Answer to Question #268723 in Management for Vineet

Question

Litson, a textile company is relocated from Murray to Fairley due to high labour costs. It Advertises for posts at the new location and gets around 500 applications out which 260 were selected. Three other companies in the same region lose their competent employees to Litson. They accuse Litson of foul practices. One of the three companies which have lost its employees to Litson is a customer of Litson and accounts for 18% of the market share of Litson's products. This company threatens to cancel all its orders to Litson, if he doesn't restrain from poaching people from the company.

Question: What should Litson do?

Answer 1

Decision Making

Litson Cotton Yarn Manufacturing Company has categorically made a decision to relocate from Murray, New jersey to Fairlee due to increases in labor costs. The new plant establishment completion covering the textile firms has accused Litson company of employee invading after hiring 260 experienced workers. The workers are previous employees of these textile firms. The company has been asked to cancel the employment of the new employees (260) hired. The demand was seconded by a threat from one of the member companies to stop doing business with Litson and this would lead to market share loss. This cancelation of employment would lead to losing plans and structuring expenses (Champion & James, 1998).

We can come up with alternative solutions. My recommendation would be to analyze the impact of losing business vs the impact of the loss of construction costs. In the meantime, I would work with the other textiles to see if there were any contractual obligations any employees had. I would not cancel the employment unless there were contractual agreements between previous textile employees. If no contractual agreement employees would remain employed. I would immediately start looking to pick up other buys and some business could be lost. But the loss of business can be replaced while high-skilled employees and reputation with the people of Fairlee would remain in good standing. It would be very important to track the public perception of the company and if it starts to dip some adjustments may need to be made.

          

 

 

References

Champion, J. M., & James, J. H. (1989). Critical incidents in management. Irwin.