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Workers and the management at the ABC Company which deals in home appliances have set an example in achieving the productivity gains that has been beneficial for all the stakeholders including company, stockholders, customers and the workers themselves. The company rose from a distress condition in which the productivity and the quality were significantly lesser as compared to its competitors. There were increased costs in the form of more defective units and rework throughout its production processes. The union politics were at highest level and the workers were less motivated towards their tasks. The company was about to shut down its plant when the management and the labor decided to improve productivity and keep the business operations running. Rather than going for the fancy machines for increasing the productivity, it was decided to improve the efficiency of the business processes and quality of the products. The motivation of the workers was enhanced through gain sharing programs and performance-based pay where the employees are benefited more with improved productivity.

The company renewed its manufacturing processes and the workers were properly trained on how to improve the quality. The improved quality resulted in greater revenues and reduced costs for doing the business. Defective units and the re-works were significantly reduced which also resulted in fewer costs for holding inventory. These reduced costs resulted in increased savings for the business which was invested in Research & development activities to further improve the quality and reduce the costs of doing the business.

Discussion Question:

On the basis of above case, discuss the TWO KEY factors that helped the management of the ABC Company to achieve productivity gains?  Provide JUSTIFICATION for each factor identified with proper reasoning that how it has contributed to productivity gains for the company.

Note: The students are required to mention any TWO KEY factors along with proper Justification. In case, justification is missing, it will lead to deduction of marks.

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On the basis of above case, discuss the TWO KEY factors that helped the management of the ABC Company to achieve productivity gains? Provide JUSTIFICATION for each factor identified with proper reasoning that how it has contributed to productivity gains for the company.

Productivity of organization rests on the management factors. The management of organization should be scientific, professional, future-oriented, sincere and competent. Managers should possess imagination, judgment skills and willingness to take risks. They should make optimum use of the available resources to get maximum output at the lowest cost. They should use the recent techniques of production. They should develop better relations with employees and trade unions. They should encourage the employees to give suggestions. They should provide a good working environment, and should motivate employees to increase their output. Efficient management is the most significant factor for increasing productiveness and decreasing cost.

Key things for good management are to organized effort of individuals to produce and sell goods for profit and the service they provide should meet the satisfaction as per society needs. Two key characteristics should be in mind of management as per business that it must satisfy a social need and business must seek to make a profit.


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