CASE BAGBY COPY COMPANY



CASE: BAGBY COPY COMPANY

1. Discuss the tradeoffs that Bagby faces in choosing between specialized and broad task assignment.

Facts:
· Bagby Copy Company manufactures 10 different copiers. The main part of these copiers is a wiring bundle. This device is plugged into various components during the assembly process.
· They can assign each major task in this process to different employees using a broad task assignment or one individual can be assigned the task of producing the completed bundle using a specialized task assignment.

Discussion:
Some of the advantages that Bagby\'s managers will obtain if they divide the total task of the manufacturing process into specific jobs or tasks are:
Exploiting comparative advantage: Specialized task assignments will permit managers at Bagby to match people with jobs based on skills and training so this will permit employees concentrate on their particular specialties. For example, Bagby can hire engineers to design and develop a product and business people to do the marketing. The principle of comparative advantage suggest that this specialization will often produce higher output than using individuals to perform a broad tasks.
Lower cost-training expenses: With specialized task assignment, each employee is trained to complete one basis function. With broad task assignment, employees are trained to complete more than one function, this can be very expensive. For instances, suppose at Bagby the designing function requires an engineer, while in the line of production function requires a person with a lower education. Specialized task assignment allows Bagby\'s managers to hire one engineer and one person without an advanced degree. With broad task assignment, the level of education required is usually the highest level, so it will cost more for Bagby to hire two persons with college degree than one. Broad task assignment is more expensive than specialized task assignment.

Some of the costs of specialized task assignments are:
Forgone complementarities across tasks: Supposing that Bagby\'s engineers have to design and develop a new copier but they do not participate into the manufacturing and marketing functions, they will not have the sufficient feedback to develop a successful product. This feedback will be traduced in customers needs, future market opportunities or cheaper substitutes for raw materials. As another example, if within a product unit, only one person is in charge of assemble and check the wired bundle the care with which person does his job will decrease.
Coordination costs: The activities of specialized employees have to be coordinated. For instance, Bagby would have to establish the methods and procedures required to process a certain quantity of bundles during a period of time so technicians could use the same methods and procedures to process different kinds of bundles, this required a high level of coordination between the different product units. Bagby\'s managers will also need to coordinate procedures between functional and product basis groups.
Functional myopia: With specialized task assignment, employees tend to concentrate on their individual functions rather than on the overall process of providing good sales and services. For example, the performance of the manufacturing department could be measure base on the quantity of produced units and the performance of the marketing department could be measure based on sales, but if the quality of the copiers decrease sales will be negatively affected and the performance of the marketing department will be low while the performance of the manufacturing department remains high.

Reduced flexibility: Failure to cross-train employees has costs as well as benefits. For example, if only one person is trained to perform a particular function he or she becomes indispensable for the organization and this is a disadvantage when bargaining with the employee over salary and other benefits.

From an incentive point of view, it is sometimes better to have employees concentrate on a narrow set of tasks, while in other circumstances, a broad set of tasks is preferred, it depends on the business activity.

2. Discuss the tradeoffs (ventajas o desventajas) between these two methods of grouping wire-harness makers into subgroups.
Facts:
In either case, there are a group of employees that are assigned individual tasks to produce a wire harness for a particular copier (broad task assignment), so there is 10 subgroups of wire harness makers. Bagby Copy Company has the following alternatives:
1. Place all 10 groups in one harness department.
2. All groups can be assigned to and report to a