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Generally labor unrest

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You are in Management for IBX Steel Components. J. D. Brotsky is a top labor leader and has just announced that her union will go on strike against management unless you grant the workers a significant pay raise. Economically, you realize that a strike might cost the company more money than the pay raise, but this might also just be the beginning of a pattern. Should management concede to the wage increase of 25%? Why or why not.

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Solution Summary

This solution discusses a hypothetical labor dispute and the correct course of action for the management to take when dealing with the union.

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Jayant Kumar

Generally labor unrest has big impact on the performance of a company because the production stops. Due to this, the company's commitments to its customers are compromised because company cannot deliver products ordered by its customers on-time. It reduces the goodwill of the company and hence its profitability sinks. It's important for the company to avoid labor unrest as much as possible.

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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