In this situation where a younger supervisor is managing an older, more experienced subordinate I would recommend that the younger supervisor acknowledges the subordinates experience, and is upfront with them about any problems that may arise as this would create a smoother relationship between the two and would allow them to better work together. Specific to the case study, instead of simply firing him/her or giving him a warning I would advise him/her to speak with him/her about what he/she is not doing well, and see if he/she believes if that is something that he can change. If he/she admits that his/her current position is something that he/she can no longer be successful in then it is possible that the company could find another position for him/her, considering that he/she has been an intergral part of the company for many years, and there are people that are loyal to him/her.
