Case Analysis

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The Future of the GIFC Brittany Geiggar Webster University The Palmer Machinery Company Problem Statement The management of Palmer Machinery Company is exhibiting ineffective leadership skills. Analysis and Evaluation Palmer Machinery Company has encountered hard times due to economic recession and from competition of Japanese imported products. In the past, labor relations have been poor. The unions usually asked for big pay increases for the workers and received them. Things have changed during the last few months, and labor and management have realized they are in for some bad times ahead. The company maintains it is in a precarious position and asks labor for concessions and givebacks. The union calls a membership meeting and discusses the company’s situation. Ann Stewart, an assembler, thinks she is overpaid and argues for a wage reduction; however, the majority present disagrees and does not want to make any concessions. There is great mistrust of management’s intentions. Workers feel that giving concessions will encourage the company to ask for additional ones. After much discussion, some workers are more agreeable to concessions if management makes similar sacrifices; however, management does not make any commitments. During the next few weeks, the situation gets worse and, now faced with a layoff situation, the union agrees to some cutbacks with an understanding that employees will share in some way in the profits of the company when conditions improve. One month later, a survey of salaries of executives of major companies published in a national magazine shows that executives of Palmer Machinery received a substantial increase in compensation. One worker remarks, “You just cannot trust top management. I wish we had a situation as in Japan where in hard times the dividends are cut first and,

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