CASE STUDY 14

MOTOROLA’S GUADALAJARA PLANT

Motorola has attempted to increase the levels of quality throughout its organization, a drive
that has been reinforced by increased competition from Japanese technology firms. Motorola’s
CEO believed that in order for the company to keep its position as one of the top high-tech firms in
the world, it had to be innovative in its approach to quality control. In fact, the CEO was so
dedicated to quality control that he spent 50 per cent of his working time on this issue, and with
good reason: a major pat of Motorola’s success was due to its Six Sigma quality enhancement
program, through which the company had reduced errors in production worldwide to an extremely
low rate of 3.4 defects per million.
Motorola management spread its vision of total quality by teaching its employees how to think
and learn about quality issues. Each employee spent about 40 hours per year in class, examining
how to improve his or her effectiveness. This program, dubbed ‘Motorola University’, ensured that
the goal of improving quality filtered to all levels of the company. Even ‘soft” divisions _ those that
do not deal with technical research _ participated in this program. Telephone operators, for
example, were graded and evaluated on their phne skills, and the legal department submitted
regular statements on its efficiency.
One of the main problems facing any international organization set on improving quality is
motivating and communicating with individuals from different cultures. Early in the 1980s, Motorola
moved its discrete semi-conductor plant to Guadalajara, Mexico, to take advantage of cheap
labour costs and a favourable business climate. By 1987, however, top management were
displeased with this production rate and the level of quality in the Guadalajara plant. A massive
change was needed to actualize Motorola’s Sigma Six program in its struggling Mexican facility.
Both the plant’s management and its Mexican workers suffered from low morale. The local
palnt official, who ere mostly Americans, had little latitude to create their own innovative policies
since the factory was over-seen by the division office in Pheonix, Arizona. Thus, when problems in
production began occurring, the plant managers did little about the situation, believing that the
problem should be solved at a higher level, as the organizational charts mandated.
The Mexican workers were unmotivated, as well, as a result of the country’s hyperinflation,
even though the factory was one of the most modern and prestigious in Mexico; that is, even
though Motorola’s employees were paid better-than- average wages, they were still losing their
buying power day after day at the marketplace. Moreover, traditional American motivational
techniques proved to be ineffective, as Mexican worker tended to be more group oriented and less
willing to offer individual opinions on problems. The employees also valued family and the church
far more than they did work. Therefore, Motorola staff members were faced with the challenge of

Case 14/ 1
developing a workable plan that gave incentives for improved performance an enhanced employee
involvement in decision making.
The regional managers in Pheonix decided that, in order to improve quality, the plant in Mexico
had to be given more autonomy. Managers and regional staffers met to work out a new system
that provided the plant with more decision-making power. They combined this new power with a
vision of quality based on a broad set of goals that the plant had to meet. The goals were based
not on production alone but on quality improvement in all areas. Further, the local managers were
given the leeway to organize the factory in ways they considered appropriate. The management in
Pheonix hope that by empowering the Guadalajara managers, they would be more motivated to
solve problems themselves, leaving the regional office free to work on broader issues.
For their part, the managers in Guadalajara needed to develop a plant that would motivated
their employees to improve both quality and quantity. They found that individual incentives were
generally not effective. Recognizing that the family was one of the most important elements in any
Mexican’s life, Motorola set out to make the Mexico factory more domestically oriented.
Management aimed to make the workplace an ‘extended family’ by developing programs that gave
family members the opportunity to tour the plant and see what their relatives did for a living and
establishing workers’ picnics and other family events.
Motorola’s management also designed work schedules around Mexican cultural traditions.
Unlike North Americans, Mexican eat a large lunch that is considered the main meal of the day.
Thus, the Guadalajara factory allowed its workers to enjoy extended lunch hours. This made the
workers feel more at hoe, and they soon became more relaxed and comfortable during they work
shifts. Finally, Motorola offered its workers health insurance, an extremely rare benefit I Mexico. By
offering medical service, Motorola management took a big step in making its employees feel like a
special part of the Motorola family.
The managers at the Guadalajara plant also knew that input was needed from all levels of the
organization in order to increase quality. In order to bring out the valued opinions of its workers, the
Guadalajara management designed a system of incentives that rewarded group thinking. The
employees felt comfortable with this style of dialogue, and they provided important insights for
management. The managers, while gaining valuable insights from their employees, also used the
group meetings to describe an reinforce Motorola’s vision of quality.
As a result of all these changes, quality levels at the Guadalajara plant increased dramatically.
Workers understood the company’s new vision for quality control ad could see how their job fitted
into this vision because they had input on how to improve quality. All of this activity was based on
an atmosphere of family and cultural security that made the Mexican employees more comfortable
about management in general.

Case 14/ 2
QUESTIONS
1. Making any necessary assumptions, apply the integrated motivation model,
summarized in figure 6.9 on page 191, to help explain:
a) the increased autonomy and motivation of the local managers
b) the increased motivation of the workers.
2. Along with picnics and factory tours, what other ways can management involve
workers’ families in the culture of the workplace?
3. ironically, Motorola give its Mexican workers health insurance at a time when many
companies were dramatically cutting back on health-care benefits for US workers.
Discuss such benefits as means of motivating employees,

Case 14/ 3