Hormel Negotiation Case Study
Q1: List the Parties involved in the Hormel negotiations. What are the primary goals/interests of each party? Briefly describe two pairs of parties that are in conflict with each other and explain why they are in conflict.
Major parties, with each’s goals/interests, involved in the Hormel negotiations are:
- Local P9 – Local union representatives that wanted to maintain employment contract. In particular, they were fighting for keeping the hourly wages at $10.69/hr. and maintaining the eroding bargaining power and appreciation/value of unions as seen by corporate entities.
- Hormel – Employer of the union worker who wanted to remain competitive in the industry by implementing cost reduction measures such as wage cuts, automation of works. Hormel
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This was a distributive negotiation whereby Hormel’s primary interest throughout the negotiation with P9 was to reduce wage bills. Hormel’s management were aware that they had the upper hand in negotiations owing to the existing business situation in America that favored corporate rights to labor. In the process of creating a new contract, there existed little legal recourse against the company if they chose to terminate/not hire current workers, reduce wages, or replaced existing workforce with cheap labour. To add on, Hormel had all of the power in this negotiation due to their market position, control of financial resources, and ability to shift production facilities to another location. Local P9 had exactly contradicting interests as Hormel. They wanted a wage increase to offset the pay cuts from the prior years. Local P9ers felt they were the right to ask for increased wages when existing contracts were about to expire because Hormel was still profitable and didn’t have to go through same plight as other players in the industry. Unfortunately, Local P9 had a weak position in this negotiation with the exception of a lone power to strike. They were emotionally driven and sought an outcome that didn’t account for their substantially weaker power …show more content…
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