TOP STAR BAKERY (CASE ANALYSIS)

I.

SUMMARY OF THE CASE

Top Star bakery was launched on October of the year 1975.
Eleven years after, the bakery entered a medium term contract
for a local hamburger chain to bake its sesame seed buns. The
rapid increase in its demand prompted the expansion of the
production of Top Star. Since then, the bakery continued its
growth.
As the bakery started as a family business, the employees
are close to the employers and most of the workers are related
to each other. Some were even descendants of the original
employees.
On 1982, the then production manager Angel Cruz started a
system of compensation that avoided the payment of overtime.
When one employee is absent, his work is divided equally
among those present and so is his salary. Before it was
implemented, the employees could adjust their working time by
either

slowing

or

rushing

their

movements.

With

the

implementation of this scheme, the management could control

the direct labor costs without spending too much time
supervising the workers.
When Manny Bautista was assigned as production manager,
many workers complained that the absentees salary should not
be shared equally because there are others who dont share in
the extra tasks. The workers suggested that they be paid hourly
for their overtimes. Bautista agreed with this but was also

concerned about not being able to control direct labor costs. He

assessed that even if twenty five percent of the workers were
absent, the target output could still be achieved and he realized
that the production section was over-staffed.
Then on May 2, 1987, Top Star accepted an order for 20,000
pieces of buns to bake. Bautista became furious when forty
percent of the workers didnt turn up and the remaining
employees would not consent to work overtime to finish the
production. Because of this incident, Bautista was convinced
that the overtime-sharing scheme should be ceased. He decided
to enforce a new system. To implement it, he thought of setting
targets for each employee and a regular evaluation of their
performance. Also, in order to achieve effective control over
direct labor costs, Bautista planned to terminate roughly twenty
percent of the employees.
II.

STATEMENT OF THE PROBLEM

How can Mr. Manny Bautista enforce his new system and
what other reformations must he implement for a more effective
work force?

III.

STATEMENT OF THE OBJECTIVES

1. To successfully enforce the new system and prevent outrage
from the terminated and the remaining employees.
2. To ensure the proficiency and efficiency of the remaining work
force.
3. To effectively

control

the

direct

jeopardizing the production output.

IV.

ALTERNATIVE COURSE OF ACTION

labor

costs

without

 One option is to have a discussion with the employees about

the new system to be implemented. Explain to them the
changes and also of the termination of some of the
employees. Give the fired workers sufficient termination pay
and talk to them further after the general meeting. Try to
soothe them and give them proper appreciation of their
loyalty to the bakery but also explain to them about the
overstaffing situation. The disadvantage is that you can never
please everyone and it is a big possibility that they might join
forces and create a union. But, as it is within the managers
right and authority, Bautista still has the upper hand so long
as the remaining workers stay loyal. Also, with the discussion,
most of the employees would understand the need for change
as it will be beneficial not only to the management and the
owners but also to them.
Another course of action is to set up weekly or monthly work
quotas for the employees and of giving incentives to
deserving

personnel.

This

could

raise

the

moral

and

motivation of the workers. Also, this will discourage absences

and inactivity or laziness. Again, the disadvantage of this is
the laborers own reaction. Some might like having goals while
others might want to stick to the traditional ways.
The management could also opt to perform

frequent

performance evaluations. This could help in determining the

personnel who are efficient and those who are not. One
disadvantage is that the employees might feel mistrusted and
could harbor ill feelings towards those who perform these
evaluations.

 Another alternative is to impose a set of rules in the

workplace. For example, late and absences will be deducted
from their salary or they could be under probation. With this,
the management could control the labor costs as there will be
fewer absences and the workers will avoid misdemeanors. The
disadvantage is that, like in the other options, the employees
might rebel and oppose the rules.
V.

RECOMMENDATION AND CONCLUSION

In this situation, most of the options have a lot of
disadvantages and many could encourage the workers to
protest against the changes. But, when combinations of the
different alternatives are employed, the outcome could be for
the better. The first alternative is a good start. The discussion
with the employees could prepare them for the changes and
during the meeting, their voices could be heard. The workers
could address their concerns directly to the management and
the employees to be dismissed could well prepare for their
impending termination. Also, the management could come up
with rules and regulation for the bakery, including the weekly or
monthly quotas and the performance evaluations. During the
assembly, discuss these also with the employees. Hearing the
opinions and suggestions of the workers could lessen the friction
of the transition. Overall, the way the management approaches
and talks with the employees will be the turning point from
disaster to obedience from them. If the management makes
sure that there are a few conflicts with their employees but with
justifiable amount of control over them, then Top Star Bakery

will have no more or infrequent problems such as the mass

absence of the employees in the future.