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Case Study: In a multinational company (MNC) the collective bargaining process was going on. The union puts up its demands to the management. But the management also had some issues to place before the unions. They said that they would consider the demands of the union only if the union is ready to make some compromise.
The MNC was catering to the markets of USA and Europe. At the same time, they had 50% dependence on domestic market. But due to Global Financial Crisis, the rest 50% export orders were affected. From 50%, it has gone down to 10%, a reduction of 40%. This is a grave situation indeed. The company may not survive only with the domestic market.
So, the management made a request to the Union that they are ready to listen to the demands of the Union, only when they fulfill either of the following conditions:
• Reduce manpower by 20 % or
• Reduce wages to meet the slack in demand.
Question: What should be response of the Union to such demands? Can you suggest some alternative and fruitful solution to this demand?
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