Alvis Corporation Kathy McCarthy was the manager of a production department at Alvis Corporation, a firm that manufactures office equipment. After reading an article that stressed the benefits of participative management, Kathy believed that these benefits could be realized in her department if the workers were allowed to participate in making some decisions that affect them. Kathy selected one decision for an experimes in participative management. The decision involved production standards. Sales had been increasing steadily over the past few years, and th company recently installed some new equipment to increase productivity. The new equipment would make it possible to produce more with the same number] of workers. The company had a pay incentive system in which workers received a piece rate for each unit produced above a standard amount. Separate standards existed for each type of product, based on an industrial engineering study conducted a few years earlier. Top management wanted to readjust the production standards to reflect the fact that the new equipment made it possible for the workers to earn more without working any harder. The savings from higher productivity were needed to help pay for the new equipment. Kathy called a meeting of her workers an hour before the end of the work day and explained that she wanted them to discuss the two issues and make recommendations. Kathy figured that the workers might be inhibited from participating in the discussion if she were present, so she left them alone to discuss the issues. Besides, Kathy had an appointment to meet with the quality control manager. Quality problems had increased after the new equipment was installed, and the industrial engineers were studying the problem in an attempt to determine why quality had gotten worse rather than better. When Kathy returned to her department just at quitting time, she was surprised to learn that the workers recommended keeping the standards the same. She had assumed they knew the pay incentives were no longer fair and would set a higher standard. The worker speaking for the group explained that their base pay had not kept up with inflation, and the higher incentive pay restored their real income to its prior level. Questions 1. Explain whether the decision was appropriate for a group decision procedure according to the Vrom model? (5 marks) 2. What mistakes were made in using participation, and what could have been done to avoid the difficulties the manager encountered? (5 marks)