史上最全英語學習大集合经典案例十

经典案例十：Johnson & Johnson 来源：新天地英语 浏览：2979次 Human Resources Management Facing Business Challenges at Johnson & Johnson Does a healthier work force translate into healthier profits? This was one of the key issues facing Johnson & Johnson CEO Ralph S. Larsen and his predecessor, James E. Burke, as they considered the challenge of managing the company's human resources and keeping employees satisfied and productive. Johnson & Johnson operates throughout the world, employing more than 70,000 people to research, manufacture, and market health-care products in dozens of countries. Employee health was a major concern for several reasons. Company studies showed that over 30 percent of Johnson & Johnson's employees were smokers, and one internal report revealed that smokers had a 45 percent greater rate of absenteeism than nonsmokers. Smokers also contributed disproportionately to the company's medical expenses (30 percent higher than nonsmokers), an ominous statistic at a time when health-care costs were rising at nearly twice the rate of inflation. Another problem confronting J&J was how changing demographics were affecting employees. Employees increasingly fell into one of three groups: They were part of two-career couples with children; they were responsible for an aging parent; or they were single mothers or fathers. A survey of 10,000 J&J employees revealed that they were frustrated by their inability to meet all their obligations, both to their families and to their employer. Many stated that they had difficulty finding day care, es­pecially sick-child care and infant care, and almost 20 per­cent responded that they could not afford day care even if they could locate a suitable provider. Although these employees felt torn between family pressures and employment roles, they found little help at work. Most stated that their managers were unsym­pathetic about the dilemma. Balancing their work and family obligations took its toll on employees, who reported higher levels of stress, greater absenteeism, and lower job satisfaction. For guidance on these issues, the CEOs turned to Johnson & Johnson's operating document, the corporate credo written by Robert Wood Johnson, son of a found­ing Johnson brother and chairman of the company for 25 years. Johnson ranked the company's obligation to its em­ployees ahead of its responsibility to its shareholders and second only to its commitment to its customers. This credo would serve as a blueprint for successful human re­sources management. So how could J&J top managers promote health in the workplace? How could they help J&J employees bal­ance family and career obligations? What programs could be established to meet the personal and professional needs of their employees more effectively? What effect would such programs have on the company's bottom line? Meeting Business Challenges at Johnson & Johnson Ralph Larsen and James Burke understood that effective human resources management was the key to the satisfied and highly productive work force so necessary to Johnson & Johnson's fu­ture success. The first step toward improving productivity was to help employees meet their dual responsibilities to family and job. To start, the company opened child-care centers at its cor­porate headquarters in New Brunswick, New Jersey, and its nearby Somerset office. Child-care costs at these centers are lim­ited to 10 percent of an employee's disposable income. Then J&J expanded its child-care program to include home care. The company contracts with child-care providers to offer employ­ees reduced rates on home-based child care. It also gives the providers advanced training and access to the resources in its on-site child-care facilities, such as books and toys. Under its Balancing Work and Family Program, J&J helps employees locate resources and referrals for child care and el­der care. It also goes beyond the bare legal minimum, allowing employees to take family-care leave of up to one year after the arrival of a newborn or adopted child and letting employees arrange a flexible work schedule to attend to an ailing family member. Moreover, employees in some locations can set flexi­ble schedules that allow them to better meet their family obli­gations and still do excellent work. In addition, Johnson & Johnson managers participated in training to sensitize them to work and family issues. To un­derscore the company's commitment to family care, human resources managers added a new sentence to the company credo: "We must be mindful of ways to help our employees with their family responsibilities." This commitment to help­ing employees better manage family pressures boosted pro­ductivity by reducing absenteeism, tardiness, and stress. In ad­dition, the company's commitment to work/family policies helped attract and keep qualified employees in a tightening la­bor market. Productivity was also enhanced by a wellness program. Live for Life was designed to emphasize steps employees can take to maintain and improve their health. The program sets four goals for employees: They should quit smoking, eat more fruit and fewer fatty foods, exercise regularly, and buckle their seat belts. At J&J headquarters, employees can work out in a gym, select "healthy heart" foods in the cafeteria, and check their weight in rest rooms. To encourage participation, employees are eligible to win prizes for meeting their goals. Over 35 J&J loca­tions now have fitness centers and wellness programs, and 75 percent of the work force participates. The results have been impressive. Smoking among em­ployees has been reduced to less than 20 percent, a decline of more than one-third. Live for Life costs J&J $225 a year for each employee, but lower absenteeism and reduced health costs have saved $378 per employee. Live for Life was so successful that J&J formed a new com­pany, Johnson & Johnson Health Management, to market the Live for Life program. The new company assists with fitness center design and management, and it orchestrates health­ promotion campaigns in such areas as smoking cessation, nutrition, and stress management. Live for Life is available at 60 leading corporations and medical centers that together employ more than 850,000 people. Johnson and Johnson maintains other progressive bene­fits policies as well, including medical, dental, and life insurance and a generous 401(k) retirement plan. By making such gener­ous attempts to help employees balance their work and family lives, Ralph Larsen is demonstrating that Johnson & Johnson employees truly are the company's most valuable asset. 经典案例九：Hallmark Cards 来源：新天地白领商务英语 浏览：2113次 Facing Business Challenges at Hallmark Cards Sending the Right Message to Employees One of Hallmark's sympathy cards reads "Please remem­ber that winter's darkness emerges into spring." Given the ­troubles at Hallmark Cards, it's just the kind of message that Human Resources vice president Ralph Christenson wants to send to employees. From the early- to mid-1990s the privately held greeting card firm saw its market share slip from well over 50 percent to about 45 percent, as new players in the market made cards that were more attractive and up to date. Even though Hallmark sales remained strong at about $4 billion annually, many profit measures slipped dramatically. It's hard to say just how bad things were because Hallmark profits are kept secret, even from the 20,000 employees who own part of the company. But it wasn't good news when-Hallmark's profit-sharing contributions slipped from 10 percent of salaries to about 5 per­cent. Newly arrived in the Human Relations department, Christenson needed to find ways of keeping company employees happy. After all, the company's core mission is to communicate affection, love, and friendship through the warm messages that employees dream up. Hallmark started out in 1910 as a family-run business, and the Hall family's leadership continues today. Based in Kansas City, Missouri, the company has always attracted talented and creative people through its friendly and family-oriented atmosphere. Because Hallmark products are based on enhancing relationships, it stands to reason that the company would focus on keeping employees happy. For example, back in the 1950s, the Hall family set up one of the first profit-sharing arrangements for employees. Today, employees own about one-third of the company. In addition, the tuition-reimbursement program pays 100 percent of education expenses for full­time staff. Other initiatives focus on child care and alter­native work arrangements such as work sharing and job sharing. And the company's policies are flexible to meet employees' special needs, such as allowing time off to care for aging parents. Overall, the company has always done such a good job helping its employees that Hallmark con­sistently ranks among the best companies to work for in the United States. But in the mid-1990s Hallmark faced declining mar­ket share and shrinking profit. Consultants suggested ma­jor cost-cutting efforts, including a merger of the admin­istrative, marketing, and product-development functions for the various card brands. To save money, Hallmark threw out its old organization and the ways that employees had beep doing their jobs. With the new focus on finances, em­ployees were concerned that their family-oriented benefits would disappear. Moreover, many employees feared that their jobs would be changed dramatically or eliminated al­together. The organization was in turmoil. Christenson had come to Hallmark because he be­lieved the company cared deeply about its employees as people. Because of management's recent sharp focus on corporate profits, Christenson worried that Hallmark wouldn't be able to keep up its long tradition of caring for employees and their families. For the company to see its way through the current crisis, he had to inspire the employees who create and produce Hallmark products. Christenson needed new ways to strengthen the family-oriented programs and shore up morale. If you were Ralph Christenson, what motivational techniques would you employ to keep Hallmark operating at peak levels? During times of massive organizational change, what would you recommend to reassure employees and help them deal with stress? How could you improve the company's communication with employees. What steps would you recommend for maintaining Hallmark's traditional focus on employee needs? Meeting Business Challenges at Hallmark Cards As the new vice president of Human Relations, Ralph Christenson was facing restructuring and disruption at Hallmark. Ru­mors of layoffs or massive job change and loss of benefits echoed along the corridors of Hallmark's Kansas City headquarters. Employees worried that profit sharing might be cut and that other important benefits such as child-care help, tuition reim­bursement, and work sharing would be lost. Always known for its family-oriented atmosphere, the company had consistently ranked among the best places to work in America. But now em­ployees' faith in Hallmark wavered, and Christenson needed to reassure company employees that things would work out. Although Hallmark Cards was a healthy company, man­agement knew the underlying cost structure was too high. More­over, the time it took to deliver new products to market was as much as three years, far too long when customer tastes can change rapidly and the competition can react more quickly. So with the help of outside consultants, Hallmark's management developed several strategies to reduce costs and introduce prod­ucts with greater speed. During this time of change, preserving employee jobs and improving morale were Christenson's primary concerns. So he developed a creative solution for containing costs by looking be­yond what people were originally hired to do. To retain em­ployees displaced by the merger of three divisions, Christenson developed a program for retraining factory workers to l1andle office jobs. Yet another group of factory employees helped paint an operating plant while receiving their standard wages. When factory work is slow, employees can even choose to volunteer for community work while drawing their usual paychecks. And no employee with more than two years with the company can be let go without a case review by company executives. So with Christenson's help, Hallmark was able to perpetuate its special caring for employees and its history of no layoffs. Then to speed up the time it takes to develop and intro­duce new card products, Christenson helped Hallmark create cross-functional teams. Before these changes, Hallmark artists, designers, printers, and financial staff were working as much as a city block apart even though some of them were working on the same card design. With the new team concept, these em­ployees have been brought together into one room to create, de­velop, cost-justify, and produce new cards. This approach cut the overall time to market from three years to about one year and helped Hallmark compete more effectively in the rapidly chang­ing greeting card business. Employees quickly adapted to the idea of working together in teams, and they embraced the opportu­nity to learn more about the company's overall operations. Next, Christenson addressed employee benefits. Al­though workers were generally happy with the existing benefits package, Christenson wanted to offer even more solutions to keep Hallmark employees satisfied. He needed to build a two-­way communication channel that allowed him to hear employee concerns firsthand; he set up a series of feedback sessions in which employees could tell him what was on their mind. As a result, Christenson reorganized the human relations depart­ment to focus on a number of themes important to employees. 经典案例十三：Starbucks 来源：新天地英语 浏览：4201次 13 Product and pricing decisions ON THE JOB: FACING A BUSINESS CHALLENGE AT STARBUCKS Brewing Up Success Nationwide Have you had your coffee yet today? If so, did you open a can of Folgers and brew it yourself, or did you hand $2 to a barista and ask for a "single tall skinny mocha no whip with extra cocoa"? More and more coffee drinkers are getting their daily dose of java from Starbucks Coffee Company. Founded in 1971, Starbucks originally sold its trademark dark-roasted coffee beans in a few Seattle stores. But everything changed when current chairman and CEO Howard Schultz took over in 1987. Schultz en­visioned selling gourmet coffee beverages in hip neigh­borhood coffee bars like the ones he saw on every corner while vacationing in Italy. He wanted Starbucks to be a meeting place where people could exchange ideas and es­cape from everyday hassles. And from day one he wanted to go national. Schultz focused on building a competitive advantage through a loyal, well-trained labor force that deliv­ers consistently superior products and service. He also fostered a company commitment to employer responsi­bility, environmental stewardship, passion for coffee, and integrity in customer relations. His efforts paid off. In a decade, Starbucks grew to over 1,100 stores in 22 states and 3 foreign countries. In the United States, Starbucks literally changed the defi1ition of "a good cup of coffee." Loyal customers are described as "religious" about the product. In fact, Starbucks is so highly regarded that the company is leveraging its reputation with brand exten­sions. Bottled coffee beverages, ice cream, music CDs, and a coffee-laced beer now bear the Starbucks logo and are available on grocery store shelves. In addition, the company receives hundreds of joint venture proposals for new products every week. But even though the success of Schultz's vision has led to unprecedented opportunities, it has also created new challenges. Rapid expansion has led some consumers to view Starbucks as a corporate villain that rides into town, throws down a lump of cash to get the best locations, and then drives the local cafes out of business. Locals fear that a Starbucks on the corner means the loss of a community's unique character. Brand extensions also raise new concerns; Although initial products have proven successful, they run the risk of diluting Starbucks' core identity as a premium coffee company. The company also faces the challenge of keeping quality consistent as the company continues to grow. Starbucks sets customers’ expectations high, and it must continue to meet those expectations to stay ahead of new competitors that enter the market almost daily. These concerns weighed heavily on the minds of Schultz's marketing team as Starbucks celebrated its twenty-fifth birthday. Team members were developing a new marketing strategy that they hoped would establish Starbucks' image and assure its future success nationwide. If you were on that team, what would you do to maintain Starbucks' leadership position? How would you evaluate the potential of new products? How would you define your target markets? What image would you want consumers to have of Starbucks, and how would you maintain that image as the company continues to grow? On the Job: Meeting Business Challenges at Starbucks Starbucks entered its twenty-sixth year as the uncontested leader of the gourmet coffee market. The company had already expe­rienced incredible growth, with sales approaching $700 million in 1996, and Schultz had plans to continue expanding, opening almost 900 new stores over the next several years. But the com­ing years would undoubtedly prove challenging. Competitors like The Second Cup, Seattle's Best Coffee, and Barnie's had ex­pansion plans of their own. And many companies imitated Schultz's formula for success with the hope of beating Starbucks at its own game. The Starbucks marketing team had to be savvy to stay on top. The team began by extensively researching both com­petitors' and Starbucks' stores. They brought in hidden cameras to document how well the employees knew their coffee, and they asked customers how they felt about the products, atmosphere, service, and coffee. The insights they gained became the foun­dation of their strategy. As with all good marketing strategies, the heart of the plan was a vision of how they wanted to position Starbucks in the coffee market. In addition to remaining the quality leader, they wanted Starbucks stores to appear more like local cafes than a national chain and more like a sanctuary from daily stresses than just a take-out coffee store. Other goals included boosting stagnant sales in older stores, establishing a central fo­cus for all Starbucks products, and developing national adver­tising that would convey a consistent image. Achieving these objectives required making changes in products, distribution, and promotion.' Over the years, Starbucks core products, coffee beans and beverages, had already undergone changes to meet cus­tomer preferences. But some merchandise, such as mugs and coffee makers, had been left untouched. Now new merchan­dise was planned for all stores. In addition, new food items were offered to attract customers throughout the day (because half the day's sales were typically made during the morning hours). New products were targeted for grocery store distribution, including cold coffee drinks and ice cream novelties. How­ever, the company was adamant about maintaining its identity through strict product standards. If a product wasn't fun­damentally related to coffee and to Starbucks' core values, it wouldn't carry the Starbucks logo. The retail distribution strategy had to address additional challenges. To combat the fears of certain communities about losing their uniqueness, Starbucks began designing new stores to reflect local cultures. For example, a store in Seattle's upscale Queen Anne neighborhood has a fireplace and large chairs that invite customers to linger and relax. The company also began redesigning older stores (where sales had begun to level off) in order to give them a more comfortable feel. To expand its mar­ket, Starbucks rolled out a nationwide line of specialty coffees to be sold exclusively in supermarkets. The company packaged the supermarket coffee uniquely but priced this new line of coffees to match prices at company stores, keeping the brand image high while discouraging cafe customers from purchasing Starbucks at the supermarket. Even though product and distribution changes were important, a well-designed promotion strategy was the key to building a consistent image nationwide. Starbucks had always taken an undifferentiated approach to marketing. If a person was a coffee lover, that person was a potential Starbucks customer. And research shows that coffee lovers have an emotional tie to the beverage. It can even be a part of their self-identity. To capitalize on this, the marketing team focused on building a national campaign that didn't feel national. They wanted customers to build a personal identification with Starbucks products. So the advertisements they developed were down-to-earth and genuine, depicting Starbucks as a place to find peace in a hectic world. To counter arguments that the company is too pristine, Starbucks used ads that were somewhat unpolished, as though an art student had done them. In addition, the com­pany began to experiment with "digital marketing" through a hip Web site that attempts to re-create the coffeehouse culture on the Internet. Finally, to ensure high standards of quality and maintain what Schultz believes is Starbucks' biggest point of differentiation, the company reaffirmed its commitment to its employees. All Starbucks employees receive extensive training before they set foot behind a counter. They also receive progressive com­pensation, including full health benefits and stock options, even for part-time employees. As Schultz says, "The only way we're going to be successful is if we have the people who are attracted to the company and who are willing to sustain the growth as owners." Only time will tell what the gourmet coffee market will I be like when Starbucks turns 50. But by continuing to offer' the best-quality coffee products in a comfortable environment, I and by supporting the brand through innovative promotion, I Howard Schultz expects Starbucks to remain on top of the bean hill 经典案例12：She's Florists 来源：新天地英语 浏览：2996次 12 Marketing and Customer Satisfaction Facing Business Challenges at She’s Florists Profiting from a Bunch of Data With only $500 in their pockets, Helen and Marty Shih (pro­nounced "she") came to the United States from Taiwan in 1979 to pursue a graduate education. But the brother and sister were sidetracked--instead of using the money Dad had given them to begin their studies, they invested it in flowers. A visionary with a passion for life, Marty Shih believed they had a one-way ticket to a better life. So he and sister Helen set up a flower stand on a Los Angeles street corner. They worked hard--sometimes 16 and 18 hours a day--and before long they were able to move their busi­ness indoors. Neither had a formal education in market­ing, but they understood the importance of customer ser­vice. They began making notes about who their customers were, where they lived, why they were buying flowers, who they were sending them to, and what types of flowers they liked. The Shihs used this information to send postcards reminding customers that a special day was approaching. Their customers appreciated being reminded to send flowers, and business grew. Customer by customer, the Shihs expanded beyond their little lobby stand, even­tually opening 16 She's Flowers shops in the Los Angeles area. They did more than just sell their blooms. They mass-produced their arrangements on an assembly line, just like McDonald's mass-produces hamburgers. Each shop offered between 15 and 21 designs, which were listed on a menu board. Again, customers appreciated the speed and consistency of these flower arrangements. However, bouquets weren't the only things blossom­ing at She's Flowers. Over time, the company's customer in­formation files had grown and were full of valuable names­--mostly Asian American immigrants. In fact, the Asian Amer­ican market became the Shihs' primary focus. Pulling Asian names and addresses out of phone books and recording cus­tomers one-by-one, the Shihs eventually gathered so many names (all potential customers) that they decided to spend $200,000 to computerize their database. In 1985 they de­signed a database program that allowed them to track much more information than they had been able to keep by hand--credit-card numbers, payment dates, personal mes­sages, delivery and vendor services, preferred floral arrange­ments, and so on. Simple to run, the database was integrated with all the shops' cash registers. In fact, employees could not complete a sales transaction without inputting all cus­tomer data, including personal notes like "Mr. Jones never wants the orchid arrangement to be sent to Mrs. Jones:' It wasn't long before Floralfax invited She's Flowers to join a worldwide telemarketing organization that was staffed by American Airlines reservationists during slow travel periods. After joining, the Shihs' annual revenues for the 16 shops doubled-from $2 million to $4 million. Convinced that telemarketing was a garden of opportu­nity, Marty Shih began exploring the possibility of selling other products to customers. If you were Marty Shih, how would you profit from a customer information file that contained data on mostly Asian American immigrants? What other products might you market to your customers? How would you continue to build relationships with your customers and keep their business? Meeting Business Challenges at She's Florists Customer by customer, Helen and Marty Shih built a business empire serving the huge multi cultural Asian American market. While Helen continued to push flowers to customers, Marty be­gan telemarketing other services to this rapidly growing mar­ket. After all, having a database of Asian American immigrants, knowing their language, and understanding their cultural dif­ferences, the Shihs could make their blossoming database pay off. So Marty Shih founded the Asian Business Co-op, an Asian buying club that negotiates discounts on products and services for its members. For instance, by entering into a joint venture with Sprint, the co-op sold special discount long-distance services to the Asian community. Of course, the growth of the partnership was helped by the fact that Asian Americans make three times more inter­national calls than other ethnic groups in the United States. Soon Marty entered into relationships with other service providers: DHL Air Express, New York Life Insurance Company, Service Master, Lucent Technologies, United Van Lines, and Pearle Vi­sion-to name a few. It seemed that the Shihs' not-so-little data­base (currently 1.5 million names) was a gold mine of opportu­nity for companies looking for new business. And Marty was their bridge-repackaging and customizing products and services and selling them to Asian Americans at a substantial discount. At the heart of the co-op were the 550 telemarketers who understood the diverse Asian culture and collectively spoke six different languages-Mandarin, Cantonese, Korean, Japanese, Vietnamese, and Tagalog (spoken in the Philippines). Asian im­migrants (most of whom did not speak English) needing advice on dealing with immigration officials or perhaps help in un­derstanding a bill, could call the Asian American 411 (at 1-800-777-Club) and get whatever information they re­quested-for free. After all. Marty knew that they would even­tually buy something. Meanwhile, each caller was added to the company's database. With over 1,200 new immigrants calling daily, the Shihs decided to sell the flower shops and concentrate on the more profitable telemarketing business. Today the Asian American Association (founded in 1995 as an offshoot of the co-op) comprises 13 companies and has branches across the United States. The 550 informed telemar­keters sit ready at computer banks and phones to address the fi­nancial, health, insurance, travel, and other personal concerns and needs of Asian Americans, while moving well over $200 mil­lion in merchandise annually and bringing the association over $25 million in annual revenue. The association has become a center of social, cultural, educational, and political life for Asian Americans. With over 1.5 million members, the list of offerings keeps expanding. The more the telemarketers learn about the callers, the better the association can serve them. Headquartered in a 65,00O-square-foot building in El Monte, California, Marty and Helen Shih have come a long way fr0111 that single street corner flower stand. Still, many challenges lie ahead. With services aimed mostly at recent immigrants, the Shihs must find new ways to keep customers once they become more assimilated into the American culture. Plus, it's not easy to market to this diverse group. After all, a person who is Chi­nese is not Japanese is not Korean or Thai. And that makes it especially difficult to convey a single marketing message. But, "we always keep thinking big," says Marty. With over 500,000 people visiting the association's Web site daily, there's a bloom­ing opportunity out there 经典案例十一：Saturn 来源：新天地英语 浏览：3243次 Employee-Management Relations Facing Business Challenges at Saturn Negotiating a Radically New Contract Richard LeFauve of General Motors and Donald Ephlin of the United Auto Workers (UAW) had been adversaries for years. LeFauve represented management (white col­lars, planners, order givers) and Ephlin represented labor (blue collars, strong backs, order takers) as they faced one another from opposite sides of the negotiating table. However, when LeFauve became president of GM's Saturn division, both men agreed that a drastic change was needed in the relationship between management and labor. Facing aggressive Japanese auto makers, both men be­lieved that management and labor had a lot to lose un­less an altogether new relationship could be forged. LeFauve recognized that GM was battling fierce competition. Honda, Toyota, and Nissan had aggressively entered the U.S. market, reducing GM’s share to about 35 percent. Customers believed that buying GM meant they were getting less car for their money, and GM was finding it increasingly difficult to compete on cost alone. For one thing, Japanese companies could build a car in about 100 hours, including suppliers' labor. General Motors took twice as long, and LeFauve saw union work rules as one cause of low productivity. At some plants, union jobs were divided into more than 100 classifications, so an entire assembly line might be shut down while a lone electrician rewired a faulty outlet. Disagreement over employees' seniority rights, job security, and wage increases threatened successive contract negotiations as GM tried in vain to streamline production rules. LeFauve believed that changes were necessary to keep the company competitive. Yet Ephlin saw union members facing more than the possibility of losing market share. Employees were concerned with personal security: More than 230,000 union jobs had already disappeared because of foreign competition, and at least 83,000 more were expected to vanish as Japanese carmakers stepped up production in nonunion US. factories. Pride was also at stake. Auto plants in the United States were averaging 82 defects for every 100 cars, whereas plants in Japan averaged only 65. Union autoworkers blamed the problem on managers who were more interested in production schedules and quotas than in raising employee proficiency. Ephlin noted that Japanese autoworkers received an average of 370 hours of job training, whereas their US. counterparts re­ceived perhaps 46 hours. Ephlin believed that change was necessary to improve the skills and job security of his union members. As General Motors planned its Saturn Division, both LeFauve and Ephlin were facing some of the most crucial questions in their long careers. How could man­agement persuade labor to streamline production rules for the good of the company? How could labor persuade management to look beyond purely financial goals? Most important, could management and labor become team­mates instead of adversaries? Meeting Business Challenges at Saturn Saturn could be viewed as one of the most expensive and risky experiments in the history of U.S. manufacturing: $5 billion for a mile-long factory to produce a car that, as one dealer said, "drives and feels like a Honda." To Richard LeFauve and Don­ald Ephlin, it was the beginning of a new relationship between management and labor. Although parts of the agreement be­tween General Motors and the United Auto Workers have, been implemented in other industries, Saturn's agreement was the first to combine so many ideas in one pact. Instead of the traditional boss-worker structure, man­agers and employees are joined into teams and committees to make decisions by consensus. These groups decide everything about Saturn's operation, including who does what job, who goes on vacation when, how to engineer component parts, how to market the car, and even the company's long-range strategy. For the first time, labor is involved in decisions concerning prod­uct, personnel, and profits. Union representatives helped choose an advertising agency and helped select which GM dealers would sell the car. Union employees are paid a salary instead of an hourly wage, and 80 percent of them-determined by senior­ity-cannot be laid off, except in the case of some catastrophic event. Even then, the joint management-labor committees can reduce the hours of operation or even stop production to pre­vent layoffs. For its part, the UAW agreed to streamline the produc­tion process. The key change was a reduction in job classifica­tions from more than 100 to a maximum of 6 for production employees and up to 5 for skilled employees. This change, com­bined with state-of-the-art production processes and equip­ment, helped boost productivity. The union also agreed to an initial 20 percent cut in compensation in exchange for the salaries and management-style bonuses employees now receive. Future salary levels are decided by consensus of the Strategic Advisory Committee, the highest group of decision makers in the Saturn hierarchy, and these levels are based on the average hourly rates at all U.S. manufacturing plants, including those owned by Japanese companies. Finally, in an effort to tear down the walls between management and labor, all employees park in the same parking lots and eat in the same cafeterias. In contrast to the 597-page UAW contract covering all other GM operations, which must be renegotiated every three years, the 28-page Saturn agreement is known as a living doc­ument, and it never expires. However, it can be altered at any time, as long as both parties agree. Some other plants have been the scene of angry confrontations between labor and manage­ment as GM closes some factories, outsources parts production, and takes other steps to cut costs. The Saturn plant, on the other hand, has generally avoided such problems because its contract allows both sides to be flexible in dealing with issues as they arise. When falling demand for smaller cars led to production cutbacks and shrinking employee bonuses at Saturn in early 1998, a large majority of the UAW Local 1853 still voted to keep the unique contract. Shop chairman Mike Bennett said the vote reaffirms that Saturn emp1oyees are “committed to the original Saturn idea,” and that “The partnership is alive and well in Spring Hill." Whether the UAW will let GM negotiate a similar contract for future plants is an open question; so far, GM contracts have generally followed the pattern bargaining of the industry. Still, Saturn’s success shows that union and management are capable of working together so that both benefit. These days, 6,000 Saturn employees produce about 300,000 cars a year, and the car has earned a reputation for quality. That success has both Chrysler and Ford looking carefully at the model of cooperation that the UAW and GM have established