Page 76 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

ACTIVITY 6.1

Zhengdong HuPeng Automobile Fittings Ltd (ZHAF) is a Chinese manufacturer of electronic components used in the car
industry. It was founded by Hu Peng 15 years ago. Many of the company’s workers have worked for the company all of their
working lives. Two years ago Hu Peng retired and the company is now managed by his son Bo, who has a degree in Business
Management and worked for several manufacturing companies before joining ZHAF.

Bo believed that ZHAF had not been working efficiently for several years and that is why it was less profitable than its
competitors. First, he introduced new machinery. ZHAF now produces more car parts with fewer workers. Six workers were
made redundant. Other workers were trained to use the new machinery, but they find the work boring. They liked their work
when it had more variety and they used their skills.
Next, Bo looked at the workers’ wages. The employees at ZHAF earned a higher wage than that offered by similar

businesses. Bo felt that some employees were paid too much because they did not produce as many items as other, more
hard-working employees. He introduced a new pay system. Many workers did not receive a pay rise. However, they can earn
a bonus if they meet production targets set by Bo. Workers say that the targets are too high to achieve. Their pay is now
lower than that of similar businesses.

In the past six months many workers have left the business, and absenteeism is at an all-time high. Production levels
have fallen while customer complaints about late deliveries and poor quality have risen.
1 Identify factors that suggest workers at ZHAF have become less motivated since Bo took over control of the business.
2 Discuss the possible reasons that have caused the workers at ZHAF to become less motivated.
3 What does this case study tell you about the importance of having a well-motivated workforce?
4 Do you think the new pay system introduced by Bo will motivate workers? Justify your answer.

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The concept of human needs – Maslow’s Hierarchy

Abraham Maslow identified the main needs of humans. These are shown in
Maslow’s Hierarchy of Needs – see Figure 6.3.

SELF‐ACTUALISATION
Reaching one’s potential

ESTEEM NEEDS

Respect from others,
recognition for a job well
done, status

SOCIAL NEEDS
Friendship, accepted, belonging to a group

SAFETY NEEDS

Health and safety at work, job security, free from threats

PHYSICAL NEEDS

Water, food, shelter, clothing and rest

Figure 6.3 Maslow’s Hierarchy of Needs