Project Management - Organizational Culture & Human Behavioral Influences

Consider the following scenario: You have just been brought in on a project, as the previous project manager has left. The project is behind schedule and over budget, and several key team members have quit in disgust, plummeting the morale of the rest of the team, who fear they will have to do the extra work without compensation.

What are some strategies that could be used by a project manager to successfully manage the relationships among project team members and the relationships among the project team and external resources (e.g., subcontractors, government agencies)? How would these strategies differ under the conditions described in the scenario?