Duffy Tool and Stamping has formed “excellence teams” made up of production line employees. These teams have been given the charge to improve production processes and enhance employee safety. The teams follow a very structured problem-solving methodology and have managed to make numerous improvements in production as well as safety. During a six-year period, pretax profits increased each year. Duffy’s management largely credits the excellence teams for the cost reductions and increased profits.

Another company, Grand Rapids Spring and Wire Products, has formed minicompanies within its factory. The objective of minicompanies is to have each employee assume ownership of his or her work. Each minicompany has its own suppliers and customers (all within the factory). Furthermore, each minicompany is assigned its own support people: accountants, engineers, marketing people, and so on. The individuals within the minicompany are given responsibility for developing and maintaining good relations with their suppliers and customers, identifying problems, and developing and implementing solutions to those problems. The focus of each minicompany is on quality, cost, delivery, safety, and morale. The company has successfully created a quality culture, achieved a reputation for being a competitive, world-class manufacturer, and has become a “learning” organization.

Required:

1. What are the objectives of excellence teams and minicompanies? Did the companies achieve these objectives?

2. Do you think that employee empowerment is a good idea? Explain your answer.

If yes, do you see any disadvantages? Explain.

3. What role, if any, does management accounting information have in employee empowerment?

4. What do you suppose is meant by the phrase “quality culture”? What is meant by a learning organization? lop5