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 Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik

nachricht RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

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: Researchers develop method to transfer entire 2D circuits to any smooth surface

What if a sensor sensing a thing could be part of the thing itself? Rice University engineers believe they have a two-dimensional solution to do just that.

Rice engineers led by materials scientists Pulickel Ajayan and Jun Lou have developed a method to make atom-flat sensors that seamlessly integrate with devices...

Im Focus: Three components on one chip

Scientists at the University of Stuttgart and the Karlsruhe Institute of Technology (KIT) succeed in important further development on the way to quantum Computers.

Quantum computers one day should be able to solve certain computing problems much faster than a classical computer. One of the most promising approaches is...

Im Focus: Substitute for rare earth metal oxides

New Project SNAPSTER: Novel luminescent materials by encapsulating phosphorescent metal clusters with organic liquid crystals

Nowadays energy conversion in lighting and optoelectronic devices requires the use of rare earth oxides.

Im Focus: A bit of a stretch... material that thickens as it's pulled

Scientists have discovered the first synthetic material that becomes thicker - at the molecular level - as it is stretched.

Researchers led by Dr Devesh Mistry from the University of Leeds discovered a new non-porous material that has unique and inherent "auxetic" stretching...

Im Focus: The force of the vacuum

Scientists from the Theory Department of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science (CFEL) in Hamburg have shown through theoretical calculations and computer simulations that the force between electrons and lattice distortions in an atomically thin two-dimensional superconductor can be controlled with virtual photons. This could aid the development of new superconductors for energy-saving devices and many other technical applications.

The vacuum is not empty. It may sound like magic to laypeople but it has occupied physicists since the birth of quantum mechanics.

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

New Plastics Economy Investor Forum - Meeting Point for Innovations

10.12.2018 | Event News

EGU 2019 meeting: Media registration now open

06.12.2018 | Event News

Expert Panel on the Future of HPC in Engineering

03.12.2018 | Event News

 
Latest News

Small but ver­sat­ile; key play­ers in the mar­ine ni­tro­gen cycle can util­ize cy­anate and urea

10.12.2018 | Life Sciences

New method gives microscope a boost in resolution

10.12.2018 | Physics and Astronomy

Carnegie Mellon researchers probe hydrogen bonds using new technique

10.12.2018 | Life Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>