Red Apple Industries manufactures institutional-use furniture.Dept.A is responsible for welding the base of the desk to the chair assembly.The desks are then placed on an automatic conveyer to Dept.B,where the desktop is riveted to the chair.The desks continue on the conveyer to Dept.C for further assembly.Wanda,the manager of Dept.A,is responsible for moving 800 welded desks per hour to Dept.
B.Required: How should the managers' dispute be resolved? How could it have been avoided?
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B.A faulty circuit in Dept.B causes a delay in processing in the department and prompts Rosie,the Dept.B manager,to ask Wanda to stop the conveyer.Wanda refuses,necessitating the removal of the welded desks from the conveyer until the riveting can resume.Rosie bills Wanda's department for the costs of this extra work.Wanda disputes the charge,citing her responsibility to convey 800 desks/hour to Dept.

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Feedback: This is an instance where the strategic performance measurement system has failed by causing a manager to adhere strictly to the performance goals of her unit.In strategic performance measurement systems,the emphasis on individual motivation and reward is a key aspect of the advantage of these systems.However,the efforts of individual managers should not be allowed to conflict with those of other managers in a way which injures the firm as a whole.This is top management's responsibility -- to maintain in effect the discipline of the strategic performance measurement system.All managers must be clearly informed that at all times they must act responsibly for the welfare of the firm as a whole.If an action by a manager causes harm to the firm,that manager will be charged (or reprimanded)for the loss,even if the action caused an improvement in performance for the manager's unit.In this case Wanda acted irresponsibly,and should be charged with the extra costs as requested by Dan.In a broader sense,this incident shows the failure of top management to communicate responsible management behavior,and so the incident is a bad mark on management.An alternative approach then would be for the costs of the incident to be charged to top management (not charged to any SBU)and explained and discussed at an executive meeting,with Wanda given a stern warning not to repeat such actions.

Red Apple Industries Manufactures Institutional-Use Furniture