Open-book management) You have been hired as a consultant by a com¬ pany that manufactures plastic and resin toys. Company management is presently discussing ways to improve product quality. Evidence of quality problems is everywhere: high rates of product defects, many customer re¬ turns, poor rate of customer retention, and high warranty costs. Top man¬ agement has traced virtually all quality related problems to the production department.

Production workers in the company are paid based on a flat hourly rate. No bonuses are paid based on corporate profits or departmental perfor¬ mance measures. As the outside consultant, prepare an oral report to pre¬ sent to your client’s top management discussing how open-book management could be applied to address the quality problems. At a mini¬ mum, include in your report how quality information would be conveyed to workers, how workers would be trained to understand the information, and how incentives would be established for improved quality performance.

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