Shams M Mamun, Student ID: 11-94644-1

HOME ASSIGNMENT CONFLICT MANAGEMENT CASE STUDY 6 GM AND THE UAW: A ONE-SIDED NEGOTIATION

1. How would you characterize the type of conflict that exists between GM and UAW using the various conflict handling interventions described in Chapter 15? The Conflict between GM and UAW was a Dysfunctional Conflict: Organization goal of GM was harmed due to such type of conflict. Once the leader of the automobile industry turned into a losing concern and got threatened even for existence.

Negotiation technique followed was Distributive Bargaining: UAW always wanted to increase the benefits for the employees without thinking of the implication of such demands. It never suggested an expansion or process that could increase the overall profitability of the company. Everincreasing demand created a huge burden on GM.

Conflict handling Intentions: For GM Accommodating, For UAW Competing: GM was too accommodative in their approach while bargaining with UAW. They conceded to almost all demands placed by UAW focusing the short term only. They did not plan for contingency. On the contrary UAW displayed competing intentions all the time. They were extremely assertive and uncooperative. As a result, GM became a losing concern financially.

Conflict Management Technique followed was Problem Solving: Both the group always set face to face, listened to the problem and tried to solve the demand. But unfortunately the UAW raised its author all the time and GM conceded the defeat.

2. Based on the case, would you conclude that GM and UAW have engaged in distributive and integrative bargaining? Which type would be better for both the parties in the long term?
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Shams M Mamun, Student ID: 11-94644-1

GM and UAW have engaged in distributive bargaining . Organization goal of GM was severely damaged due to such conflict. The most influential automobile industry producer turned into a losing concern and got threatened even for existence as a result of this conflict.

Integrative bargaining would be better for both the parties in the long term. Instead of thriving for managing a better benefit package for employees, both the bargaining teams could concentrate on making a comprehensive integrative plan that could maximize the benefit of the company. And such increased benefit could be shared with the employees. A profitable company can provide better for its employee in the long run.

3. What types of power does the UAW holds over GM? How has this power influenced its ability to negotiate with GM? UAW bases of power over GM: UAW enjoyed two types of power over GM. o Formal Power Coercive Power : UAW always had their voice high in the negotiation table. They concentrated on their demand and avoided other implications on the table. Unfortunately GM failed to fathom that. o Personal Power - Expert Power: UAW had been the sole supplier of expert manpower for GM for over two decades. So, they enjoyed expert power over GM that made GM over-dependent on UAW.

Expert Power increased GMs Dependency on UAW: o Importance GMs sole supplier of skilled labor was UAW. So they established themselves important and maintained the status throughout. o Scarcity There were no other company to supply skilled manpower in a desired volume and with desired skill. o Nonsubstitutability Because of the paucity of the labor supplier there was no good substitute for UAW. And UAW exploited this status throughout.
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Shams M Mamun, Student ID: 11-94644-1

GMs over dependency on UAW turned them into a weaker side in the negotiation table. It was easy for UAW to adopt the following power tactics in the negotiation: o Rationale persuasion o Exchange o Ingratiation o Pressure

4. Basing on the case, what decision making errors with the union might have led GM to its current financial position? What can GM do to eliminate these errors in future? Decision making errors: o GMs complete submission to UAW in the negotiation over everincreasing benefits o 100% Healthcare benefits for the employees families and retired workers without comprehensive cost-benefit analysis o Extension of Healthcare benefits to cover mental and pre/postnatal conditions: It was completely unnecessary to expand the benefit in that level o Full pension plan: Prior to such decision making a cost analysis had been a must. But GM indulged them in a cheap popularity without thinking of future implication.

Probable steps for GM do to eliminate these errors in future? o Reality Check between desire and the capability in the long term. o Thorough and detail Cost Benefit Analysis prior making a promise o Redesigning the benefits options an integrative approach (win-win): benefits proportional to company benefits o Convince UAW on the settlement
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Shams M Mamun, Student ID: 11-94644-1

o Focus on serving employees rather than retirees o Accept some loss in terms of HR expertise, but focus on long term sustenance o Establish, consolidate and maintain authority

5. Although benefits such as a guaranteed wage likely are appealing to workers, how might such benefits affect employee motivation? How might they affect Job satisfaction and organizational commitment? Could this be a case where management engages in the folly of rewarding A, while hoping for B? Guaranteed Wage: No doubt it is a Source of Inspiration for employees. But It may affect motivation, Job Satisfaction and Organizational commitment in other ways too. o Affecting Employee Motivation. No discrepancy between hard works and lame works. No rewards for being innovative and more productive. Not good for talents. No penalty for wrong doers. No pressure is exerted for lame workers.

o Affecting Employee Job Satisfaction. No challenge and excitement, Kind of boring compensation strategy. Performance based compensation system gives Job satisfaction to knowledge workers. They do not get job satisfaction in such compensation package. Guaranteed employees. wage system is good for regular/average

o Affecting Organizational Commitment. Fixed salary/wage productivity.

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Shams M Mamun, Student ID: 11-94644-1

It does not inspire innovation and performance excellence. No reward/penalty system may not ensure 100% commitment of employees in achieving organizational goals.

6. As a manger of a large company such as GM that operates in a highly competitive environment, how would you attempt to strike an appropriate balance between employee treatment and company profitability? I would take the following fundamental steps attempt to strike an appropriate balance between employee treatment and company profitability: Analyze and understand Company Goals and Objective Establish the fact that, Its a business, not a charity Carry out meticulous and comprehensive Cost Benefit Analysis for long term Take integrative approach in bargaining the benefit to ensure win-win situation for both the company and the employee Avoid being over-dependent on fixed supply chain, and always keep alternatives Preserve and maintain authority over supportive organization/business If needed, I would accept some loss in short term in order to ensure long term benefit for the company