team members to be able to leave.
• Everyone learns how to do many of the assembly tasks so they
can help each other.
• Teams are responsible for hiring new team members. They do
the interviewing, and they have to agree on the right person.
• Teams solve problems and often come up with unique but simple
solutions.
The team environment in Durham works. The plant has the lowest
turnover rate and lowest production costs of any of General Electric’s
engine assembly plants. Its unique organization demonstrates that
when employees are given the chance to work together to manage
their work, they do it better than anyone could have imagined.
Think Critically

1. How do you believe the pay plan affects employee motivation?
What are the advantages and disadvantages of that plan?
2. Discuss reasons why the team problem-solving process seems
to result in unique but effective solutions. Are there reasons
a solution developed by employees is likely to be more suc-
cessful than if the same solution was developed by a manager
without the input of employees?

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