Reference no: EM133043701

Take Home Assignment: Best practices at Volvo Case Scenario Do traditional workplaces reward long hours instead of efficient hours? Wouldn't it make more sense to listen to workers' needs and try to meet them? Or, to have a workplace in which people can do whatever they want, whenever they want, as long as the work gets done? Well, that's the approach that Volvo in Sweden has taken. Volvo is one of the largest industrial concerns in the Nordic countries and is directly responsible for the employment of more than 42,000 people in Sweden alone. The company found itself suffering from a high degree of absenteeism and staff turnover. There were also issues with the quality of the cars leaving the production line, and the cost of retrospectively solving the faults was high. The root of these problems was believed to lie in the traditional assembly line model, characterized by highly repetitive tasks, which allowed for little flexibility and meant Volvo's factories were not an attractive workplace. Volvo decided to reorganize the production line to take into account the uniqueness of each individual on it. After a series of false starts, Volvo came up with a new manufacturing system where small groups of between 5 to 12 employees were responsible for the assembly of a complete vehicle, from beginning to end, rather than inspect, and assign their own work, and receive equal financial rewards for their work, except for the supervisor. Goals are set as to how many vehicles the team has to produce in a day, and any time left over is used to discuss experiences from that day's production and to plan for the following day. While being able to work independently is an important part of the new philosophy, teamwork is also key to making it work. Thus, the interaction between coworkers is helped by a culture called FIKA. FIKA is small-scale get-together every day, where the team shares coffee and ideas, with a grand FIKA every Friday where one member of the department is responsible for preparing food for everyone. Every worker is also encouraged to take advantage of the flextime working arrangement, where they can choose to complete their 40-hour workweeks. Reorganizing the workforce into smaller, self-managed, groups meant that many members of the workforce needed to learn new skills. This was particularly true of the older team members who had been with the company for some time. However, instead of letting these older workers to go and replacing them with younger, Volvo introduced an initiative to offer workers employment in a specialized senior unit. Alternatively, both the old and young who want to learn any new skills are offered courses during the working day, which are financed by the company and lead to valuable professional qualifications. Productivity has soared thanks to the new humanist approach, and staff turnover has also reduced. Volvo also discovered that when employees engagement with their job increases, average annual sales increases too.

Questions

1. Describe the management elements of Volvo's new production approach in human resource management perspective. What do you think might be positive or negative side of this program?

2. Using one motivation theory that you have learnt, explain why you think Volvo's system works or not with the threat of COVID-19.

3. What are the implications for managers of studying Volvo's management experiences (such as organizaitonal culture, structural implications or controling system)?