Case Study: Northern Defence PLC
Learning Outcomes
After completing this assessment, the students should be able to:
- Analyse the relevance of policies in employment relations areas such as employee engagement; employee voice; conflict resolution; management of underperformance; discipline and grievance, dismissal and employment tribunals.
- Evaluate the complexity of relationships between various stakeholders in employment relations and the need for strategic integration of employment relations policies with other HR policies taking account of organisation culture and objectives.
Case study:
Nothern Defence PLC
Nothern Defence PLC is a business based in North East of England, it was built prior to the Second World War, where it was the centre for the Lancaster bomber production for the war effort. It has now developed its manufacturing capabilities and its portfolio includes the development of highly sophisticated machining centres and remotely controlled machines and is also engaged in the design and manufacturing of electric aircraft engines for domestic flights.
The business employs 2,560 workers. The factory has a long history of union recognition and membership (particularly among the engineering and manufacturing staff) with 78% of the workforce belonging to a union (predominantly Unite and Unison).
Relations with the unions in the past have been good, with the last round of compulsory redundancies having been in 2009. In the last 18 months the relationship has become strained.
The business is facing uncertain times, there are a number of competitor companies that are aiming to design and build either hybrid or all electric aircraft for commercial flights starting in 2022. These motors can be installed into small planes to replace conventional engines.
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A five-way co-operative venture between the UK and other European countries has been formed, that would create enough orders to secure jobs within the organisation for at least another 15 years, this is looking increasingly unstable.
The European Aviation Safety Agency (EASA) says it will begin categorising aircraft based on their CO2 emission, Norway and Sweden are aiming to make their short haul flights in their airspace electric by 2040.
The Chief Executive of Northern Defence says that with 1.5 billion air tickets sold each year for flights under 500 miles, the business potential for small electric passenger aircraft is clear.
The UK government has also become the first G7 country to accept the goal of net zero carbon emissions by 2050. This is a huge challenge for the air travel business with tickets sales expected to reach 8 billion by 2037. Critically, electricity is much cheaper than conventional fuel.
Negotiations between the countries over the project are making national headlines. The workforce is well aware that the organisation would not survive the cancellation of the order. For the time being, however, they are forced to sit and wait. The mood in the business is sombre. Work on existing orders for the domestic defence project is nearly completed, and alternatives are scarce.
The Chief Executive and Executive Leadership Team (ELT) are an established and cohesive team, acting together as a unit to make strategic decisions which focus on efficiency and profitability. The CEO is part of the UK government team leading on the negotiations over the European hybrid/electrical aircraft project, which is at a delicate stage.
Below this team, the structure consists of managers and supervisors, who have little influence on the broader business strategy and operate in silos. This has contributed to the choppy relationship with employees and trade unions.
The HR team have been leading on developing mechanisms to support ‘employee voice’, seeking direct employee communication methods. This has been hampered by an increase in low level individual employee conflict, which has not been resolved positively and has contributed to the change in relationship with trade unions.
Questions:
- Draw on academic literature and examples of organisational approaches to evaluate the employee relations strategy adopted by Northern Defence PLC.
- Discuss the key drivers that engender effective employee engagement and the extent to which these drivers shape the management of employment relations.
This evaluation essay requires you to use the relevant module material (ideas, concepts, theories, frameworks, and research findings) to inform your evaluation based on the case study.
Your assignment should be structured as follows:
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