Business Management

04 Jul

CASE – 1  

Harish Bhatt, a very bright and ambitious young executive, was born and raised in Jaipur. He graduated from a local college and married a girl who was his class-mate. Harish then went to Mumbai where he received an M.B.A. He was now in the seventh year with Birla Steel Ltd, which is located in Jaipur.

As part of an extension programme, the Board of Directors of Birla Steel decided to build a new branch plant. Bhatt was selected to be the manager at the new plant. He was also informed that if the new plant is a success he would be promoted to a higher post. The location of the new plant was to be decided by an ad hoc committee of which Bhatt was made the chairman. In the committee’s first meeting Bhatt explained to the members the ideal requirements for the new plant and gave them one month to come up with three choice locations.

When after a month the committee re-met, it recommended the following cities of preference: Gurgaon, Chennai, and Indore. Bhatt thanked the committee members for their fine job and told them he would to study the report in more depth before he made his final decision.

That evening he asked his lovely wife. “Honey, how would you like to move to Gurgaon?” Her answer was quick and sharp. “Heavens no!” she said. “I have lived in Rajasthan all my life and am not at all inclined to move out to Gurgaon—extension to Delhi. That kind of life is not for me.” Bhatt weakly protested by saying that the committee had ranked Gurgaon as the best location for the new plant. The second was Chennai and the third was Indore. His wife thought a moment, then replied, “Well I would consider moving to Indore, but if you insist on Gurgaon, you will have to go by yourself.”

The next day, Bhatt called his committee together and said, “Gentlemen, you should all be commended for doing an excellent job on this report. However, after detailed study, I am convinced that Indore will meet the needs of our new plant better than Gurgaon or Chennai. Therefore, the decision will be to locate the new plant in Indore. Thank you all again for a job well done”


a) Did Bhatt make a personally rational decision?

b) Did he make an organisationally rational decision?


CASE – 2

Sigma Appliances Limited was in the business of trading of various home appliances. For this purpose, the company entered into agency agreement with different leading manufacturers. The agency business was doing well. About ten years back, it was diversified into manufacturing some of the appliances like electric iron press, electric oven, electric heater and other electrical gadgets. For this purpose, the company hired a team of technical personnel led by Khempal who was a diploma holder in Electrical Engineering but had considerable experience in the relevant field. The marketing was looked after by personnel of agency division with the addition of some more hands.

With increased business activities, the company was facing the problem of integrated information system, as this could not be built up since the company graduated from a small-scale level. Whatever information system was developed, it was based on the needs felt rather than based on planning. In order to develop its management information system based on computerised processing, the company decided to recruit an MIS manager and advertisement was put in leading newspaper inviting the applications for the post. After receiving the applications, the company appointed a selection committee consisting of three members—managing director of the company, manager of agency division, and an outside consultant. The committee interviewed applicants and selected Narayanan with three years’ experience in MIS in a large company. Narayanan was very happy on this appointment as he was offered very profitable emoluments.

On one day, Khempal had an informal chat with the Agency Manager (Rajnish), which proceeded this way:

Khempal: I have heard that you have appointed a new manager who will provide us information about how we should do.

Rajnish: I have not appointed him but the management has done this. I was just a spectator in the selection committee meeting. Further, Narayanan will not provide us information about how we should work. Rather he will collect information from us regarding how we are working.

Khempal: I do not see any need for that. We are working alright and management has wasted money in appointing Narayanan. With this money, I could have three more engineers who could have done something meaningful. Well, it is their money. If they want to waste in this manner, what we can do.

The chitchat ended as both departed. After joining the company, Narayanan decided to meet the senior personnel to understand their information need and the information that could be generated from different parts of the organisation. In this process, he met Khempal in his factory office, which was adjacent to the administrative block and the conversation took place as follows:

Narayanan: Good morning sir.

Khempal: Good morning. How do you do?

Narayanan: I am fine sir. Sir, I want to know what information your department needs.

Khempal: If you want to enjoy a cup of tea with me, you are welcome. But if you want to ask such a silly question, I am sorry.

At this Narayanan looked visibly upset and left the factory office saying, “Sir I will meet you later.”


(a) Discuss the nature of problems involved in this case.

(b) What kind of perception was formed by Khempal about the role of MIS manager? What could have been the probable reasons for this?

(c) Advise Narayanan about how he should proceed.

(d) What methods should the chief executive adopt to overcome the problem?


CASE – 3

Ramoji Rao is incharge of a bindery in Vijaywada, which employs fifteen people, five of whom work in the factory. Three of these employees run machines, one supervises and the fifth moves the blank paper and finished print by handcar. This fifth position, which demands on skill other than driving a handcar, needs to be filled, and three applicants have responded.

The first is Mr Matti Anjaiah who is thirty-five, unmarried, and a Navy veteran. Anjaiah has poor work record. During his five years in Vijaywada he has worked only as a seasonal labourer on occasional odd jobs. He drove a forklift in the Navy, while working at Vishakapatanam. He has a strong build, which could help, although the work is generally light.

Mr Nehal Singh, age twenty-two, came to Vijaywada two years back from Punjab. He has done farm labour for many years and assembly-line work for one year. His command of English is poor (but can speak regional language, Telugu, fluently). He resides with his mother and seems certain to remain in the area for some time. After having run farm equipment he should have no trouble steering a handcar.

Mr Vandaveeti Raja is a local boy who finished high school two years ago. Subsequently he got a diploma from a local institute and is currently employed as an assistant in Savani Transport Company, Vijaywada. His character references are excellent. Mr Raja is small, but he seems quick and was track star in high school.


(a) How much consideration should be given to Mr Anjaiah’s poor work record? Should Mr Ramoji Rao check to verify it?

(b) How important is a command of English to the job? How quickly could Mr Nehal Singh learn enough English to be effective?

(c) Should Mr Nehal Singh be passed over because of his status as a recent migrant?

(d) Should Mr Raja get he job? Should his excellent character references be given more weight than his inexperience?

(e) Who should be hired? Why?


CASE – 4

As part of the company management development programme, a group of managers from various functional areas has devoted several class sessions to a study of motivation theory and the relevance of such knowledge to the manager’s responsibility for directing and controlling the operations of the organisation. One of the participants in the programme is Ashok Jain who has been a supervisor in the production department for about a year. During the discussion session, Jain made the observation. “Motivation theory makes sense in general, but there is really no opportunity for me to apply these concepts in my job situation. After all, our shop employees are unionised and have job security and wage scales that are negotiated and are not under my control. The study of motivation concepts has given me some ideas about how to get my children to do their chores and their home work, but it has not given me anything I can use on the job. Furthermore, in a working situation we are all dealing with adults, and it seems to me this reward and punishment thing smacks of personal manipulation that just won’t go over with people.”


1. In what respect is Jain correct in his comment about not having opportunity to apply motivational concept in his job situation?

2. What types of motivators for effective performance may Jain be overlooking?

3. What do you think about his concern that the application of motivational concepts leads to the manipulation of people?


CASE – 5 

For several months, the supervisors of a large corporation have been very dissatisfied with the new division head. Before the arrival of the new division head, the department had functioned as cohesive, effective unit, combining hard work with equal amount of leisure. The new division head has very strong ideas about the type of environment his employees should have. As one supervisor puts it, it resembles a full scale military operation. No longer are employees allowed to place personal belongings on the walls of their offices or have occasional informal gatherings during office hours. The bottom line has become productivity first, with the employees’ feelings being considered as an afterthought. Grass-root employees as well as supervisory personnel are very upset about the changes in structure, and their dissatisfaction is beginning to show up in their performances. Because of the decrease productivity levels, the supervisors have been informed that if they don’t shape up their subordinates, “the axe will fall on several heads”. The frustration and anger in now beginning to come to a full boil and the supervisors have decided to meet to discuss the situation.


1. Identify the leadership style of the division head from the angle of Managerial Grid.

2. From the viewpoint of Theory X and Y, what assumptions did the new head make about the way in which people work most effectively?

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