You are the Finance Director of medium size clothing company. Performance of directors are evaluated based on amount of profit generated as their compensation is linked to that. However, the companys profit has dwindled over the past two years due to increasing cost of production.

The companys handmade clothing line is one of the most celebrated clothing lines around the world, and that has been a source of pride for many years now. However, production level for the handmade clothing line has been reducing due to increasing labour costs. Labour unions have pressured policy makers into amending labour regulations, particularly those relating to pension and minimum wage, to provide more benefits and protection for workers. In the last quarterly review meeting of the board, the Managing Director gave a hint about a plan to invest in new equipment for use in the production process to replace work currently done by hand.

The current financial year is about to end, and management will be finalising the strategic document for the coming year in the next board meeting. An issue that is likely to dominate discussions at the upcoming meeting is the plan to invest in new equipment to mechanise work currently done by hand.

In the last quarterly review meeting when the issue of automating production processes to replace work done by hand came up, the Marketing Director showed concerned about likely drop in patronage if customers get to know that the celebrated handmade clothes are no longer handmade. She is likely to lay before the upcoming board meeting a proposal for an aggressive marketing campaign that will cost twice the budget allocation to marketing efforts.

Required:

Prepare a paper for presentation at the upcoming board meeting:

1. Suggesting likely sources of conflict in relation to the following issues:

2. the plan for investing in equipment for use in replacing work currently done by hand
3. the Marketing Directors proposal for an aggressive marketing campaign

2. For each scenario suggest ways through which the conflicts could be avoided or resolved.