General Management

05 Jul


Ray Kroc opened the first McDonald’s restaurant in1955. He offered a limited menu of high-quality, moderately-priced food served in spotless surroundings. McDonald’s QSC&V (quality, service, cleanliness, and value) was a hit. The chain expanded into every state in the nation. By 1983 it had more than 6,000 restaurants in the United States and by 1995 it had more than 18,000 restaurants in 89 countries, located in six continents. In 1995 alone, the company built 2,400 restaurants, and by 2001 it had more than 29,000 restaurants in 121 countries.

In 1967, McDonald’s opened its first restaurant outside United States, in Canada. Since then, international growth has been accelerate. In 1995, the “Big Six” countries that provide about 80 per cent of the international operating income are: Canada, Japan, Germany, Australia, France, and England. Yet fast food has barely touched many cultures. The opportunities for expanding the market are great, as 99 per cent of the world population are not yet McDonald’s customers. For example, in China, with a population of 1.2 billion people, there were only 62 McDonald’s restaurants in 1995. McDonald’s vision is to be the major player in food services around the world.

In Europe, McDonald’s maintains a small percentage of restaurant sales but commands a large share of the fast-food market. It took the company 14 years of planning before it opened a restaurant in Moscow in 1990. But the planning paid off. After the opening, people were standing in line up to 2 hours for a hamburger. It has been said that McDonald’s restaurant in Moscow attracts more visitors—on an average 27,000 daily—than Lenin’s mausoleum (about 9,000 people) which used to be the place to see. The Beijing opening in 1992 attracted some 40,000 people to the largest (28,000 square-foot).  McDonald’ restaurant in China at a location where some 800,000 pedestrians pass by every day. Food is prepared in accordance with local laws. For example, the menus in Arab countries comply with Islamic food preparation laws. In 1995, McDonald’s opened its first kosher restaurant in Jerusalem where it does not serve dairy products. The taste for fast food, American style, is growing more rapidly abroad than at home. McDonald’s international sales have been increasing by a large percentage every year. Every day, more than 33 million people eat at McDonald’s around the world with 18 million of them in United States.

The prices vary considerably around the world ranging from $4.90 Switzerland to 1.23 in the Philippines for the Big Mac that costs in the United States $2.90. The Economist magazine even devised a Big Mac index to estimate whether a currency is over or under-valued. For example, the $1.26 Chinese Mac translates into an Implied Purchasing Power Parity of $3.59. The inference is that Chinese currency is undervalued. Here are other price comparisons for the $2.90 U.S. Big Mac: Chile $2.18, Euro area $3.28 (Weighted average of member countries), Hong Kong $1.54, Japan $2.33, Mexico $2.33, Peru $2.57, Singapore $1.92, and Thailand $1.45.

Its traditional menu has been surprisingly successful. People with diverse dining habits have adopted burgers and fries wholeheartedly. Before McDonald’s introduced the Japanese to french fries, potatoes were used in Japan only to make starch. The Germans thought hamburgers were people from the city of Hamburg. Now, McDonald’s also serves chicken, sausage, and salads. One of the items, a very different product, is pizza. In Norway, McDonald’s serves grilled salmon sandwich, in the Philippines pasta in a sauce in a sauce with furter bits, and in Uruguay the hamburger is served with a poached egg. Any new venture is risky and can be either a very profitable addition or a costly experiment.

Despite the global operation, McDonald’ stays in close contact with its customers who want good taste, fast and friendly service, clean surroundings, and quality. To attain quality, so called Quality Assurance Centers are located in the US, Europe, and Asia. In addition, training plays an important part in serving the customers. Besides day-to-day coaching, Hamburger Universities in the US, Germany, England, Japan, and Australia, teach the skills in 22 languages with the aim of providing 100 per cent customer satisfaction. It is interesting that McDonald’s was one of the first restaurants in Europe to welcome families with children. Not only are children welcomed, but in many restaurants they are also entertained with crayons and paper, a playland, and the clown Ronald McDonald, who can speak twenty languages.

With the generally aging population, McDonald’s takes aim at the adult market. with heavy advertising (it has been said that McDonald’s will spend $200 million to promote the new burger) the company introduced Arch Deluxe on a potato-flower bun with lettuce, onions, ketchup, tomato slices, American cheese, grainy mustard and mayo sauce. Although McDonald’s considers the over-50 adult burger a great success, a survey conducted five weeks after its introduction, showed mixed results.

McDonald’s golden arches promise the same basic menu and QSC&V in every restaurant. Its products, handling and cooking procedures and kitchen layouts are standardized and strictly controlled. McDonald’s revoked the first French franchise because the franchise failed to meet its standards for fast service and cleanliness, even though their restaurants were highly profitable. This may have delayed its expansion in France.

The restaurants are run by local managers and crews. Owners and managers attend the Hamburger University near Chicago, or in other places around the world, to learn how to operate a McDonald’s restaurant and maintain QSC&V. The main campus library and modern electronic classrooms (which include simultaneous translation systems) are the envy of many universities. When McDonald’s opened in Moscow, a one-page advertisement resulted in 30,000 inquiries about the jobs; 4000 people were interviewed, and some 300 were hired. The pay is about 50 percent higher than the average Soviet salary.

McDonald’s ensures consistent products by controlling every stage of the distribution. Regional distribution centres purchase products and distribute them to individual restaurants. The centres will buy from local suppliers if the suppliers can meet detailed specifications. McDonald’s has had to make some concessions to the available products. For example, it is difficult to introduce the Idaho potato in Europe because of the special soil requirement.

McDonald’s uses essentially the same competitive strategy in every country: Be first in a market, and establish your brand as rapidly as possible by advertising very heavily. New restaurants are opened with a bang. So many people attended the opening of one Tokyo restaurant that the police closed the street to vehicles. The strategy has helped McDonald’s develop a strong market share in the fast food market, even though its US competitors and new local competitors quickly enter the market.

The advertising campaigns are based on local themes and reflect the different environments. In Japan, where burgers are a snack, McDonald’s competes against confectioneries and new “fast sushi” restaurants. Many of the charitable causes McDonald’s supports aboard have been recommended by the local restaurants.

The business structures take a variety of forms. Sixty-six per cent of the restaurants are frankfranchises. The development licenses are similar to franchising, but they do not require McDonald’s investments. Joint ventures are used when understanding of the local environment is critically important. The McDonald’s Corporation operates about 21 per cent of the restaurants. McDonald’s has been willing to relinquish the most control to its Far Eastern operations, where many restaurants are joint ventures with local entrepreneurs, who own 50 per cent or more of the restaurant.

European and South American restaurants are generally company-operated or franchized (although there are many affiliates—joint ventures—in France). Like the US franchises, restaurants aboard are allowed to experiment with their menus. In Japan, hamburgers are smaller because they are considered a snack. The Quarter Pounder didn’t make much sense to people on a metric system, so it is called a Double Burger. Some German restaurants serve beer; some French restaurants serve wine. Some Far Eastern McDonald’s restaurants offer oriental noodles. In Canada, the menu includes cheese, vegetables, pepperoni, and deluxe pizza; but these new items must not disrupt existing operations.

Despite its success, McDonald’s faces tough competitors such as Burger King, Wendy’s, Kentucky Fried Chicken, and now also Pizza Hut with its pizza. Moreover, fast food in reheatble containers is now also sold in supermarkets, delicatessens and convenience stores, and even gas stations. McDonald’s has done very well, with a great percentage of profits coming now from international operations. For example, McDonald’s dominates the Japanese market with 1,860 outlets (half the Japanese market) in 1996 compared to only 43 Burger King restaurants. However the British food conglomerate Grand Metropolitan PLC, which owns Burger King, has an aggressive strategy for Asia. Although McDonald’s has been in a very favourable competitive position, by 2001 the customer satisfaction level has been below that of its competitors Wendy’s and Burger King. In China, KFC is more popular than McDonald’s. Some observers suggest that McDonald’s expanded too fast and that Burger King and Wendy’s have tastier meals. It is Mr. Jack Greenberg’s (the McDonald’s top manager) task to change things around.


1. What opportunities and threats did McDonald’s face? How did it handle them? What alternatives could it have chosen?

2. Before McDonald’s entered the European market, few people believed that fast food could be successful in Europe. Why do you think McDonald’s succeeded? What strategies did it follow? How did these differ from its strategies in Asia?

3. What is McDonald’s basic philosophy? How does it enforce this philosophy and adapt to different environments?

4. Why is McDonald’s successful in many countries around the world?



Shanghai Volkswagen is a joint venture between the German Volkswagen AG and a consortium of Chinese partners. The 25-year agreement signed by the partners in the middle of 1980s provided for 50 per cent VW AG equity. By 2001, this venture was the most successful automobile venture in China. Other attempts made by the US AMC Jeep Corporation and other carmakers failed. Other companies were attracted by the large population of 1.2 billion people (certainly only a very small percentage would be the customers), VW built successful venture over the years. By 2001, it had a market share of over 50 per cent due to introducing “hot” models and assuring reliable service. But a great deal of effort was necessary to build up this market.

The early years were not without difficulties. For example, VW had to develop suppliers for quality components, train the work force, work under constraints imposed by the government, and had to share its latest technology. The Santana model, that proved successful in Brazil, was the primary vehicle that suited the Chinese market. By 1995, the improved Santana 2000 was introduced. The ultimate aim of the Chinese, however, is to design, and eventually develop their cars by themselves. The factory, not far away from Shanghai, has one of the most modern engine plants. Chinese engineers and managers were sent to the factory in Wolfsburg, Germany for training. Moreover, Chinese managers and technicians attended German universities to gain engineering expertise. One of the major difficulties was the lack of quality components. Therefore, VW also introduced an incentive system that paid their suppliers handsomely for quality car products. At the same time, the company worked hard to build relationships not only with the suppliers, but also with the community.

The Chinese government, on the other hand, provided tax incentives and protected care market for VW during the early years. For example, from 1993 to 1996 the government did not permit other carmakers to set up joint ventures for passenger car assemblies. The combination of hot models and reliable service resulted in an 8 per cent sales increase in 2000 and expected sales of more than 14 percent in 2001. Besides the popular Santana model, VW produces Jettas, Passats, and Polos that should result in more than 4,00,000 cars in 2001. But the competition is not sleeping with Ford introducing a budget car and Toyota a compact car. With 90 percent of the parts produced in China, VW was able to keep the price lower that its competitors. Still the Passat at $29,000 is expensive for a person having monthly earnings of $1,200. In comparison, the midsize Buick by General Motors costs $44,000, partly due to the fact that only 60 percent of the parts are locally made. With China’s entrance to the World Trade Organization (WTO) in 2001, competition is likely to increase, putting pressure in prices. VW could counteract by bringing the low-priced, Czech Skoda (which is wholly owned by VW) to China. Although the successful in the past, VW cannot rest on its past success, but must prepare for the future global competition.


1. Why was VW so successful in China while other companies failed?

2. What would you recommend to Shanghai VW to remain successful in the future?

3. Was it wise of VW AG in Germany to share its latest engine technology with the Chinese?



Daewoo was founded in 1967 by its hardworking relentlessly driven chairman Kim (surname) Woo-Choong. After its initial success in exporting textiles, the company expanded into trade, autos, machinery, consumer electronics, construction, heavy shipping, computers, telephones, and financial services, becoming Korea’s fourth largest business group. The company became, for example, a textile supplier for Sears, Christian Dior, Calvin Klein, and London Fog. Daewoo also engaged in a joint venture with General Motors to build the Le Mans car. However, labor and other problems limited the car shipments.

Chairman Kim’s philosophy of hard work and the value placed in people were important factors in the firm’s success. However, in the late 1980s and early 1990s, the company faced several problems. For one, Kim was concerned that with the increasing prosperity of Koreans, the workforce might lose the spirit of hard work. Moreover, there was a growing discontent among the younger workers and a lessening of motivation.

Through Kim’s hands-off approach to managing, some of the companies in the Daewoo group went out of control. For example, in the profitable heavy shipping industry, he noticed many unnecessary expenses. The elimination of company sponsored barbershops saved the company $8 million a year. In general, Daewoo’s workforce is young and well educated. In contrast to similar positions in many other Korean companies, top positions at Daewoo are occupied by managers with no family ties.

Although Daewoo is a major company with 91,000 employees, it is not dominant in any one industry. The strategy of being a supplier for major foreign companies, such as Cater-pillar, General Motors, and Boeing, may have led to bypassing opportunities for becoming a major marketer of its own brands. Now in the 1990s, Kim is also looking at opportunities in Europe; for example, he formed a joint venture with a distribution company in France.

The massive restructuring has already had some positive effects. Kim sold some steel, financial, and real estate units. The hands-off managerial style has been replaced by hands-on style, resulting in recentralization. Managers were “retired” or otherwise let go. Thousands of positions were also eliminated.

Things were looking better in 1991. The company lost money in 1988 and 1989 but made some profit in 1990 partly because of the sale of some major assets. The joint venture with GM registered a healthy growth. The company was also optimistic about the future of the new compact car Espero. Still, Daewoo had to cope with its labor costs and Japanese competition.

What looked good in the early 1990s, dramatically changed in the latter part during that decade and especially in the years 2000 to 2002. In 2000, Ford planned to buy Daewoo Motors for some $7 billion. However, he deal fell apart later in that year. Moreover, the company went bankrupt in November 2000. Chairman Kim mysteriously disappeared. He liked to think big, and also left the company with big debts behind. Several billion dollars were also unaccounted for. With Ford out of the picture, General Motors (GM) entered seriously in negotiations with Daewoo, which was once Korea’s second biggest car maker. On April 30, 2002, GM agreed to buy the bankrupt company that was named GM-Daewoo. What is in it for GM? The acquisition is a key component of its global strategy. On the other hand, restructuring Daewoo is going to be a formidable task. The brand image has to be restored and the Korean market share of 10 per cent (which was 37 per cent in 1998) has to be improved. The product line also has to be reviewed and complemented with new models. Moreover, GM-Daewoo can expect difficulties with Korea’s aggressive unions.


1. What are the advantages and disadvantages of a hands-off, decentralized management approach?

2. How can Daewoo stay competitive with the Japanese?

3. What are some of the controllable and uncontrollable factors in this case? How should Mr. Kim respond to those factors?

4. What do you think of Daewoo’s expansion into central Europe? What are the advantages and risks for the company?

5. Why do you think GM acquired the company, while Ford did not?


CASE 4: Jack Welch Leading organizational Change at GE

When Jack Welch, the chairman and CEO at GE (General Electric) retired in 2001, he could look back at a very successful career. He became CEO in 1981 at the age of 45. At that time, GE had a very complex organization structure with considerable bureaucratic rules.

One of his first changes was to initiate a strategy formulation process guideline that each of the businesses should be No.1 or No.2 in their respective areas. If this was not the case, managers had the options of fixing the problem, selling their particular business, or closing it. In an effort to streamline the organization, Welch deleted the sector level and eliminated thousands of salaried and hourly employee positions. Because of these drastic measures, Welch earned the nickname “Neutron Jack.” The re- organization increased the span of management (also called span of control) for many managers so that they would have 10 or even 15 subordinates.

The restructuring was followed by changing the organizational culture and the managerial styles of GE’s managers. One such program was the “Work-Out program.” Groups of managers were assembled to share their views in three-day sessions. At the beginning of the meetings, the superior presented the challenges for his or her organizational unit. Then the boss had to leave, requesting the groups to find solutions to the problems. Facilitators helped these discussions. On the last day, the superior was presented with problem solutions. The manager then had three choices: to accept the proposal, not to accept it, or collect more information. This process put great pressure on the superior to make decisions.

Another program to improve the effectiveness and efficiency was the “Best Practices program.” The aim was to learn from other companies how they obtained customer satisfaction, how they related to their suppliers, and in what ways they developed new products. This helped the GE people to focus on the processes in their operations that would improve the company’s performance.

Jack Welch was personally involved in developing managers at GE’s training center in Crotonville. Leaders, Welch suggested, are not only those who achieve results, but also those who share the values of the company—those managers received highest ranking. Managers who shared the company values but did not achieve the results got another opportunity to improve their performance. On the other hand, managers who achieved results but did not share the values received coaching that had the aim of changing their value orientation. There was little hope for those types of managers who did not achieve the results, nor shared the company’s values.

The stretch initiative emphasized “dream targets” with little consideration of how to achieve them. This approach is similar to setting creative objectives used in some MBO programs by other companies. These dream targets did not replace the traditional objective-setting approach, but supplemented it.

To improve the quality, the Six Sigma approach, which was used by Motorola Inc., was introduced at GE. The Six Sigma program suggested that the quality should not exceed 3-4 defects for a million operations. Managers were required to participate in the program and their bonuses were related to the achievement of the quality level. With the strong conviction of relating performance to rewards, an appraisal systems was also introduced that ranked employees into five categories ranging from the top per cent to the bottom 10 per cent. The top 25 per cent got stock option as their reward.

While some managers were in favor of the organizational transformation because they felt greater freedom, rewards for good performance and value sharing, other saw flaws in the system.


1. Do you think it is ethical to engage in restructuring and delayering resulting in massive reduction of positions?

2. How would you feel if you were the boss in the “workout” sessions being asked to leave the meeting while your subordinates discuss problems and suggest solutions to which you have to say “yes,” “no,” or “require further study”?

3. Why would other companies agree to study their “best practices”?

4. What do you think of evaluating the performance of managers not only on the achievement of results, but also on the degree to which they share the organizational values?

5. How would you feel of setting unrealistic (stretch) objectives?

6. Should managers be ranked in their organizational unit? What would you suggest if one such unit is far superior to another unit with most of them being generally good managers, yet you still have to identify the bottom 10 per cent?Overall, how would you evaluate GE’s approach to organizational change? What are the advantages and possible problems?


CASE – 5 Could The Challenger Accident Have Been Avoided?

The Challenger Space Shuttle accident on January 28, 1986, gripped the nation more than any other event in the last dozen years or so. It was a tragic accident in which seven people died. There is now some evidence that the astronauts may have survived the initial explosion and may have died on impact when the space shuttle hit the water. The purpose of recounting the Challenger accident is to briefly explain what happened, why it may have happened, how it may have been prevented, and what one can learn from it.

The Challenger mission consisted of two complex systems: the technical system and the managerial system. The technical problem was the troublesome O-rings, which under pressure and low temperatures became ineffective and did not provide the required seal. Engineers and managers were aware of the problem. So why was the go-ahead given for launching the spacecraft? Can it be explained by the way the managerial system worked?

The engineers at Morton Thiokol, the contractor for the booster rocket, argued against the launch, citing previous problems at low temperatures. Management, on other hand, may have felt pressure from NASA to go ahead with the launch. Roger Boisjoly, one of the engineers who argued strongly against the launch, stated that he received looks from management that seemed to say “Go away an don’t bother us with the facts.” He said that he felt helpless. Another engineer was told to take of his engineering hat and put on his management hat.

Eventually, the go-ahead was given by the managers. Engineers were excluded from the final decision. What, then, were some possible reasons for the disaster? Some argued that there was a lack of communication between engineers and managers. They have different goals: safety versus on-time launching. Others suggested that people with responsibilities did not want to hear the bad news. Thus, no listening. Still others suggested that there was insufficient provision for upward communication outside the chain of command. There was also a suggestion that status differences between engineers and managers and between upper- and lower-level managers may have played a role in inhibiting upward communication. Perhaps there was also false confidence in the mission because of past luck. Managers and engineers knew of the problem, but nobody was killed before. Moreover, no one in the organizational unit wanted to be the “bad guy” to halt the launch. Morton Thiokol may also have been concerned about a pending contract.

The result of the series of events was to the death of seven Americans: Jarvis, McAuliffe, McNair, Onizuka, Resnik, Scobee, and Smith. The question on our minds is: Could this accident have been prevented?


1. What can you learn from this disaster that may be relevant to your organization or an organization you know?

2. What do you think was the cause, or were the causes, of the Challenger disaster?

General Management

05 Jul

Case I


The case is based on an actual incident which took place in an Army unit operationally deployed in a field area just a few months before the 1971 showdown with Pakistan. The opposing forces of India and Pakistan were taking their respective positions in a pre-war scenario. The clouds of showdown were looming large over the horizons of both the countries. The rumbling of own tanks and guns, the reconnaissance, leaders of different arms and services establishing liaison with one another in the process of formulating plans for both defence and attack, digging of main and contingency positions was in progress, complete war machinery was being mobilized, camouflaged, and concealed. Ammunition and other explosives were being unloaded and dug down. Junior leaders were being briefed and rebriefed, communications were being checked, and troops were being motivated and looked after as most of them were green because of their sudden induction in the Army in post war days of 1965. Such was the scene which convinced all and sundry that war was imminent. Most of the troops looked forward to a showdown mainly because they wanted to get rid of the heavy ammunition as also for the mere thrill of it. Those who had not seen a battle, seemed excited over the prospects of a war and those who had seen the war, took everything in their stride, displaying a perfect cool, calm and confident countenance.

One Ram Bali Mishra (RBM) was a raw and green jawan of about 20 years of age and two years’ service and naturally had not seen a war. He was relatively tall, well built with fair complexion. He had pleasant manners, turned himself out well and spoke well. He was a complete teetotaler, non-smoker, and a vegetarian. He was well educated and well versed in religious affairs, particularly, of the religion to which most of the unit belonged. In the absence of the religious teacher of the unit, he held religious institute (dharamsthal) and gave religious discourses at the dharamsthal to all officers, junior commissioned officers JCOs), non-commissioned officers (NCOs) and jawans. During the pre-war days, he was performing the duties of a Sahayak (assistant, formerly known as orderly) to Gun Position Officer (GPO), a young officer, of the rank of a Second Lieutenant with one year of service.

RBM’s charter of duties included:

(a) attending all the training activities of his trade (telephone operator) which were being organized in the sub-unit;

(b) making arrangements to get the food from the officers’ mess and water from the tube- well for the office; and

(c) attending the telephone and noting down all the messages for the office.

By virtue of the nature and timings of these duties, RBM was excused physical training in the morning and games in the evening which all other jawans of the sub-unit attended. He was generally happy with these duties and working with the officer: After a short span of a week or so, the officer noticed some changes in the behavior of RBM. He also looked pale and worried. He was less talkative, less lively and his interaction with other jawans decreased. He started keeping aloof except where his duties warranted interaction with others. The officer tried to find the reasons from RBM but nothing emerged except a shy and coy smile and “aisi to koi baatNai, Sahib”. The officer tried to probe further to find out if some guilt conscience was bothering him because of some bad habit which young man of his age is likely to fall prey to, in the absence, of even visual contact of civil life and members of the opposite sex.

This was denied vehemently. After another week or so, it was noticed that RBM had developed constipation, ate very little, felt tired after walking even a few hundred yards and had become weak. He was interviewed by the officer but nothing emerged once again. He was sent to the Regimental Medical Officer (RMO). The RMO inspected him and gave some medicines. On being contacted by the officer, the RMO mentioned that there was nothing wrong medically with RBM except that he was scared of the prospects of war. He even disclosed that after having been medically examined, RBM even started giving a discourse to the RMO on the bad effects of a war on environment, economy, costs, etc. He stated that people would be loaded with sufferings; killed, injured, maimed, and would become homeless. The children would become orphans, women widowed, and the humanity would suffer. He vehemently advised the RMO to make all attempts to stop the war and if he could, at least oppose it. After a brief conversation, the RMO was convinced that all the symptoms pointed to a fear psychosis of war. He gave some medicines to RBM and sent him to the sub-unit.

The RMO told the GPO that because of the worry about the war, RBM had developed problems of digestion and hence, ate less, became inactive and felt tired quickly. He had earlier been feeling shy of expressing his apprehensions about the war to others, lest they consider him a coward. The GPO gave a thought to the whole problem and interviewed RBM, advising him to attend• all physical activities, including physical training, weapon training, games, etc. thence on. The officer also planned to keep RBM among the persons of his trade, specially in the command post which controlled the firing of the guns, where from the officer himself was expected to control the’ fire in case of breakout of war.

A small cadre (class) was organized for all ranks of the sub-unit to apprise them of the organization of all arms and services in the army, starting from the level of a sub-unit. They were explained the tactics in the battlefields, the deployment patterns of different arms, the pattern and modes of support by the Air Force, the capabilities of weapons held by them, the comparative sizes of the countries, India versus Pakistan, and the level of forces held by them. They were also explained the cause for which they were there. They were there to make their contribution towards the liberation of Bangladesh (then East Pakistan), wherefrom about a crore refugees had entered India because of the repression by Pakistan forces. These refugees had become a burden on the Indian economy and social structure which India could not afford. Thus, India, the foremost leader of peace loving nations, had to prepare for war to ensure return of these refugees to liberated Bangladesh. At times, to maintain peace, it becomes necessary to resort to war.

The participants were also told about the strength of their Army and deployment in that area, of course, within the constraints of security requirements. They were also told that none of them would remain alone even during the war and that their sub-unit and the unit would always fight together. They would always have their weapons and ammunitions with them, which they were very good at firing. The process of medical care, the claim of evacuation in case of serious injuries and the enhanced benefits and compensation to families in case of death of a soldier, then announced by the government, were also communicated to them. The reliability of India’s friends on the international scene was also intimated. The tactics, capabilities of aircrafts and weapons, and reliability of Pakistan’s friends were also brought out. The disadvantages and difficulties of supply to the then East Pakistan were explained to the participants. The geographical location of East Pakistan in relation to our country was also described. Everybody was convinced of the great advantages and superiority we had vis-a-vis Pakistan.

Thence on, RBM was a totally changed man. He was noticed to be more active, intermingling with others at the slightest pretext and opportunity, giving discourses about loyalty to the country and martyrdom. He took keen interest in all the training activities, including the digging of a number of contingency gun positions. He volunteered to go with night patrols too, which operated to shoot bursts of rounds with light machine guns in trees and groves close-by, whenever the guns were deployed at a new place. He volunteered to venture out with the line party which was earmarked to lay telephone lines over long distances through sugarcane fields. He started watching the slaughtering of goats in the unit. Above all, he started eating eggs, though he did not touch meat.

This transformation in RBM was a welcome sight and appreciated by all. Everyone heaved a sigh of relief on seeing RBM becoming a brave “Fauzi” from a timid “Pandit”. The RMO was informed of this transformation. He too felt happy. His contribution had been no less in diagnosing the cause of sickness correctly. The cadre was conducted for the whole sub-unit with a view to eradicate any apprehensions from the minds of others too, in case there were any, and to educate all. The cadre proved to be a great success. It motivated the whole lot, made them more confident and ready to face the challenge bravely. This was subsequently apparent when the hostilities started.


1. What was the cause of fear in RBM?

2. What were the symptoms of fear displayed by RBM?

3. How did the RMO come to know of the war phobia of RBM?

4. What actions should be taken to avoid building up of fear among the troops? Which of these steps were taken by the officer?


Case II


In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector. While the latter was started a decade later than the former, it had achieved greater expansion. Both were located in the same state.

After we obtained necessary permission to conduct our study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a matter of principle, we wanted to meet the General Secretary of the workers’ union. The Personnel Department was not willing for this. On our insistence they called the union official. We talked to him for about half an hour but Personnel Department people were all the time hovering around.

So we fixed a time in the evening to meet him in the union office in the town. We visited the union office in the evening. The union was having problem regarding wage deduction of some workers who did not show up for overtime. The overtime notice was short and they had not consented either, even then the management was threatening wage deduction for one week.

The union could hardly do a thing’ as they in the past had burnt their hands when they had to unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide. They were scared to the extent that they had productivity linked bonus agreement for even 12% bonus. Moreover, a new minuscue union was recently started in the company.

We visited the new union’s office next evening and held a long discussion. They asked for’ our suggestions. The union believed in legal battles more than agitations. After a visit to the industry the author visited the state headquarters of the new union. There every office bearer was surprisingly a lawyer. In the HQ we learnt that after we left, their union took out a procession and held a meeting in the temple. Perhaps this was the result of our discussion. While the older union was a prisoner of its past, the new union was free to write its own history. Workers’ interests were being served perhaps by both.


1. Discuss merits/demerits of the role of strike, agitation and legal approach in union¬management relations.

2. What role does mutual trust play in building union-management relations?




The telecom sector had been functioning as a typical government department right from its inception. With the Department of Telephones (DoT) being under the exclusive control of the Ministry of Communications, Government of India (GO!), the system functioned more as a monopoly., With the advent of the LPG process (liberalization, privatization and globalization) in the early nineties, the telecom department went through a phase of modernization. A number of new and sophisticated electronic exchanges were installed which enhanced the capacity and lead to the disappearance of waiting list for telephone connections. In a landmark decision in 1995-96, the Government of India threw open its gates for private players in the area of cellular services. LCG and ACG were the two major players to enter this area in Karnataka region, while DoT decided to remain as an observer and continued as a provider of basic services only. Subsequently the Internet, ISD and other services were also opened to private participation.

The year 1998 saw the entry of VikasTelenet (VTNL) as a basic service provider in the state of Karnataka. It launched its basic services in Bangalore district, the commercial capital of the state, in January 1998. The impact of this entry was felt by DoT as it resulted in a mass customer churning, challenging the market leadership of DoT in basic services. This growing challenge from VTNL made General Manager DoT Indore, R.L. Rawat realized the need for a comprehensive review of the competitive scenario. The situation faced by the Bangalore district was one of its kind. It was the only city where four companies were providing telephone services. LCG and ACG were providing cellular services while VTNL and DoT were providing basic services. To attract the customers all the providers had attractive tariff plans. DoT’s market share was not affected by the entry of LCG and ACG as – they operated only as cellular service providers and their services carried a premium price. But the entry of VTNL as a basic service provider with attractive tariff plans showed a marked shift in customer base from DoT to VTNL specially in case of heavy users make it necessary for DoT to come up with similar competitive tariff plans.

General Manager Operations DoT Bangalore, S.N. Dutt, felt that improved services, customer care and proper pricing would help in winning back the heavy users who accounted for almost 60 to 65% of the total revenue. Keeping this in mind, a review of VTNL’s tariff plans was done (Annexure I). The review revealed that the customers were getting a distinct price advantage in the rentals and free calls given by VTNL.

Along with this, a discount ranging from 2.5 to 16% was also announced by VTNL. S.N. Dutt formulated a comprehensive plan to guard DoT’s market share. Officers were appointed as account holders and were responsible for rendering personalized customer care to commercially important customers hoping to retain them with better services. He also formulated a proposal of discounts which was forwarded to the Circle Head Office (Annexure-II) and a presentation was made by DGM – Marketing K.K. Sen, highlighting the rate at which customer churning was taking place and the need for implementation of new tariff plan. He pleaded with the senior officers that DoT needed to be at least reactive if not proactive, to sustain itself in the market. The proposal was well received and forwarded to the Ministry of Communications for approval. Responding to the need of the hour, the Ministry decided to offer a comprehensive discount of 2.5 to 16% for its heavy users. The scheme was introduced in Bangalore, which was extended first to the state of Karnataka and later on to the entire nation.

VTNL, which had so far been concentrating only on the heavy users, decided to now expand its network to get a wider customer base. With this view in mind, a number of promotional schemes were introduced e.g., web phone, a facility for internet usage where access to the net was provided at a cost of 60 paise per call only. It also announced free Internet facility for a year on every new connection. Besides this, VTNL went in for heavy promotion of its schemes. The careful wording of the schemes and enhancement of the number of free calls made the customers feel that they were gainers as far as rentals were concerned. These schemes when launched created very difficult times for VTNL during May -August 2001. By then, DoT had been Corporatised (October 1, 2000) and came to be known as VSNL. The Bangalore office was extremely hopeful that the corporatisation would facilitate. the implementation of new innovative schemes. For drafting a proposal of innovative schemes, VSNL first conducted a market research where in -the database of surrendered connections was used as sample and effort were made to identify the cause of disconnections. The survey revealed that of the total number of disconnections 30% were due to economic recession while 40% were due to customer turning in favor of VTNL while the remaining were due to a multitude of factors interplaying with one another.

To redeem the situation, VSNL, Bangalore prepared an innovative plan known as Business Special Plan – Plan 600-800, which offered 800 free calls on a monthly rental of Rs.600 only. The plan was put forward to Chief General Manager at Bangalore for approval. The persistent efforts of K.K. Sen bore fruits and the proposal was approved at the Circle level.

However, at the time of launch K. K. Sen realized that they needed TRAI’s (Telecom Regulatory Authority of India) approval for going ahead. To ensure the unhindered approval of TRAI, modified tariff plans called 500-700 and an economy plan were suggested and sent for approval. While formulating these plans, an attempt was made to segment the market with an intention to target each segment with a customized/specific set of services. Plan 500-700 was targeted at high end users. Here, 700 calls were offered free on a monthly rental of Rs. 500 only. The economy plan carried a rental of just Rs.160 per month with a rate of Rs.l.20 per call. This plan was specially targeted at customers who had more of incoming calls and needed a facility for meeting their specific requirements. The rolling out of these schemes had an immediate impact with nearly 8,000 customers coming over to VSNL Bangalore. Along with these new tariff proposals a number of innovative strategies were introduced by VSNL, Bangalore.

  • The initial registration amount was reduced and new subscribers were offered the facility of paying the amount in installments.
  • Call centre functioning since February 2001 to deal with customer grievances was made proactive to ensure better customer care.
  • Training was given to the front-end-people for updating their skills and changing the mindsets.
  • Tele-shopping service was started which provided a one stop shopping facility, giving the customers the option to choose their telephone numbers, instrument and service.. Installation was assured within 48 hours.
  • Phone-on-Phone facility was started wherein customers could obtain a connection installed by simply ringing up for it.
  • A bill collecting facility was also introduced to further assist the customers.
  • VCC Le., prepaid cards were introduced and even delivered at the doorsteps of the customers.
  • Bill collection in the rural areas by mobile vans was introduced.
  • Linemen were given pagers to facilitate prompt servicing of faulty telephone lines.
  • Regular meetings between call centre members and maintenance staff were held to exchange information and solve grievances.
  • For motivating and facilitating their employees, free telephone service was provided to all the employees.
  • An advertising budget of Rs.30,00,000 (0.2% of the total sales revenue) was outlined for launching a comprehensive promotion programme using both indoor and outdoor media ensuring a good coverage of the market.

VSNL – Tariff Structure

Scheme Rental (Rs.) Free Colis Facilities

Business Plan – 500-700* 500 (Monthly) 700 Without STD

Economy Plan ** 160 (Monthly) Nil With STD

Standard Plan* 500 (Bimonthly) 150 With STD

* 0.80 Per Call ** Rs.1 .20 Per Call

VTNL – Tariff Structure

Scheme Rental (Rs.) Free Calls

Silver 300 349 (Monthly) 300

Golden – 500 499 (Monthly) 500


1. What were the strengths and weaknesses of VSNL?

2. Do you think that VSNL should have changed its thrust from basic telephony to cellular services?

3. If you were the Deputy General Manager, what strategies would you have undertaken to deal with the competition?


Case IV


The Walt Disney Company is heralded as the world’s largest entertainment company. It has earned this astounding reputation through tight control over the entire operation : control over the open – ended brainstorming that takes place 24 hours a day ; control over the engineers who construct the fabulous theme – park rides; control over the animators who create and design beloved characters and adventurous scenarios ; and control over the talent that brings the many concepts and characters to life. Although control pervades the company, it is not too strong a grip. Employees in each department are well aware of their objectives and the parameters established to meet those objectives. But in conjunction with the pre-determined responsibilities, managers at Disney encourage independent and innovative thinking.

People at the company have adopted the phrase “Dream as a Team” as a reminder that whimsical thoughts, adventurous ideas, and all – out dreaming are at the core of the company philosophy. The over all control over each department is tempered by this concept. Disney managers strive to empower their employees by leaving room for their creative juices to flow. In fact, managers at Disney do more than encourage innovation. They demand it. Projects assigned to the staff “ imaginers” seem impossible at first glance. At Disney, doing the seemingly impossible is part of what innovation means. Teams of imaginers gather together in a brainstorming session known as the “Blue Sky” phase. Under the “Blue Sky”, an uninhibited exchange of wild, ludicrous, outrageous ideas, both “ good” and “ bad”, continues until solutions are found and the impossible is done. By demanding so much of their employees, Disney managers effectively drive their employees to be creative.

Current Disney leader Michael Eisner has established the “Dream as a Team” concept. Eisner realized that managers at Disney needed to let their employees brainstorm and create with support. As Disney president Frank Weds says, “If a good idea is there, you know it, you feel it, you do it, no matter where it comes from.”


1. What environmental factors influenced management style at Disney?

2. What kind(s) of organizational structure seem to be consistent with “Dream as a Team” ?

3. How and where might the informal organization be a real asset at Disney ?


Case V


When Robert Frey purchased Cin – Made in 1984, the company was near ruin. The Cincinnati, Ohi-based manufacturer of paper packaging had not altered its product line in 20 years. Labor costs had hit the ceiling, while profits were falling through the floor. A solid quarter of the company’s shipments were late and absenteeism was high. Management and workers were at each other’s throats.

Ten years later, Cin – Made is producing a new assortment of highly differentiated composite cans, and pre-tax profits have increased more than five times. The Cin – Made workforce is both flexible and deeply committed to the success of the company. On-time delivery of products has reached 98 percent, and absenteeism has virtually disappeared. There are even plans to form two spin – off companies to be owned and operated by Cin-Made employees. In fact, at the one day “Future of the American Workforce” conference held in July 1993, Cin-Made was recognized by President Clinton as one of the best – run companies in the United States.

“ How did we achieve this startling turnaround ?” mused Frey. “Employee empowerment is one part of the answer. Profit sharing is another.”

In the late spring of 1986, relations between management and labor had reached rock bottom. Having recently suffered a pay cut, employees at Cin- Made came to work each day, performed the duties required of their particular positions, and returned home-nothing more. Frey could see that his company was suffering. “To survive we needed to stop being worthy adversaries and start being worthy partners,” he realized. Toward this end, Frey decided to call a meeting with the union. He offered to restore worker pay to its previous level by the end of the year. On top of that, he offered something no one expected : a 15 percent share of Cin-Made’s pre-tax profits. “ I do not choose to own a company that has an adversarial relationship with its employees.” Frey proclaimed at the meeting. He therefore proposed a new arrangement that would encourage a collaborative employee-management relationship “Employee participation will play an essential role in management.”

Managers within the company were among the first people to oppose Frey’s new idea of employee involvement. “My three managers felt they were paid to be worthy adversaries of the unions.” Frey recalled. It’s what they’d been trained for. It’s what made them good managers. Moreover, they were not used to participation in any form, certainly not in decision making.” The workers also resisted the idea of extending themselves beyond the written requirements of their jobs. “ (Employees) wanted generous wages and benefits, of course, but they did not want to take responsibility for anything more than doing their own jobs the way they had always done them,” Frey noted. Employees were therefore skeptical of Frey’s overtures toward “employee participation.” “We thought he was trying to rip us off and shaft us,” explained Ocelia Williams, one of many Cin-Made employees who distrusted Frey’s plans.

Frey, however, did not give up, and he eventually convinced the union to agree to his terms. “ I wouldn’t take no for an answer,” he asserted. “Once I had made my two grand pronouncements, I was determined to press ahead and make them come true.” But still ahead lay the considerable challenge of convincing employees to take charge :

I made people meet with me, then instead

Of telling them what to do, I asked them.

They resisted.

“ How can we cut the waste on his run ?” I’d

say, or “How are we going to allocate the

overtime on this order ?”

“That’s not my job,” they’d say.

“But I need your input,” I’d say. “How in the

World can we have participative management

If you won’t participate?

“I don’t know,” they’d say. “Because that’s

not my job either. That’s your job. ?”

Gradually, Frey made progress. Managers began sharing more information with employees. Frey was able slowly to expand the responsibilities workers would carry. Managers who were unable to work with employees left, and union relations began to improve. Empowerment began to happen. By 1993, Cin Made employees were taking responsibility for numerous tasks. Williams, for example, used to operate a tin-slitting machine on the company’s factory floor. She still runs that same machine, but now is also responsible for ordering almost $ 100,000 in supplies.

Williams is just one example of how job roles and duties have been redefined throughout Cin-Made. Joyce Bell, president of the local union, still runs the punch press she always has, but now also serves as Cin- Made’s corporate safety director. The company’s scheduling team, composed of one manager and five lead workers from various plant areas, is charged with setting hours, designating layoffs, and deciding when temporary help is needed. The hiring review team, staffed by three hourly employees and two managers, is responsible for interviewing applicants and deciding whom to hire. An employee committee performs both short – and long – term planning of labor, materials, equipment, production runs, packing, and delivery. Employees even meet daily in order to set their own production schedules. “We empower employees to make decisions, not just have input,” Frey remarked. “I just coach.”

Under Frey’s new management regime, company secrets have virtually disappeared. All Cin-Made employees, from entry-level employees all the way to the top, take part in running the company. In fact, Frey has delegated so much of the company’s operations to its workers that he now feels little in the dark. “I now know very little about what’s going on, on a day-to-day basis,” he confessed.

At Cin-Made, empowerment and delegation are more than mere buzzwords; they are the way of doing business – good business. “We, as workers, have a lot of opportunities,” said Williams. “If we want to take leadership, it’s offered to us.”


1. How were principles of delegation and decentralization incorporated into Cine – Made operations?

2. What are the sources and uses of power at Cin – Made?

3. What were some of the barriers to delegation and empowerment at Cin –Made?

4. What lessons about management in a rapidly changing marketplace can be learned from the experience of Cin – Made?


Case VI


When a manger finds that demand exceeds inventory, the answer lies in making more goods. When a manager finds that inventory exceeds demand, the answer lies in making fewer goods. But what if a company management finds that they just do not know which situation applies?

This is the situation that recently confronted management at Rollerblade, the popular skate manufacturer based in Minnetonka, Minnesota. Rollerblade has been one of the leading firms in the fast growing high performance roller skate marketplace, it matters a great deal for Rollerblade managers whether demand and inventory are in balance, or not.

Rollerblade was in a bind. The product literally could not be shipped out the door. The managers found that workers were not able to ship products because, as a result of poor storage structures, they could not find the products. Once they were found, overcrowded aisles, in addition to other space constraints, still prevented efficient shipping because the workers could barely manage to get the products out the door. “We were out of control because we didn’t know how to use space and didn’t have enough of it,” said Ian Ellis, director for facilities and safety. “Basically, there was no more useable space left in the warehouse, a severe backlog of customer orders, and picking errors were clearly in the unacceptable range,” added Ram Krishnan, Principal of NRM Systems, based in St. Paul, Minnesota.

The answer for Rollerblade was found in technology. High-tech companies have introduced a collection of computer simulations, ranging in cost roughly from $10,000 to $30,000, that assist managers in generating effective facility designs. With the help of layout Master IV simulation software, developed by NRM, Rollerblade Management was able to implement a new distribution design. As a result of the distribution improvement, Rollerblade was able to increase the number of customer orders processed daily from140 to 410 and eliminate order backlog. “Now we have a different business,” says Ellis. “The new layout has taken us from being in a crunch, to being able to plan.


1. With retailers as their primary customers, what customer competitive imperatives could be affected by Rollerblade’s inventory problems?

2. How appropriate might a just – in – time inventory system be for a product such as roller skates?”

3. What opportunities are therefore Rollerblade managers to see FOR themselves as selling services, instead of simply roller skates?

General Management

05 Jul


George David has been CEO of United Technologies Corporation (UTC) for more than a decade. During that time he has received numerous accolades and awards for his performance as a CEO. Under his leadership UTC, a $343 billion conglomerate whose operating units include manufacturers of elevators (Otis Elevator), aerospace products (including Pratt & Whitney jet engines and Sikorsky helicopters), air conditioning systems, and fire and security systems, has seen earnings grow at 10–14 percent annually—impressive numbers for any company but particularly for a manufacturing enterprise.

According to David, a key to United Technologies’ success has been sustained improvements in productivity and product quality. The story goes back to the 1980s when David was running the international operations of Otis Elevator. There he encountered a Japanese engineer, Yuzuru Ito, who had been brought in to determine why a new elevator product was performing poorly. David was impressed with Ito’s methods for identifying quality problems and improving performance. When he was promoted to CEO, David realized that he had to lower the costs and improve the quality of UTC’s products. One of the first things he did was persuade Ito to work for him at UTC. Under David, Ito developed a program for improving product quality and productivity, known as Achieving Competitive Excellence (ACE), which was subsequently rolled out across UTC. The ACE program has been one of drivers of productivity improvements at UTC ever since.

Early in his tenure as CEO, David also radically reorganized UTC. He dramatically cut the size of the head office and decentralized decision making to business divisions. He also directed his accounting staff to develop a new financial reporting system that would give him good information about how well each division was doing and make it easier to hold divisional general managers accountable for the performance of the units under them. He then gave them demanding goals for earnings and sales growth and pushed them to improve processes within their units by implementing the ACE program.

At the same time David has always stressed that management is about more than goal setting and holding people accountable. Values are also important. David has insisted that UTC employees adhere to the highest ethical standards, that the company produce that have minimal environmental impact, and that employee safety remain the top consideration in the work-place.

When asked what his greatest achievement as a manager has been, David refers to UTC’s worldwide employee scholarship program. Implemented in 1996 and considered the hall-mark of UTC’s commitment to employee development, the program pays the entire cost of an employee’s college or graduate school education, allows employees to pursue any subject at an accredited school, provides paid study time, and awards UTC stock (up to $10,000 worth in the United States) for completing degrees. Explaining the program, David states, “One of the obligations that an employer has is to give employees opportunities to better themselves. And we feel it’s also very good business for us because it generates a better workforce that stays longer.”

David states that one of his central tasks has been to build a management team that functions smoothly over the long term. “People come to rely upon each other,” he says. “You have the same trusting relationships. You know people; they know you. You can predict them; they can predict you. All of that kind of begins to work, and it accelerates over the tenure of a CEO. If you have people bouncing in and out every two to three years, that’s not good.”

According to Sandy Weill, former chairman of Citicorp and a UTC board member, David has the right mix of toughness and sensitivity. “When somebody can’t do the job he’ll try to help; but if that person is not going to make it work, that person won’t be on the job forever.” At the same time Weill says, “He does a lot of things that employees respect him for, I think he is a very good manager. Even though David is demanding, he can also listen—he has a receive mode as well as a send mode.”


1. What makes George David such a highly regarded manager?

2.How does David get things done through people?

3.What evidence can you see of David’s planning and strategizing, organizing, controlling, leading, and developing?

4. Which managerial competencies does David seem to posses? Does he seem to lack any?



In 1997 Michael O’Dell, the chief scientist at World-Com, which owned the largest network of “Internet backbone” fiber optic cable in the world, stated that data traffic over the Internet was doubling every hundred days. This implied a growth rate of over 1,000 percent a year. O’Dell went on to day that there was not enough fiber optic capacity to go around, and that “demand will far outstrip supply for the foreseeable future.”

Electrified by this potential opportunity, a number of companies rushed into the business. These firms included Level 3 Communications, 360 Networks, Global Crossing, Qwest Communications, World-Com, Williams Communications Group, Genuity Inc., and XO Communications. In all cases the strategic plans were remarkably similar: Raise lots of capital, build massive fiber optic networks that straddled the nation (or even the globe), cut prices, and get ready for the rush of business. Managers at these companies believed that surging demand would soon catch up with capacity, resulting in a profit bonanza for those that had the foresight to build out their networks. It was a gold rush, and the first into the field would stake the best claims.

However, there were dissenting voices. As early as October 1998 an Internet researcher at AT&T Labs named Andrew Odlyzko published a paper that de-bunked the assumption that demand for Internet traffic was growing at 1,000 percent a year. Odlyzko’s careful analysis concluded that growth was much slower—only 100 percent a year! Although still large, that growth rate was not nearly large enough to fill the massive flood of fiber optic capacity that was entering the market. Moreover, Odlyzko noted that new technologies were increasing the amount of data that could be sent down existing fibers, reducing the need for new fiber. But with investment money flooding into the market, few paid any attention to him. WorldCom was still using the 1,000 percent figure as late as September 2000.

As it turned out, Odlyzko was right. Capacity rapidly outstripped demand, and by late 2002 less than 3 percent of the fiber that had been laid in the ground was actually being used! While prices slumped, the surge in volume that managers had bet on did not materialize. Unable to service the debt they had taken on to build out their networks, company after company tumbled into bankruptcy—including WorldCom, 360 Networks, XO Communications, Global Crossing. Level 3 and Qwest survived, but their stock price had fallen by 90 percent, and both companies were saddled with massive debts.


1. Why did the strategic plans adopted by companies like Level 3, Global Crossing, and 360 Networks fail?

2. The managers who ran these companies were smart, successful individuals, as were many of the investors who put money into these businesses. How could so many smart people have been so wrong?

3. What specific decision-making biases do you think were at work in this industry during the late 1990s and early 2000s?

4. What could the managers running these companies done differently that might have led to a different outcome?



A handful of major players, compete head-to-head around the world in the chemical industry. These companies are Dow Chemical and Du Pont of the United States, Great Britain’s ICI, and the German trio of BASF, Hoechst AG, and Bayer. The barriers to the free flow of chemical products between nations largely disappeared in the 1970s. This, along with the commodity nature of bulk chemicals and a severe recession in the early 1980s, ushered in a prolonged period of intense price competition. In such an environment, the company that wins the competitive race is the one with the lowest costs. Dow Chemical was long among the cost leaders.

For years Dow’s managers insisted that part of the credit belonged to its “matrix” organization. Dow’s organizational matrix had three interacting elements: functions (such as R&D, manufacturing, and marketing), businesses (like ethylene, plastics, and pharmaceuticals), and geography (for example, Spain, Germany, and Brazil). Managers’ job titles incorporated all three elements (plastics marketing manager for Spain), and most managers reported to at least two bosses. The plastics marketing manager in Spain might report to both the head of the worldwide plastics business and the head of the Spanish operations. The intent of the matrix was to make Dow operations responsive to both local market needs and corporate objectives. Thus the plastics business might be charged with minimizing Dow’s global plastics production costs, while the Spanish operation might determine how best to sell plastics in the Spanish market.

When Dow introduced this structure, the results were less than promising: Multiple reporting channels led to confusion and conflict. The many bosses created an unwieldy bureaucracy. The overlapping responsibilities resulted in turf battles and a lack of accountability. Area managers disagreed with managers overseeing business sectors about which plants should be built where. In short, the structure, didn’t work. Instead of abandoning the structure, however, Dow decided to see if it could made more flexible.

Dow’s decision to keep its matrix structure was prompted by its move into the pharmaceuticals business is very different from the bulk chemicals business. In bulk chemicals, the big returns come from achieving economies of scale in production. This dictates establishing large plants in key locations from which regional or global markets can be served. But in pharmaceuticals, regulatory and marketing requirements for drugs vary so much from country to country that local needs are far more important than reducing manufacturing costs through scale economies. A high degree of local responsiveness is essential. Dow realized its pharmaceutical business would never thrive if it were managed by the same priorities as its mainstream chemical operations.

Accordingly, instead of abandoning its matrix, Dow decided to make it more flexible to better accommodate the different businesses, each with its own priorities, within a single management system. A small team of senior executives at headquarters helped set the priorities for each type of business. After priorities were identified for each business sector, one of the three elements of the matrix—function, business, or geographic area—was given primary authority in decision making. Which element took the lead varied according to the type of decision and the market or location in which the company was competing. Such flexibility that all employees understand what was occurring in the rest of the matrix. Although this may seem confusing, for years Dow claimed this flexible system worked well and credited much of its success to the quality of the decisions it facilitated.

By the mid-1990s, however, Dow had refocused its business on the chemicals industry, divesting itself of its pharmaceutical activities where the company’s performance had been unsatisfactory. Reflecting the change in corporate strategy, in 1995 Dow decided to abandon its matrix structure in favor of a more streamlined structure based on global product divisions. The matrix structure was just too complex and costly to manage in the intense competitive environment of the time, particularly given the company’s renewed focus on its commodity chemicals where competitive advantage often went to the low-cost producer. As Dow’s then-CEO put it in a 1999 interview, “We were an organization that was matrixed and depended on teamwork, but there was no one in charge. When things went well, we didn’t know whom to reward; and when things went poorly, we didn’t know whom to blame. So we created a global divisional structure and cut out layers of management. There used to be eleven layers of management between me and the lowest-level employees; now there are five.


1. Why did Dow Chemical first adopt a matrix structure? What benefits did it hope to derive from this structure?

2. What problems emerged with this structure? How did Dow try to deal with them? In retrospect, do you think those solutions were effective?

3. Why did Dow change its structure again in the mid-1990s? What was Dow trying to achieve this time? Do you think the current structure makes sense given the industry in which Dow operates and the strategy of the firm? Why?



As with most fast-food restaurant chains, McDonald’s needs more people to fill jobs in its vast empire. Yet McDonald’s executives are finding that recruiting is a tough sell. The industry is taking a beating from an increasingly health-conscious society and the popular film Supersize Me. Equally troublesome is a further decline in the already dreary image of employment in a fast-food restaurant. It doesn’t help that McJob, a slang term closely connected to McDonald’s, was recently added to both Merriam-Webster’s Collegiate Dictionary and the Oxford English Dictionary as a legitimate concept meaning a low-paying, low-prestige, dead-end, mindless service job in which the employee’s work is highly regulated.

McDonald’s has tried to shore up its employment image in recent years by improving wages and adding some employee benefits. A few years ago it created the “I’m loving it” campaign, which took aim at a positive image of the golden arches for employees as well as customers. The campaign had some effect, but McDonald’s executives realized that a focused effort was needed to battle the McJob image.

Now McDonald’s is fighting back with a “My First” campaign to show the public—and prospective job applicants—that working at McDonald’s is a way to start their careers and develop valuable life skills. The campaign’s centerpiece is a television commercial showing successful people from around the world whose first job was at the fast-food restaurant. “Working at McDonald’s really helped lay the foundation for my career,” says ten-time Olympic track and field medalist and former McDonald’s crew member Carl Lewis, who is featured in the TV ad. “It was the place where I learned the true meaning of excelling in a fast-paced environment and what it means to operate as part of a team.”

Richard Floersch, McDonald’s executive vice president of human resources, claims that the company’s top management has deep talent, but the campaign should help to retain current staff and hire new people further down to hierarchy. “It’s a very strong message about how when you start at McDonald’s, the opportunities are limitless,” says Floersch. Even the McDonald’s application form vividly communicates this message by showing a group of culturally diverse smiling employees and the caption “At McDonald’s You Can Go Anywhere!”

McDonald’s has also distributed media kits in several countries with factoids debunking the McJob myth. The American documentation points out that McDonald’s CEO Jim Skinner began his career working the restaurant’s front lines, as did 40 percent of the top 50 members of the worldwide management team, 70 percent of all restaurant managers, and 40 percent of all owner/operators. “People do come in with a ‘job’ mentality, but after three months or so, they become evangelists because of the leadership and community spirit that exists in stores,” says David Fairhurst, the vice president for people at McDonald’s in the United Kingdom. “For many, it’s not a job, but a career.”

McDonald’s also hopes the new campaign will raise employee pride and loyalty, which would motivate the 1.6 million staff members to recruit more friends and acquaintances through word of mouth. “If each employee tells just five people something cool about working at McDonald’s, the net effect is huge,” explains McDonald’s global chief marketing officer. So far the campaign is having the desired effect. The company’s measure of employee pride has increased by 14 percent, loyalty scores are up by 6 percent, and 90-day employee turnover for hourly staff has dropped by 5 percent.

But McDonald’s isn’t betting on its new campaign to attract enough new employees. For many years it has been an innovator in recruiting retirees and people with disabilities. The most recent innovation at McDonald’s UK, called the Family Contract, allows wives, husbands, grandparents, and children over the age of 16 to swap shifts without notifying management. The arrangement extends to cohabiting partners and same-sex partners. The Family Contract is potentially a recruiting tool because family members can now share the same job and take responsibility for scheduling which family member takes each shift.

Even with these campaigns and human resource changes, some senior McDonald’s executives acknowledge that the entry-level positions are not a “lifestyle” job. “Most of the workers we have are students—it’s a complementary job,” says Denis Hennequin, the Paris-based executive vice president for McDonald’s Europe.


1. Discuss McDonald’s current situation from a human resource planning perspective.

2.Is McDonald’s taking the best approach to improving its employer brand? Why or why not? If you were in charge of developing the McDonald’s employer brand, what would you do differently?

3. Would “guerrilla” recruiting tactics help McDonald’s attract more applicants? Why or why not? If so, what tactics might be effective?



London-based Reuters is a venerable company. Established in 1850 and devoted to delivering information around the world by the fastest means available—which in 1850 meant a fleet of 45 carrier pigeons—by the late 1990s the company had developed into one of the largest providers of information in the world.

Although Reuters is known best to the public for its independent, unbiased news reporting, 90 percent of Reuters’ revenues are generated by providing information to traders in financial markets. In the 1990s the company used a proprietary computer system and a dedicated telecommunications network to deliver real-time quotes and financial information to Reuters terminals—devices that any self-respecting financial trader could not function without.

When Reuters entered the financial data business in the early 1970s, it had 2,400 employees, most of them journalists. By the late 1990s its employee base had swelled to 19,000 most of whom were on the financial and technical side. During this period of heady growth Reuters amassed some 1,000 products, often through acquisitions, such as foreign-language data services, many of which used diverse and sometimes incompatible computer delivery systems.

The late 1990s were the high point for Reuters. Two shocks to Reuters’ business put the company in a tailspin. First came the Internet, which allowed newer companies, such as Thompson Financial Services and Bloomberg, to provide real-time financial information to any computer with an Internet connection. Suddenly Reuters was losing customers to a cheaper and increasingly ubiquitous alternative. The Internet was commoditizing the asset on which Reuters had built its business: information. Then in 2001 the stock market bubble of the 1990s finally broke; thousands of people in financial services lost their jobs; and Reuters lost 18 percent of its contracts for terminals in a single year. Suddenly a company that had always been profitable was losing money.

In 2001 Reuters appointed Tom Glocer as CEO. The first nonjournalist CEO in the company’s history, Glocer, an American in a British-dominated firm, was described as “not part of the old boys’ network.” Glocer had long advocated that Reuters move to an Internet-based delivery system. In 2000 he was put in charge of rolling out such a system across Reuters but met significant resistance. The old proprietory system had worked well, and until 2001 it had been extremely profitable. Many managers were therefore reluctant to move toward a Web-based system that commoditized information and had lower profit margins. They were worried about product cannibalization. Glocer’s message was that if the company didn’t roll out a Web-based system, Reuters’ customers would defect in droves. In 2001 his prediction seemed to be coming true.

Once in charge, Glocer again pushed an Internet-based system, but he quickly recognized that Reuters’ problems ran deeper. In 2002, the company registered its first annual loss in history, £480 million, and Glocer described the business as “fighting for survival.” Realizing that dramatic action was needed, in February 2003 Glocer launched a three-year strategic and organizational transformation program called Fast Forward. It was designed to return Reuters to profitability by streamlining its product offering, prioritizing what the company focused on, and changing its culture. The first part of the program was an announcement that 3,000 employees (nearly 20 percent of the workforce) would be laid off.

To change its culture Reuters added an element to its Fast Forward program known as “Living Fast,” which defined key values such as passionate and urgent working, accountability, and commitment to customer service and team. A two-day conference of 140 managers, selected for their positions of influence and business understanding rather than their seniority, launched the program. At the end of the two days the managers collectively pledged to buy half a million shares in the company, which at the time were trading at all-time low.

After the conference the managers were fired up; but going back to their regular jobs, they found it difficult to convey that sense of urgency, confidence, and passion to their employees. This led to the development of a follow-up conference: a one-day event that included all company employees. Following a video message from Glocer and a brief summary of the goals of the program, employees spent the rest of the day in 1,300 cross-functional groups addressing challenges outlined by Glocer and proposing concrete solutions. Each group chose one of “Tom’s challenges” to address. Many employee groups came up with ideas that could be rapidly implemented—and were. More generally, the employees asked for greater clarity in product offerings, less bureaucracy, and more accountability. With this mandate managers launched a program to rationalize the product line and streamline the company’s management structure. In 2003 the company had 1,300 products. By 2005 Reuters was focusing on 50 key strategic products, all delivered over the Web. The early results of these changes were encouraging. By the end of 2004 the company recorded a £380 million profit, and the stock price had more than doubled.


1. What technological paradigm shift did Reuters face in the 1990s? How did that paradigm shift change the competitive playing field?

2. Why was Reuters slow to adopt Internet-based technology?

3. Why do you think Tom Glocer was picked as CEO? What assets did he bring to the leadership job?

4. What do you think of Glocer’s attempts to change the strategy and organizational culture at Reuters? Was he on the right track? Would you do things differently?

General Management

05 Jul

CASE – 1   Your Job and Your Passion—You Can Pursue Both!

The 21st century offers many challenges to every one of us. As more firms go global, as more economies interconnect, and as the Web blasts away boundaries to communication, we become more informed citizens. This interconnectedness means that the organizations you work for will require you to develop both general and specialized knowledge—such as speaking multiple languages, using various software applications, or understanding details of financial transactions. You will have to develop general management skills to foster your ability to be self-reliant and thrive in a changing market-place. And here’s the exciting part: As you build both types of knowledge, you may be able to integrate your growing expertise with the causes or activities you care most about. Or, your career adventure may lead you to a new passion.

Former presidents George H. W. Bush and Bill Clinton are well known for combining their management skills—running a country—with their passion for helping people around the world. Together they have raised funds to assist disaster victims, those with HIV/AIDS, and others in need. Jake Burton turned his love of snow sports into an entire industry when he founded Burton Snowboards. Annie Withey poured her business and marketing knowledge into her two famous business ventures: Smartfood and Annie’s Homegrown. Both products were the result of her passion for healthful foods made from organic ingredients.

As you enter the workforce, you may have no idea where your career path will lead. You may be asking yourself, “How will I fit in?” “Where will I live?” “How much will I earn?” “Where will my business and personal careers evolve as the world continuous to change at such a fast pace?” If you are feeling nervous because you don’t know the answers to these questions yet, relax. A career is a journey, not a single destination. You may have one type of career or several. It is likely you will work for several organisations, or you may run one or more businesses of your own.

As you ask yourself what you want to do and where you want to be, take a few minutes to review the chapter and its main topics. Think about your personality, what you like and dislike, what you know and what you want to learn, what you fear and what you dream. Then try the following exercise.


1. Create a three-column chart in which the first column lists nonmanagement skills you have. Are you good at travel? Do you know how to build furniture? Are you a whiz at sports statistics? Are you an innovative cook? Do you play video games for hours? In the second column, list the causes or activities about which you are passionate. These may dovetail with the first list, but they might not.

2. Once you have you two columns complete, draw lines between entries that seem compatible. If you are good at building furniture, you might have also listed a concern about families who are homeless. Remember that not all entries will find a match—the idea is to begin finding some connections.

3. In the third column, generate a list of firms or organizations you know about that reflect your interests. If you are good at building furniture, you might be interested working for the Habitat for Humanity organization, or you might find yourself gravitating towards a furniture retailer like Ikea or Ethan Allen. You can do further research on organizations via Internet or business publications.


CASE – 2   Biyani – Pioneering a Retailing Revolution in India

“I use people as hands and legs. I prefer to do thinking around here.”

─ Kishore Biyani, CEO & MD, Pantaloon Retail (India) Ltd.

Kishore Biyani (Biyani), CEO& MD of Pantaloon Retail (India) Ltd., planned to have 30 Food Bazaar outlets, 22 outlets in Big Bazaar, 21 Pantaloons outlets, and four seamless malls under the Central logo, by the end of 2005. He also planned to launch at least three businesses every year and had already selected music, footwear and car accessories as his next areas of investments. He was already the top retailer in India followed by Raghu Pillai of RPG. As of 2004, Biyani headed a company that had a turnover of Rs 6,500 million and operated 13 Pantaloon apparel stores, 9 Big Bazaars, 13 Food Bazaars, and 3 seamless malls (Central), one each located in Bangalore, Hyderabad, and Pune.

Biyani’s journey from a person who looked after his family business to India’s top retailer in 1987, when he launched Manz Wear Pvt. Ltd. The company launched one of the first readymade trousers brands – ‘Pantaloon’ – in the country. The company also launched its first jeans brand called ‘Bare’ in 1989. On September 20, 1991, Manz Wear Pvt. Ltd. went public and on September 25, 1992, it changed its name to Pantaloon Fashions (India) Limited (PFIL). ‘John Miller’ was the first formal shirt brand from PFIL.

The company opened its first apparel stores, called ‘Pantaloons’ at Kolkata in August 1997. The stores generated Rs 70 million. Biyani then realized the potential of the Indian market and started to aggressively tap it. Accordingly, Biyani decided to expand into other segments of retailing besides apparel. To reflect this change in focus, the company changed its name to Pantaloon Retail (India) Limited (PRIL) in July 1999 and set itself a target of achieving Rs 10 billion in sales by June 2005. In course of time he launched three other retail formats — Big Bazaar, Food Bazaar, and Central.

Biyani didn’t believe in copying ideas from western retailers. He was critical of his peers who felt just copied ideas form the west without making any effort to mold them to Indian conditions. He ensured that his store formats such as Big Bazaar, Food Bazaar, and Pantaloons were all suited to the purchasing style of Indian consumers.

Biyani was a huge risk taker and his planning was always different from the conventional way of doing business. This was also one of the factors that had prompted Biyani to move away from his father’s conventional way of doing business. During the initial stages of his success, his risk-taking attitude sometimes had the effect of turning away financiers. The biggest risk that Biyani took was in opening Big Bazaar in Mumbai in 2001. The company needed money to expand Big Bazaar’s operations. However, it had profits of only Rs 40 million with a low share price at eighteen rupees. Therefore, Biyani could not raise money through equity. In light of this situation, Biyani took a loan of Rs 1,200 million from ICICI for launching the operations of Big Bazaar, which increased his debt exposure. However, Big Bazaar proved to be a resounding success with 100,000 customer visits in its first week of operations. According to analysts, if Big Bazaar had failed, Biyani would have landed in a severe debt crisis. The success of Big Bazaar not only increased the company profits, it also changed the perception of investors.

Many people criticized Biyani for not delegating authority and Biyani himself accepted the criticism. He said, “I use people as hands and legs. I prefer to do the thinking around here.” He preferred taking individual decision on activities like strategic planning, ideas for other ventures, and other important issues. It was because of this that managers like Kush Medhora of Westside were initially apprehensive about joining Biyani’s business. However, Biyani changed his attitude gradually with the launch of Big Bazaar, Food Bazaar, and Central and appointed different people for managing different business units.

Biyani believed in leading a simple life and in being simply dressed. His vision came from his diverse reading connected to retailing and other areas. He made it a point to visit each of his stores across the country. He aimed to spend at least seven hours a week at the stores. In the stores, he would stand at a corner and observe people. He also walked on streets, met common people, and talked to local leaders to plan and put up new products in his stores. Each of his stores was set with a weekly target, which was reviewed every Monday. Whenever a new store was opened, the details of its operations during the first 45 days were to be sent to him. Sometimes, he suggested remedies to some problems. Biyani believed in extensive advertising to make more people know about the product. His decision making was quick and devoid of unnecessary delays. Biyani was also a good learner and learned quickly from his mistakes. He planned to improve inventory management through responding effectively to the demands of the customers rather than forecasting them, as he felt that forecasting would pile up the inventory in this dynamic market.


1. The tremendous success of the ‘Pantaloons’, ‘Big Bazaar’ and ‘Food Bazaar’ retailing formats, easily made PRIL the number one retailer in India by early 2004, in terms of turnover and retail area occupied by its outlets. Explain how Biyani is further planning to consolidate his businesses.

2. “Our striving toward looking at the Indian market differently and strategizing with the evolving customer helped us perform better.” What other qualities of Kishore Biyani do you think were instrumental in making him top retailer of India?


CASE – 3   The New Frontier for Fresh Foods Supermarkets

Fresh Foods Supermarket is a grocery store chain that was established in the Southeast 20 years ago. The company is now beginning to expand to other regions of the United States. First, the firm opened new stores along the eastern seaboard, gradually working its way up through Maryland and Washington, DC, then through New York and New jersey, and on into Connecticut and Massachusetts. It has yet to reach the northern New England states, but executives have decided to turn their attention to the Southwest, particularly because of the growth of population there.

Vivian Noble, the manager of one of the chain’s most successful stores in the Atlanta area, has been asked to relocate to Phoenix, Arizona, to open and run a new Fresh Foods Supermarket. She has decided to accept the job, but she knows it will be a challenge. As an African American woman, she has faced some prejudice during her career, but she refuses to be stopped by a glass ceiling or any other barrier. She understands that she will be living and working in an area where several cultures combine and collide, and she will be hiring and managing a diverse workforce. Noble has the support of top management at Fresh Foods, which wants the store to reflect the surrounding community—in both staff makeup and product selection. So she will be looking to hire employees with Hispanic and Native American roots, as well as older workers who can relate to the many retired residents in the area. And she will be seeking their inputs on the selection of certain food products, including ethnic brands, so that customers know they can buy what they need and want a Fresh Foods.

In addition, Noble wants to make sure that Fresh Foods provides services above and beyond those of a standard supermarket to attract local consumers. For instance, she wants the store to offer free delivery of groceries to home-bound customers who are either senior citizens or physically disabled. She wants to be sure that the store has enough bilingual employees to translate for and otherwise assist customers who speak little or no English. Noble believes that she is a pioneer of sorts, guiding Fresh Foods Supermarkets into a new frontier. “The sky is almost blue here,” she says of her new home state. “And there’s no glass ceiling between me and the sky.”


1. What steps can Vivian Noble take to recruit and develop her new workforce?

2. What other ways can Noble help her company reach out to the community?

3. How will Fresh Foods Supermarkets as whole benefit from successfully moving into this new region of the country?


CASE – 4   The Law Offices of Jeter, Jackson, Guidry, and Boyer


David Jeter and Nate Jackson started a small general law practice in 1992 near Sacramento, California. Prior to that, the two had spent five years in the district attorney’s office after completing their formal schooling. What began as a small partnership—just the two attorneys and a paralegal/assistant—had now grown into a practice that employed more than 27 people in three separated towns. The current staff included 18 attorneys (three of whom have become partners), three paralegals, and six secretaries.

For the first time in the firm’s existence, the partners felt that they were losing control of their overall operation. The firm’s current caseload, number of employees, number of clients, travel requirements, and facilities management needs had grown far beyond anything that the original partners had ever imagined.

Attorney Jeter called a meeting of the partners to discuss the matter. Before the meeting, opinions about the pressing problems of the day and proposed solutions were sought from the entire staff. The meeting resulted in a formal decision to create a new position, general manager of operations. The partners proceeded to compose a job description and job announcement for recruiting purposes.

Highlights and responsibilities of the job description include:

  • Supervising day-to-day office personnel and operations (phones, meetings, word processing, mail, billings, payroll, general overhead, and maintenance).
  • Improving customer relations (more expeditious processing of cases and clients).
  • Expanding the customer base.
  • Enhancing relations with the local communities.
  • Managing the annual budget and related incentive programs.
  • Maintaining annual growth in sales of 10 percent while maintaining or exceeding the current profit margin.

The general manager will provide an annual executive summary to the partners, along with specific action plans for improvement and change. A search committee was formed, and two months later the new position was offered to Brad Howser, a longtime administrator from the insurance industry seeking a final career change and a return to his California roots. Howser made it clear that he was willing to make a five-year commitment to the position and would then likely retire.

Things got off to a quiet and uneventful start as Howser spent few months just getting to know the staff, observing day-today operations; and reviewing and analyzing assorted client and attorney data and history, financial spreadsheets, and so on.

About six months into the position, Howser became more outspoken and assertive with the staff and established several new operational rules and procedures. He began by changing the regular working hours. The firm previously had a flex schedule in place that allowed employees to begin and end the workday at their choosing within given parameters. Howser did not care for such a “loose schedule” and now required that all office personnel work from 9:00 to 5:00 each day. A few staff member were unhappy about this and complained to Howser, who matter-of-factly informed them that “this is the new rule that everyone is expected to follow, and anyone who could or would not comply should probably look for another job.” Sylvia Bronson, an administrative assistant who had been with the firm for several years, was particularly unhappy about this change. She arranged for a private meeting with Howser to discuss her child care circumstances and the difficulty that the new schedule presented. Howser seemed to listen half-heartedly and at one point told Bronson that “assistance are essentially a-dime-a-dozen and are readily available.” Bronson was seen leaving the office in tears that day.

Howser was not happy with the average length of time that it took to receive payments for services rendered to the firm’s clients (accounts receivable). A closer look showed that 30 percent of the clients paid their bills in 30 days or less, 60 percent paid in 30 to 60 days, and the remaining 10 percent stretched it out to as  many as 120 days. Howser composed a letter that was sent to all clients whose outstanding invoices exceeded 30 days. The strongly worded letter demanded immediate payment in full and went on to indicate that legal action might be taken against anyone who did not respond in timely fashion. While a small number of “late” payments were received soon after the mailing, the firm received an even larger number of letters and phone calls from angry clients, some of whom had been with the firm since its inception.

Howser was given an advertising and promotion budget for purposes of expanding the client base. One of the paralegals suggested that those expenditures should be carefully planned and that the firm had several attorneys who knew the local markets quite well and could probably offer some insights and ideas on the subject. Howser thought about this briefly and then decided to go it alone, reasoning that most attorneys know little or nothing about marketing.

In an attempt to “bring all of the people together to form a team,” Howser established weekly staff meetings. These mandatory, hour-long sessions were run by Howser, who presented a series of overhead slides, handouts, and lectures about “some of the proven management techniques that were successful in the insurance industry.” The meetings typically ran past the allotted time frame and rarely if ever covered all of the agenda items.

Howser spent some of his time “enhancing community relations.” He was very generous with many local groups such as the historical society, the garden clubs, the recreational sports programs, the middle-and high-school band programs, and others. In less than six months he had written checks and authorized donations totaling more than $25,000. He was delighted about all this and was certain that such gestures of goodwill would pay off handsomely in the future.

As for the budget, Howser carefully reviewed each line item in search of ways to increase revenues and cut expenses. He then proceeded to increase the expected base or quota for attorney’s monthly billable hours, thus directly affecting their profit sharing and bonus program. On the other side, he significantly reduced the attorneys’ annual budget for travel, meals, and entertainment. He considered these to be frivolous and unnecessary. Howser decided that one of the two full-time administrative assistant positions in each office should be reduced to part-time with no benefits. He saw no reason why the current workload could not be completed within this model. Howser wrapped up his initial financial review and action plan by posting notices throughout each office with new rules regarding the use of copy machines, phones, and supplies.

Howser completed the first year of his tenure with the required executive summary report to the partners that included his analysis of the current status of each department and his action plan. The partners were initially impressed with both Howser’s approach to the new job and with the changes that he made. They all seemed to make sense and were directly in line with the key components of his job description. At the same time, “the office rumor mill and grape vine” had “heated up” considerably. Company morale, which had been quite high, was now clearly waning. The water coolers and hallways became the frequent meeting places of disgruntled employees.

As for the marketplace, while the partner did not expect to see an immediate influx of new clients, they certainly did not expect to see shrinkage in their existing client base. A number of individual and corporate clients took their business elsewhere, still fuming over the letter they had received.

The partners met with Howser to discuss the situation. Howser urged them to “sit tight and ride out the storm.” He had seen this happen before and had no doubt that in the long run the firm would achieve all of its goals. Howser pointed out that people in general are resistant to change. The partners met for drinks later that day and looked at each other with a great sense of uncertainty. Should they ride out the storm as Howser suggested? Had they done the right thing in creating the position and hiring Howser? What had started as a seemingly, wise, logical, and smooth sequence of events had now become a crisis.


1. Do you agree with Howser’s suggestion to “sit tight and ride out the storm,” or should the partners take some action immediately? If so, what actions specifically?

2. Assume that the creation of the GM—Operation position was a good decision. What leadership style and type of individual would you try to place in this position?

3. Consider your own leadership style. What types of positions and situations should you seek? What types of positions and situation should you seek to avoid? Why?


CASE – 5   The Grizzly Bear Lodge

Diane and Rudy Conrad own a small lodge outside Yellowstone National Park. Their lodge has 15 rooms that can accommodate up to 40 guests, with some rooms set up for families. Diane and Rudy serve a continental breakfast on weekdays and a full breakfast on weekends, included in the room they charge. Their busy season runs from May through September, but they remain open until Thanksgiving and reopen in April for a short spring season. They currently employ one cook and two waitpersons for the breakfasts on weekends, handling the other breakfasts themselves. They also have several housekeeping staff members, a groundkeeper, and a front-desk employee. The Conrads take pride in the efficiency of their operation, including the loyalty of their employees, which they attribute to their own form of clan control. If a guest needs something—whether it’s a breakfast catered to a special diet or an extra set of towels—Grizzly Bear workers are empowered to supply it.

The Conrads are considering expanding their business. They have been offered the opportunity to buy the property next door, which would give them the space to build an annex containing an additional 20 rooms. Currently, their annual sales total $300,000. With expenses running $230,000—including mortgage, payroll, maintenance, and so forth—the Conrads’ annual income is $70,000. They want to expand and make improvements without cutting back on the personal service they offer to their guests. In fact, in addition to hiring more staff to handle the larger facility, they are considering collaborating with more local business to offer guided rafting, fishing, hiking, and horseback riding trips. They also want to expand their food service to include dinner during the high season, which means renovating the restaurant area of the lodge and hiring more kitchen and wait staff. Ultimately, the Conrads would like the lodge to open year-round, offering guests opportunities to cross-country ski, ride snow-mobiles, or hike in winter. They hope to offer holiday packages for Thanksgiving, Christmas, and New Year’s celebrations in the great outdoors. The Conrads report that their employees are enthusiastic about their plans and want to stay with them through the expansion process. “This is our dream business,” says Rudy. “We’re only at the beginning.”


1. Discuss how Rudy and Diane can use feedforward, concurrent, and feedback controls both now and in future at the Grizzly Bear Lodge to ensure their guests’ satisfaction.

2. What might be some of the fundamental budgetary considerations the Conrads would have as they plan the expansion of their logic?

3. Describe how the Conrads could use market controls plans and implement their expansion.

General Management

05 Jul

CASE 1:    Spirituality in the workplace

Traditionally, the workplace and spirituality did not mix in America. But things are changing. Andre Delbecq, a Professor in Santa Clara University, a Jesuit institution, said: “There were two things I thought I’d never see in my life, the fall of the Russian empire and God being spoken about in a business school.” Now management books and conferences (including the annual meeting of the Academy of Management) deal with the various aspects of how God can be brought into the organizational environment. To be sure, people who want to integrate spiritual dimensions into the workplace are still considered rebels. But ServiceMaster, a Fortune 500 company with some 75,000 employees, created a spiritual organization culture many years ago. Indeed, Peter Drucker, one of the most prolific writers on management, had high regards for the company that is known for its products such as Terminix (pest control), TruGreen, Merry Maids, and others.

When people in the US were asked if they believe in God, some 95 per cent said yes. It is in a spiritual context that business people under the daily pressure can discuss their inner feelings. As the baby boomers, now in their 50s, are reaching the top in the organizational life, they begin to wonder what life is all about. They lived through the youth culture of the 1960s and the 1980s that was dominated by greed. They are now questioning the real meaning of life and the ethical dimension of work. Jose Zeilstra, an executive at Price WaterhouseCoopers worked around the world, practicing her Christian principles in different cultures. During her assignment in China, she strongly argued against the practice of giving “very expensive gifts.” As a result the business transaction did not work out. Yet, in the long run, while integrating her personal beliefs with her work, resulted in a very successful career. Academic institutions such a the University of St. Thomas, the University of Denver, and the Harvard Divinity School are following and studying the movement of spirituality. Other schools such as Antioch University in Los Angeles, the University of New Haven in Connecticut, the University of Scranton in Pennsylvania, Santa Clara University in California as well as institutions abroad such as the University of Bath in England and the Indian Centre for Encouraging Excellence in Bombay, India, are conducting research, conferences, or lecture on spirituality.

The cover story of Business week (November 1, 1999) discussed how company outlets such as Taco Bell, Pizza Hut, and McDonald’s as well as the Xerox Corporation pay attention to spiritual needs of their employees. Some companies claim an increase in productivity, decrease in turnover, and a reduction in fear. A research study by the consulting firm McKinsey & Co. in Australia showed that firms with spiritual programmes showed reduced turnover and improved productivity. Professor Ian I Mitroff at the University of Southern California even stated, “Spirituality could be the ultimate competitive advantage.” But there is also the concern that cult members and groups with a radical perspective could use the workplace for their own aims. Still, employees in companies that integrate spirituality in their work place count on the potential benefits of greater respect for individuals, a more humane treatment of their fellow workers, and an environment that permeates their organization with greater trust.


1. What is spirituality?

2. Is this topic appropriate for businesses?

3. What are the arguments for and against its inclusion in business?


CASE  2:  Coke’s European Scare

What seemed like an isolated incident of a few bad cans of Coca-Cola at a school in Belgium turned into near disaster for the soft drink giant’s European operations. In June 1999, Coke experienced its worst nightmare—a contamination scare resulting in the recall of 14 million cases of Coke products in five European countries and a huge blow to consumer confidence in the quality and safety of the world’s most recognizable brand.

After the initial scare in Bornem, Belgium, Coke and Coca-Cola Enterprises (CCE), a bottler 40 per cent owned by Coca-Cola, thought they isolated the problem. Scientists at the CCE bottling plant in Antwerp found that lapses in quality control had led to contaminated carbon dioxide that were used in the bottling of a recent batch of Coke. Company officials saw the contamination as minor problem and they issued an apology to the school.

At the same time that the problems were being dealt with an Antwerp, things were breaking down at Coke’s Dunkirk, France, bottling plant. In Belsele, 10 miles from Bornem, children and teachers were complaining of illnesses related to drinking Coke products. The vending machines at the school were stocked with Coke from the company’s Dunkirk plant and were thought to be safe. Now a second bottling plant’s practices were being questioned. What initially seemed like an isolated incident was now a crisis.

Immediately following the second scare, Belgium’s health minister banned the sale of all products produced in the Antwerp and Dunkirk plants. Things got worse when Coke gave an incomplete set of recall codes to a school in Lochristi, Belgium, resulting in 38 children being rushed to the hospital. Immediately following this incident, French officials banned the sale of soft drinks produced in the Dunkirk plant. It was believed that fungicide on wooden shipping pallets were the cause of the illnesses at the Dunkirk plant.

On June 15, 1999, 11 days after the initial scare in Bornem, Coke finally issued an explanation to the public. Most Europeans were not satisfied. Coca-Cola officials used vague language and often contradicted one another when making statements. France’s health minister, Bernard Kouchner, stated, “That a company so very expert in advertising and marketing should be so poor in communicating on this matter is astonishing”

After three weeks of testing by both Coke officials and French government scientists, it was concluded that the plants were safe and that there was no immediate threat to the health of consumers. Coke has destroyed all of the pallets in Dunkirk and tightened quality control on co2.

How could this happen to the company that is revered worldwide for its quality control and the superiority of its products? Coke has spent decades building its reputation overseas and the European market now represent 73 per cent of total profits. While the scare has had some effect on Coke’s profits in Europe, the company is more concerned with damages to its reputation and consumer confidence in its products.

Many critics say that Coke’s slow response time, insisting that no real problem existed and belated apology have severely damaged the company’s reputation in Europe. Some would disagree and feel that Coke handled the situation as best it could. “I think that Coke acted in a responsible, diligent way,” says John Sitcher, editor of Beverage Digest. “Their first responsibility was to ascertain the facts in a clear and unequivocal way. And as soon as Coke knew what the facts were, they put out a statement to the Belgium people.”

The character and quality of a company can often be measured by how it responds to adversity. Coca-Cola believes that this crisis has forced the company to re-examine both its marketing and management strategies in Europe. Coke executives in Brussels are predicting that the company will double its European sales in the next decade and that this setback will only make the company stronger. Wall Street analysts seem to agree. Only time will tell.


1. What are the management issues in this case?

2. What did Coke do and what could have been done differently?

3. What are the key factors that were or should have been considered by management?


CASE  3  Trials and Challenges For Barrett at Intel

Intel Corporation is best known for its processors. The sign “Intel Inside” is familiar to most people using a computer. There is, for example, the Pentium 3 and 4 and the new generation Itanium. For servers and workstations, Intel produces Xeon. The colorful CEO Andy Grove led the company for many years. By 2001,  however, the Chief Executive Officer Craig R. Barrett faces many challenges, including criticism.

The new strategy of moving into new markets such as information appliances, communications, and Internet services was costly and so far less than successful. In fact, the move beyond its core businesses may have detracted from its core business of computer chips. These new directions resulted in frequent reorganizations resulting in organizational uncertainties for the managers. While some think that the frequent changes were necessary to adapt to new situations and to keep the organization agile, others disagree.

Barrett’s leadership and his moves into various directions is quite different from Grove’s carefully crafted strategy that focused on chips. Barrett’s personal strengths lie in manufacturing. He invested heavily in research and development. But new products such as the Itanium require several years before they show results, and Barrett has only a few more years before his retirement. Investing in new manufacturing technologies with the aim of achieving virtually automated plants results in the reduction of manufacturing costs of chips. But the PC market is stagnated in the early 21st century and wireless communication and cell phones are becoming important in the market. In the cell phone market, for example, Motorola and Texas Instruments are developing new digital signal processors and Intel would have to work hard to catch up. A key to success of Intel may be whether the company can become an important player in the wireless market. Barrett made a number of costly acquisitions, including Level One Communications. But the question remains if the heavy investments in new technologies will result in profitable businesses. This may determine the legacy of Craig Barrett.


1. What is your assessment of Barrett’s performance and his vision for Intel? Is he the right person for the job at Intel?

2. What are some problems associated with frequent reorganization?

3. What are the pros and cons for focusing on the distant futures and the heavy investments in new technologies?


CASE: 4   Profiles of Two Visionaries—Bill Gates & Steve Jobs

Two men have their hearts and souls for developing their visions have driven the personal computer revolution. However, the way in which each of these men went about this quest has been different. Steve Jobs and Bill Gates have changed the way the world does business, but the story of their leadership styles is even more compelling than the success spawned Apple and Microsoft.

Gates and Jobs: The Early Years  Bill Gates started developing his computer skills with his childhood friend Paul Allen at Lakeside School in Seattle. At the age of 14, the two had formed their first computer company. After high school, Allen and Gates left Seattle for Boston. Gates was off to Harvard and Allen began working for Honeywell. After only two years at Harvard, Gates and Allen left Boston for Albuquerque to develop a computer language for the new Altair 8080 personal computer. This computer language would become BASIC and was the foundation for Microsoft, which was created as a partnership in 1975.

After five years in New Mexico, Microsoft relocated to Bellevue, Washington in 1980 with BASIC and two other computer languages (COBOL and FORTRAN) in its arsenal. Later that year IBM began developing its first PC and was in need of an operating system. Microsoft developed the Microsoft Disk Operating System (MS-DOS) for IBM while two other companies created competing systems. Gates’ determination and persuasion of other software firms to develop programs for MS-DOS made it the default IBM platform.

As Microsoft became more successful, Gates realized that he needed help managing Microsoft. His enthusiasm, vision, and hard work were the driving force behind the company’s growth, but he recognized the need for professional management. Gates brought in another one of his friends from Harvard, Steve Ballmer. Ballmer had worked for Proctor & Gamble after graduating from Harvard and was pursuing his MBA at Stanford University. Gates persuaded Ballmer to leave school and join Microsoft. Over the years, Ballmer has become an indispensable asset to both Gates and Microsoft. In 1983, Gates continued to show his brilliance by hiring Jon Shirley who brought order to Microsoft and streamlined the organizational structure, while Ballmer served as an advisor and sounding board for Gates. Microsoft continued to grow and prosper in the 1990s and Gates became the richest man in the world with Microsoft dominating the operating systems market and the office suite software market with Microsoft Office.

Gates recognized that his role was to be the visionary of the company, but that he needed professional managers to run the operations of Microsoft. He combined his unyielding determination and passion with a well-structured management team to make Microsoft the giant it is today.

The other visionary, Steve Jobs, and his friend Steve Wosniak started Apple Computer in Job’s garage in Los Altos, California in 1976. In contrast to Bill Gates, Jobs and Wosniak were hardware experts and started with the vision for a personal computer that was affordable and easy to use. When Microsoft offered BASIC to Apple, Jobs immediately dismissed the idea on the basis that he and Wosniak could create their own version of BASIC in a weekend. This was typical Jobs: decisive and almost maniacal at times. However, Jobs eventually agreed to license Microsoft’s BASIC while pursuing his vision of developing a more usable and friendly interface for the PC.

Jobs, seen by some as the anti-Gates, is a trailblazer and a creator as opposed to Gates who is more of a consolidator of industry standards. Jobs, whose goal was to change the world with his computers, was very demanding of his employees. Jobs was not a hard-core computer programmer, but he sold the idea of the personal computer to the public. He changed the direction of Apple by developing the Macintosh (Mac) that used a new Graphical User Interface (GUI) that introduced the world to the mouse and on-screen icons. With all this success, there was a major problem developing at Apple: Steve Jobs was overconfident and did not see Gates and Microsoft as a serious threat to Apple.

Soon after the release of the Macintosh computer, Jobs asked Microsoft to develop software for the Mac operating system. Gates obliged and proceeded to launch a project copying and improving Apple’s user interface. The result of this venture was what became Microsoft Windows.

Jobs’ cocky attitude and the lack of management skills contributed to Apple’s problems. He never bothered to develop budgets and neglected his relationship with his employees. Wosniak left Apple due to differences with Jobs. In 1985, John Scully, formerly CEO of PepsiCo, was hired to replace Steve Jobs as president and CEO of Apple Computers. Differences between Scully and Jobs developed which eventually resulted in the dismissal of Jobs.

Microsoft and Apple at the turn of the Century: An Industry Giant and a Revitalized Leader      With the success of Windows, the Office application suite, the Internet Explorer, Microsoft has become a household name and Bill Gates has been hailed as a business genius. The fact that Microsoft’s competitors, the press, and the US Justice Department have called Microsoft a monopoly reinforces Gates’s determination to succeed. Some people even questioned whether Microsoft can survive the Justice Department’s decision. But Bill Gates has shown that he is the master of adapting to changing market conditions and technologies.

In the 1990s, Apple went in the opposite direction. The outdated operating system and falling market share eventually led to a decrease in software development for the Mac. Something needed to be done. In 1998 Steve Jobs returned to Apple as the “interim” CEO. His vision, once again, resulted in an innovative product: the iMac. In the 80s he created the simple-to-operate Macintosh to attract people who were using IBM PCs and their clones. Now he developed a simple, stylish, and Internet-friendly computer that added some much-needed excitement to the computer market. Jobs had also changed as a manager and a leader. He had matured and looked to his professional staff for advice and ideas. The Mac is an expression of his creativity and Apple as a whole is an expression of Steve, leading to continuing the success for Apple and a renewed battle between Gates and Jobs.

Gates and Jobs in 2006   Bill Gates, one of the richest men, has also become one of the biggest charitable givers. He and his wife Linda have donated some $31 billion to philanthropic causes. When Bill Gates read the World Development Report by the World Bank, he realized that he could improve the health of people in poor countries by supplying drugs and treatment. The Bill and Melinda Gates Foundation also provides scholarships for students with different backgrounds. While Gates is very much in philanthropy, Microsoft is preparing the new Windows Vista which helps users in enhancing their computing experience.

Steve Jobs’ career also took some interesting turns. After he was fired by Scully (the person he hired), he started a company called NeXT and Pixar, the firm that created the first computer animated feature film. When Apple got into trouble, Jobs was rehired, doing some amazing things. When he was diagnosed with cancer—which fortunately could be successfully treated—his outlook on life changed. In the 2005 commencement address at Stanford University he said: “Because almost everything—all external expectations, all pride, all fear of embarrassment or failure—these things just fall away in the face of death, leaving only what is truly important.” In 2006, Jobs can look back with exciting new products such as computers and the best selling iPods: the Nano and the Video. Now, the pundits are wondering, what will be Steve’s next innovation?


1. Compare and contrast the careers of Bill Gates and Steve Jobs.

2. Compare and contrast the leadership styles and managerial practices of Gates and Jobs.

3. What do you think about the future of Microsoft and Apple Computers?

4. What is the outlook on life of the two computer nerds?



The information system at American Airlines has become an integral part of the overall strategy to gain a competitive edge in the industry. The extensive use of computers began in the 1950s in payroll and inventory control and extended to customer service. In the early 1960s, American developed the widely known SABRE system (SABRE stands for Semi-Automated Business Research Environment). It is one of the most sophisticated passenger reservation system used by travel agents and customers.

Shortly after implementing SABRE, American also used the system for other tasks, such as controlling freight shipments, as well as dispatching and tracking flights. When the government deregulated the airline industry in 1978, the information system became an even more important tool for competing against the low-cost airlines whose labour costs were as much as 40 to 50 per cent lower. American Airlines’ strategy was to use the information technology to compete in a variety of ways. One application was to have as many aircrafts seats as possible filled without having many passengers “bumped” through overbooking. Another application was to obtain the proper balance between discount and regular fares. It was estimated that revenues could be increased dramatically by shifting only one per cent of discount fares to the full fare—clearly a competitive advantage in a market where price change occur daily and even hourly. Still another application of the information system was to find the most efficient way to fly in order to reduce fuel cost, which is the second largest expense. Some airplanes have sensors on board to monitor essential equipment; the operational information is sent to the ground station. Maintenance can then be planned effectively and performed more efficiently when the aircraft lands. Still another application of the computer was to determine the most profitable routes. The complexity of scheduling over 13,000 pilots and flight attendants on 1300 daily flights is horrendous. The high cost of overtime can put an airline at a competitive disadvantage.

Robert L Crandall, the former chairman and president of American Airlines, thinks that information systems are the key for success. He stated: “We have taken what was once a basic reservation system and built it into an integrated information system that drives our corporate strategy as much as it is driven by that strategy.” While American Airlines has been the industry leader in the use of information technology, competition developed. The 1992 program of the European Community (EC, now the European Union or EU) was designed to eliminate trade and many political barriers. The European airline industry also became deregulated than engaging in mergers, some airlines are now integrated into a network linking selected carriers together. An illustration of the cooperation among airlines involves the two computer reservation systems called Galileo and Amadeus. Thus, American Airlines—with a strategy of expanding in the European market, the largest market in the industrialized world—has ample competition. Recently, the five biggest US Airlines (Continental, Delta, Northeast, United Airlines, and now also American Airlines) developed a common website called (, which could also affect SABRE.

Technology that may have given once a competitive advantage to a company may, in time, become obsolete unless it adapts to new demands and develops new applications. Max Hopper, the architect of the SABRE system, suggests that old models are no longer sufficient. Those who can use the available tools and modify them will gain a competitive edge. The trend is away from stand-alone applications to platforms that facilitate new approaches to problem solving and decision making. SABRE is not only a reservation system, but also a system for inventory control, making flight plans, and scheduling flight crews. Other data-basses were added for car rentals, hotel reservations, and theatre shows. SABRE has become an electronic travel supermarket.


1. Discuss the evolving use of information technology at American Airlines?

2. Should American Airlines expand its position in Europe? What are the arguments for and against this expansion?

General Management

05 Jul


Marsha Jackson is a recent MBA graduate with a degree in marketing. She has accepted a position with General America, a large firm selling a number of consumer products. Her first assignment is to conduct research on the sales of one of her company’s products versus sales of competing products.

This division is responsible for sales of over-the-counter drugs such as headache remedies, indigestion cures, and similar products. In business school, Marsha had worked with a personal computer in her MBA program and was happy to see that General America had a local area network (LAN) for the marketing department subscribed to several different services that provided sales results for over-the-counter drugs. Some of her fellow workers had private databases, and a few even keyed data into their PCs from lengthy printouts they had purchased.

Marsha feels that there must be a better way to conduct market research, particularly given the fact that the department has a LAN with a lot of capacity. What solutions to this problem can you recommend?



Assume you have just been appointed to chair the board of a medium sized manufacturing firm that makes small consumer appliances. The company has experienced stagnant growth over the past five years, and a new board of directors was recently elected by dissident stockholders.

One of your first tasks is to help top management discover why sales are constant and profits have been declining. Currently, the firm is faced with excessive inventory and problems in acquiring raw materials. Prices for these materials have been fluctuating widely in recent months; the previous management seems to have been unable to cope with this problem.

How will you approach this task? What sources of information will you seek to help understand and solve problems in the company?



The governor of a state is confronted with a series of conflicting recommendations from his staff. Recently welfare costs have been dropping, and he is concerned that they will start to rise again.

The director of the state welfare department suggested in her report that the new reduced payments schedule passed by the legislature has reduced overall expenditures and so the downward trend will continue. The governor’s advisor for economic affairs indicated that the recent improvement in the state’s economy had resulted in large increases in employment. These new jobs are attracting people and taking them off the welfare roles. A state senate leader, however, felt that most of the change resulted from enforcing requirements for welfare, limits on how long one can collect payments, and requirements to work.

Who is right? What is responsible for so many different positions? How can the governor reconcile these conflicting viewpoints and arrive at the true cause of the problem?



Dave Masters in vice president of manufacturing for Siliconix, an electronic components manufacturer. Siliconix runs most of its production control and factory systems on an IBM mainframe computer. The firm has just purchased another company that makes similar components, but the newly purchased another company that makes similar components, but the newly purchased division runs its applications using a package called SAP R/3 on a client-server computer configuration.

Masters has to decide what to do about the different computer applications. The staff of the corporate management department wants to make the new division feel welcome and does not want to upset its employees. Staff members argue that SAP is probably better than their old custom-programmed system on the mainframe. However, the implementation of SAP is a major task, and they do not recommend undertaking it right now. They are content to run the two systems separately.

Masters is concerned because he feels the entire company would be better off with a single production control system. However, he recognizes that the merger will cause some disruptions, and he questions the wisdom of undertaking a major systems conversion at the same time.

What do you recommend? How should Masters go about making his decision?



Block and Thomas, a regional stockbrokerage firm, hired a chief information officer (CIO), a senior manager who is responsible for all technology in the firm. The brokerage firm uses technology heavily as is typical in the industry. Block and Thomas has a number of systems to process stock trades and support its brokers. It also subscribes to a broker workstation system provided by a market data vendor. Each broker has a personal computer that provides a great deal of data and analytic capabilities in different windows on the screen.

The new CIO surveyed users and potential users at Block and Thomas. He concluded that in the past, users had very negative attitudes toward systems. However, the interviews he conducted convinced him that users’ attitudes were now different. The users described problems but also mentioned that they were very optimistic about the potential of technology and wished they could implement the technology faster. The new CIO was surprised by the creative suggestions that came from users during the interviews.

What events do you think are responsible for the new attitudes on the part of users? How can the CIO take advantage of them?



The traditional organization is characterized by tacit understandings among managers and subordinates. In some instances, the rights and responsibilities of each group are contained in a detailed contract, such as the one between a union and management. Under a tacit understanding, an employee responds to a supervisor for a number of reasons. Custom or habit is a very important reason; organizations throughout history have functional through a hierarchical relationship like that found in the armed forces. A manager usually has the ability to determine the subordinate’s pay and can even arrange to have the subordinate dismissed. Because there is a long history of this type of relationship, most people in organizations are quite comfortable with it.

In some of the organizations described in this chapter, managers form alliances with various partners. These alliance firms may provide a virtual component for your organization. However, the employees involved in this alliance do work for two different firms. How does a manager manage under these conditions? Suppose that your firm enters into a relationship with another firm to take over its inventory of raw materials and to become a just-in-time supplier. The partner firm hires your former inventory employees so they no longer work directly for you. Describe the role of a manager in working with an alliance partner that provides you with a virtual component of your firm?



Boats-R-Us operates a group of 50 discount marine supply houses throughout the U.S., primarily on the east and west coasts and around the Great Lakes. The company has both walk-in and mail-order business. It has been organized traditionally as a retail store and several warehouses. A central order processing site accepts orders over 800 numbers and by mail and fax: this site distributes the order to the warehouse that is closest to the customer and that has the products requested in stock. A large number of purchasing agents is involved in determining what to stock and in negotiating purchases.

The president of the company has read about new organizational forms enabled by information technology. The only technology in place now is the order entry and warehouse inventory system. The president would like to make Boats-R-Us both more efficient and more responsive to its customers. What new kinds of organization forms for Boats-R-Us might be enabled by information technology?



Harold Rubin has spent a career in banking. He how works for a large money-center bank that has global presence. However, Harold is worried: He has been the explosion in interest in the Internet and World Wide Web, and he thinks there will be profound implications from IT for banking. The picture is confused, however. Some banks are reducing the number of physical branches as they are expensive in terms of real estate and labor. The banks replace branches with ATMs and phone banking; other banks offer PC banking so that customers can do almost everything they can in a branch from home. They are usually able to pay bills via their home computers as well.

To Rubin, these changes seem evolutionary and rather mild. He has read articles about electronic commerce and even shopped on the Web to try it out. He also sees small firms becoming global as they advertise their products on the Web. What kinds of banking services will these firms want? How will changes in commerce and life styles influence what customers, both individual and corporations, want from a bank? Will a bank become “a piece of computer software on a network,” a statement attributed to the chairman of Citibank?



Standard International (SI) is the subsidiary of a large manufacturing firm; it is responsible for marketing, sales, and distribution outside the United States. Standard International does not develop products; the parent firm creates all products it sells. SI has operations in 30 countries. In virtually all these countries the local SI operations in treated legally as a subsidiary of Standard International.

Recently a new president took control of SI. Historically the firm’s systems were oriented to finance and accounting because the technology group reports to the vice president of finance. Accounting applications are important because so many different currencies are involved. The new president, however, is impatient and feels that technology should be able to do something for marketing and sales.

She asked you to consult with SI in the hope of finding a strategic application for information technology: “I want something that will give us a competitive edge,” she said. What kind of process would you follow to try to identify a strategic application? What applications areas look promising? How does a firm like SI develop a strategic system? How does it establish and maintain a competitive advantage?



Autozip sells accessories for cars through a chain of stores on the West Coast. The company started a catalog sales division 4 years ago that now accounts for 25 percent of sales. Customers like the convenience of calling a toll-free number and having the parts they order delivered via USP or an overnight carrier such as Federal Express.

The president of Autozip realizes that the firm needs to have a presence on the Internet. He is trying to decide whether to accept orders on the Internet. He is trying so decide whether to accept orders on the Web, and if so, how. He is caught between two positions offered by his staff. The marketing vice president advocates taking orders on the Web. Her reasoning is: What have we got to lose? We have everything to gain; it’s another market channel and our competitors are already there or will be soon. We save money because customers act as their own order entry personnel.

The controller disagrees. His reasoning is: Any advantage we gain will be temporary; it is so easy to set up a system to order on the Web that everyone will take Web orders and we won’t gain a sustainable advantage.

The president has to make a decision. First, should Autozip accept orders on the Web, and second, if so, how? Should it go to a firm that hosts Web marketplaces, buy software and set up its own site, or develop its own software?



Hershey and Sherman is a medium-sized consulting firm that specializes in helping clients install “enterprise software,” the kind of applications packages that automate all aspects of a company’s operations. The company has always stayed at a high level, and according to Sheila Hershey, “We deal with management to prepare a change program. We are not programmers.” However, the tremendous success of several enterprise software packages, most notably SAP’s R/3 and a series of applications from Oracle and PeopleSoft, have created a problem for Hershey and Sherman.

Clients are asking for recommendations from the firm on whether to purchase one of these packages, and then they want help implementing it. Sheila is confronted with several choices for responding. “We can try to hire more technical people, but everything we read and hear says that it is very difficult to find consultants with expertise in these systems. The demand is very high, and all of the big consulting firms have practices devoted to installing SAP. Hiring specialists would also change the character of our firm.

“Another option is to form an alliance with a firm that does have technical capabilities. We can continue to do our high-level management consulting and then bring in a firm appropriate to the client’s needs. The problem here is that we may be helping provide our competitors with business—one day we are partners, the next day we are after the same client.”

What advice would you give Hershey and Sherman? What are the pros and cons of strategic alliances in this situation?



Bill Roberts is the chief information officer for a multinational company. He reports to the company president and has a staff of 50 at headquarters. This group runs systems for the headquarters operation and also tries to provide standards for subsidiaries in foreign countries.

Headquarters has developed a standard library of financial and accounting applications that runs on most of the computers in the subsidiaries. (Bill was successful a few years ago in getting all the subsidiaries expect the largest to agree on one model of computer.) Since many of the subsidiaries are not large and have trouble recruiting skilled technology staff members, they are quite happy with the library of programs.

Each Country has its own information services department manager, generally reporting to the controller or possibly the president of the subsidiary. Bill and his staff travel extensively to try to help each subsidiary better manage its technology effort.

Bill is facing a major problem in at least two countries; he and his staff think the local person in charge of information systems is not doing a good job. “After several years of working with the people in charge in two countries, I have come to the conclusion that we really should let them go. However, I have no real responsibility; these people report to a manager in the country, not to me.”

How can Bill help the company solve this problem? Do you think they need to reorganize the structure of their IT units? Does it make sense to have foreign operations reporting to Bill? If not, how can he influence what goes on in subsidiaries outside the U.S.?

General Management

28 Jun


Case on Discomfort in a factory and Management Decision Making

Mohan remembered the call from the head office as he puts down the telephone receiver. His boss from head office he said, “I just read your analysis and I want you to go down to our plant in Kollakal near Mysore right away. You know we cannot afford this plant any more – the costs are just too high. So go down there, check out what would be our operational costs would be if we move, and report back to me in a week.”

Mohan knew the challenge quite well as the branch manager of the Good will Specialty Products. His company is into manufacturing of special apparel for injured and people with other medical conditions. He needs to deal with high-cost labor in a remote village not so sophisticated plant, unionized manufacturing plant. Although he had done the analysis there were 480 people who made a living at this facility and if it is closed most of them will find it very difficult to get another job in the small town consisting of about 10 000 people.

Instead of the Rs.20/- per hour paid to the Kollakal workers the wages paid to the migrant workers near Aurangabad will be much cheaper Rs.7/- hour working in sub human conditions. This provides a saving of 15 lakhs to the company for a year, which, can now be used to meet the costs for training, transportation and other matters.

After two days of talking with Migrant workers association and representatives of other companies using the same services in the town, Mohan had enough information to formulate alternative plan for production and the cost figures for production and transportation. What was bothering him was only the thought that how is going to handover the termination of service notice to the Kollakal workers.

The plant in Kollakal had been in operation since 1930s making special apparel for persons suffering from injuries and other medical conditions. Mohan has often talked to the employees who would recount stories of their fathers and grant fathers working in the company plant-the last of the original manufacturing operations in the town.

But friendship aside competitors had already edged past Good will in terms of price and were dangerously close to overtaking it in product quality. Although Mohan and his Boss had tried to convince the union to accept the lower wages, union leaders resisted it. In fact, in one occasion when Mohan tried to discuss a cell manufacturing approach, which would cross train employees to perform up to three different jobs, local union leaders could barely restrain their anger. Yet probing beyond their anger Mohan sensed their vulnerability, but could not break through.

Tomorrow he will discuss his report with the CEO. Mohan does not want to be responsible for dismantling of the plant at Kollakal, an act, which Mohan believes is personally wrong, but he is helpless. Mohan said to himself “The costs are too high, the union’s unwilling to cooperate, and the company needs to make a better return on its investment if it has to continue at all. It sounds right, but it feels wrong. What should I do?


1. Assume you want to lead the change to save the Kollkal plant. Describe how you would proceed?

2. What is the primary type of change needed – technology, product, structure or people/culture?

3. What techniques would you use to overcome union resistance and implement change?




A small group of managers at Falcon Computer met regularly on Wednesday mornings to develop a statement capturing what they considered to be the ‘Falcon Culture’. Their discussions were wide-ranging, covering what they thought their firm’s culture was, what it should be and how to create it. They were probably influenced by other firms in their environment since they were located in the Silicon Valley area of California. Falcon computer was a new firm, having been created just eight months earlier. Since the corporation was still in the start- up phase managers decided it would be timely to create and instill the type of culture they thought would be most appropriate for their organization. After several weeks of brain storming, writing, debating, and rewriting, the management group eventually produced a document called ‘Falcon Values’, which described the culture of the company as they saw it. The organizational culture statement covered such topics, as treatment of customers, relations among work colleagues, preferred style of social communication, the decision making process, and the nature of working environment.

Peter Richards read over the Falcon values statement shortly after he was hired as a software trainer. After observing managerial and employee behaviors at Falcon for a few weeks, he was struck by wide discrepancy between the values expressed in the document and what he observed as actual practice within the organization. For example the Falcon values document-contained statements such as this: “Quality; attention to detail is our trademark; our goal s to do it right the first time. We intend to deliver defect free products and services to customers on the date promised.”

However Richards had already seen shipping reports showing that a number of defective computers were being shipped to customers. And his personal experience supported his worst fears. When he borrowed four brand-new Falcon computers from the shipping room for use in a training class he found that only two of them started up correctly without additional technical work on his part.

Another example of the difference between the Falcon Values document and actual practice concerned this statement on communication: “Managing by personal communication is part of the Falcon way. We value and encourage open, direct, person to person communication as part of our daily routine.” Executives bragged about how they arranged their chairs in a circle to show equality and to facilitate open communications whenever they met to discuss the Falcon values document Richards had heard the “open communication” buzzword a lot since coming to Falcon, but he hadn’t seen much evidence of such communication. As a matter of fact all other meetings used a more traditional layout with top executives at the front of the room. Richards believed that the real organizational culture that was developing at Falcon was characterised by secrecy and communications that followed the formal chain of command. Even the Falcon values document Richard was told had been created in secret.

Richards soon became disillusioned. He confided in a coworker on afternoon “the falcon values document was so at avarice with what people saw everyday that very few of them took it seriously.” Employees quickly learned what was truly emphasized in the organization-hierarchy, secrecy, and expediency and focused on those realities instead, ignoring many of the concepts incorporated in the values document. Despite this frustration Richards stayed with Falcon until it filed for bankruptcy two year later. “Next time” he thought to himself as he cleaned out his desk “ill pay more attention to what is actually going on, and less to what top management says is true. Furthermore, I guess you just can’t create values.”


1. What is more important the statement in a corporate culture document or actual managerial behaviour?

2. Why did the Falcon executives act as they did?

3. Why didn’t employees like Richards blow the whistle on Falcon, challenging the inconsistency between values and behaviour?

4. How can executives go about changing the old values that govern an organization?




Study the case below.Discuss customer insight? Define CRM,role and advantages for todays management?

Archana Tuli (Owner of a water purifier): Look at my water purifier. Last week a person came to my house saying my service contract was up for renewal. Mind you, that was the first time in 10 months I was seeing anyone from Purifo. I did not like his barging into my time without prior notice. But that did not bother him. He had a list to clear, never mind if I was in the midst of cooking lunch.

I asked him about the servicing, since under the maintenance contract the company should have serviced the unit twice that year. ” You should have called the company,” he said. But that was a preventive maintenance contract and it was for the company to call and take a date.

Finally, he set about servicing the machine. I found that his handling of the machine was rather clumsy. He dropped the casing twice and strewed the carbon all over the sink. I discovered that he was just four months old in the Company. Before that, he used to sell plastic boxes. Is this what I get for being your customer?

Then he said the filter candle needed to be changed which I would have to pay for. That annoyed me. I showed him the contract, which clearly stated that the company would replace the candle once a year at its cost. He did not know that. Would you believe that? Clearly such service contracts are simply a means to make money. There is no attitude to servicing. He came because it was February and he had contract renewal targets to complete. He came without calling, expecting we would drop everything else to serve him. He had no clue as to what he had to give the customer for the contract. He messed up my kitchen and did not even attempt to tidy it up.

The worst was that when I started the machine, the water would not flow. I was furious. Purifo sends incompetent, inexperienced people to cut costs. I carry the responsibility of providing my family asafe, hygienic environment at home, so I am prepared to pay for preventive maintenance. But what did I get?

But it is a good product and I am an informed consumer who knows how to work around a manufacturer’s inefficiency. I simply gave the service contract to a private firm. I don’t want to have anything to do with Purifo.

Ritikant Sharma (Credit Card holder): Every month, I receive a credit card bill and my payment is sent the very next day. Five months ago, the bill did not come on the 22nd evening as it normally would. I received the bill 10 days later with a charge of Rs. 675/- for overdue interest. I was taken aback and called up by the bank. But the bank manager argued that the bill had been sent earlier. It was my word against his.

I wrote to Monet Bank, protesting against this undue charge. Eventually, after six letters from me, including one to the managing director, the bank ” waived” the interest. But I was left with a bitter taste in my mouth. I wondered why the bank did this to me. Did I deliberately delay payment? I had this card for three years and not once had I defaulted on payment.

I also wondered if the bank considered the cost of this argument to me. Was it worth the Rs. 675/-? Why was the customer not right this time? And what about all those times when I paid four days before the due date? I was amazed that the bank treated me like an errant schoolboy. Since then I have not felt good about using the Monet credit card.

Worse, every month the bill continues to show the overdue interest and every month there is a fresh exchange of letters on the matter. Only last week I received an invitation to become a member of another credit card company. I am planning to surrender the Monet Card.

Divya Mathur (Owner of a washing machine): You say I am an important customer of Crysta. Great. But for your customer service cell, I am just a number. For six months now, I have been having problems with the washing machine. Last month, when I called the customer service cell to follow up an old complaint about the motor, the lady who took the call asked me to repeat the details: model number, date of purchase, and the like. When I pointed out that all these details had been given several times before and all she needed to do was check the complaint order number, her response was shocking. ” May be, but I can’t boot the system. I am only standing in for someone who has not reported today. So, you have to give the details again.” She said.

Tell me what am I getting for being your customer? Respect? Good handling? No. Now you come here and ask me personal details like family income, number of members, husband’s designation. You still haven’t told me why you need all this information. You are researching. Are you collecting this information to help your company or me?

Then there was the problem with the V-belt. Within a day of replacing it, there were some cracking sounds. The engineer said he would have to wait for the senior supervisor to examine it. Reason? ” We recently changed our supplier and all his pieces are turning out to be defective.” I was taken aback. It frightened me to know that there was no quality check at your end. We outsource a lot of stuff for our garment business, but every button and needle is checked before it is used. We are not a multinational, just an old family-managed business.

Radhika Iyer (School Teacher): That feeling for the customer is simply not there. The customer is not a person but a collective noun. If the customer was important, wouldn’t my water purifier Company tell me when it changed the service agent? When I called the number in my contract card, I discovered that the number now belonged to a courier company. I had to call the head office in Mumbai and get the new service agent’s number in Delhi.Is this fair? Or does it matter? I guess the Company’s attitude was: ” If a customer needs service, let her break her back and spend money to find out who the new agent is. ” The only motives are profits and sales volumes. Not customer loyalty or service. Therefore a customer is one who buys your product, not one who has bought your product. Once you’ve bought the product you are a ‘has been’. Why would you want to invest energy in a set of people to whom a sale has been made? You spend energy as long as a sale is not made. Once a sale is done, it is for the customer to invest energy in sustaining his relationship with the manufacturer. Isn’t that how it is? The manufacturer’s attitude is-you need me more than I need you, so guess who should work harder?

And everyone once in a while, there is a new face at my door asking me if I own a Zento purifier. Dammit, don’t you have a customer file? No, he says. We go from door to door. Splendid. Then what do you do with all the data you collect? And every one of these men asks me the same questions: when did you buy it, what is your model number, is it working properly? The worst is: ” What is your address?” I don’t care what the information is being used for. But I don’t want to be disturbed for information, which you already have.

We believe that because India now manufactures Coke and Mercedes, we have progressed. But this new market is no different from the gray market, where you can buy anything but cannot expect service. For instance, I bought a packet of macaroni, which said I had to boil it in 250 ml of water. I did that, but after the prescribed five minutes of boiling, there was enough water left in the pan. I then boiled it for another three minutes, and the pasta dissolved into a unrecognizable mass.

One day, I met someone who worked for this macaroni company. I told him about my experience. He said I should let the pan rest for five minutes after turning off the heat. The residual water would get absorbed. That worked. Couldn’t the firm have said so on the pack? Or is it cheaper to let the customer learn? Does the Company use experienced hands-on cooks while designing these products or are they MBAs who can’t tell a stove from a cigarette lighter?

I bought a jar of mayonnaise the other day. The label said it should be used within six months. Of what? Of the date of manufacture or of the date of opening the seal? Do I refrigerate it or not? It takes us back to what I said before: once the sale has been made, the consumer does not matter anymore. The sale is not on the customer’s involvement, loyalty or satisfaction. It never was; it will never be.

DIPANKAR BARUAH (Cell Phone Owner): There are numerous messages that are flashed on the cell phone to announce the sale of wedding suits, printers, shoes, or TV programmes, or updates on cricket scores. These messages usually send out a single, short beep. Only personal messages are announced with a long, continuous beep. Last week, I was distracted by six ad messages for a chocolate. And all of them were long beeps. It made me mad because I was in the midst of meeting clients and that kind of triviality is distracting.

The cell phone is a great device. It helps me catch messages, which I would otherwise have missed. But I don’t want it to distract me during a meeting. Please respect my privacy. The cell phone is for my convenience, not for the convenience of callous advertisers. Now, I leave the cell phone with the secretary and she calls me only if the message is a personal one.

Tell me, has the advertiser benefited? He sought to get his messages across to 1,50,000 subscribers at one go. It appears to me that my cell phone has become a cheap medium for advertising. Since it has done me the favour of selling me the cell phone, the cell phone operator can pass on my personal details to advertisers without even asking me. The cell phone is a private medium of communication, not a public address system like a radio.

We have allowed a million new products to enter the country but along with that, we have not allowed the market mindset to evolve or grow. Few people realize that the customer needs to be treated with respect.

BERYL DIAS (owner of a laser printer): This printer cost me Rs. 28,000. My company did not fund it. I saved for it for a year. Saving that kind of money was not easy. I wanted the best, which is what I thought I got when I bought it., It worked very well and I know it is a good product. But that’s where my ecstasy ends.

One day, the paper jammed and I needed help. So I called up the company. The lady who took the call said: ” You will have to bring the printer here, we are not going to come there.” I felt that was very hostile. I expressed surprise that their service engineers would not come to my home. The lady gave me a silly reason. ” If your mixie breaks down wouldn’t you take it to the service center?” Maybe she took the liberty to talk down to me because I was a woman and I operated a home office. But there’s a world of difference between a Rs. 2,500 mixie and a Rs. 28,000 printer. But she was surly from the word go. Worse, their office was located very far from where I lived and going there would mean wasting an entire morning.

It was her surly behaviour that angered me the most. I recall how the sales engineers hovered around me when I had first contacted the company for a brochure. For three weeks someone from the company would call me practically daily. They virtually pushed me into buying the printer. I remember I still had the last Rs.1,500 /-to save up, when they decided to give me a Rs.1,000/- discount to hasten my decision. Their sales pitch mesmerized me. Today, I am just a statistic. I can almost hear them saying: “You have no choice. If your printer is not working, that’s your problem. If you live afar, that’s also your problem.!”

I had not considered the after – sales trauma when I brought the printer. I assumed that the company would come home to repair it, as other companies do for other products. They did not tell me about their service terms at the time of the sale. It was not important, I guess. For, all they wanted was my Rs.28, 000/-.

To repair the printer, I went through an agent, who lost my complaint order papers, forgot to intimate the company about the part I wanted and made me wait for four weeks before the printer was repaired. Then I discovered it had not been repaired at all. I decided then that I wouldn’t have anything to do with the company ever again. I sold that printer and brought another brand after ascertaining that there was a service agent close by. My old printer was state of the art, but the real differentiator is the effort a firm is willing to put into customer service.




Company Social Responsibility & AIDS

The AIDS epidemic today is unparalleled in the challenges it poses to the world, and it is clearly an issue that no one can address alone. Business is an essential partner in the response to AIDS. The private sector like the other sectors is not immune from AIDS. Involvement of the private sector in the response to HIV/AIDS is crucial to the success of our country’s efforts against the epidemic.


1. What is the impact of AIDS on businesses? Do you agree that businesses in the near future would be actively interested in addressing the issue of AIDS? Justify your answer.

2. ABC Corporation wants to partner with an NGO and address the issue of AIDS around its factory, discuss what steps should ABC Corporation take to initiate, manage and sustain its partnership with the NGO.




Read the following case study and answer the questions that follow

Prakash Gupte is a sales representative with Beta Water Purifiers. Prakash is a star sales representative with the highest sales turnover record for 5 consecutive months. He is an aggressive and a dynamic sales person with a strong target-orientation. His marketing manager Shreyans Desai is very proud of his accomplishments. Based on his performance appraisal, Prakash has been promoted to the rank of Assistant Manager (Marketing). He is now required to supervise the work of 6 sales representatives and to manage sales targets for his area.

After assuming charge as an Asst. Marketing Manager, Prakash set the targets for the first month and communicated these to the sales representatives in a direct and explicit manner. 4 sales representatives found the targets to be too ambitious but reserved their comments. After the meeting they discussed the issue informally and dispersed. Prakash called the fortnightly review meeting to take stock of the situation. He was extremely disappointed to know that all the six representatives were trailing behind in target achievement. He was very blunt in communicating his disappointment and told their team to get their targets by the end of the month. After the meeting, all the six representatives expressed their displeasure with the meeting and found the demand of Prakash unreasonable. They commonly perceived him to be a difficult person to deal with. They thought of approaching Shreyans for this. Harish and Sameer, two of the representatives met Shreyans and discussed this with him. Shreyans was a little upset with Prakash, but he thought to himself that Prakash is very efficient but lacks tact to work with people. He assured the duo that he will speak to Prakash in this regard.

Shreyans called Prakash for an informal chat and advised him to go a little easy with people. Prakash was clearly agitated about this since he took this as a personal affront, as he sensed during this meeting that someone must have complained about his behavior to Shreyans. Instead of going easy with the team, he turned more bitter in his approach. He called a meeting of all the sales representatives, and indirectly communicated his displeasure with the incident. He once again made it clear that the targets were attainable but needed a greater sense of commitment from the group. Obviously the sales representatives did not like this. At the month-end briefing, Prakash was absolutely disappointed with the team for having under-achieved on the targets’ count. He rebuked them for going slow on their work and told them sternly to adhere to the targets in the next month. Deepak, on of the sales representatives, objected to highly monthly targets and suggested that the targets be made more reasonable. To this Prakash retorted by saying that the targets were absolutely reasonable. Obviously the team was disheartened with this. They all decided to collectively approach Shreyans this time and seek his intervention. When they met Shreyans to brief him about the situation, Shreyans was sure that he had made a mistake somewhere.



1. What happened when Prakash got promoted to the position of Asst. Manager (Marketing)? Why did this happen?

2. If you were entrusted with the responsibility of managing 6 sales representatives & creating an effective sales team, how would you do it?

General Management

28 Jun

1. What is Input & Output model?

2. Describe some major kinds of strategies/policies & the hierarchy of strategies?

3. What do you mean by reengineering organization & Explain key aspects?

4. What is departmentation & Types of departmentation?

5. Distinguish strength of appraisal against verifiable objectives?

6. Explain Maslow hierarchy of needs theory?

7. Define Leadership with examples?

8. Explain communication flow in the organization?

General Management

27 Jun

Answer the following question.

Q1. What are the elements of management?

Q2. What is the responsibility of business towards customers and shareholders?

Q3. Define planning. What are the characteristics of planning?

Q4. Write a note on MBO.

Q5. What are the characteristics and types of informal groups?

Q6. What are the main steps in the process of job analysis?

Q7. How to forecast human resource demand?

Q8. What are the methods of performance appraisal?