Question

1. The first step in creating an ABC system is to develop an activity list and then breakdown the time it takes to complete each activity. Why might employees NOT want to reveal realistic information about time spent on their activities? What could be revealed? What is the significance?
2. Discuss the validity of this statement: “I work for a national airline. ABC is irrelevant to my company because we do not manufacture anything.” Do you agree? Why or why not?

Answer 1

Solution:

Employees can be hesitant to reveal the actual information about their jobs & activities because of reasons to protect their position and job if they state the actual information which can jeopardize their jobs. Hence, revealing the time spent on activities during a job can be used as a metric to judge the performance of an employee and hence in order to ensure that the performance is not perceived lower the employees may tend to elevate the information provided or even falsify it depending on the activity involved. If the employee reveals the actual time spent on the activities then there can be issues if the time taken is higher. The efficiency and productivity of the employee will be revealed and it has a huge significance for the organization and also employees because for most of them their pay is linked to their performance. Hence, it has a huge significance to the jobs of employees.

I do not agree because the ABC system can also be applied to services firms or software products firms. This is because the inventory in the service firms in their operations and services and these services, processes can be categorized as per ABC system for a better analysis of the most important processes and the ones taking too long to complete. Hence, for airlines company as well the use of the ABC system is efficient and it is definitely not necessary for any company to be manufacturing something to be able to implement the ABC system in place.

Hence, this is why I do not agree with the statement.