Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Productivity rises when companies are facing closure

09.05.2008
In companies that are slated to be shut down, productivity increases during the phase-out period itself.

When management is busy dealing with matters other than daily operations, employees shoulder a greater responsibility for their work­ and efficiency is enhanced. According to business economist Magnus Hansson at Örebro University in Sweden, this shows that it is possible to boost productivity considerably without investing. This is also an argument for longer phase-out periods, which would benefit both the employees and the company.

“Extending the shut-down periods creates better conditions for employees to find new jobs, for the surrounding business community to develop substitute jobs, and for company management to phase over production to other facilities.”

Magnus Hansson recently submitted a doctoral dissertation in business studies at the Swedish Business School, Örebro University. His research is based on the closure processes at ten manufacturing companies, two of them outside Sweden, between 2002 and 2007, and he has seen the same course of events in all cases:

“The patterns are surprisingly clear. When the decision to close is made public, there is an initial drop in productivity. People are angry, sad, and worried about their future. But when negotiations are over and everyone knows what the conditions are, productivity rises,” he explains.

And then, as management control of everyday operations lets up, there is suddenly scope for employees to act spontaneously and independently, and to reorganize their work.

“Innovative forces are released. They don’t have to lead to radical changes, but many minor changes can boost productivity. In several cases I studied it was also apparent that individuals who had no formal responsibility or authority took on greater responsibility and became informal leaders.”

“This is just the opposite of what happens when a company downsizes its employees. Even though the aim is to increase productivity, paradoxically it hampers production.”

The explanation for this difference, according to Magnus Hansson, is that a decision to shut down eventually leads to a situation where employees know what is going to happen, whereas employee downsizing creates uncertainty and conflicts.

Magnus Hansson’s research is based on the factories’ own production statistics, but to see what lies behind the figures, he also studied three companies in depth.

Interviews with plant managers, union representatives, and employees were complemented by his own observations, including what employees talked about during coffee breaks, what views they had of management and their work. Here he discovered several key factors that largely explain the increase in productivity:

“It’s about people and what motivates them. It’s surprising to see the commitment and efforts of employees in such an extreme situation as when they are losing their jobs.”

Magnus Hansson defended his thesis on March 28, and his dissertation is the first one to be submitted at Örebro University’s newly established Swedish Business School.

The ten companies covered by Magnus Hansson’s dissertation are:

Korsnäs Marmaverken in Söderhamn
SSAB in Luleå
PLM (Hammars Glasbruk) in Hammar (moved to Limared)
Fundia Steel, Wire Rod, in Smedjebacken
Lovene Dörr in Lidköping
Gusab Stainless in Mjölby
Gislaved tire factory, tire production in Gislaved
Gislaved tire factory, studding division in Gislaved
BHP Billiton in Newcastle, Australia
Boston Scientific in Seattle, USA

Ingrid Lundegårdh | alfa
Further information:
http://www.oru.se

More articles from Business and Finance:

nachricht Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik

nachricht Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A Challenging European Research Project to Develop New Tiny Microscopes

The Institute of Semiconductor Technology and the Institute of Physical and Theoretical Chemistry, both members of the Laboratory for Emerging Nanometrology (LENA), at Technische Universität Braunschweig are partners in a new European research project entitled ChipScope, which aims to develop a completely new and extremely small optical microscope capable of observing the interior of living cells in real time. A consortium of 7 partners from 5 countries will tackle this issue with very ambitious objectives during a four-year research program.

To demonstrate the usefulness of this new scientific tool, at the end of the project the developed chip-sized microscope will be used to observe in real-time...

Im Focus: Giant Magnetic Fields in the Universe

Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.

The results will be published on March 22 in the journal „Astronomy & Astrophysics“.

Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...

Im Focus: Tracing down linear ubiquitination

Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.

Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...

Im Focus: Perovskite edges can be tuned for optoelectronic performance

Layered 2D material improves efficiency for solar cells and LEDs

In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...

Im Focus: Polymer-coated silicon nanosheets as alternative to graphene: A perfect team for nanoelectronics

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International Land Use Symposium ILUS 2017: Call for Abstracts and Registration open

20.03.2017 | Event News

CONNECT 2017: International congress on connective tissue

14.03.2017 | Event News

ICTM Conference: Turbine Construction between Big Data and Additive Manufacturing

07.03.2017 | Event News

 
Latest News

Researchers shoot for success with simulations of laser pulse-material interactions

29.03.2017 | Materials Sciences

Igniting a solar flare in the corona with lower-atmosphere kindling

29.03.2017 | Physics and Astronomy

As sea level rises, much of Honolulu and Waikiki vulnerable to groundwater inundation

29.03.2017 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>