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BUS 340: JinJian Garment Factory

Final Case Analysis Project
by

peishuo mi

on 27 March 2015

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Transcript of BUS 340: JinJian Garment Factory

CAPABILITY GAPS
ORGANIZATIONAL JUSTICE
SWOT Analysis
ORGANIZATIONAL INJUSTICE
RECOMMENDATIONS
Resolving Capability Gaps and Injustice Issues
JINJIAN GARMENT
SUBSTITUTES
No information given
No real substitutes for human labor involved in complicated procedures
ORGANIZATION
RESOURCES
BARRIERS OF ENTRY
BUYERS
Foreign buyers
Upscale retailers
Require standard quality and short lead time
KSF: Price, Delivery, Quality, Relationship

SUPPLIERS
Many suppliers
No substitutes
Wage based on piecework performance
High turn over
KSF: retained skilled workers, justice and relationship

Industry
Competitors
BUS 340: JinJian Garment Factory
The Team
Alvin Tang
Stefan Mi
Michael Hsu
Lili He
Mickey Ma
Angie Chan
Strengths
Short production lead-time
Low cost
Cheap labor

Weaknesses
Poor management
Poor leadership
Profit conflict within piecework system

Inexpensive land and labor
Close to HK and manageable
Special economic zone since economic reform
Opportunities
Industry-wide Organizational Injustice
Highly competitive
Little knowledge and control of demand

Threats
Distributive Justice
Procedural Justice
Informational Justice
Interpersonal Justice

CMT Determination
Quality Problem
High Turnover
Organizational Injustice

INTERNAL CAPABILITIES
Industry Analysis
Low capital investment
$5000 to enter the business
Free trade in China
KSF: Low Cost
STRONG POWER
WEAK POWER
LOW TO MEDIUM POWER
LEADERSHIP
LEADERSHIP
Value: low educated but ambitious
Experience: no industry management experience
Vision: motivate workers
Team: no management team/ solo owned

ORGANIZATION
System: piecework system
Structure: production team(10-15 workers)
Culture: sweatshops & guanxi

RESOURCES
Human: more than 250 workers
Operational: 150 sewing machines
Financial: $75,000 annual profit
Overcome
weaknesses
Grow
Restructure
Diversify
STRATEGY
STRATEGY
COST LEADERSHIP STRATEGY !
SHORT-TERM
European Order Problem
Outsource production to other company
Temporarily increase piecework rate
If < $15,000
LONG-TERM
Organizational Restructuring
Unfair Wage
Unfair Management Unfair Punishments
Distributive Injustice:
Procedural Injustice:
Interpersonal Injustice:
Auction System
Determining CMT and Fair Wage
Orders (high variability)
Teams bid CMT on orders
Lowest bid gets order
Manager splits piecework
Size, Design, Colour
Team A, $3 > Team B, $2.90, Team B produces (Dress shirt, Size M)
Bidding on production of Dress Shirt (Size M)
Inequality: Different wage levels

Inequity: Unfair

Lack of standard procedure to determine fair compensation

Mismanagement
CMT/wage before production
(Informational Justice)

Teams bid CMT they are willing to produce (Procedural Justice)

Efficient CMT and wage determination (Distributive Justice)
Quality Assurance System
Job assignment

No communication

Morbidly long work hours

May be left without work

Compensation

Short production lead times
Establishing Quality and Fair Punishment
Skilled-Worker System
Reducing Turnover and Fair Management
Informational Injustice:
Quality monitoring within teams
(Procedural Justice)

Mistakes easily identified to individuals
(Informational Justice)

Fair Punishment
(Interpersonal Justice)
High Skilled workers assigned as Team Leaders/Managers
(Procedural Justice)

Assigning workers based on skills
(Distributive Justice)

Low team performance = demotion
(Interpersonal Justice)

Share options, build group cohesion
Supporting the Cost-Leader Strategy
Employee self-selection
Lower Turnover
Reduced Costs
Maintained Quality
Fair
Highly Competitive
KSF: Costs, Organizational Responsibility
Summary
Effective Organizational Justice:
Full transcript