Engineering ProductsIntroductionEngineering Products produces fasteners for industrial consumption. The company had to cut many of its activities due to cost inflation and stiff competition. It cut most of its other production houses to concentrate on the automotive, defence and a few industrial services. Concentrating purely on the export market, the company relocated most of its 33,000 employees abroad. The company has a far greater presence in the automotive sector, so it’s but natural for the management to retain most of its employees in that industry. While 69% of the total workforce was stationed in Europe, an equal number of employees made up the percentage in U. S and UK.
As the strength of the workforce in Europe was considerably more, it is but natural to guess that the volume of sales in Europe far exceeded that of U. S and UK at 21%. While the sales of cars varied among the countries in Europe, they were all produced in similar ways, requiring components that matched the same specifications. This led to the demand for standardisation of their operations. Since there were many multinational first-tier suppliers, Engineering Products had to get their act together to perform on par if not better to enhance their sales over others.
This meant that the company had to restructure the way they operated and how its managers could inculcate more motivational strategies to bring out better performance. 2.0OverviewThe impetus for change was brought about by the demands of its customers. Till then, EP served the local markets in the UK and had operated in a de-centralised manner. The challenge with internationalisation in creating management structures; senior directors had to examine new processes to adopt to meet the challenges.
This called for restructuring of the current practices through a leaning process for engineers, similar to the one taught at the, ‘International College of Engineering’, and the creation of an international cadre of managers. In addition, HRM had to introduce strategies of bringing together its managers from various offshore sites to discuss initiatives and best practices, such as induction packages for graduates to problem-solving techniques. However, there were problems faced by such ambitious moves; some plant managers who worked in a familiar de-centralised atmosphere may not be willing to participate in changes that curbed their autonomy.
The company practice was to take customer orders for components at the HQ, then disburse orders to various production plants. This gave the company an important source of leverage over managers at plant level, who were directly dependent on the HQ. The distribution of orders was based on comparisons of earlier performance in terms of costs and quality. With the initiative to bring changes, it brought about differences of opinion between the management and plant managers on issues related to performance-related pay (PRP) and sanctions.
Internal competition to outperform other units to get more orders led to many managers to make changes to improve their performance. The power of HQ to dictate the way orders were to be disbursed led to the process of international integration in Engineering Products. It induced managers at plant level to participate in the sharing of best practice across sites and to comply with the wishes of HQ in terms of the nature of the production processes and the way in which labour was managed.
These developments had a significant impact on the work of both managerial and non-managerial employees.