Describe in detail the control dilemma at Ace Electronics.

Ace Electronics, Inc is a small company located in
Centerville. It is owned and operated by Al Brams, a highly experienced
electronics person who founded the company.

Ace’s basic product
is a walkie-talkie that is sold primarily to the U.S. military. The
walkie-talkie units are relatively simple to produce. Ace merely purchase the
parts-cables, wires, transistors, and so on-and assembles them with hand tools.
Due to this moderate level of company, Ace employs semiskilled workers at low
wage rates.

Although Ace has made a profit each year since it started
production, Al Brams was becoming increasing concerned. Over the past six
years, he had noticed a general decline in employee morale; furthermore, he had
observed a decline in his employees’ productivity and his company’s profit
margin.

As a result of his concern, Al asked his supervisors to keep
a closer watch on the workers’ hour-to-hour activities. In the first week, they discovered two
workers in the restroom reading magazines. This “bird-dogging” technique, as
management called it, or “slave driving”, as the workers called it, failed to
increase either production or productivity.

Al recognized that the lack of performance on the part of
some employees was affecting the production of everyone. This phenomenon was
caused by the balanced assembly line under which the walkie-talkies were
assembled. If an employee next to a normally productive employee did not work
fast enough, walkie-talkies would back up on the line. Instead of having a
backup, however, the assembly line was usually readjusted to the production
rate of the slower employees.

In addition, another situation developed to lower
productivity and increase unit costs. Ace was required by the government to
meet monthly production and delivery schedule. It if failed, a very substantial
financial penalty could result. In recent years, the production and delivery
schedule had become more difficult to meet. For the last eight months, Al had
scheduled overtime to meet the production and delivery schedule and thus avoid
the financial penalty. This overtime increased unit production costs and caused
another problem. Many employees began to realize that if they worked more
slowly at the beginning of the moth, they could receive more overtime at the
end of the month. Even the senior employees were slowing down to increase their
overtime wages.

Al was very reluctant to fire employees, especially senior
employees. Even if he was inclined to do so, it was difficult to catch
employees slowing down or provide any reasonable evidence for such a rash
action. Al was frustrated and perplexed.

1.
Describe in detail the control dilemma at Ace
Electronics.

2.
Are Al Abrams and the employees getting the same
feedback? Why or why not?

3.
What should Al do?

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