Choosing what to reward During the late 1970s, Harley-Davidson, the mo torcycle manufacturer, was losing money and
Question:
Choosing what to reward During the late 1970s, Harley-Davidson, the mo¬ torcycle manufacturer, was losing money and was very close to bankruptcy. Management believed that one of the problems was low productivity and, as a result, asked middle managers to speed up production. The employees who made the motorcycles were told that the priority was to get the motorcycles made and shipped on schedule, which was usually very tight. Middle man¬ agers were judged by their ability to meet shipment schedules.
REQUIRED
(a) What is the rationale that would lead to a desire to speed production in the face of increasing costs and declining productivity?
(b) What type of behavior do you think that this performance measurement system would create in the sense of the priorities that middle manage¬ ment would establish for the production process?
(c) What type of problems would this performance measurement system<. create?
(d) How, if at all, would you modify this system?
LO1
Step by Step Answer:
Management Accounting
ISBN: 9780130101952
3rd Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, S. Mark Young, Rajiv D. Banker, Pajiv D. Banker