Published 10 Oct 2017
Labor-management relations have always been strained. However, Xerox has managed to become one of the leaders in terms of establishing cooperation between the laborers and management, thus resulting in a more vibrant workplace. Labor-management cooperation has been so successful in the company that for twenty-five years, they have not resorted to outsourcing even with when bankruptcy was on the horizon.
This all began with the company’s employee involvement program for workers and their union to have participation in quality, safety and other decisions. Although they had no authority to change anything, their inputs were considered by the management. When they began to lose money and outsourcing was being suggested, the employees gave effective and efficient suggestions that saved more than the projections they had if they did outsource. Because of the effectiveness, changes that were required were agreed upon for both Xerox and union procedures. The next fifteen years featured a greater cooperation between employees and management with teams-based organization. The CEO also usually sat at the negotiations to new labor contracts and the union was often able to justify why offshore ventures would not be necessary in maintaining operations. Compromises have been made by both parties to make the company work. Management and the union share most of the problems of the company in efforts to overcome them and, in the long run, it keeps jobs within the United States.
Xerox’s model is not perfect, however, and that this was only possible because of mutual goals and dependency by the labor union and the management. From its recent performance slump, CEO Anne Mulcahy rigorously cut costs, maintained R&D spending, meeting earnings expectations and increasing stock price. All this was made possible with updated work rules, employee commitment to efficiency and quality, and other changes proposed by unionized workers.
1) Which reaction to conflict is demonstrated by Xerox and union leaders in the case?
Among the reactions to conflict, Xerox chose first, to collaborate. In the case, Xerox needed to cut costs and continue operations. The labor union, on the other hand, needed to retain their jobs. With the common goal to meet as many current needs as possible, they used their mutual resources to cooperate and solve the problem at hand. There are also times when both Xerox and the company chose to compromise especially when the resources are unavailable, as evidenced by the Union agreeing to stock options instead and the management to not choose outsourcing as an option.
2) What are the situational characteristics surrounding Xerox’s labor-management negotiations? In your opinion, do each of these characteristics make the negotiations easier or more difficult? Tell why.
Several of the situational characteristics in the negotiations is that there is a mutual need to keep the company afloat, there is a need to cut costs, there is a need to retain jobs, calls for wage increase, and that there is a need to improve the company’s performance. The situations that include keeping the company afloat and improving the company’s performance make negotiations easy for both parties because of mutual interests. The situations that include the need to cut costs, retain jobs and increase wages, make the negotiations more difficult because the interests of the two groups clash against each other. An example is that while the union calls for increases in wages, which increase costs, the management would like to reduce costs that would pull the company further into losses.
3) Have Xerox leaders adopted a win-win approach to negotiation? If so, explain what each side stands to gain from the negotiation. If not, explain the current approach and tell whether a win-win approach would be more beneficial than the current one.
Although, as stated in the case, Xerox’s approach is far from perfect, it is the closest the company can get to a perfect win-win situation. Basically, it can be observed that laborers and management have always had different interests. While management’s interests lie on keeping the company working efficiently while increasing profits and minimizing costs, the laborer’s interests lie on protecting their welfare through wages and benefits, and worker-related issues. It can be derived from these conflicting interests that it is impossible to please both sides. However, with the current set-up, the main goals of both parties are met. For the union’s side, the laborers get to keep their jobs and stand to gain from benefits they have forgone in terms of wages. On the management’s perspective, however, while they are not able to reduce costs through labor outsourcing, they have reduced other costs through other means and processes because of the contributions of the workers.
- Kim S Cameron; Robert E Quinn ‘Diagnosing and changing organizational culture : based on the competing values framework’ Reading, Mass. : Addison-Wesley, 1999.
- Robert N Lussier; Christopher F Achua ‘Leadership : theory, application & skill development’ Boston, MA, USA : Cengage Learning, 2016