Mgmt 6045 - Red Ribbon Chicken

Case Study MGMT 6045

Red Ribbon Chicken

Jacqueline Malison

Abstract:

This paper focuses on a chicken-processing firm. Ivan and Deane own a firm that was originally called Provincial Chicken Products Inc.-which was part of the provincial government and was main chicken processer for the province. It was regulated and had considerable protection until the government sold the operation to private company. This sale affected the workers. It lead to 300 people turning to unionized hourly work that was no longer protected by the previous agreement from the province. Money became tight and the company went into a receivership (which is a treatment available to secured creditors to recover amounts outstanding under a secured loan in the event the company defaults on its loan payments.) These creditors wanted a new agreement to be signed and that labour costs for the next 5 years had to be settled. The union recommended the workers take a deal that was not the best, but they could keep their jobs. Since the cost of living rises every year, the age increases were not the most suitable, but again, they could keep their jobs. Thus came Red Ribbon Chicken. Three years after that agreement was signed, money started coming back in, new products and equipment arrived, and temporary staff was called in when needed. They are now making a plan for the next 3 years. The HR specialist needs to create a collective bargaining agreement. The relationship between employee and employer can be optimal if a successful bargaining agreement is reached and signed.

Case Study MGMT 6045

Within this scenario the union strategy is clear. The union wants the best benefits, the best wages, and no job loss. The company is in a bit of a hard spot, because it has so many union workers that stuck with the company for basically no wage increase during the downturn of the company. These loyal employees may be at risk due to the growing products and new equipment that makes fewer employees necessary.  The company has to decide if they feel like giving the loyal employees the jobs and wages they deserve, or if they should invest in new machinery and products in order to have fewer employees (and save money in the long run). In order for future quality and product improvements – they both need to work together. Basically, the company wants to make money and keep vital in their industry, the workers want to make money and keep vital in their homes, and the union wants them to work together. Collective bargaining is the best method for success.

“Deanne’s department will need to mesh with the overall business strategy. With this as the backdrop, they set out to map a plan that will continue to ensure financial stability, product quality and a stable, committed workforce”

There are three scenarios that can occur for this company and the employees whom work for it.

1. The company can do the moral thing and keep the employees with no job loss, but give them little-to-no wage increase in the same way they did previously.

Advantage: the company can feel morally good, sticking with employees in the good times while employees stuck with them in the bad times.

Disadvantage: the company will not profit as much money.
Disadvantage: Not staying on par with competing market