Pacific Brands is an Australian company that manufacturers home appliances and uniforms for fire fighters. The company has experienced problems if managing its employees and staying afloat in the hard economic times. In addition, the company has decided to retire off its workers to cut on costs and reduce its spending in order to survive.
Other companies, including some rivals, have shifted their operations to china and are doing well against the problems in the economy at the time. The other problem with the company is that it is not able to balance the salaries among its employees.
While the government has tried to bail out the company from crisis, the company management decided to lay off workers and at the same time increase the earnings of its management team. It appears wrong for the company managers to do this, taking in to consideration that the company is on the verge of collapse.
The other problem with the company is that it is not able to adapt to the difficult times like other companies in the region. Several other Australian companies are said to have shifted their operations to China after it became impossible for them to operate in Australia.
The public image of the company is tainted since even the government was not in support of the actions of the company management of retiring off the workers while there was a better action that could have been taken.
Although the relocation of operations is not a new practice in Australia, it is not ethical to follow the actions of other companies considering the fact that a pacific brand has employed many people in Australia.
Management Problems
The case of pacific brands is a difficult one. The company management insists on moving its operations to china in an emergency move to protect itself against the deteriorating marketing situation in Australia. The shift of operations is because China has cheaper labour and has a better overall access to raw materials.
However, the company has not considered its priorities while it chose to move its operations to china. Although Pacific Brands claims to be flexible, it is proved otherwise by a keen examination of its decisions to move its operations to china.
The company has not explored less radical idea of shifting its production to other types of goods, which are selling at a good price for the sake of its workers and its market in Australia. In addition, the management has hurt the public image when some personalities and the government come out in criticism of the company’s actions (Oshri, 2011, p.75).
An overall assessment of the company’s actions shows that its management is incapable of making good decisions on the behalf of its workers and the company as a whole. The decisions that have been taken by the company at the moment seem to be against the interest of many people who are important in the light of the company’s popularity in Australia (Oshri 2011, p.81).
The actions that the company has opted to institute as a solution to the problems it faces are not in the interest of the community and the company employees (Schermerhorn 2011, p.85). The said actions are an emulation of the actions that companies took in the eighteenth century.
It is not logical to compare situations and circumstances of companies from the eighteenth century with the situation of the company in Australia in the twenty first century. It can be understood that the company is facing a situation of total collapse if it fails to take action on the current problems in its marketing (Gospel & Pendleton 2005, p.120).
The management has contradicted itself in its commitment to survival of the company. The facts are that the company is making profit, and that it has better options. In addition, the manufacturer has received support from the government to help the company to stay afloat in the economic situation of the time
The other problem that the company has is the inability to speculate the future trend of the market and the labour. Currently, the problems that the company faces are due to global economic crisis. An earlier detection of the impending problems in the company’s operations could have helped the company salvage the situation in a better way.
This is supported by the fact that the company has decided to move its operations to china when it is already too late. The time that it would take for the company to shift from Australia to China, and the cost of the actions does not seem logical depending on the nature of the problem at hand (Oshri et al 2009, p.52).
Another problem in the company’s operations is the lack of an alternative product to market during low economic times. The company’s production lines seem fixated on selling the same goods it had been producing when it was performing better.
Possible Solutions
If Pacific Brands wished to control the rise of prices of its products in the market, it should have considered other means. One of the tactics that would have been useful in solving the problems that the company faces now is cutting down on its spending. It is noted that the workers are not complaining on the current pay of the general labour population.
However, the company has decided to increase the pay of its management while ignoring the plight of the bigger worker population. It is absurd decision to increase any of the company employee’s salaries when the company faces closure due to financial insolvency (Schermerhorn 2011, p.89). The management team including the president of the company is a part of the labour force that the company pays to maintain operations.
However, the management has decided to ignore this fact and go on to exempt them by increasing their salaries at this time. Instead of a complete shift of operations to other countries, the company should have considered selling some of its assets to a willing foreign company to increase its capital base (Hopkins 2010, p.46).
In addition, the company should have considered shifting its production to other goods since the products it was offering at that time were already being offered in the country at a cheaper price.
Justification
Pacific Brands is in dire crises now. Its experienced labour and its factories are at the risk of being permanently lost in the temporary economic depression. The company ought not to have decided to move its operations since it still has other options.
Shifting line of production and reducing spending and overheads is one of the solutions that would have helped the company survive hard times. Moreover, the negative publicity associated with the company’s action is not worth risking, considering that its major market is in Australia.
References
Gospel, H. F., & Pendleton, A 2005, Corporate governance and labour management: an international comparison, Oxford University Press, Oxford.
Hopkins, T 2010, Selling in tough times: secrets to selling when no one is buying, Business Plus, New York.
Oshri, I., Kotlarsky, J., & Willcocks, L 2009, The handbook of global outsourcing and offshoring, New York Publishers, Basingstoke, Hampshire.
Oshri, I 2011, Offshoring strategies: evolving captive center models, MIT Press, Cambridge, Mass.
Schermerhorn, J. R 2011, Management foundations and applications, John Wiley, Milton, Qld.