Two years ago, the firm started experiencing liquidity problems. This was mainly as a result of the Governments move to stop

Popote Wote Wasome Ltd is a fairly large firm operating throughout the country. The firm was established twenty years ago as a quasi-governmental institution. It is involved in the production and marketing of educational materials and has a near monopoly hold of this market.

The head office of the firm is located in one of the buildings in the Central Business District of Nairobi County. It has other operational bases in the county in the industrial and upper hill areas. The head office is the administrative hub of the firm while the industrial area base is the main production and operations’ centre. The upper hill offices serve as the distribution nerve centre of the firm. However, the firm has coordination centres in the major towns in all the other counties.

The firm has grown into a fairly large entity from its very humble beginnings as a one office operation. It has a staff complement of 254 permanent and pensionable employees. It also usually has about 300 people working as casuals at any one time. The firm relies on contracted professionals for the development of the learning materials, as well as for quality assurance of the materials.

Two years ago, the firm started experiencing liquidity problems. This was mainly as a result of the Government’s move to stop direct financial support to its subsidiary organizations. It was also a result of the cumulative cash losses arising from inefficient cash control systems. The liquidity problems necessitated a re-evaluation of the firm’s operating systems.

One of the key outcomes of the re-evaluation was the need to reduce employee remuneration as a way of cutting costs. This would involve the emoluments of all categories of workers including the contracted staff.

The senior management, under the stewardship of Mr. Mwakesho, the Chief Executive Officer (CEO) commenced on the implementation of the stringent cost cutting measures. These measures included, among others:

Abolishing staff welfare benefits previously taken for granted such as 10.00 O’clock tea and subsidized lunches even for contracted workers.

Removal of periodic performance based bonuses and the travelling allowances for consultants.

Abolishing of overtime pay with no reduction in work load.

Withdrawal of company vehicles previously used to ferry workers between stations. Employees were expected to find their way to the stations.

Scaling down of salary structures for middle-level managers and support staff

The CEO decided to deal ruthlessly with any form of dissent. As an example, he immediately demoted one of the middle level managers, Mrs. Otieno. Mrs. Otieno was accused of behaving in a manner likely to-incite other workers to disobedience. The CEO assumed the duties of the Human Resource Manager. He single-handedly, handled disciplinary proceedings against Mrs. Otieno. She was stripped of her privileges and re-located from the head office to the industrial area offices where she was expected to share an office with a junior worker.

There was widespread discontent among the workers. This recently culminated in a go-slow at all work stations, which was effectively coordinated via the short messaging service (sms) facility by anonymous leaders. This created a lot of problems for the firm in the form of deliveries that were not met and unfulfilled promises to customers.

The CEO sought advice from other managers outside the firm. He was advised to go for conciliation as a method of resolving the dispute. He then decided to look for a conciliator on his own. He has identified a consultant in industrial relations for the purpose, whom he intends to introduce to the workers’ representatives in the hope that a workable solution will be found.

There are certain omissions according to accepted disciplinary procedure that the Chief Executive Officer of PWW Ltd made in meting out disciplinary action against Mrs Otieno. Highlight these omissions. (10 marks)

Describe the violations of the welfare expectations of employees by the management of PWW Ltd. (5 marks)

(d) Explain the reasons that may lead to the failure of the strategy adopted by the CEO of PWW Ltd to resolve the employee dispute. (10 marks

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