Physically interactive presentation on the NUMMI (Toyota feat GM jointventure) Case Study regarding High Involvement Organizations.

1. Managing Performance

2. Team members
• Samer Abdul Samad
• Giacomo Conti
• Jacopo Coppi
• Joseph Pothen
• Rebecca Nuti
• Zeno Rama

3. What do you think the
topic might be?
Make an educated guess...

4. In some fields the use of
technology is not so
important
To give you a better explanation let’s play some
golf!

5. Impressions
• Why do we use two different kind of
clubs?
• Did you fell any improvements?
• How has it affected your game?

6. Ability VS Technology
There are two different effect:
Ability-based work are those where the
capacity that a person has is the most
important aspect to accomplish a task (
Sport or drawing ).
Technology–based work are those in
which the level of technology doesn’t
require high abilities (Assembly line ).

7. As you can immagine higher is
the level of technology used,
lower is the ability required.

8. CREATING A HIGH-INVOLVEMENT
STRUCTURE
BUSINESS STRATEGY
ORGANIZATIONAL DESIGNS AND STRUCTURES
DIFFERENT BEHAVIOURS AND OUTCOMES
INVOLVEMENT DESIGN FITS STRATEGIES THAT EMPHASIZE: HIGH
QUALITY PRODUCT, SPEED OF RESPONCE, INNOVATION, AND THAT
REQUIRE COMPETIVE OR LOWER THAN COMPETITIVE COSTS.

9. THE CONCEPT OF FIT
• STARTING POINT FOR FIT: SPECIFY WHAT
BUSINESS THE ORGANIZATION IS INVOLVED IN,
WHO ITS CUSTOMERS ARE, AND HOW IT
INTENDS TO PERFORM IN ORDER TO GAIN
COMPETIVIVE ADVANTAGE.
• THE MAJOR ELEMENTS OF AN ORGANIZATION
THAT NEED TO FIT IN ORDER TO HAVE AN
EFFECTIVE ORGANIZATIONAL SYSTEM ARE:
• PEOPLE
• TASK/ TECNOLOGY
• INFORMATION PROCESS
• REWARDS
• ORGANIZATIONAL STRUCTURE

10. INFORMATION, KNOWLEDGE,
POWER, REWARDS
• CONGRUENCE: IN HI APPROACH, CONGRUENCE
IS ACHIEVED BY LOCATING SIGNIFICANT
AMOUNT OF INFORMATION, KNOWLEDGE
POWER, AND REWARDS AT LOW LEVELS IN THE
ORGANIZATION.
• CONGRUENCE BETWEEN THE 4 ELEMENTS CAN
BE STATED WITH A SIMPLE EQUATION:
• INVOLVEMENT = INFORMATION X KNOWLEDGE X
POWER X REWARDS. ( scale of the presence of
an element: 0-1)
• ALIGNMENT: THE 4 ELEMENTS NEED TO BE
PROPERLY DISTRIBUTED AMONG AN
ORGANIZATIONAL LEVEL FOR THE
ORGANIZATION TO BE EFFECTIVE.
• THE 4 ELEMENTS CAN BE EXPANDED.

11. Organizational structure
• “Small is beautiful”:design organizations that can be big
when they need to be gaining competitive advantages but
small in terms of letting everyone feel as though they are
involved and can contribute to and influence the success of
the organization.
• Two important elements: Vertical hierarchy and
Horizontal hierarchy

12. Vertical design
• Number of hierarchical levels: the more levels in an
organization, the more difficult it is to move information,
knowledge , power and rewards to lower levels
• Span of control: the number of employees reporting to
a supervisor. A small span of control creates two
problems:
-Employees perform their work poorly because they are not motivated
-Employees are underutilized

13. Horizontal design
Decide how the organization is structured at the very top.It
can be structured in different ways:
• Functionalization:grouped around functional
areas(sales,manufacturing,marketing…)
• Profit centers around the costumers :align employees
with an external customer who can give feedback and who
makes purchasing decisions
• Structure organized around products or services

14. There are also two others interesting alternatives :
1. Front-End-Back-End Organizations:Combine a focus
on costumers and products at the same level in the
organization
2. Network Organizations:this approach is about focusing
on something that the organization does really well and
building relationships with others to do other parts of the
business process

15. HIO IMPLEMENTATION AT
NUMMI
The New United Motors Manufactering Inc. (NUMMI)
is a GM-Toyota joint venture having plant in
Fremont,California.
This plant was earlier used by GM for its own
manufactering processes but it had to layoff its
5700 workers when in 1982 it had to close its doors
due to unexcused absenteeism (around 20%) and to
low quality and productivity levels.
By 1986, despite the continuity with GM-Fremont’s
workforce* and the use of comparable equipment,
NUMMI’s productivity increased by 40%.
By 1990 the plant continued to excel in quality and
productivity.(trucks made here were rated n°1 in
initial quality by JD Power and Associates)

16. This huge turnover took place thanks to 2 guiding
philosophies:
1. TPS (Toyota Production System)
2. Supporting (MGMT) Policies
TPS
The work processes at NUMMI were structured by 4
main
TPS principles:
• JIT
• Team concept
• Jidoka
• Kaizen
Employee
involvement
is
fundamental

17. JIT
A JIT production seeks in eliminatinig all work in
process inventory so each part is delivered to the
following workstation Just In Time.
Effects of JIT on productivity:
SHORT RUN: workstation downstream didn’t get the
required parts in time
MEDIUM RUN: costs fell as problems were
discovered and resolved
Consequence of JIT on workers:
1. Extensive worker involvement in real time
problem-solving
2. Great worker flexibility

18. TEAM CONCEPT
The main purposes of having Teams within
organisations is increase workers flexibility and thus
efficiency.
WORKER TEAM GROUP
TEAM LEADER
•Train workers
•Replace absent
members
•Hand low level
responsabilities
GROUP
LEADER
Stands at the
first level of
MGMT

19. JIDOKA
JIDOKA AUTONOMATION HUMAN
AUTOMATION
Jidoka at the Fremont plant:
Defective parts were immediatly recognized to
avoid waste and to facilitate identification of the
root causes behind problems.
Consequences on workers:
Workers can decide to stop tha assembly when
they find a defect they can’t repair.

20. KAIZEN
Kaizen is a Japanese philosophy that focuses
on continuous improvement of processes in
manufactering, engineering, supporting
business process and managment.
Kaizen at the Fremont plant:
Team members and leaders identified optimal
procedures for each task.

21. Nummi
• Nummi contract promised a measure of job security.
It successful avoided layoffs and enhanced employees’
confidence.
• Nummi’s Performance Improvement Plan encouraged
commitment sharing program rewarded workers for
improvement in plant-wide quality and efficiency.
• Workers commitment was supported by cooperative
labour-management relations. The UAW ( A policy-making
levels ) was consulted on many issues that
would have been considered management
prerogatives at GM-Fremont.

22. • It also opened many avenues for skill formation: new hires
received more than 250 hours of training during their first
six months on the job compared.
• Member cross training waas fundamental to the plant’s
operations : workers learned all the jobs in their team and
rotate among them several times a day. It reduced
monotony and increased alertness and quality.
• Promotion provided an incentive and another opportunity
for skill formation.
• An apprentice program for its two skilled trades
classifications, tool-and-die maker and general
maintenance. The UAW offered a 10-week pre-apprenticeship
training program.
• Skill development opportunities were available through
numerous special project team assignments.

23. Employee selection
• Nummi re-hired the entire former
Union hierarchy. New workers
employeed had to face a long
selection process by interviews and
special attitude tests.
• One example of non traditional test
it’s this one adopted by a famous
Japanese company.

24. FIT: a new model of selection that is focused
on hiring a "whole" person who will fit well into
the specific organization’s culture.
It involves hiring practises that seem peculiar,
and also extravagant, from a traditional human
resource point of view.
Example: In the Toyota plant
in Georgetown, Kentucky
(USA) was used an hiring
process that involved a 18
hours examination that
include for example a general
knowledge exam, an attitude
test toward work, a physical
exam and others.

25. The New Selection Model:
Hiring for Person-Organisation FIT
4 Steps:
• ASSESS THE OVERALL WORK ENVIRONMENT
- Job Analysis
- Organisational Analysis
• INFER THE TYPE OF PERSON REQUIRED
- Technical Knowledge, Skills and Abilities
- Social Skills
- Personal Needs, Values and Interests
- Personal Traits

26. • DESIGN "RITES OF PASSAGE" FOR
ORGANIZATION ENTRY THAT ALLOW THE
ORGANIZATION AND THE APPLICANT TO ASSESS
THEIR FIT - Tests of
Cognitive, Motor, and Interpersonal Abilities -
Interviews by Potential Co-Workers and Others
- Personality Tests
- Realistic Job Previews, Including Work Samples
• REINFORCE PERSON-ORGANIZATION FIT AT
WORK - Reinforce Skills and Knowledge Through
Task Design and Training
- Reinforce Personal Orientation Through
Organization Design

27. Please clap your hands!
This is the end
my only friend
THE END…