Managing Business Relationships - Red Carpet Limited - Case Study Example

Section One - Law - Question Issues: The primary issue in this scenario involves determining if Red Carpet Limited (RCL) can do anything about Computerlink's failure to provide 24 hour 7 days a week support service that was promised by mouth but not by contract. Law: Inquiry - Involves learning about terms of potential agreement but is not legally binding. Offer - Is legally binding on the party that is making it. Verbal contract - Includes both oral and written; both are legally binding Application: When Lee from RCL calls John from Computerlink, he makes an inquiry regarding the availability of a 24 hour 7 days a week support service. John answers this inquiry by saying to Lee, "I have a full and reliable team at Computerlink who delivers a 24 hour helpline 7 days a week." Because he has confirmed that this sort of support is available, he shows his intent to be legally bound. The written contract between RCL and Computerlink made no mention of the promised support service. The spoken agreement, however, is still to be considered legally binding - as long as none of the terms specified in the written contract conflict with those terms that were spoken. John never said anything signifying a retraction of that offer and neither party made a counter-offer because Lee accepted the terms. John knowingly withheld the change in terms he was aware of because he knew Lee would not accept those terms. This sort of knowing deception can often void a contract. Because there is nothing in writing stating that Computerlink would provide support service 24 hour 7 days a week, it will be difficult for RCL to prove that this oral agreement existed. If Computerlink admits to saying that or if RCL somehow proves they said that, Computerlink will be held legally responsible for their breach of the contract. Conclusion: Computerlink is legally bound to the oral offer that was accepted by RCL. Lee does not have to continue the contract with Computerlink if Computerlink can no longer provide what they offered. Section One - Law - Question 2 Issues: The main issue in this scenario involves investigating whether or not RCL can hold Dave and/or Computerlink responsible for the excessive damages they caused by failing to follow proper procedure. Law: Employment Relations Act 2000 - Employers are responsible for damage caused by their employees as it pertains to their employment. Special damages - compensate for damages that can be measured numerically/monetarily Direct losses - compensation for just the things that were damaged Consequential losses - compensation for loss of profits due to being closed to deal with or fix damages Application: Dave, a young assistant of the chief technician of Computerlink, is left at RCL to wrap things up and finish the job. It was his responsibility to lock up and set the alarm system before he left, but he failed to do so. This failure to comply with necessary procedures allowed for some rowdy teens to cause an immense amount of damage to the property of RCL. While it may seem that Dave is to be held responsible, the Employment Relations Act of 2000 puts forth that Computerlink is to be held responsible. Employers are responsible for any damage that may be caused by their employees while they are on the job. RCL will be able to claim special damages from Computerlink. This will include the direct losses of the cost associated with cleaning and replacing the walls and blinds and possibly also the consequential losses that may be felt if RCL must be closed while those damages are being repaired and thus lose profits. Conclusion: RCL can hold Computerlink legally responsible for the cost of cleaning and replacing the damaged walls and blinds. Section Two - Management - Question 1 After Red's death, new changes for Red Carpet Ltd. (RCL) were discussed and agreed upon by Lee, Mike and Janet. These changes involved new responsibilities for the staff. Lee and Mike utilized different strategies for initiating these changes, and with them came different benefits and consequences. When Lee introduced the changes to his staff, they were frightened by these changes. Lee did very little to prevent or alter this fear. One of the disadvantages of Lee's technique of implementing change is that he was not clear to the employees about when things would happen and what the employees would have to do in order to change with the company. This uncertainty and lack of communication only led to unhappiness and potentially false rumours. Perhaps one of the advantages of Lee's scheme is that he obviously notified his staff with ample time before the changes were actually to take place. As the scenario said, six months went by and the changes had still not been made. Unfortunately, the staff did not know when they were going to happen and what they needed to do. When Mike introduced the changes to his staff, they were initially concerned. Mike, however, implemented a committee so that his employees would have greater say and input regarding their employment. Mike's committee technique had great advantages, including the overall boost of employee morale. They were able to determine goals for the company, decide their own schedules, and become excited about making more sales. However, this scheme has a disadvantageous potential. Management involves leadership and control. Although everything is going fine for the time being, if things start to go sour Mike might have a hard time trying to regain control over his now liberated employees. Section Two - Management - Question 2 If Mike and Lee decided to implement Janet's proposal for a joint-consultative committee for Red Carpet Ltd. (RCL), there are many issues that they would have to consider. The first issue to be contemplated is that of planning.. In order for a joint-consultative committee to be an effective tool for RCL, they need to really plan out what functions it will serve and how those goals will be met. Things such as the location of the committee's meetings, the frequency and duration of the meetings, and the topics to be handled at these meetings are all important things to be planned before the initiation of this new tool. Organisation is another important issue for Mike and Lee to consider. Janet's proposal specified that the committee would include her, Mike, Lee, and two employees (one from each location). They should consider what the roles of each of them will be within that committee and whether they will all have equal say. Depending on how many employees they have altogether, they may want to consider having more than one employee from each location serve on the committee so that more of the voice of the employee population at RCL will be heard. It is also crucial to consider the issue of how the employees to take part in the committee will be selected. If Mike and Lee select an employee themselves, they may just pick employees that shares similar values with them rather than the rest of the employees. Alternatively, it may be a useful tool to allow all of the employees to vote for a willing candidate to be their representative in the committee. The selection of employees to be part of this committee leads to another issue. It would likely be wise of Mike and Lee to form a written agreement with the employee who ends up being part of the committee. This will address things like whether they will get paid for their time spent in the committee, as well as what their rights and duties are as a member of the committee. Implementing changes potentially agreed upon by the committee is the final issue to be considered. If a change is agreed on by the members of the committee, Mike and Lee must not assume that all of their employees are going to be just as agreeable just as quickly. They must go through the proper processes involved in implementing the changes so that their employees are aware not only of the changes but why they are happening and how it will affect them as well. Section Three - Social Science - Essay One of the employment relationship problems evident in Part Two of the Red Carpet Ltd. Scenario involves the changing of job responsibilities. When Lee and Mike made major changes to Red Carpet Ltd. (RCL), the employees were overwhelmed with the new tasks they were responsible for but didn't feel they had ever agreed to. Some of the employees also feared losing their jobs because of the changes being made within the company. While Lee and Mike found it frustrating that their employees, reluctant to take on the new tasks, were disobeying instructions, Lee and Mike were still at fault. The 2000 Employment Relations Act puts forth that employees must obey their employers, but only if what their employers have told them to do is within the range covered by the written agreement. Based on the Employment Relations Act of 2000, it is crucial that employers provide written agreements to their employees. These written agreements must include a description of the job duties, among other things like compensation and hours. The employees at RCL were upset because the job duties expected of them were changing from what they had initially agreed to in written agreements when they were first hired. Communication is a vital element in the management of any business as well as conflict resolution. It was important the Mike and Lee communicated with their employees about the changes. With an open discussion of why the changes were occurring as well as the formation of new written agreements, employees may have been more favorable towards their new job duties. Additionally, if employees are not comfortable with the changing duties, it is important for them to receive proper training or perhaps be offered the chance to switch to a different position within the company. Communication is both a way to prevent conflicts and a way to solve them. If employees at RCL were right about the likelihood of them losing their jobs because they were no longer needed, there were specific steps that Mike and Lee needed to take. As made clear by the Employment Relations Act, they would need to discuss with and notify the employees prior to the changes, explain by what criteria they would be selecting which jobs were no longer needed, offer the employees other positions within the company, and allow a lengthy period of time before the changes were made (so employees could begin to search for new jobs as necessary). Read More