Jim Malescowski is the president of Wisconsin specialty items division with Lamprey Inc. This company’s Ocoromo Mexico plant is the employer of 520 people out of the town’s population of 9900 people. The employees are unionized, and the wages they earn are far above the average wages earned in this town. The Ocoromo plant paid its employees $16 per hour on average while the average wages for Mexicans in this highly polluted town ware $1.6 an hour on average (Daft, 2010).
This meant that Lampery Inc. would save almost $15 million annually. These would be offset through higher costs for transportation, training and other notable aspects. Although Jim Malescowski was the one who had made recommendations to his boss before being tasked with this next move, he pitied the employees who were about to lose their livelihood (Daft, 2010). The Lampery Company had been making apparels for people with injuries or other medical conditions since 1921.
In addition, this company had extremely strong ties with the local community. Most members these communities had parents or grandparents who worked at this plant in the past. It was one of the last manufacturing factories in this town (Daft, 2010). However, friendship aside, competitors had already succeeded in edging past Lampery on the side of price and by the time of making this journey, they were close to overtaking Lampery on the aspects of product quality.
Both Jim and the plant manager had tried to convince the union to take lower wages, but the union had resisted adamantly (Daft, 2010). Doing his best to save the situation, Jim Malescowski and the plant manager, had even attempted a discussion on a possible cell manufacturing approach. This approach would have equipped employees to work on up to three different jobs (Daft, 2010).
If I was in Malescowski’s shoes, I would have just asked those who were willing to take this approach to sign up and commence training while those who were unwilling would be left to their own devices (Turner, 1991). This would have jolted some of the ambitious company employees to take the offer (Turner, 1991). If this failed, then I would start gradual training of non employees who were not yet chained to the union laws (Moody, 1997). Such a move would have rescued some of the plant employees from redundancy.
However, the local leaders of the worker’s union were almost openly angry at the suggestion, but Jim could sense their fear. Although Jim saw their fear, he was unable to make them see sense in his suggestions (Daft, 2010). Jim’s empathy towards the workers was the only thing which kept the ongoing concern alive. His ethical basing and strong belief in the dignity of life made him feel bad about what would happen to employees and their families (Daft, 2010).
Anytime during the past six months, Jim would have simply recommended that Lampery simply walk off, regardless of the people who would have been left without any form of livelihood. He well knew that the continued adamancy on the side of workers was likely to lead to frictional unemployment (Daft, 2010). Frictional theory of unemployment looks at the voluntary decisions to work on the basis of a person’s valuation of the work which they do.
It also compares the work with the prevailing wage rates and effort and time required to find a new job. The solutions and causes for frictional unemployment most of the times addresses the barriers to entry as well as the wage rates (Daft, 2010). Most behavioral economists have highlighted the biases of individuals in decision making while often involving solutions and problems as pertains to efficiency and sticky wages (Daft, 2010). Despite good grasp of these economic theories, Jim just wrote his report and handed it to his boss. He knew well that Lampery would just close its Ocoromo plant and walk away. However, he did not want to be responsible for making the decision which would take the worker’s livelihood (Daft, 2010).
If I was Malescowski, I would have called for a meeting with all the workers before presenting final report to the CEO. During this meeting, I would explain to them that the wages that they were earning could no longer be sustained by the company (Moody, 1997). Therefore, I would explain to the plant laborers that they had a choice of either standing firm on their current wages and losing everything or accepting lower wages in the hope that things would shape up soon (Moody, 1997). In addition, I would explain to them that there was a need for everyone to work hard to ensure that the quality apparels we made is not compromised lest we lose to our competitors.
In addition, I would bring to their attention the fact that other workers in the town were earning an average of $1.6 per hour and that is what they would end up getting if at all they were lucky to land any job. With this, I would tell them that neither I nor the manager was in a position to change the way in which things were going because the company and those at the helm were interested in a return on their investment (Moody, 1997). This would have probably helped the workers to see that they stood to lose more by refusing wage cuts. Hopefully such a move would have salvaged the situation.