Production Cost and Ethical Industrial Relation Management - Assignment Example

We address ourselves, not to their humanity but to their self-love, (Smith, 1909, p. 20) However, this self-centered philosophy is giving way to a more other-centered philosophy to work and its management. According to Schweitzer (1955), work was meaningful beyond the salary. In his work ethics caring approach to clients, colleagues and the wider biotic community is needed. This pursuit of the public good is found in all religious and secular ethics. Maslow's hierarchy of needs and Herzberg's theory of motivation are linked to a search for wider welfare.

In the given scenario, it appears that the company has enough orders on hold which shows that the company's products can roll out from the company. The company is not in a recession stage nor is its products lack takers in the market. The decision to close down the plant and move its manufacturing operations to South East Asia springs from the desire for more profit for the company. The threat of the workers to launch a strike is only a normal reaction. Many possible actions are open to the plant manager.

By the application of behavioral psychology of workers and using quantitative techniques of measurement, the bargaining models have been arrived at. In the model of Ashenfelter and Johnson (1969), the firm's negotiators can understand the unions' bargaining strength and concession curves. This knowledge is used for the bargaining advantage of the company. What is at risk in the approach is the very credibility of the company's human resources policies. To make the employer cow down to the demands of the company on the lack of their bargaining strength definitely goes against the principles of Maslow and Herzberg's theory of motivation.

Though Maslow's hierarchy of needs is an old theory, its ethical value in the present context is undeniable. According to Maslow, the most basic needs are physiological, such as the need for food. The next one is the need for security. If these needs are not met, a person cannot achieve a healthy personality. In the given context, the company is not under any threat of serious financial breakdown. So the closure of a plant that enjoys a reputation in the market, as evidenced by the orders it has, supports so many workers and runs on reasonable profit is primarily unethical.

No manager should go for a decision, which is intrinsically unethical. From the point of Herzberg, a true leader has the ability to attend the needs of the workers and inspire them to go beyond their lower needs. Therefore, a true leader who is a transforming leader can refocus the workers by engaging in fulfilling their more authentic needs. So, in the context, the constraint of meeting higher profit for the company can be achieved by another strategy, by engaging all workers in a spirit of participation.

This is becoming a popular approach in management today, called the approach of servant leadership, put forward by Greenleaf (1970).