Doddai Motors Case Study - Leading Management Consultant - Management Theory - Business Assignment Help

Assignment Task:

Doddai Motors: The future of cars is here:

Doddai Motors is a well-established Korean automotive company and is a well-known car brand in America. They have decided to focus on creating a new electrical car with outstanding battery and engine technology.
 
They have recently set up a factory in Vietnam to produce cars but this Doddai factory is struggling to match the success of their other production facilities. The goal of producing 10,000 vehicles per week at their new factory has been unobtainable with the new factory yet to produce even 4,500 vehicles per week. This is frustrating the Korean firm which has had no problems making 15,000 vehicles per week at their other factories. Naturally, missing deadlines and targets is causing a lot of tension and conflict between the workers and managers located in different countries. Demand is high with many customers wanting to buy the cars but because Doddai cannot produce enough, the company is consequently making large financial losses and receiving negative reviews for sales online.
 
These overly ambitious targets are often argued by some managers as the reason for the increase in the injury rate at the factory. Claims of a serious unsafe work environment have subsequently resulted in the Vietnamese factory’s workers going on strike. This began soon after Doddai fired 250 workers for underperformance. Several nameless quotes from workers were published in a local newspaper including:
 
“Our production is checked by Doddai management every hour, if you are not working fast enough you will receive a written warning from your production manager. You’re fired when you get three. It is a lot of stress and pressure to put on workers. Lots of my colleagues who started working here with me are no longer here because they couldn’t reach their daily targets.” 

“Doddai managers have strengths such as writing spreadsheets and doing calculations but are horrible with people. They are constantly monitoring and assessing you. They don’t try to support you or fix problems when you go to them with issues.”
 
“Workers are treated like plastic rubbish bags – disposable, forgotten once thrown out or broken. Doddai measures performance and remote workers who can’t do what they want them to do without giving them a chance to improve”.

Despite such comments, a lot of local workers have been seeking out work at Doddai. The factory managers are often perceived to be taking advantage of this surplus labour through a high turnover of workers, who are made to feel inadequate and to blame for losing their jobs.
 
Concerns about the working environment spread further than the local workers. Local Vietnamese government officials have criticised Doddai for several factors including exploiting workers who come from rural backgrounds without enough education or experience to know what they are entitled to and providing poor working conditions such as long hours, poor air conditioning in factories and unsafe working conditions.
 
An investigation by an international workers charity wrote a 50-page report called “The truth of Doddai” which highlights that workers are paid less than the minimum wage, were forced to live in overcrowded dormitories close to the factory and there were unconfirmed reports that workers had purposely hurt themselves to lifetime compensation because of the pressure that the company is putting their workers under. The report also discusses workers’ concerns and allegations that foreign and local managers harass women and local minorities and discriminate for promotions on the basis of gender and personal relationships. For this reason, the local government is now investigating if there have been any breaches of labour laws.

Poor quality of products is another concern emerging out of the Doddai factory. The factory was quickly established to attempt to address the high global demand for electric cars. This demand increased so rapidly that instead of delivering high-quality products that both partners were famous for, the production focus was on growth and increasing outputs.
 
This resulted in poor hiring processes, lacking recruitment of experienced workers and good managers to supervise the factory workers. It was furthermore increasingly difficult to source enough top quality machines, raw materials, and parts to meet the extreme production targets.

Doddai set an aggressive goal of growing by 50% each year for the first 5 years. Senior managers were overly confident with setting such a high target. They believed due to the success of the parent company and the enthusiastic response of customers and automotive media for Doddai electric cars, it would be an easy goal. However, the Head of Research and Development at Doddai cautioned that the business should slow down in order to be confident in the products they were producing and maintaining quality. Unfortunately, he was ignored.

Generally, corporate headquarters made decisions taking no input from local managers of the factory. As a consequence of predominantly focusing on efficiently producing the most cars possible, solutions were not developed and implemented to address quality issues in the Vietnamese factory. 

Customers began to increasingly complain about Doddai’s reputation continuing to be negatively affected as the media picked up on the slow and inadequate responses from the car company. Some of the complaints posted to social media include: 

“I bought a new Doddai car but it keeps breaking down. The electrical engine isn’t charging properly so it completely stops after four or five kilometres of driving. I don’t feel safe with it breaking down on freeways!”

“Just paid a lot of money for a new Doddai and waited a year for the car to arrive. What a disappointment!! The air conditioning broke after 2 weeks! Doddai says that it will take 2 months to get a new system installed. I can’t use the car! It is 40 degrees where I live and is costing me $100 a day in rental car fees. Absolutely useless! Don’t waste your time or money waiting for these cars.” 

“Like many people, I had issues with the electrical engine. The dealership replaced the 6-month-old engine for free but I waited 3 months for it to be done and even then, the car breaks down now every week!”
 
Not surprisingly, some workers that Doddai fired for underperformance have provided various media outlets with their insider knowledge of the company. They maintain that the issues with quality are well known by management but nothing is done to address it, rather the focus is on increasing production. The past employees argue that up to 70% of daily car production has extensive defects which could be easily addressed in the factory but are ignored due to the delay it would cause in the joint venture’s overall huge production targets.

In contrast, when speaking at various industry forums, Doddai’s foreign senior managers blame the quality of local workers for the problems. At the largest international automobile conference in the world, senior management had the following arguments when aggressively questioned by international media: “Many lack experience and knowledge about the electric car technology which we simply can’t address due to the lack of education in the country on such technology,” maintains the factory General Manager.

“Workers are not proactive in looking out for issues and defects. Many do not know what to look out for on the factory floor and despite being told what to do when such problems are identified, they ignore obvious faults,” agreed the Doddai’s lead Engineer.
 
The challenge of requiring a lot of inputs sourced globally is another concern for Doddai. One factory manager says it (the strike) is a “blessing” as production is well behind schedule. This delay is affecting other businesses who have been hired to transport the finished cars or provide other parts for the projected number of cars. 

The Korean managers believe in producing all electronic and computer parts themselves to ensure high quality to compete with their German competitors but also to try to protect their intellectual property (IP). However, much of the technology used in Doddai cars has not been mass-produced by anyone previously therefore planned production times are unrealistic. Many of the required special parts are impossible to mass produce due to the rarity of the minerals required in unique microchips with other electronic items difficult to source simply as a result of limited suppliers. International critics understandably argue that Doddai is failing as the cars have been designed to be too complicated and not appropriate for modern technology and supply chains.
 
The different attitudes as a result of varying cultures have also impacted relationships among the Koreans and Vietnamese management teams. The Koreans are very focused on the importance of time be it meetings’ start time or meeting deadlines for ordering, production and payments. They are often the first to arrive in the factory and the last to leave with many Korean managers looking disgusted when they see Vietnamese workers having hour-long lunch breaks when it should only be 30 minutes. 
One Vietnamese supervisor overheard their Korean colleagues describe the Vietnamese managers as “useless” and “lazy” and the “reason for low production”. Vietnamese managers, however, think that the Koreans are “slave drivers” and do not care about the workers. They believe more support should be given to the factory workers and training with targets too rigid and unreasonable.
 
Naturally, with the local workers increasingly becoming unhappy and quitting, the local media is criticizing Doddai more and more. An additional focus of the media is the factory’s impact on the local environment. Although Doddai cars are environmentally friendly, production is not sustainable and involves extensive pollution and chemical waste being produced by the factory. There are concerns that local waterways are becoming polluted, impacting 100,000 people in surrounding areas with an increase in diagnosed lung and breathing problems among children at schools near the factory. 

Doddai hasn’t helped their local reputation by accusing the local government of corruption. They argue local officials are interfering with land sales to increase the size of their factory, requesting for an extensive increase in costs of fees and taxes which Doddai says are bribes. The refusal of Doddai to pay these is seen by management as the reason why the Government ignores the company’s requests for help with dealing with factory workers and the union. Insiders within the government have told local media that although they are happy to have the factory’s investment and therefore jobs for the local economy, Doddai’s treatment and relationships with stakeholders is terrible and may not be permitted for much longer. 

Your Task:
As a leading Management Consultant who specializes in business process improvement, you have been hired to provide expert advice to the client Doddai by providing a report.

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