My take on ECSA

Abiola Temitayo-Afolabi Written by Abiola Temitayo-Afolabi · 1 min read >

ESCA is a case in the analysis of business problems. The dilemma is about a company that just got a contract to produce parts for a wind turbine company. ECSA produces metal for aerospace, automobile, lighting and farming machinery industries. The company is doing well financially. In 2010, the expected turnover is 141 million euros, therefore this new contract is a plus.

ECSA management figured that the wind turbine parts cannot be done in any of their existing plants. ECSA has 3 factories; one in the city and two in different small towns. The factory in the city has not been giving the management any problem until recently when the union went on strike for three weeks; disrupting production and causing huge losses. The factory workers in the small towns did not join the Union even though they have tried to lure them into it but it has not been successful.

Due to this, the management is wary of sitting the industry in the city. The company has two options to choose from. There is a small-town option that is open and eager to be the host community but they do not have enough skilled labour, the cost of electricity is higher and should the company decide to close down the factory, the cost of disposing of the land is cheaper than what they could get in the city.

On the other hand, the city location is a short distance away from the main plant. There is more than enough skilled workers and the cost of electricity is relatively lower should the company consider reselling the property, the value is higher and getting a buyer would be superfast. The only glitch is that the management fears that the new staff will get lured into the Union, and disrupt production by going on strike like the workers in the main factory did.

The interesting thing about ABP cases is that we never seem to reach any conclusive thing. It is all about weighted scores and averages to arrive at a decision and there is no wrong or right answer, you just have to show how you arrived at your position. Another thing is that your opinion is not allowed, so you only infer from the statistics given.

This is not an ABP class so I will just give my opinion for free. I do have a problem with the management. I believe their management skill can be better. I also think they are a paranoid bunch of people because I don’t understand the apprehension over a group of people that you have never met and they already believe they will go on strike after getting employment. I am open to being proved wrong but I don’t see a group of 220 people who have been unemployed for a while decide to go on strike immediately after getting a job.

Even the main plant staff did not go on strike immediately after employment it was many years later. And so just because a strike happened in plant A, ECSA management believes deeply that the new 220 employees will also go on strike after being employed, disrupt production and cause them to lose money. Therefore, they decided to opt for the small town which has union-free baggage.  

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