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TOTAL QUALITY MANAGEMENT: Benz INTRODUCTION: Benz is the biggest industrial firm in Germany.

They feature mostly simple passenger cars to luxury cars. In order to stay number one, they must practice TQM. TQM: Benz concentrates on car quality, stability, reliability, safety, high performance and luxury. All these combined result in an effective program of TQM. Benz must constantly emphasize that its cars are stable and reliable, which means that there are no defected cars in their production. Next, the safety should include rear three point seat belts, special seats for children, and bumpers on cars made of special composite materials to absorb great impacts to the cars, thereby protecting the cars' occupants. The luxury in TQM is that the cars constantly have automatic features such as automatic windows and gears, automatic climate control, electronically adjusted seats with heaters installed in them. COMPARISON: As we have shown, McDonald's, Daimler Chrysler , and Benz are large corporations with a common goal: to provide its customers with top quality products. These firms are very highly customer oriented, taking into account their customers' needs and wants. Also the companies are growth oriented shown by Benz's merger with Chrysler and McDonalds opening of three new restaurants every three hours. In addition, these companies are decentralized resulting in high employee morale and thus motivation. Another important aspect is that these companies operate on a global scale. Also, these companies follow an Analyzer Strategy by constantly innovating new products. These firms also became diversified in that McDonald's uses a backward vertical integration, thus replacing its suppliers, while Chrysler and Daimler have merged to become a more diversified company. These companies also differ. For example, Benz uses a differentiation strategy emphasizing its high quality and high value of its products. On the other hand, McDonalds uses an overall cost leadership strategy to reduce costs and increase sales. Similarly Chrysler uses an overall cost leadership strategy to reduce costs and to sell a much larger amount. CONCLUSION: In conclusion, we have explored a large corporation such as McDonald's and shown how its Task Environment, Workforce Diversity and Total Quality Management can have a profound effect on the organization. In order for such a corporation to remain a leader in its field, it must stay growth oriented and constantly have contingency plans to overcome turbulence. Another important factor is the type of strategy that it follows. McDonald's, Daimler Chrysler and Benz follow an analyzer type of

strategy, constantly introducing new products while defending their existing products.

Decision Making

Eastern Airlines Facing Bankruptcy

In fourth

1986, Eastern Airlines was in of 1985 had shown a

desparate $67.4

trouble. loss, and

The and chief 20 2) On



financially executive percent

experts had told Frank Borman,



that the airline had three choices: and noncontract

1) a


cut for all union

employees. airline.

Filing for Chapter 11 (bankruptcy) or 3) Selling the February 23,

1986, Eastern's board of directors met to decide the

fate of the company. Frank Borman, quickly left his home in Coral Gables to

Building 16 at Miami International Airport that Sunday evening, to discuss plans on saving the airlines. The board of directors had

recessed for dinner following afternoon session and was to convene at 7:30 p.m. vice At the earlier meeting,

scheduled Yeoman, time Frank



president for finance,

had spent most of


outlining the details of Texas Air's offer to buy Lorenzo originally systems, sale. As Frank entered his office, and Frank Borman had been the talking

Eastern. since

December reservation possible

about then ,



as Eastern's problems deepen,

about a

he found his his loyal excutive

assistant; president discussed

Wayne Yeoman; for legal

and Dick Magurno, Eastern's senior vice For about 20 minutes the for three saving and since


the fourthcoming meeting and the prospects

the airline. TWU but

Negotiations were going to come around for ALPA The IAM would not budge

no break from the IAM.

Charlie Byran, head of the machinist's union, stood firm against a 20 percent wage cut. At 7:30 the board meeting began with the discussion of the

Texas Air offer, to the

concentrating on some of the conditions attached More talk and hours nearing an dragged on. The

buying of the company. word


got out that ALPA was


meeting recessed for an hour. During the recess Frank needed to get Charlie's surport the 20 percent pay cut, otherwise the company was going to Frank told on

sold. "

He told Charlie to come up to his office.


we've been at this since 83' and you have to recognize it can't go on. I have every reason to believe that the pilots are going to give us what we need. I know and it's But I flight more know to

attendants difficult you

for you because your contract is not open.

have a sense of history.

We have a very good opportunity in the

cure this airline,

and if you just understand this,


run you'll come out a stronger,

more admirable person. Choose the and let's go forward." you with

harder right instead of the easier wrong, With this Charlie replied,

"Frank you don't understand that

are just trying to run the company down and I can't go along that.

With this, Frank gave up and told Charlie to wait outside.



everything he could to get Charlie's




attempts failed. This was going to be the end of Eastern Airlines. The board meeting finally reconvened at 10:30, an hour an a

half away from the deadline. Word had reached that ALPA reached an agreement and TWU negotiations were still up in the air. The

directors heard analysis of the Texas Air offer by representatives of Saloman Brothers and Merrill Lynch, at this point Charlie Bryan finally spoke up. He said, "I've had discussion with the chairmen and would like the board Two of the directors, to

of the audit and finance committees, be Hood view informed what we talked about." Bassett and Peter Crisp, of the

Harry the his also

told Charlie to reconsider in and the fact that They

57 years of the airline, impact all the





reminded him that seemed to be a tragic end for such fine


Nineteen pairs of eyes turned towards Bryan. Mr. Bryan stated that when the IAM amended it' s contract on October 17, 1985, they never complained about the other two unions. The IAM has made

recommendations for cost savings over the past several months, but we were never given the opportunity to implement them. Frank

responded , "That's nonsense!". operate , replied,"

He told Charlie if he doesn't coand it's his fault! asked to Byran trust

he'll destroy the airline, Year

in and out the unions have been


Each year has been a crisis situation and unions were It's time for management productivity and and no

told there were still enormous problems. to

trust the employees to find ways to improve

reduce costs."

After a half an hour more of discussions,

agreement, the board was ready to vote. But then

word come around


ALPA agreement was ready to besigned and TWU was



inch of reaching an agreement. Also Texas Air is willing to extend the deadline to 4 a.m. Byan, One board member in a last ditch effort

asked Mr.

"are you fully aware that this board is going to If so, I'd like you to say for the record that

sell the airline?

you still refuse to participate." Byan replied, " Although the IAM will not agree to the company's proposals, are saving labor costs and improving we have proved that we and, if the


board decides to sell or bankrupt the company, me and say,

you can't point to tonight At this

'It's your fault.' I am against any activity

to sell Eastern or any decision to file for bankruptcy." point,

one of the board directors said, " Mr. Bryan you have said

that you will vote no tonight to the sale, and you indicated to me that along the there is no basis whatsoever that you would agree to come that is

with the other unions to fix it.

It is obvious to me

responsibility for forcing the board to sell the yours!"



After this there was a brief adjournment, Charlie Byran finally came back with a proposal to cut the IAM's salary since the IAM had contributed 5 wages to 15




productivity gains. An attached condition was also proposed that a new chief executive officer to be appointed within Frank a reasonable given 5


responded "Any allegation that the IAM has

percent is nonsense!

If the IAM will give 20 percent this evening I 15

like other employees I will submit my resignation this evening. will not submit because my resignation if the IAM will only simply give


that supposed 5 percent simply


exist!" The time was 2:00 am. to vote on the Texas Air offer. Frank that

The board believed that it was time

left the auditorium and told the board that Outside, one of Byran's



he abstain from any vote.


came out to persuade Frank to resign. said,

He told the lawyer, "like I deduction I will gladly

if the IAM takes a 20 percent wage

resign." After this comment Frank walked away. A counter of a proposal vice was made by the directors by the to the

appointment committee went

chairmen to be


board Charlie the

if the IAM takes the 20 percent pay


off on a huddle with his lawyers and returned to reject

proposal. At 3 a.m. Eastern Airlines sold the company to Texas Air with a vote to sell was 15 to 4. All four union directors. Byran

included included against the merger. The major management problem concerned here is that

management was unable to get the IAM union to negotiate in wage deceases which lead to the selling of the company.