1 Drawing on your own speculations, as well as what you can glean from the account, consider where you think the triggers for change were coming from for the organization in Illustration 3.16.

2 If your organization (or your particular part of it) is structured into self-managing teams, what, if any, are the issues which cause most concern? What benefits are there for managers and others?

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Illustration 3.16 From hierarchy to self-managed teams In 1994 a factory of some 200 employees, which was part of a division of a US organization manufacturing ceramics, took a deliberate decision to move from a hierarchically structured organization to one based on self-managed teams. The factory, based in Scotland, was one of 74 manufacturing plants employing a total of 8,500 people in 21 countries. As the company started operating new plants, employees were often sent for training or retraining to the Scottish factory, which, by that time, was the oldest in the company. However, the management realized that the factory's status as a 'master plant' could not be taken for granted. In the words of the operations manager: 'Here we are, a successful company in the west of Scotland. But the head office is in Brussels and we have no customers nearer than the north of England and no raw materials nearby.' Having no natural advantages other than themselves, the concern was that, if they were not seen as being as good as the rest they would 'wither on the vine". Consequently a change programme was put into place under the banner of what is known as the business excellence model developed by the European Foundation for Quality Management (EFQM). The programme centred on the introduction of self-managed teams. Elements of the programme included the institution of new work practices for which all staff received training. All facilitators gained NVQS at level 3 with all 185 shop floor workers gaining an NVQ level 1. Every employee had an Individual development plan linked to team targets, which in turn linked to wider business objectives. The factory's clocking-in system was removed to symbolize management's trust in the workforce. Consultations and negotiations with trade union. representatives overcame their initial resistance, particularly in the context of no loss of jobs. Over a four year period the differential pay rates for different production jobs were replaced by a single wage structure and complete labour flexibility across jobs and departments. At an average age of 51, the plant's supervisors undertook an extensive development programme designed to equip them for their new roles as facilitators rather than supervisors. Indicators of the success of the new structure came from the results of employee opinion surveys. These indicated significantly increased levels of overall satisfaction and satisfaction with quality and productivity, company image, employee involvement and career development. Satisfaction with health and safety rose steeply to 90 per cent. At the time of this account (1999), all aspects of the business - including HR, purchasing, accounts and senior management - were self-managing teams. However, the ultimate measure of success comes from the company's results. The plant's turnover rose from 37 million in 1993 to 55 million in 1998-a result the company attributes to the competitive edge gained from empowering the employees and giving them responsibility for quality. Cost savings amount to 500,000 a year. Most significantly, the company's market share has grown. Source: Based on Arkin, A. (1999) "Peak Practice', People Management, 11 November, pp. 57-59.