This paper focuses upon factors that would tend to exert influence on the dilemma of Oz Clothing and would determine the success or failure of the company in seeking to address its situation. These are comprised of factors external and internal to the firm…
In the near future, there are also indications that the government will provide further empowerment to labor unions such as the CWU in light of its newly instituted Industrial Relations policy. Economic – The global economy is experiencing a critical downturn, resulting in the cancellation of orders by large retailers who are in turn affected by poor consumer demand. The high cost structure of the firm, particularly its labor, is rendering the firm uncompetitive against rival firms operating in regimes that allow them a lower cost structure. The Australian garments industry may not be able to secure additional bailout funds from the government as it has already released a large amount of funding for this purpose, and is itself deep in public debt which it may not wish to increase further. Social – The Australian Council of Trade Unions plans to mount a campaign to “buy local” which may be joined in by other non-governmental organizations and special interest groups. The ultimate objective is evidently to create a broad-based, society-wide demand for local products in order for demand to support more profitable business operations for Australian firms. To jump start the process, however, the initial objective is to secure the commitment of federal, state and local governments to give preference to products that have been made in Australia. Technological – The industry’s production method is low-skilled and labor intensive, for which reason it is prone to easy replication in countries that have a large labor base that are able to command a lower labor cost. Such a country is China, which has successfully mass...
The paper tells that the business of Oz clothing has entered a period of economic uncertainty, requiring the need for a strategic change in order to survive. The Australian firm manufactures clothing items among which are underwear lines it describes as commodity type, indicating the lack of distinguishing characteristics or brand name from other mass produced, basic clothes wear. Oz Clothing will be undertaking a bold, risky, yet in the long run necessary, strategic change that promises to create short-term uncertainties for the company, but greater stability and growth in the distant future. A shift of market focus may prove beneficial; it is suggested that the firm design products for the senior consumers (50 years old and above), which is the fastest growing and most wealthy segment of society. The change will involve dramatic alterations in the firm’s products, for which its old manufacturing processes may no longer be applicable. A change in the skills set needed will therefore have to be acquired by the employees, for which training and mentoring will need to be done. Secondly, the firm will need to create a bond of trust between itself and its employees, and conduct business in a transparent way with its employees, in case there will be a need to engage them to agree to a pay reduction or shorter work week for the duration of the crisis. Furthermore, in order to avoid demotivation or labor union disputes, it will be necessary to frankly approach the matter of possible layoffs and work stoppages if such will be warranted by the firm’s financial situation. ...
Cite this document
(“Economic downturn hits Oz Clothing Essay Example | Topics and Well Written Essays - 3500 words”, n.d.)
Retrieved from https://studentshare.net/management/3753-economic-downturn-hits-oz-clothing
(Economic Downturn Hits Oz Clothing Essay Example | Topics and Well Written Essays - 3500 Words)
“Economic Downturn Hits Oz Clothing Essay Example | Topics and Well Written Essays - 3500 Words”, n.d. https://studentshare.net/management/3753-economic-downturn-hits-oz-clothing.
The research recommends for Oz clothing a new set of business objectives which are in close adherence to the policies of industrial relation and considers the impact of the objectives on the stakeholders. An assumption is also held regarding the operation of the organization in the past and how the previous strategies of the organization might have an effect on the policies and practice of Industrial relations.
Some of the key causes are given below. First of all, the interrelated markets of different countries may cause this downturn. That is, America has a strong market in Asia, and if the American production collapses it will also cause cost push inflation in Asia which will then cause problems in other countries related to Asia.
According to Fancher (1999-20110), banking deregulation is defined as the removal of regulations which governs the banking system. Arguably, it is clear to illustrate that the United Kingdom’s overreliance on a deregulated banking industry contributed considerably to the economic downturn experienced in the period 2007/2008.
The company's main concern was what action to take with regard to the workforce. With fewer production facilities, the company needed to reduce the number of labor hours by twenty per cent. There were several factors that affected the decision, most important was how to deal with a company union which strongly opposed a lay-off of any employee.
It is to be noted in this context that the task of financial management cannot be confined merely to cash management. Rather, the scope of financial management includes all financial resources such as receivables and payables. Management of all financial resources assume great importance as it has rightly been coined as the life blood of business.
Many were in the trap for longer lime as GM Motors has been and ultimately gave in. Majority of the companies felt the acute pinch but somehow or other survived. It is not easily conceivable that giant
Firms are faced with excess supply and with lack of demand firms are forced to cut down on prices to sustain their margins and beat the competitors. This reduces the profit margins of firms and reduces their profitability. Under these circumstances firms are forced to