MSC-1-2a7
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Individual Assignment
Pacific Rim Clothing and Apparel (PR) is a successful company based in a South-East Asian country that has built up an international reputation by supplying Western retailers with garments made up to the retailers' designs and quality standards.
Like most other local companies, PR has, for many years, recruited new staff by encouraging existing employees to contact people from their own villages and regions. It was felt that he gave a more ‘family’ atmosphere to the organization and often several members of the same family would be employed in its main plant. The Company has thus built up a high degree of loyalty from its workforce, the majority of whom are young women.
It has just been announced that a large US clothing MNC is going to open up in the export processing Zone at the main port of the country, only 10 miles away. They are advertising for experienced clothing workers and offering a higher wage than PR currently pays. The Managers at PR also know that, in the EPZ, companies are exempt from what few labour laws the country has, including less stringent health and safety requirements. PR will try to continue to compete on price but it will mean asking the employees to work longer hours.
Task
In your group, discuss how this situation looks from the different viewpoint of :
- The PR Management
- The Local workforce
- The expat management of the incoming MNC
- The Country’s government
Suggest likely course of action for each of these stakeholders
THE PR MANAGEMENT
Situational Analysis:
- The Pacific Rim clothing and Apparel (PR): The Pacific Rim Clothing and Apparel based in South-East Asian country is a successful company built for supplying western retailer’s garments.
- Customers : Western retailers that are satisfied with the product from the company (they supply Western retailers with garments made up to the retailer's design and quality standard)
- Recruitment: PR has for many years’ recruited new staff by encouraging existing employees to contact people from their own villages and regions.
- The Employees: The employees of the company (PR) are loyal to the workforce due to family atmosphere given to them.
- Competition: (i) high priced competitors (ii) Competitor gaining access into the market
- Problem Definition: The New US clothing MNC pose as a threat to PR and this might make the PR Company to loose ground in the market. The employees of PR may likely want to quit their jobs because of the higher wage the MNC is offering and with less employees, the company will not be able to satisfy their customers which will make the customers to withdraw from the company.
Alternatives
- Ask the Employees to work longer hours and increase their wages
- Educate the customer market about the product
Evaluation of Alternatives/ Likely course of Action
- Establishing the Company's image
- Increase in market share
- Increase in sales
- Adverstiment
- Low price to enable it to compete with the MNC Company
THE LOCAL WORKFORCE
The local workforce among who work for PR, though loyal, looks at the situation as an opportunity to improve on their standard of living. Despite the fact that they are not certain if MNC will provide them with adequate health and safety needs, the local workforce is motivated to work for MNC because of the higher wage.