Root Cause Analysis

Root Cause Analysis

In this root cause analysis, we will carefully dissect the internal environment of Engstrom Auto Mirror Plant to locate the source of this longstanding company’s demise. In order to accomplish this, we will explore the fallacies laced deep within the organizational structure of the company and polarize them into distinct categories for further understanding. First let’s take a look as to how Engstrom Auto Mirror Plant’s organizational structure became compromised in the light of their downturn.

Organizational problems tend to be sundry and mischievous in nature. When organizational issues are not discovered in their adolescence they can be deadly as a wolf raised in a herd of unexpected sheep. “When unanticipated events and contingencies arise, organizational improvisation comes into its own. Improvisation is the deliberate fusion of design and execution in a novel production entailing the cognitive, rational, and event intuitive interpretation of prescribed rules and standards of conduct at various levels of aggregation.” (Giustiniano/Clegg, 2016)

Too often we see organizations move into paralysis from a lack of informational flow. “Nearly half of executive teams lack the information they need to manage effectively because employees withhold vital input out of fear that doing otherwise will reflect poorly on them. This restricted information flow can cripple a company's ability to identify and respond to internal and external threats.” (Edelman, Seshadri & Rathindran, 2010) Through further analyzation of Engstrom Auto Mirror Plant, there are multiple organizational problems which have resulted in structural conflict and these factors are prevalent across a host of establishments.

The most shared organizational issues include (Authenticity Consulting LLC, 2009):

View entire breakdown of issues in exhibit 1

• Board operations

• Strategic planning

• Business planning

• Management development

• Employee development

• Teamwork

• Financial management

• Advertising and promotions

• Evaluations of products and services

While we will not dive into each avenue of the known organizational issues, we will look into what issues are most relevant to Engstrom Auto Mirror Plant.

Employee Development:

The Harvard Business Review on Engstrom Auto Mirror Plant made it clear from the start of the publication that employees were not performing up to par. This lack of performance resulted to quite a few skirmishes inside the plant. Management had the idea of implementing the Scanlon Plan as an effective mean of incentivizing employees and increasing performance. However, over time the plant’s employees failed to retain the positive response initially put forward from the debut of the Scanlon Plan.

“Enthusiam waned and dissatisfaction grew with certain aspects of Scanlon. Suggestion rates dropped precipitously, down from hundreds to 50 a year. And two consistent themes were heard in coworker complaints:” (Beer/Collins, 2008)

• Distrust of bonus calculations:

o Employees thought the company might be maneuvering the numbers

o The calculation itself was full of jargon

o Suspicion whenever the management team changed the ratio

o Creating a “moving carrot” through reductions

• Question of fairness:

o Employees felt that supervisors should have received a reduced bonus

It was very clear that the Scanlon Plan was in its in early development and was not instrumental in addressing the needs of each employee. Several months went by and a host of workers did not receive their bonuses. This could be a key factor in the decrease which took place after a sprint of increased productivity. In the end, Engstrom Auto Mirror Plant’s