question archive The outcome of contract negotiations can have a major impact on the ability of a company to meet its competitive challenges
The outcome of contract negotiations can have a major impact on the ability of a company to meet its competitive challenges
Subject:Operations ManagementPrice:2.87 Bought7
The outcome of contract negotiations can have a major impact on the ability of a company to meet its competitive challenges. Labor costs, productivity, flexibility, and many other outcomes are determined in large measure by what happens during negotiations. Therefore, the company must carefully prepare along a number of dimensions. Fossum defined a sequence of management preparations for negotiations, establishing seven steps management should take.
LBSC, Inc., operates a milk processing plant in Kenosha, Wisconsin. Its union, the Brotherhood of Food Processing Workers (BFPW), represents all non-supervisory production employees in the facility. The contract between LBSC and BFPW expires in six months, so LBSC must start to prepare for the negotiations. LBSC’s HR department plans to conduct a number of management meetings asking for feedback on the appropriate goals of bargaining, and to ask the finance department to estimate the acceptable cost profile for the term of the next contract. It will gather information on plant average seniority and inventory levels, and forecast customer demand. It will analyze grievances and find out what it can do about the course of other recent negotiations for the BFPW. Its finance department will estimate the costs of one additional holiday and a 401(k) plan. Finally, it will decide how much latitude it will have to make concessions and what will have to be referred to the corporate office before it can be approved.
Identify the steps LBSC Inc. should take as it prepares for negotiations with its union. LBSC's preparation steps conform to the preparation process as laid out by Fossum. Demonstrate your knowledge of the process by ordering the steps in proper sequence.
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Answer:
Step 1: Preparation & Planning
In this step the HR dept. of LBSC should research about the previous contract agreements with BFPW. Also, LBSC must be list down the issues of contention, both past & possible which might be raised by the BPFW that might hinder LBSC from reaching an agreement. A proper strategy to reach amicable ground for both parties without undermining the needs of eitherperties must be formulated.
Step 2: Definition of ground rules
In this step LBSC must set the limits to which it can extend itself in meeting the expectations of BFPW members. E.g.: Healthcare benefits will be extended only for immediate family members but discussions will be held on whether dental plan will or will not be included in the package
Step 3: Clarification & Justification
In this step both parties will engage in extensive dialogue & deliberation to validate their original claims.
Step 4: Bargaining & problem solving
Here both LBSC will attempt to reach the middle ground for demands which cannot be met in full. This may be through offering benefits in some other area or by offering to resolve the issues raised. E.g: BFPW may demand for 5 days/week working but since it will effect productivity LBSC may agree on grounds that the working hours per day be extended to compensate for the day off.
Step 5: Closure & Implementation
This is the final stage wherein the negotiation is closed having been to the satisfaction of both LBSC & BFPW. In this stage the implementation roadmap & expected delivery dates are confirmed.
