Harvard Business School 9-396-326 Rev. February 18, 1998 Adam Baxter Company/Local 190 Debrief and Endnotes These negotiation exercises are based on management-labor relations at Hormel Foods Corporation’s main plant in Austin, Minnesota. The local union was Local P-9 of the United Food and Commercial Workers (UFCW) Union. The simulations are intended to portray events that occurred at Hormel, rather than to reflect precise details in Hormel’s history. The company and union were intentionally disguised, with the aim of preventing possible bias in role-playing the exercises. The 1978 negotiation role-play presents a fairly accurate portrayal of management/labor relations at Hormel in 1978. The building of the new plant and the …show more content…
The harmonious relationship between management and the workers at Hormel was exemplified in the “Working Agreement,” an ongoing contract securing jobs, profit sharing, wage increases, and worker autonomy. The company was nationally reputed to be a great place to work. The only previous strike had ended peacefully in 1933. Changes at Hormel In the 1970s, inflation skyrocketed and wage increases became harder to justify. To keep up with the competition from non-labor meatpackers, Hormel had decided to build a new facility and was considering building outside of Austin. As a concession for building the new plant in Austin, after the 1978 negotiations labor allowed the plant to operate at higher levels of production and allowed management to determine work methods. Then, in 1979, Local P-9 and other AFL/CIO member unions were engulfed by the UFCW Union of more than a million members. Thus, Local P-9 and its 1,700 members lost voice and influence in their parent union. By 1984, Hormel’s competitors had cut base rate wages to close to $8.00/hour, while Hormel continued paying base rate wages of $10.69/hour. Management argued that the “escalator clause,” which had been implemented in the 1978 contract to keep Hormel’s wages in line with inflation, meant that wages also could be lowered. They asserted that the “escalator” clause allowed Hormel to set these
Hormel company had their BATNA in placed and their anchor points and also presented their solid reservation point, which allowed them to have the upper hand around the negotiation table. Even though Hormel company had their alternatives and had the ability to replace their workers there was no Justificability. They did not consider their reputation, assuming that in the future they will be seated at at table negotiating with another company. They also did not take into consideration that these workers had families that could cause the public to stop buying their products. Also they allowed the
This paper presents my reflections on the Negotiations: Strategy and practice coursework in the MBA program at Said Business School, University of Oxford. My paper will present various reflections on different themes of negotiation simulation undertaken by me during the course. This course has allowed investigating and reflecting on key drivers of negotiation techniques for me. I have learned that transparency and coalition are the core tenet of negotiation for me. For the purpose of this reflective exercise, I will conduct a comparative analysis of the process, dynamics and outcomes based on the themes such as negotiation styles, bargaining zones, power, emotion, coalitions, value claiming vs value creation etc. for the below-mentioned simulations:
a) The two negotiators in the film, Bob White and Rod Andrew, have specific and hard positions. It is easy to identify that neither of them is willing to change or modify their position. In the case of Bob White, as the union representative, his position is to achieve a raise of 3% in hourly wages for the line workers. For Rod Andrews, the GM negotiator, his position is to make the union representatives understand that GM’s profitability is fragile and for that reason it is not possible to give line workers a raise in hourly wages.
In the simulation involving a negotiation over a job offer at Robust Routers, I played the role of the human resource director; Leigh Bultema, and my partner played the role of Joe Tech; the recent MBA graduate seeking permanent employment with the technology company. Joe is not in agreement with the terms of the original offer and would like to negotiate the terms of certain issues within the bargaining mix. One key issue Joe is negotiating is the relocation to Robust Routers headquarters in Silicon Valley, California. He would rather remain in Nashville, Tennessee and become a telecommuter. Other issues within the bargaining mix include the annual salary, signing bonus, and stock options. In this negotiation, a variety of
The labor relations movement has been one of the most successful driving forces behind such efforts as: providing aid to workers who were injured or retired, better health benefits and to stop the practice of child labor in the workforce. Ostensibly, unions in the United States arose out of the need to better protect the “common interests” of laborers. Today, many of the social movements and alliances forged are created under the guise to better protect the employer from a plethora of interests made against the organization, rather than, increasing wages, improving reasonable employment hours and/or enhancing work conditions.
The mill workers felt that they simply did not have any other options and feared the punitive steps management would take if they unionized. Indeed, this appeared to be the case. When several employees expressed a tentative interest in the union, management reduced their work days, and, consequently, their pay. The mill’s management used many other scare tactics to try and persuade employees to reject the union.
Unions were formed to protect and improve the rights of workers. Their first order of business was to establish the eight-hour workday and in 1866, the national labor union was formed. Labor movements were around before 1866, but few organized up until this point. Unions created an environment for workers with difficult tasks, creating better pay, safer work conditions, and sanitary work conditions. Unions made life better for many Americans in the private sector. Collective bargaining became the way in which employers and a group of employees reached agreements, coming to a common consensus. From 1866 to the early 1900’s Unions continued to make headways increasing membership and power. The real gains started in 1933 after several pieces of legislature, which saved banks, plantations, and farmers. The American Federation of Labor (AFL) proposed an important, and controversial, amendment to the National Industrial Recovery Act of 1933. It insisted that language from the pro-labor Norris-LaGuardia Act of 1932 be added to the simple declaration of the right to collective bargaining. The setbacks the Congress of Industrial Organizations (CIO) suffered in Little Steel and textiles in the latter half of 1937, and in Congress from 1938 to 1940, despite the gains made by the AFL, by 1940 the amendment had stalled. WWII created a rapid buildup within the industrial complex, creating more work for women and African Americans, overshadowing the union’s inability to project their power
In labor as in all things there is strength in numbers it is this strength that American labor unions provide. Labor unions provide a collective voice for those who had not previously been heard. As the professor in the “Frustrated Labor Historian” Dr. Horace P. Karastan is left with the dilemma what are the three most important events in American labor union history it would be difficult to choose with so many important moments. There are however several events that stand out as being turning points in giving employees unquestionable protections. The Norris-LaGuardia Act of 1932 allowing employees the right to organize. Further the Wagner Act protecting employees from reprisal from employers for organizing spurring the growth of unionization. The Landrum-Griffin Act of 1959 building on the Wagner Act as well as the Taft-Hartley Act of 1947 which granted protections from the unions. It is these Acts that have changed the landscape of American labor union history and leave us with the unions that we have today.
Throughout American history, labor unions have served to facilitate mediation between workers and employers. Workers seek to negotiate with employers for more control over their labor and its fruits. “A labor union can best be defined as an organization that exists for the purpose of representing its members to their employers regarding wages and terms and conditions of employment” (Hunter). Labor unions’ principal objectives are to increase wages, shorten work days, achieve greater benefits, and improve working conditions. Despite these goals, the early years of union formation were characterized by difficulties (Hunter).
During 1877, railroad workers in West Virginia went on strike. The railroad industry had grew following the Civil War, and wage cuts during the Panic 1873 established anger among workers. Later B & O Railroad stated a second wage cut later in the year. On the other hand employers believed business owners were terrible for business. Business owners wanted to keep costs down, which would cut jobs and wages. “Business owners fought against unions and able to keep their factories and mines operating, they hired strikebreakers, often employed immigrant workers from other areas who were hungry for jobs and had no stake in the union struggle.” (Schultz, p. 305, 2009) However, family and small factories were united as one and controlled by large
The labor union movement over the years has shaped the way individuals work and live for both the nicest and unpleasant. Some would think the unions influence has created a power struggle between management and union leaders. In today’s time, some citizens insist the existence of unions are a must to aid in employee freedom, while others view the labor unions as just another problem in the line of progress. The purpose of labor unions was for employed workers to come together and collectively agree on fundamental workplace objectives. The rise of the union came about after the Civil War- responding to the industrial economy. Surprisingly at the least unions became popular within the 1930-50’s and began to slowly decrease,
In this case study of Lakeside Packers, I will analyze the collective bargaining process with regards to the main disputed issues and union priorities, workforce diversity, and balancing the differing interests of such as the processes of unionization and negotiation unfolded. I will examine management attitudes and actions, and union strategies, and
While organized labor’s storied history demonstrates remarkable achievements, there has been a downside for the American economy. By way of example, the formerly dominant U.S. steel industry serves to remind of an time when poor management, global competition, and union excess were necessary causes of a dramatic and rapid industry decline.
The negotiation simulation was a very informative and interesting assignment from beginning to end. The practical application was unlike anything else we’ve been required to complete thus far in our program. The ability to openly engage in a mock negotiation was very insightful, and allowed me to further develop an understanding of the intricate underworking’s of the personal interactions and preparations that define how the negotiation unfolds. I enjoyed the insight into the perspective of the union’s side of negotiation, as I typically assume a perspective from management when considering negotiations and their implications. This allowed me to understand the viewpoint and strategies accompanying the union’s side of the negotiation, which could prove invaluable to me in the future.
Through the in-class activities about negotiation, I observed the significant influences that different negotiation tactics have on the result of the negotiation in the workplace. In the activity, I was assigned to play the role of manager Dale Williams who is facing with the challenge of persuading two of his subordinates to wear safety glasses without causing any conflicts. The whole play was reflecting and educational, and I was inspired by having an actual negotiation with my employees and also by observing the others doing the process.