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?

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