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INSTALLATION OF NEW MACHINES case study solution (Code: c47)

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You are the General Manager of a large electronic toy company. After an extensive study of operation you have approved installation of new machines and a new scheduling system. This investment is expected to result in sub­stantial increase in number of units produced and decrease in manufacturing costs. To the surprise of everyone the production has not Una-eased as ex­pected. In fact, production has dropped, quality has fallen off and worker-complaints have increased.

You believe that there is nothing wrong with the machines. The manufacturer's representatives have thoroughly checked the operation in plant and are satisfied that they should operate at peak efficiency.

You have reason to believe that new scheduling system may be the culprit. But your immediate subordinates insist that the new system is oper­ating as intended. Some subordinates believe the drop in production is entirely due to worker psychology. It is caused by a combination of factors such as poor training, poor supervision, lack of financial incentives and poor morale.

Your President called you in the morning and has reviewed your pro­duction figures for the last quarter. He is concerned about the effectiveness of your investment decision to acquire new machines. He indicated that the problem was yours and he wanted to know what actions you intend to take to resolve this problem within one week.


  1. What do you feel are the causes of low productivity ? Elaborate.

  2. What could be the possible causes of increase in complaints of workers ?

  3. If you were the General Manager of the Company, how would you handle the situation?


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