Page 138 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

Exam-style case study

Precision Tooling
Appendix 1
Precision Tooling makes components that are used in
Organisation of production workers
the manufacture of medical equipment. The company
has one factory and 60 employees. There is a tall
Factory manager
organisation structure. Production workers are the
largest group of employees at Precision Tooling. See
Appendix 1. There is division of labour at Precision
Tooling. Each production worker is trained to Supervisor A Supervisor B Supervisor C Supervisor D
complete specifi c tasks. Supervisors and production
workers are paid using the hourly rate method. In 10 production 10 production 10 production 10 production
workers workers workers workers
addition, supervisors can earn a bonus if their
section achieves a production target of 2,500 units
per month.

The Operations Director is concerned about the Appendix 2
decrease in output of all four sections over the past
Units of output produced by each section during the past three
three months, as shown in Appendix 2. He believes months.
the production workers need to be better motivated.
He has sent an email to the factory manager outlining Month 1 Month 2 Month 3
his thoughts. See Appendix 3. Most of the production 2,380 2,370
Section A 2,400
136 workers are members of a trade union. 2,300
Section B 2,320 800
The factory manager is due to retire in three months’ Section C 2,390 2,400 2,270
time. Also, the supervisor of Section A has resigned. 1,500 2,080
Section D 2,190
The Human Resource Manager is considering the
best way of recruiting replacements for these two
employees. The Operations Director is very keen
that the new factory manager has manufacturing
Appendix 3
experience and understands the importance of the
functions of management. Email from the Operations Director to the Factory Manager

We need to improve worker motivation and I think the best way of
doing this is to change the pay system from hourly-rate to piece-
rate. What do you think?