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Case 7-2 A Change in the Medical Insurance Plan

Case Study 7-2 The employer designs, installs, and maintains private telephone systems for customers. Employees in the bargaining unit have been represented for many years by the union. The parties' current collective bargaining agreement provides for the following medical insurance benefits:
"basic medical benefits covering reasonable and customary charges; and major medical benefits with an unlimited maximum benefit; a dental benefit plan; and long-term disability benefits. These benefits are described by the specific insurance contracts to be filed with the Union's district office."

The company had been experiencing declining profits for several months attributed to a general economic recession and the loss of a major client. In June, the management team reviewed the current situation and forecast for the firm's short-term future and decided to adopt a strategy of cutting operating costs. As part of this strategy, the three top managers of the firm, who were also its owners, agreed to eliminate thier salaries and lay off two members of the administrative staff.

Please see the attached document for the rest of the problem.

Analysis and Evaluation

1. What stakes do the stakeholders have and who are the stakeholders? What are the stakeholders' opportunities, threats, and challenges?

2. What are the extent and nature of the responsibilities of the company in terms of economic, legal, ethical and philanthropic?

3. What did the company do/not do in terms of handling these issues?


Solution Preview

Please see the attachment.

Analysis and Evaluation

1. Who are the stakeholders in the case and what are their stakes? What challenges, threats or opportunities are posed by these stakeholders?

The stakeholders in the case are employer, the employees, the management, and the union. The challenges and threats faced by the employer is that high operating cost could lead to liquidation. Similarly, the management could lose its livelihood if the company had to go into liquidation. The employees faced the threat of reduced salaries and reduced medical benefits. The union ...

Solution Summary

This solution discusses the sakeholders in 358 words in plain text and formatted in an attached Word document.