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Raghupati strategy of encouraging employees to trade union

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Reference no: EM133505628

Mr. Raghupati started a carrier company in 1998 with just Rs. 1,00,000 and three employees. He developed the company to the tune of Rs.100 million turnover and 300 employees by 2007. He wants to expand the operations of the company to new towns and also to new customers. The company had always paid higher salaries and provided better benefits than comparable employers in the city. But, he found that his employees wanted to form a union, even though he offers higher salaries

One day Mr. Raghupati was overhearing the conversation of employees about the formation of union in the company. He thought for a while and got disappointed immediately as he has been one of the good pay master; but yet he could not get the maximum contribution, commitment and support of the employees

He spent whole night thinking of the possible problem. He got into a different psychological state and started thinking of how he could make use of the situation for the betterment of the company. He got an idea that he should inspire the employees to form a union and let the union demand for still higher salaries.

Immediately he implemented the idea and encouraged the employees to form a union. His idea worked well. Quite a surprise to the expectations of the employees, Mr. Raghupati inaugurated the union and encouraged the union to make their demands. Trade Union leaders after a year met the CEO with a charter of demands. He made a counter proposal while appreciating the union leaders for their charter of demands. His counter proposal includes additional contribution and commitment from employees side for every rupee of hike in salaries and benefits. Trade union leaders appreciated and accepted the counter proposal made by the CEO.

Mr. Raghupati encouraged trade union leaders to enlighten employees and enhance their deficiencies for higher wants and better life.

Questions

1. Why were the employees not content with the salaries and benefits ?

2. How do you analyse Mr. Raghupati's strategy of encouraging employees to form a trade union?

3. How do you perceive the strategy followed by the CEO in making the counter offer for the employees and its ramification to their trade union.

Reference no: EM133505628

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