Critical Analysis - Southern Discomfort & Waterway Industries - Lab Report Example

Part Critical Analysis of Case Study: Southern Discomfort Ans. To Question The forces for changes that are evidenced in the Oconomo Plant arethat the labour charges are very high at $16/hour. A similar production unit in Mexico would cost the company labour charges of only $1.60/hour, saving $15 Million in the bargain, exclusive of moving, transportation and installation costs at the new location in Mexico. (Wallace 1996).The workmen are obdurate about reducing the hourly wage rate and do not seem to share the management’s viewpoint in implementing innovative changes in the present technology.

Further, the competitors have successfully overtaken the company’s pricing and are set to offer stiff competition, even in terms of product quality. The company needs to improve its performance and Return on Investments (ROI) to stay in the business. Under these circumstances, the company’s management is faced with only two options: Either to stay on in Oconomo with a substantially reduced operating budget, or to relocate the plant to Mexico where future profit margins are more assured. Ans.

To Question 2:The primary type of change that needs to be brought about in the Oconomo Plant is a conspicuous transformation in people’s culture, attitudes and approach to work. This has assumed significant connotations, because the plant is now going through a very critical phase where, even its very future existence hangs on a balance. If the management is not in a position to convince the labour to accept lower wage rates, the plant may have to be moved to Mexico, thus endangering the jobs of nearly 520 employees.

(Wallace 1996). Jim Malesckowski, President of the company has to deal with the challenging tasks of negotiating with a well organised and strong Labour Union while seeking to introduce changes in the work culture and remuneration of the labor force. The Wisconsin plant could be saved by changing the work culture and ethos of the work force and by convincing them that the reduction in wage rate would be beneficial to the labour force in the long run. Ans. To Question3:The major underlying cause for the Union leaders’ resistance to change stems from the fact that they fear that changes would result in downsizing and lay-offs, or even the use of a person for multiple jobs, in order to gain maximum productivity from him.

Fear of job losses or labour exploitation may be the underlying reasons for the Trade Union leaders’ reluctance to allow changes in the organization. The management has sought to dispel this fear by informing the Union about cross-training schemes after which a person would be able to undertake job rotation and would be skilled in performing new jobs, besides his current work. But apparently, this does not seem to have impressed the Union leaders.Part 2: Critical Analysis of Case Study: Waterways Industries Ans.

To Question 1: Prima facie, it appears that Waterway’s current compensation system on a case to case basis does not fit the company’s plans for aggressive growth and product innovation. The current strategy formulated to achieve aggressive growth envisages the designing of new products, backed by aggressive national marketing campaigns, intended to boost sales all over the country. (Based on Robert D Nicoson. 2006). This calls for greater efforts and work load on the team responsible for designing and marketing kayaks, and also the sustained need to create and respond to wider market demands.

In my opinion, an hourly performance linked incentive system would be in line with current work demands. Besides, schemes to reward high management performance through increased pay scales and vacations need to be introduced in order to retain executive talents. Ans. To Question 2: Specifically, the methods to gain and design competitive compensation systems for Waterways would envisage a long term study of the cost vs benefit of the industry as a whole and the organisation in particular. While a Competitive package would seek to attract and reward the best performers, it also needs to consider its impact on the unit as a whole.

While seeking to offer attractive remuneration in line with industry standards, the company also needs to offer long term value addition to the needs of the employees.There would definitely be a difference between the pay scales designated for hourly workers vis -a -vis Managers. They need to be calibrated according to their experience, contribution to the growth of the organisation, sincerity and commitment to duty and other qualitative factors. All managers could be treated equally only if they meet these criteria, otherwise the top slots would need to be filled by managers who fulfill these requirements.

Ans. To Question 3: The non-financial incentives could be in terms of accident, medical benefits and other non-monetary methods, seeking to retain the hourly shop workers. By assigning values to the non-financial incentives in terms of quantitative analysis, this could help in improving the health and working environment of the hourly shop workers.To a large extent, Lee Carter and Jack Schiffer have been instrumental in changing the course of the Company. It is seen that “Lee Carter is a relatively new employee whose high-powered sales ability has rocketed Mahers sleepy canoe company into unprecedented growth.

” (Nicoson 1996). Their contribution level, in real terms, would surpass that of the other managers in the Company. However, in this case, it is seen that they are demanding profit sharing as a pre-requisite to stay on in the Company. (Based on Robert D Nicoson. 2006). Under these circumstances, it is doubted whether Lee and Jack could be persuaded by the CEO, Cyrus Maher, to stay on with Waterways, by offering them non- financial incentives.Works citedWallace, Doug. What would you do? Business Ethics. 1996. 52 -53.

Based on Robert D Nicoson. Growing pains: Harvard Business review. 2006. 20 – 36.Nicoson, Robert D et al. Harvard Business Online. Growing pains: commentary on HBR case study. 1996. 31 Oct. 2007 .