Abstract:
In 1952, with steel deemed a necessity for national defense, the US faced the prospect of a national steelworkers' strike. This three-part case examines the Truman administration's response to the threatened strike and particularly Truman's attempt to seize the steel mills. Part A provides background on the administration, the Korean War, the American economy at the time, and the steel industry. The supplement to Part A provides further documentation of this material. Part B presents the decision of the Truman administration to seize the mills and the subsequent lower court decision that this was unconstitutional. Part C follows the ensuing strike, attempts at negotiation, and the Supreme Court decision finding seizure unconstitutional. The case concludes with the final settlement of the strike. The supplement to Part C contains excerpts from the Supreme Court ruling.
Learning Objective:
This case is useful for illustrating that the choice of a channel for political action (e.g., the courts vs. a congressional committee) has enormous strategic implications, and that the way a manager frames an issue (e.g., as a threat to national security vs. to collective bargaining) is equally important strategically. It can also support a more sophisticated discussion of political bargaining and conflict. Finally, it illustrates the paradox of a manager who is able to strengthen his own power by giving authority away to others.
