General Management

Case on Discomfort in a factory and Management Decision MakingMohan remembered the call from the head office as he puts down the telephone receiver. His boss fromhead office he said, "I just read your analysis and I want you to go down to our plant in Kollakal near Mysore right away. You know we cannot afford this plant any more - the costs are just too high. So godown there, check out what would be our operational costs would be if we move, and report back to mein a week."Mohan knew the challenge quite well as the branch manager of the Good will Specialty Products. Hiscompany is into manufacturing of special apparel for injured and people with other medical conditions.He needs to deal with high-cost labor in a remote village not so sophisticated plant, unionized manufac-turing plant. Although he had done the analysis there were 480 people who made a living at this facilityand if it is closed most of them will find it very difficult to get another job in the small town consisting of about 10 000 people.Instead of the Rs.20/- per hour paid to the Kollakal workers the wages paid to the migrant workers near Aurangabad will be much cheaper Rs.7/- hour working in sub human conditions. This provides a savingof 15 lakhs to the company for a year, which, can now be used to meet the costs for training, transporta-tion and other matters.After two days of talking with Migrant workers association and representatives of other companies usingthe same services in the town, Mohan had enough information to formulate alternative plan for produc-tion and the cost figures for production and transportation. What was bothering him was only the thoughtthat how is going to handover the termination of service notice to the Kollakal workers.The plant in Kollakal had been in operation since 1930s making special apparel for persons sufferingfrom injuries and other medical conditions. Mohan has often talked to the employees who would recountstories of their fathers and grant fathers working in