QUESTION: Explain your recommendations for alternative management structures, pay systems, and allocation of work to individuals and groups.

READING:

Mr. Woody, the owner/operator of a small furniture company specializing in the manufacture of high-quality bar stools, has experienced a tremendous growth in demand for his products. He has standing orders for $750,000. Consequently, Mr. Woody has decided to expand his organization and attack the market aggressively. His stated mission is to manufacture world-class products that are competitive in the world market in quality, reliability, performance, and profitability. He would like to create a culture where pride, ownership, employment security, and trust are a way of life. He just finished a set of interviews, and he has hired 32 new workers with the following skills:

Four skilled craftspeople. Ten people with some woodworking experience. Twelve people with no previous woodworking experience or other skills. One nurse. One schoolteacher. One bookkeeper. Three people with some managerial experience in nonmanufacturing settings.

Mr. Woody (with your help) must now decide how to design his new organization. This design will include the management structure, pay system, and the allocation of work to individuals and groups. The bar stoolmaking process has 15 steps:

1. Wood is selected. 2. Wood is cut to size. 3. Defects are removed.

4. Wood is planed to exact specifications. 5. Joints are cut. 6. Tops are glued and assembled.

7. Legs/bases are prepared. 8. Legs/bases are attached to tops. 9. Bar stools are sanded.

10. Stain is applied. 11. Varnish is applied. 12. Bar stools are sanded.

13. Varnish is reapplied. 14. Bar stools are packaged. 15. Bar stools are delivered to the customer.

Mr. Woody currently manufactures three kinds of bar stools (pedestal, four-legged corner, and four-legged recessed). There is no difference in the difficulty of making the three types of bar stools. Major cost variations have been associated with defective wood, imprecise cuts, and late deliveries to customers. Mr. Woody must decide how to organize his company to maintain high quality and profits.

He has thought about several options. He could have some individuals perform the first step for all types of bar stools; he could have an individual perform several steps for one type of bar stool; or he could have a team perform some combination of steps for one or more bar stools. He wonders whether how he organized would affect quality or costs. Hes also aware that although the demand for all types of bar stools has been roughly equal over the long run, there were short periods where one type of bar stool was in greater demand than the others. Because Mr. Woody wants to use his people effectively, he has committed an expert in work design to help him set up an optimal organization.