Jake Andrews Case Study - Forces Resisting Change - Economics Assignment Help

Assignment Task :

Case Study
Jake Andrews, president of mining giant Megamines International stands at the end of the highly polished oak boardroom table. Tall, distinguished looking and blunt, Andrews is recognised as a tough no-nonsense manager. 'As you are well aware, the prices of our two core products, iron ore and coal are at rock bottom. China, our major customer is not buying, and the price of our high-grade thermal coal is at a 10-year low. The pressure is on. We must cut costs or we will go under. It is that simple. I am open to suggestions.' Megamines Australia CFO Michelle Vella is the first to speak. 'The obvious choice is to close the Kookaburra Mine. It is the highest cost mine in our portfolio. It is a constant source of industrial problems and takes up far too much management time.' 41 agree,' says Mike Lee, general manager of operations

• Australia. 'The union runs that mine. It is impossible to implement any changes that will increase productivity. We have been stuck in negotiations with the Fair Work Commission for almost two years trying to reduce our headcount and introduce more flexible work arrangements. To become viable in today's market, we need to cut 500 jobs and reduce our wages bill by at least 25 per cent, but our hands are tied. We can't manage the mine according to best practice because we are at the mercy of the unions and the FWC.' 'Mike is right, but there are some potentially serious social and political problems,' Sasha Mena, CHAO for Megamines Australia adds. 'If we shut down the mine and put all 2000 employees out of work, the effects on the local township and its people will be horrendous. Green Valley is a mining town, we are the major employer
• the economic and social consequences of a mine closure will be disastrous. Local house prices have already dropped by ten per cent based on rumours of cutbacks in the mine workforce.' 'If the workers and the unions don't want to face reality, what else can we do?' asks Mike. 'Our cost per tonne at the Kookaburra mine is $50 compared with S25 at our other operations.' 
   

'DISCUSSION QUESTIONS

1 What ethical and HR issues are raised?

2 What economic, political and social issues are raised?

3 Identify the major stakeholders involved. Outline what you think their particular views would be. What possible effects could automation have on their interests?

4 What major environmental influences are at play?

5 Which are the forces stimulating change and which are the forces resisting change? 

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