Management Style of Brian Driscoll
The blame for the demise of Hostess has been squarely put at the union’s feet and their contracts. After conducting a close examination on the company, I have realized that free labor would have led to the death of Hostess; the striking employees only enhanced the inevitable. In this situation, people on the right track have pointed fingers at greedy unions. However, we must acknowledge that the two sides must reach a realistic agreement in a collective bargaining setting. Unions reflect the demands and wishes of employees and are natural to engage in negotiations in order for their demands to be fulfilled. Companies must communicate accurate company data with the union and companies should provide clear answers when they cannot meet the demands of employees. A positive relationship with workforce cannot be built by asking employees to give significant amounts of benefits back and pay while boosting the salaries of executives twice in a span of ten years (Longenecker, 2006).
The demands raised by employees of Hostess were just but normal; just as many employees in facing similar situations in their workplace, these workers had to hold on to what was at their disposal. The blame cannot be put on the unions or workers for the years of failed ideas and inept management at Hostess. Nevertheless, these employees and their unions have lost their jobs: they are carrying the heavy load occasioned by the blame. Brian Driscoll, the former CEO of the company tripled his salary despite the knowledge that the company was geared towards bankruptcy. It is reported that various top managers received massive pay increases with some of them doubling their salaries. Currently, the incumbent CEO has put the blame on the union for fostering the demise of the company. It is evident that the new CEO is partial because he is quick in blaming the union and fails to see and talk about the part where former CEO tripled his salary and doubled salaries of other top managers; all these happened even after knowing that Hostess was operating on life support (Grossbauer, 2010).
After an announcement by the company to go out of business because of labor strikes causing limited distribution of company products and minimized production, conservatives pinned the blame. The conservatives’ union bosses were allegedly celebrating because they had destroyed the most enduring American brand and were not amused. Despite the fact that the union comprised of employees of the company who were laid off, the claim remained. Today, over 18,000 workers are not employed because of labor leaders and their followers are short sighted and greedy thus have decided to kill their own jobs instead of making concessions, which would enhance the survival of the company (Longenecker, 2006). Parasites are known for murdering their hosts away from the eyes of the public. Consistent poor management and crony capitalism have driven Hostess into a grave, but the price is laid on the heads of employees. These employees engaged in creating great products that citizens love, would love to see the success of the company. They have always remained committed in their stand against industry competition to the bottom of the company. In the end, these workers together with their communities have to suffer from needless layoff tragedies (Stout, 2008).
The company has been struggling to maintain their market share because consumers’ appetites are increasingly shifting from junk foods, increased competition, and the company’s bankruptcy. Recently, the debts of Hostess were cleared by two funds, Monarch and Silver Point who engage in purchasing discounted corporate debts hoping to turn businesses around. While the company attained an agreement with the leading union, it failed to create an agreement with striking Grain Miller’s Union, Tobacco employees and Confectionary workers. The unions reported that the management of Hostess had unreasonable demands (Grossbauer, 2010).
The company is facing a crisis rooted on a decade of operational and financial mismanagement that led to two bankruptcies, lost market share, monumental debts, and decline in sales. Company investors are trying to resolve the latest bankruptcy after taking over the company through attacks towards the most valued assets of the company’ the employees (Longenecker, 2006). The falling corporate cookie is engaged in a battle of to generous pension funds for employees. During this time, the company had over $2 billion pension liabilities that had not been funded. This is not what business schools are teaching. Although are being used in the corporate world, research offers little evidence whether such hefty compensation leads to improved delivery and production. Many people think that if CEOs and top executives are paid more, it leads to positive results; this is not true in the real world. This has been the case for the U.S. airline sector, which has been experiencing one bankruptcy after the other while salaries of executive s kept increasing (Stout, 2008).
These are a few examples of horror stories, which strike people’s nerves because the trend is on the increase in America. It is the belief of the media that they should idolize such CEOs, despite the fact that many common people are facing the after math of these dead business deals. There have been cases where top executives have engaged in selling their companies after predicting that their personal taxes are poised to increase. Many people have lost their jobs so that top executives can secure percentage points on taxes, which rarely happen. Corporations are not encouraged to engage in such obscene salary scenarios and the public must develop opinions to make this practice less acceptable. Investors demanding more rights to vote are still emphasizing on high pay (Grossbauer, 2010).
Changes in the current business practice must occur since one percent of people live under a set of policies and put the blame for corporate problems on the rest of the employees. This is because employees keep on trying while top executives keep on taking what employees produce. People are tired of hearing about the CEO of Hostess who keeps blaming the demise of the company on the unions. In this case, if the company was to triple the salary of the CEO and double top executives’ salaries despite being aware that the company was on the path to bankruptcy, the problems causing the demise goes beyond the unions. The unions have argued that they have witnessed concessions meant for capital investment, new equipment, plant development and product development being diverted to hefty bonuses and pays for top executives, high priced salaries for consultants and attorney, as well as payouts to investors (Longenecker, 2006).
Reports indicate that the company might have manipulated salaries of top executives as efforts geared towards sidestepping bankruptcy compensation provision. Evidently, the company will have converted chunks of salaries for top executives from performance-based to fixed salaries. This might have been an effort to sidestep on rules designed to make sure that bankrupt companies do not entice workers to keep working because they are promised cash (Longenecker, 2006).
Grossbauer, S. (2010). : a systems approach for healthcare and institutions. Dubuque, Iowa: Kendall/Hunt Pub. Co
Longenecker, J.G. (2006). Small business management: An entrepreneurial emphasis. Mason,
Stout, R. (2008). Under the Andes. Auckland: Floating Press.