Oriental College of Management, Bhopal

MBA III Sem

Assignment I
Subject: Management of industrial relations

Syllabus: Unit 1 and 2

Note:There are 2 cases given below .1st case has four questions,2nd case has one question .Attempt all the
Questions.

1.  A Multinational Company specialized in food processing has been  operating in India for about 3
decades.  The Company has recently decided to expand its production. It was decided to shift the
factory  to a new location about 20 kms. away from its present site. As the workers transferred to the
new site were living in town, the union demanded an increase of Rs. 6000/- per month in the salary,
but the Company offered to give Rs. 2000/- only to cover the transport cost.

When the plant was being shifted to the new site, negotiations went on uninterrupted between the
Management and the Union on this issue. However both the parties could not come to a settlement
even after 6 months.

The Management was firm on their decision even though the union indicated some flexibility. The
Union refused to compromise fully on the issue. They adopted go-slow tactics to pressurize the
Management. The production went down drastically, but still the Management was firm on their
stand. In the meanwhile the Management charge-sheeted some of the Trade Union leaders and
suspended them pending enquiry.

Questions : 
a)   Analyse the case given above and discuss the problem and causes.
b)   Do you justify the Management’s decision ? If Yes/No- why?
c)   Are the workers right in their approach ?  Comment.
d)   As  a General Manager – HR  of this Company how would you resolve the
      problem ?                                   

2 . In a multinational company (MNC) the collective bargaining process was going on. The union puts up
its demands to the management. But the management also had some issues to place before the unions.
They said that they would consider the demands of the union only if the union is ready to make some
compromise.

The MNC was catering to the markets of USA and Europe. At the same time they had 50% dependence
on domestic market. But due to Global Financial Crisis, the rest 50% export orders were affected. From
50%, it has gone down to 10%, a reduction of 40%.This is a grave situation indeed. The company may
not survive only with the domestic market. So, the management made a request to the Union that they are
ready to listen to the demands of the Union, only when they fulfill either of the following conditions:

 Reduce manpower by 20 % or
 Reduce wages to meet the slack in demand.

Question: What should be response of the Union to such demands? Can you suggest some alternative and
fruitful solution to this demand?