Business leaders have a choice in how they wish to compete. “High Road” companies are managed over a long time period and desire to struggle through a varied mixture of elevated productivity, innovation, and quality customer service that advocate high wages and career opportunities for staff, says the writer Thomas A Kochan.
In correspondence “Low Road” companies on the opposite seek profits and shareholders returns by decreasing and controlling labor through techniques that reduce costs and managing labor in such a way that keeps wages down for employees and contractors. An example of such a company is Southwest Airlines Co., which was a successful company in U.S over the last 30 years and also ranked as best places in U.S to work.
In the summer of 2014, Market Basket's legacy of low prices, good customer support, and great-quality occupations was emphasized when a household feud broke out among members of its own board of directors and the family member who'd been serving as CEO and was popular among employees was fired. After a six-week "strike “by nonunion workers and managers that had broad community and media support (it caused an astounding 92% decrease in the business’s revenues), the board agreed to sell the business to the ousted CEO, whose reinstatement workers had sought. Standard economics argues that the higher job costs are as a proportion of total prices, the more important it is to control these costs.
But, the writer explains, highroad businesses take another perspective, relying heavily on practices including screening employees for their strong practical, problem solving, and collaborative abilities; investment in training and development of the entire workforce; settlement systems that align employee and business interests through profit sharing and/or payment for achieving higher levels of abilities; and job-management ventures. Regardless of the effectiveness of high-road practices and their attractiveness to young workers, they're not widely followed by managers. "Few MBAs learn about high road strategies in their own economics, finance, and operations courses, “the author writes. "They do not learn that, as business leader, they will have distinct options to make about how to compete. “He asserts that academics, business and labor leaders, and workers themselves need to prepare current and next-generation business leaders about the choices before them.
The Leader's Choice case study solution
PUBLICATION DATE: October 01, 2015 PRODUCT #: SMR538-PDF-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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