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Malescowski - Southern Discomfort

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1. Analyze and describe the issues faced by Malescowski and the company and the reasons for these issues.
2. Describe a strategy for changing things that would help resolve the situation at hand.
3. Describe a strategy for changing people that would help resolve the situation at hand.
4. Put yourself in Malescowski's place and discuss what arguments to present to the union.

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Solution Summary

Moving operations to Mexico is discussed step-by-step in this solution. The response also has the sources used.

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1. The first issue faced by Malescowski and the company is that the return on investment of the company is very low. It is so low that keeping the investment in a bank deposit would have brought better returns. The second issue is that the cost of production at the Oconomo plant is very high. The third issue is that if Malescowski and the company moved its operations from Oconomo plant to Mexico there will be high savings in labor cost. In the Oconomo plant the company is paying workers $16 an hour. On the other hand the cost of labor at Mexico will be $1.60 an hour. There will be a savings of $15 million a year. The fourth issue was that competitors had a more favorable cost structure and were selling at lower prices than Malescowski and his company. Further, they were likely to overtake ...

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