R. B. Dillman Company manufactures a high-tech component that passes
through two production processing departments, Molding and Assembly.
Department managers are partially compensated on the basis of units of
products completed and transferred out relative to units of product put
into production. This was intended as encouragement to be efficient and
to minimize waste. Jan Wooten is the department head in the Molding
Department, and Tony Ferneti is her quality control inspector. During
the month of June, Jan had three new employees who were not yet
technically skilled. As a result, many of the units produced in June had
minor molding defects. In order to maintain the department’s normal
high rate of completion, Jan told Tony to pass through inspection and on
to the Assembly Department all units that had defects nondetectable to
the human eye. ?oCompany and industry tolerances on this product are too
high anyway,?? says Jan. ?oLess than 2% of the units we produce are
subjected in the market to the stress tolerance we’ve designed into
them. The odds of those 2% being any of this month’s units are even
less. Anyway, we’re saving the company money.??
(a) Who are the potential stakeholders involved in this situation?
(b) What alternatives does Tony have in this situation? What might the company do to prevent this situation from occurring?