Reference no: EM134024703
Case Study: Growing Pains
Hugh Mannon has been running a large farm near Gingin on Perth's urban fringe for over 30 years. There he grows a variety of fruit and vegetables for the Perth market which is sold under the well-regarded brand of Mannon Vegetables. Their main buyer is CBA, an independent chain of supermarkets that competes with Coles and Woolworths. In 2016 competition heated up among retail buyers as Aldi became established and started taking market share. This led to a general feeling among growers that the changing circumstances in the retail sector may help improve prices for smaller growers like Mannon Vegetables. With a location close to Perth, Hugh felt he was well positioned to compete with competitors from the eastern states. Yet somehow, they continued to match or beat Mannon's prices.
Hugh was angry about these rivals undercutting his prices. So, he decided change to his approach to workforce recruitment and management. He was recently approached by a business which did a lot of the workforce management and recruitment for his larger competitors. He was offered an attractive package where he paid them to recruit, pay and accommodate workers that were mainly backpackers and other foreign temporary visa holders. The lower costs were too attractive to ignore, and he felt it would help address the cost advantages the larger competitors enjoyed while reducing the demands of building his own workforce. While he used his long-time workers when needed, he would use labour hire firms to address the bulk of his needs and draw up some production bonuses to motivate managers to increase productivity.
Problems became evident when Liang, his long-standing Head of Operations, resigned over these decisions. Liang objected to letting "newcomers" control too much and he was concerned they would have problems with quality among other things. His resignation meant he had to promote his less experienced Operations Manager (Chris) to the role of Head of Operations. Chris was never one of the popular managers and Hugh was soon dealing with complaints about Chris's abrupt manner and lack of concern for worker conditions. Two long standing employees including another manager left and when Hugh interviewed them some clear themes were evident.
Chris was not well liked as he was not respectful to workers and treated them poorly. The poor training and experience of new workers meant the experienced long-standing workers had to do a lot more work to help train them up. As training had not been sufficiently budgeted for, Chris was not prepared to pay experienced workers for the time spent training or, reduce their production targets which they needed to meet to be paid at the higher full rate. Then as the new foreign workers took on more work as their skills improved, the existing workers began to feel they were being robbed of hours by the cheaper foreign workers.
By early March 2020, it was clear the world would change drastically. The government needed to shut down sectors of the economy to prevent the spread of COVID19 and Hugh knew what it meant for his business and the new approach for farm operations. Foreign workers became harder to find and in time those they could find were not always the best workers. They struggled to harvest crops with less experienced employees which were not particularly motivated given the work situation and recent events.
Worker conflict sometimes boiled over and the work environment became tense and stressful. The remaining original workers didn't like the new workers for taking their hours and as the new workers got better at their job, they became resentful of the better pay the few remaining local workers received. At times quality was an issue as concerns began to surface that some workers were deliberately damaging product as a form of protest. Many workers suspected Chris was getting a bonus for cutting labour costs and indeed, he did admit to some of them that the new foreign workers were paid less. This made the better foreign workers particularly angry.
By early November 2021 as Mannon was planning to harvest the Tomato crop, he received a call from an ABC journalist. The journalist was requesting his comment on accusations of slave labour in the agricultural sector and the poor treatment these workers. Chris's attitude was mentioned by the reporter as a "significant issue" by some of those they had spoken to. He was told by the reporter that some of his foreign workers were being paid virtually nothing by the labour hire firm he used after they deducted accommodation and food expenses from worker pay. The foreign workers were now planning legal action against both him and the labour hire firm he used. He was deeply upset and surprised by these revelations.
1. Apply a situational leadership framework to explain how leadership could improve in the case.