Public Relation Management

02 Sep



Indefinite Strike by Employees—Role of PR: The VSNL Experience

VSNIL—the erstwhile Overseas Communication Service (OCS), and Navratna Central Public Enterprise—had always had a very cordial employee-employer relationship. The problem started when the Government of India decided to allot PSU employees shares of the company they worked in. while other Navratna companies allotted shares to their employees, VSNL did not do so. The reason for the delay VSNL was going for a GDR (global depository receipt) issue at that time, and the ministry of communications wanted to complete the issue before allotting the shares to the employees.

But after the GDR issue, a technical problem about the price at which the shares were to be issued to employees arose. The VSNL employees demanded a share price that was in accordance with the first disinvestments to the institutional investors in 1992—Rs 216 per share or Rs 10 each. But the ministry maintained that since the shares were not allotted to employees at that time for whatever reason, they could be allotted now only according to market rates, with a 15 per cent discount as per finance ministry rules.

The market value of the shares at that time was in the range of Rs 1,000 and Rs 1,100. For the employees, buying their quota of shares at those prices was a very costly proposition. They demanded that they should not be penalized for the government’s inability to issue the shares to them at the time of the first disinvestments. This was not acceptable to the government. Hence the employees decided to go on indefinite strike to compel the government to allot shares to them at Rs 216 each, instead of market rates with a 15 per cent discount as suggested by the government.

Stakeholders and the public

Obviously, the prime target group, in this situation was the employees and their leaders. However, at the same time there were other target groups who had to be reached and communicated with, and who would directly or indirectly help in resolving the problem, and maintaining the good image of the company, internally and externally. These other target groups were:

  1. Non-striking employees who did not participate in the strike call.
  2. Government and legal/labour authorities.
  3. Trade, customers and suppliers.
  4. Media, especially the national and international press.
  5. Industry leaders and industry associates.
  6. Last but not the least, subscribers of the corporation’s services.


  1. The company’s objectives for this industrial relations and image problem were to instill discipline, and achieve the required productivity level.
  2. To put across the issue in its right perspective to the various target publics.
  3. To help in resolving the issue by communicating to the employees the management’s stand, and its fairness to both parties.
  4. To keep the morale of other employees high, and gain support through appropriate communications to them via various internal media.
  5. The company, in the true spirit of its past harmonious relationship with employees, took a fair and just stand in all respects. Despite determined efforts by union activitists to paralyse the working of the corporation, the management of the corporation on many occasions met union representatives to break the deadlock. But the union was adamant as it considered its demand legitimate.
  6. The PR department organised press relations meetings and briefings, supported by information and facts on the situation at different times.

Eventually the government decided to accept the employees’ demand as a very special consideration, keeping in view the importance of the international telecommunications facility to customers. Besides, VSNL was going in for a second GDR issue, and the government did not want to give a wrong impression to international investors about the unhealthy industrial relations in VSNL. However, the government decided on a three-year lock-in period during which employees could not sell the allotted shares. This was to ensure that employees, being shareholders, took all possible steps to ensure the progress and achievements of VSNL, especially its high profit-earning position.


1. What measures would you take if you were the PR of BSNL

2. What according to you was the outcome of the solution taken by PR of BSNL?



NEEPCO Ltd: Accidental Death of a Woman Worker—Role of PR

The corporate office of the North Eastern Electric Power Corporation Ltd (NEEPCO) is located in Shillong (Meghalaya). The company had a major hydroelectric project at Kopili, in the Jayantia district of Meghalaya, 90 km from Shillong. The main project building was under construction when big marble tiles on its walls began falling. Realising the consequences of these tiles falling on anybody, NEEPCO project officials put rope barriers around the building to keep people away from danger.

Unfortunately however, a big piece of marble fell on a woman worker’s head when she wandered into the roped-off area. A huge crowd soon started gathering at the place, and they soon turned against the corporation, accusing it of carelessness. The victim was rushed to the nearby civil hospital by the project management, where she was declared dead.

Stakeholders and public

First, people gathered at the place of accident. Subsequently, the relatives of the victim arrived at the accident spot, followed by journalists who wanted to know the exact nature of the accident resulting in the death of the woman.


The NEEPCO management became very concerned about criticism resulting from the accident. They called the PR chief and asked for his advice. Initially, the management wanted to hush up the incident; they wanted to discuss the matter only with the relatives of the victims, and defuse the situation by paying compensation. They felt that if the incident was publicised, it could have serious repercussions. So they thought it better to put an end to the matter at that point.

But the PR chief did not agree with this suggestion. He felt it was dangerous to hide the information from the press, and that it would be better to issue a press release giving details of the incident. This way, they could explain the company’s viewpoint and clarify the corporation’s role in getting medical aid to the victim promptly, and its willingness to help the victim’s family in suitable manner—either through monetary compensation or giving a job to the victim’s next of kin.

The NEEPCO PR chief pointed out to the management that if the matter was not explained then, the press would come to know of the incident from other sources. They could then form a different opinion about the motives of the NEEPCO management, conclude that the corporate wanted to hide the matter deliberately, and criticise it for inefficiently handling the matter.

Ultimately, the NEEPCO management agreed to the PR chief’s suggestion. It issued a press release, and also called some journalists for a meeting, where the PR chief explained the company’s viewpoint. Two company directors and the PR chief went to the residence of the victim, met her relatives, and assured them of all possible assistance.

The next day, the press coverage of the incident was very mild, with opinion going in the company’s favour.


1. Explain in detail the management’s point of view and PR’s point of view on the accidental death of woman worker?

2. What would have been the situation if neepco didn’t face the press?



1. What is public relations? How is it a two-way communications process?

2. “Style has many meanings in journalism.” Discuss.

3. Discuss the duties and responsibilities of a reporter.

4. Discuss the various features of pictorial journalism.

5. Discuss Media Relation. Explain why it is so important for public relations.

6. Discuss the role of new information technology media in public relations.


Public Administration

02 Sep

1. Discuss history and development of PR in India.

2. What is the importance of public opinion to PR.? How can public opinion be influenced by a PR practioner?

3. Write short notes on:

(a) mass media

(b) house journals

(c) press conference

(d) news letter

(e) exhibitions.

4. Discuss PR programmes and campaigns.

5. Explain the latest trends in Pr.

6. PR is the art of making a company liked and respected by the employees and customers‘‘ -Discuss.

7. How would you prepare the House Journal for a Joint Stock Company?

8. Discuss the structure and functions of a PR Department in Government.

9. Discuss the functions of prcounseling and mass media.

10. State the ethics of public relations.

Project Management

02 Sep

Case 1   Disaster Recovery at Marshall Field’s (Another Chicago River Story)

Early in the morning on April 13, 1992, basements in Chicago’s downtown central business district began to flood. A hole the size of an automobile had developed between the river and an adjacent abandoned tunnel. The tunnel, built in the early 1900s for transporting coal, runs throughout the downtown area. When the tunnel flooded, so did the basements connected to it, some 272 in all, including that of major retailer Marshall Field’s.

The problem was first noted at 5:30 A.M. by a member of the Marshall Field’s trouble desk who saw water pouring into the basement. The manager of maintenance was notified and immediately took charge. His first actions were to contact the Chicago Fire and Water Departments, and Marshall Field’s parent company, Dayton Hudson in Minneapolis. Electricity—and with it all elevator, computer, communication, and security services for the 15-story building—would soon be lost. The building was evacuated and elevators were moved above basement levels. A command post was quickly established and a team formed from various departments such as facilities, security, human resources, public relations, and financial, legal, insurance, and support services. Later that day, members of Dayton Hudson’s risk management group arrived from Minneapolis to take over coordinating the team’s efforts. The team initially met twice a week to evaluate progress as the store recovered. The goal of the team was to ensure the safety of employees and customers, minimize flood damage, and resume normal operations as soon as possible. The team hoped to open the store to customers 1 week after the flood began.

An attempt was made to pump out the water; however, as long as the tunnel hole remained unrepaired, the Chicago River continued to pour into the basements. Thus, the basements remained flooded until the tunnel was sealed and the Army Corps of Engineers could give approval to start pumping. Everything in the second-level basement was a loss, including equipment for security, heating, ventilation, air-conditioning, fire sprinkling, and mechanical services. Most merchandise in the first-level basement stockrooms also was lost.

Electricians worked around the clock to install emergency generators and restore lighting and elevator service. Additional security officers were hired. An emergency pumping system and new piping to the water sprinkling tank were installed so the sprinkler system could be reactivated. Measures were taken to monitor ventilation and air quality and dehumidifiers and fans were installed to improve air quality. Within the week, inspectors from the City of Chicago and OSHA gave approval to reopen the store.

During this time, engineers had repaired the hole in the tunnel. After water was drained from the Marshall Field’s basements, damaged merchandise was removed and sold to a salvager. The second basement had to be gutted to assure removal of contaminants. Salvageable machinery had to be disassembled and sanitized.

The extent of the damage was assessed and insurance claims filed. A construction company was hired to manage restoration of the damaged areas. Throughout the ordeal, the public relations department dealt with the media, being candid yet showing confidence in the recovery effort. Customers had to be assured that the store was safe and employees kept apprised of the recovery effort.

This case illustrates crisis management, an important aspect of which is having a team that moves fast to minimize losses and quickly recover damages. At the beginning of a disaster there is little time to plan, though companies and public agencies often have crisis guidelines for responding to emergency situations. Afterwards they then develop more specific, detailed plans to guide longer-term recovery efforts.


1. In what ways are the Marshall Field’s flood disaster recovery effort a project? Why are large-scale disaster response and recovery efforts projects?

2. In what ways do the characteristics of crisis management as described in this case correspond to those of project management?

3. Who was (were) the project manager(s) and what was his or her (their) responsibility? Who was assigned to the project team and why were they on the team?

4. Comment on the appropriateness of using disaster recovery efforts such as this.

5. What form of project management (basic, program, and so on) does this case most closely resemble?


Case 2 Flexible Benefits System Implementation at Quick Medical Center

The management committee of Quick Medical Center wanted to reduce the cost and improve the value and service of its employee benefits coverage. To accomplish this it decided to procure and implement a new benefits system. The new system would have no meet four goal; improved responsiveness to employee needs, added benefits flexibility, better cost management, and greater coordination of human resource objectives with business strategies. A multifunctional team of 13 members was formed by selecting representatives of departments at Quick that would rely most on the new system—Human Resources (HR), Financial Systems (FS), and Information Services (IS). Representation from each department was important to assuring all departmental needs would be met. The team also included six technical experts from the software consulting firm of Hun and Bar Software (HBS).

Early in the project a workshop was held with team members from Quick and HBS to clarify and finalize project objectives and develop a project plan, milestones, and schedules. Project completion was set at 10 months. In that time HBS had to develop and supply all hardware and software for the new system; the system had to be brought on-line, tested, and approved; HR workers had to be trained how to operate the system and load existing employee data; all Quick employees had to be educated about and enrolled in the new benefits process; and the enrollment data had to be entered in the system.

The director of FS was chosen to oversee the project. She had a technical background and, prior to serving as director, had worked in the IS group where she assisted in implementing Quick’s patient care information system. Everyone on the team approved of her appointment as project leader, and many team members had worked with her previously. Two team members had worked with her previously. Two team leaders were also selected, one each from HR and IS. The HR leader’s task was to ensure that the new system met HR requirements and the needs of Quick employees, and the IS leader’s task was to ensure that the new software interfaced with other Quick systems.

Members of the Quick team were committed to the project on a part-time basis. Roughly 50 percent of the time they worked on the project; the rest of the time they performed their normal daily duties. The project manager and team leaders also worked on the project part-time. When conflicts arose, the project took priority. Given specific performance requirements and time deadlines, the Quick top management committee made it clear that successful project completion was imperative. The project manager was given authority over functional managers and project team members regarding all project related decisions.


1. What form of project management (basic, program, and so on) does this case most closely resemble?

2. The project manager is also the director of FS, only one of the departments that will be affected by the new benefits system. Does this seem like a good idea? What are the pros and cons of her selection?

3. Comment on the team members’ part time assignment to the project and the expectation that they give the project top priority.

4. Much of the success of this project depends on the performance of team members who are not employed by Quick, namely the HBS consultants. They must develop the entire hardware/software benefits system. Why was an outside firm likely chosen for such an important part of the project manager in meeting project goals?


Case 3   Glades County Sanitary District

Glades Country is a region on the Gulf Coast with a population of 600,000. About 90 percent of the population is located in and near the city of Sitkus. The main attractions of the area are its clean, sandy beaches and nearby fishing. Resorts, restaurants, hotels, retailers, and the Sitkus/Glades County economy in general rely on these attractions for tourist dollars.

In the last decade, Glades Country has experienced a near doubling of population and industry. One result has been the noticeable increase in the level of water pollution along the coast due primarily to the increased raw sewage dumped by Glades County into the Gulf. Ordinarily, the Glades County sewer system directs effluent waste through filtration plants before pumping it into the Gulf. Although the Glades County Sanitary District (GCSD) usually is able to handle the county’s sewage, during heavy rains the runoff from paved surfaces exceeds sewer capacity and must be diverted past filtration plants, directly in to the Gulf. Following heavy rains, the beaches are cluttered with dead fish and debris. The Gulf fishing trade also is affected; pollution drives away desirable fish. Recently, the water pollution level has become high enough to damage both the tourist and fishing trade. Besides coastal pollution, there is also concern that as the population continues to increase, the county’s primary fresh water source, Glades River, will also become polluted.

The GCSD has been mandated to prepare a comprehensive water waste management program that will reverse the trend in pollution along the Gulf Coast as well as handle the expected increase in effluent wastes over the next 20 years. Although not yet specified, it is known that the program will include new sewers, filtration plants, and stricter anti-pollution laws. As a first step, GCSD must establish the overall direction and mission of the program.

Wherever possible, answer the following questions (given the limited information, it is okay to advance some logical guesses; if you are not able to answer a question for lack of information, indicate how and where, as a systems analyst, you would get it):


1. What is the system? What are its key elements and subsystems? What are the boundaries and how are they determined? What is the environment?

2. Who are the decision makers?

3. What is the problem? Carefully formulate it.

4. Define the overall objective of the water waste management program. Because the program is wide-ranging in scope, you should break this down into several sub- objectives.

5. Define the criteria or measures of performance to be used to determine whether the objectives of the program are being met. Specify several criteria for each sub-objective. As much as possible, the criteria should be quantitative, although some qualitative measures should also be included. How will you know if the criteria that you define are the appropriate ones to use?

6. What are the resources and constraints?

7. Elaborate on the kinds of alternatives and range of solutions to solving the problem.

8. Discuss some techniques that could be used to help evaluate which alternatives are best.


Case 4 West Coast University Medical center

(This is a true story.) West Coast University Medical Center (Pseudonym) is a large university teaching and research hospital with a national reputation for excellence in health care practice, education, and research. Always seeking to sustain that reputation, the senior executive board at the Medical Center (WCMC) decided to install a comprehensive medical diagnostic system. The system would be linked to WCMC’s computer servers and be available to physicians via the computer network. Because every physician’s office at WCMC has a PC, doctors and staff could access the system from these offices as well as from their homes or private-practice offices. By simply clicking icons to access a medical specialty area, then keying in answers to queries about a patient’s symptoms, medical history, and so on, a physician could get a list of diagnostics with associated statistics.

The senior board sent a questionnaire to manager in every department about needs in their areas and how they felt the system might improve doctor’s performances. Most managers felt it would save the doctor’s time and improve their performances. The hospital computing and information systems (CIS) group was assigned to investigate the cost and feasibility of implementing the system. CIS staff interviewed medical-center managers and software vendors specializing in diagnostic systems. The study showed high enthusiasm among the respondents and a long list of potential benefits. Based on the study report, the senior board approved the system.

The CIS manager contacted three well-known consulting firms that specialized in medical diagnostic systems and invited each to give a presentation. Based on the presentations, he chose one firm to assist the CIS group in identifying, selecting, and integrating several software packages into a single, complete diagnostic system.

One year and several million dollars later the project was completed. However, within a year of its completion it was clear that the system had failed. Although it did everything the consultants and software vendors had promised, the few doctors that did access it complained that many of the system “benefits” were irrelevant, and that certain features they desired were lacking.


1. Why was the system a failure?

2. What was the likely cause of its lack of use?

3. What steps or procedures were absent or poorly handled in the project conception phase?


Case 5 X-philes Data Management Corporation

X-philes Data Management Corporation (XDM) requires assistance in tow large projects it is about to undertake: Agentfox and Mulder. Although the projects are comparable in terms of size, technical requirements, and estimated completion time, they are independent and will have their own project managers and teams. Work for both projects is to be contracted to outside consultants.

Two managers at XDM, one assigned each to Agentfox and Mulder, prepare RFPs and send them to several contractors. The RFP for Agentfox includes a statement of work that specifies system performance and quality requirements, a desired completion deadline, and contract conditions. As an incentive, the contractor will receive a bonus for exceeding minimal quality measures and completing the project early, and will be charged a penalty for poor quality and late completion. The project will be tracked using precise quality measures, and the contractor will have to submit detailed monthly status reports. The REP for Mulder simply includes a statement of the type of work to be done, an expected budget limit, and the desired completion date.

Based on proposals received in response to the REPs, the managers responsible for Mulder and Agentfox each select a contractor. Unknown to either manager is that they select the same contractor, Yrisket Systems. Yrisket is selected for the Mulder project because its specified price is somewhat less than the budget limit in the REP, and Yrisket has a good reputation in the business. Yrisket is chosen for the Agentfox contract for similar reasons—good price and good reputation. In responding to the Agentfox REP, Yrisket managers had to work hard to get the price down to the amount specified, but they felt that by doing quality work on the project they could make a tidy profit through the incentive offered.

A few months after the projects are underway, some of Yrisket’s key employees quit their jobs. Thus, to meet their commitments to both projects, Yrisket workers have to work long hours and weekends. It is apparent, however, that these extra efforts might not be enough, especially because Yrisket has a contract with another customer and will have to start a third project in the near future.


1. What do you think will happen?

2. How do you think the crisis facing Yrisket will affect the Mulder project? The Agentfox project?


Case 6 Star-Board Construction/West-Starr Associates

Star-Board Construction (SBC) is the prime contractor for Gargantuan Project, a large skyscraper project in downtown Manhattan. SBC is working directly from drawings received from the architect, West-Starr Associates (WSA). Robert Starr, owner and chief architect of WSA, had designed similar buildings and viewed this one as similar to the others. However, one difference between this building and the others is in its facing, which consists of very large granite slabs—slabs much larger than traditionally used and larger than anything with which either WSA or SBC has had prior experience.

Halfway into project, Kent Star, owner and project manager for SBC, started to receive reports from his site superintendent about recurring problems with window installation. The windows are factory units, premanufactured according to WSA’s specifications. Plans are to install the granite facing on the building according to specifications that allow for dimensional variations in the window units. The architect provided the specification  that a ½-inch tolerance for each window space be made (that is, the window space between granite slabs could vary as much as ¼ inch larger or smaller than the specified value). This created a problem for the construction crew that found the granite slabs too huge to install with such precision. As a result, the spacing between slabs is often too small, making it difficult or impossible to install window units. Most of the 2,000 window units for the building have already been manufactured so it is too late to change their specifications, and most of the granite slabs have been hung on the building. The only recourse for making window units fit into tight spaces would be to grind away or reinstall the granite. It is going to be very expensive and will certainly delay completion of the building.


1. What steps or actions should the architect and contractor have taken before committing to the specifications on the window units and spacing between granite slabs the would have reduced or eliminated this problem?


Professional Communication

02 Sep


A Reply Sent to an Erring Customer

Dear Sir,

Your letter of the 23rd, with a cheque for Rs. 25,000/- on account, is to hand. We note what you say as to the difficulty you experience in collecting your outstanding accounts, but we are compelled to remark that we do not think you are treating us with the consideration we have a right to expect.

It is true that small remittances have been forwarded from time to time, but the debit balance against you has been steadily increasing during the past twelve months until it now stands at the considerable total of Rs. 85,000/-

Having regard to the many years during which you have been a customer of this house and the, generally speaking, satisfactory character of your account, we are reluctant to resort to harsh measures.

We must, however, insist that the existing balance should be cleared off by regular installments of say Rs. 10,000/- per month, the first installment to reach us by the 7th.  In the meantime you shall pay cash for all further goods; we are allowing you an extra 3% discount in lieu of credit. We shall be glad to hear from you about this arrangement, as otherwise we shall have no alternative but definitely to close your account and place the matter in other hands.

Yours truly,


1. Comment on the appropriateness of the sender’s tone to a customer.

2. Point out the old – fashioned phrases and expressions.

3. Rewrite the reply according to the principles of effective writing in business.


Case II

Advertising Radio FM Brand

A young, gorgeous woman is standing in front of her apartment window dancing to the 1970s tune, “All Right Now” by the one – hit band free.  Across the street a young man looks out of his apartment window and notices her.  He moves closer to the window, taking interest.  She cranks up the volume and continues dancing, looking out the window at the fellow, who smiles hopefully and waves meekly.  He holds up a bottle of wine and waves it, apparently inviting her over for a drink.  The lady waves back.  He kisses the bottle and excitedly says, “Yesss.”  Then, he gazes around his apartment and realizes that it is a mess. “No!” he exclaims in a worried tone of voice.

Frantically, he does his best to quickly clean up the place, stuffing papers under the sofa and putting old food back in the refrigerator, He slips on a black shirt, slicks  back his hair, sniffs his armpit, and lets out an excited , “Yeahhh!” in eager anticipation of entertaining the young lady.  He goes back to the window and sees the woman still dancing away.  He points to his watch, as if to say “Come on.  It is getting late.”   As she just continues dancing, he looks confused.  Then a look of sudden insight appears on his face, “Five,” he says to himself.  He turns on his radio, and it too is playing “All Right Now.”  The man goes to his window and starts dancing as he watches his lady friend continue stepping.  “Five, yeah,” he says as he makes the “okay” sign with his thumb and forefinger.  He waves again.  Everyone in the apartment building is dancing by their window to “All Right Now.”  A super appears on the screen: “Are you on the right wavelength?”


1. What is non – verbal communication? Why do you suppose that this commercial relies primarily on non-verbal communication between a young man and a gorgeous woman? What types of non – verbal communication are being used in this case?

2. Would any of the non-verbal communications in this spot (ad) not work well in another culture?

3. What role does music play in this spot? Who is the target market?

4. Is the music at all distracting from the message?

5. How else are radio stations advertised on TV?




Mr. R P Sinha is a MBA.  He is being interviewed for the position of Management Trainee at a reputed company.  The selection committee’s is chaired by a lady Vice – President.  Mr. Sinha’s interview was as follows:

Committee: Good morning!

Mr. Sinha: Good morning to Sirs and Madam!

Chairperson: Please, sit down.

Mr. Sinha : Thank you (sits down at the edge of the chair, keeps his portfolio on the table)

  1. Chairperson: You are Mr. R. P. Sinha

A Sinha: Yes, Madam.  This is how I am called.

  1. Chairperson: You have passed MBA with 1st Division.
  2. Sinha: Yes, Madam.
  3. Chairperson: Why do you want to work in our organization?

A Sinha: It is just like that.  Also, because it has good reputation.

  1. Member A: This job is considered to be quite stressful. Do you think you can manage the stress involved.
  2. Sinha: I think there is too much talk about stress these days. Sir, would you tell clearly what you mean by stress? I am very strong for any stress.
  3. Member B: What are your strengths?
  4. Sinha: Sir, who am I talk boastfully about my strengths. You should tell me my strengths.
  5. Member C: What are your weaknesses?
  6. Sinha: I become angry very fast.
  7. Member A: Do you want to ask us any questions?

A Sinha: Yes Sir!  What are the future chances for one who starts as a management trainee?

The member tells M. Sinha the typical career path for those starting as Management Trainee.  The Chairperson thanks Mr. Sinha.  Mr. Sinha promptly says in reply, “you are welcome,” and comes out.


1. Do you find Mr. Sinha’s responses to various questions effective? Give reasons for your view on each answer given by Mr. Sinha.

2. Rewrite the responses that you consider most effective to the above questions in a job interview.

3. Mr. Sinha has observed the norm of respectful behavior and polite conversation. But, do you think there is something gone wrong in his case?  Account for your general impression of Mr. Sinha’s performance at the interview.


Case IV

Outsourcing Backlash Gets Abusive, Ugly

I don’t want to speak to you. Connect to your boss in the US,” hissed the American on the phone. The young girl at a Bangalore call centre tried to be as polite as she could.

At another call centre, another day, another young girl had a Londoner unleashing himself on her, “Young lady do you know that because of you Indians we are losing jobs.”

The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young men and women taking calls at these outsourced job centers. Supervisors tell them to be “cool”.

Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm says,” Companies involved in outsourcing both in the US and India are already getting a lot of hate mail against outsourcing and it is hardly surprising that some people should behave like this on the telephone.” Vashistha says Indian call centers should train their operators how to handle such calls.

Indeed, the furore raised by the western media over job losses because of outsourcing has made ordinary citizens there sensitive to the fact that their call are being taken not from their midst but in countries, such as India and the Philippines.

The angry outbursts the operators face border on the racist and sexist, says the manager of a call center in Hyderabad. But operators and senior executives of call centers reguse to go on record for fear of kicking up a controversy that might result in their companies’ losing clients overseas.

“It’s happening often enough and so let’s face it,” says a senior executive of a Gurgaon call centre, adding, “This doesn’t have any impact on business.”


1. Assume you are working as an operator at a call centre in India and are receiving irate calls from Americans and Lodoners. How would you handle such calls? Conceive a short conversation between you and your client, and put it on paper.

2. “Keep your cool.” What does this mean in term of conversation control?

3. Do you agree with the view that such abusive happenings on the telephone do not have any impact on business? Justify.

Professional Communication Skills

02 Sep

Case I

HAZARDS OF HILLS                                                  


This case is based on an actual incident which took place in an Army Unit deployed in field area. A part of a Battery (about ¼ of an Artillery Regiment) was deployed in a snow bound high altitude area of Kashmir. This was the first time, an artillery unit was deployed in an area with roads and tracks still under development. Preparation of this area for such a development needed a lot of digging for guns, pits for ammunition storage, living place of the personnel, slit trenches and weapon pits for local defence against any possible enemy/terrorists’ attack on the position, place for storage of rations, cook-house and communication trenches, etc.

The total strength of the party deployed there was

  1. Officer – 1 (Second Lieutenant with about one year service)
  2. Junior Commissioned Officer (JCO) – 1]
  3. Jawans – 40

The Battery Commander (BC) remained with the Regiment Headquarters at Srinagar (with the remaining part of the Battery) as per the orders of the commanding Officer. There was a vehicle with the part of the Battery which was deployed at high altitude to assist in the daily administration of the troops like collection of ration, stores for preparation of defences, water, and ferrying of personnel from one place to another. The vehicle could go only upto a limited number of places due to bad road conditions and steep gradients. Only one driver was kept for this vehicle to reduce administrative problems due to more number of personnel. The vehicle completed about 35 to 40 kms. of running daily in its routine commitments.

The part had just been inducted about two weeks back. The defences were being prepared which involved lot of effort in digging of hardened ground due to the cold winter months of November. The defence stores were to be collected, once the digging was complete, from another Engineering Unit located about 5 kms. to the rear. The roads were treacherous; with a number of stones and slides falling down occasionally during drizzle due to precipitation in atmosphere, there were steep gradients, narrow roads with sheer falls on one side due to the road having cut into the side of hills. The digging was complete by end November. In the month of December, snow fall at that location was expected any time, as it had already started snowing in the higher reaches and tops of mountains. The digging had been completed in a record time of two weeks. The party under the stewardship of the young officer had done a commendable job.

In the first week of December, the only driver of the vehicle reported pain in the chest and problem in breathing. He was evacuated by helicopter the next day with instructions to inform the unit to send another driver for the vehicle. It took about three days for any one to reach this area, with staying of two nights enroute in order to acclimatise by stages. The detachment was to be without any driver for about three days. Another driver was detailed to proceed to this area, after having been medically examined and found fit. A day after the dispatch of the driver, the young officer with this party arrived in the unit and reported that the vehicle had fallen from a hill-side road and was completely damaged. The office was in a complete state of disarray and shock. What actually had happened goes something like this.

After the first driver of the vehicle was evacuated, the weather started turning bad and it seemed that it was going to snow that day. The officer realised that in case of snow fall all the efforts put in by the troops would go waste, if the dug-ins were not covered. Realising this, he borrowed a driver of an ambulance from a local medical unit to direct his vehicle for collection of defence stores. After the stores had been collected and dumped at the site of defences, the vehicle was being driven back to the party’s location. Before it could reach this location, it had to negotiate a dusty and steep track. At a steep climb the vehicle stalled and got switched off. All the men got down, prevented the vehicle from reversing by putting stones behind the wheels and started checking what had gone wrong. After the check on the engine had been carried out, the bonnet cover slipped off the hands of the driver while closing it and fell to closing it and fell to closing position with a bang. Because of the jerk thus created, the stones placed behind the vehicle slipped off. It was later discovered that there was a glassy smooth layer of ice under the thin layer of dirt which could not hold the stones firmly and stopped upside down because of the obstruction created by a big boulder. As there was no one in the vehicle, there were no injuries to personnel. On close inspection by the officers, it was found that the vehicle body, cabin, bonnet steering wheel and two of the four wheels were badly damaged. The office, being quite young and inexperienced, could not ascertain the real condition of the engine and chassis. He thought those too were damaged, whereas because of some providential chance, the chassis and engine remained intact.

The BC was given the responsibility of getting the vehicle back to the unit. He was given a vehicle fitter and recovery vehicle with a driver. The BC took two more Non-Commissioned Officers (NCOs) and proceeded to the location to retrieve the vehicle. It took two days to reach with a few hours of the last leg of the journey in complete darkness in that snow bound area with treacherous slippery roads. On reaching the location, the Commanding Officer of the local unit, who happened to be the Station Commander of that sector, expressed his unhappiness on their taking such a great risk. With the assistance of all ranks of that unit, who came in willingly, it took two days to get the vehicle out of the boulder strewn area on to a track. It was a minor military operation in itself in that hostile terrain, and inclement weather of high altitude. The troops and officer had a very good rapport with those of the local unit and there was not much of a problem in getting the men of that unit to assist.

While coming back, the hazards of night journey were very obvious. There was a thick layer of snow on the road with slope towards the khuds as layers after layers kept on accumulating, freezing before the water could roll down the complete slope. There were steep falls on one side. Both these phenomena, peculiar to hilly terrain, were not very discernible because of the darkness. The headlights of the vehicles exposed very little. There were frozen nalas where the vehicle would skid, aligning itself in the direction of the frozen nala, which tended to prove quite dangerous at times. At such places, the few troops and officer available would get down, push the vehicle to keep it aligned to the road and in turn slip down themselves on the frozen snow, most of the times face-down, in an attempt to push the vehicle. Though the situation was quite grave, it sometimes bordered on being humorous with everyone laughing spontaneously. At one place, the BC, pushing the vehicle to keep its tail and aligned to the direction of road, fell down, slipped a few feet down the frozen nala and landed up head down in a frozen khud about five feet deep. But for the direction of landing, the slip and fall could have proved quite dangerous. There was complete silence. The vehicle was gently stopped on the snow itself, secured with pegs along the wheels and rescue operation commenced for the ditch. There were several humorous remarks by the BC and the tension was relieved at once, with troops working on the vehicle with renewed vigour and strength once again.

At another place, the recovery vehicle with the damaged vehicle behind it at suspension toe slipped, but because of the dexerity of the driver, it was saved from going down a nala by putting it on the left. The BC himself was in the recovery vehicle to give encouragement and moral support to the driver, sharing all the risks which his troops were facing. He did all that the troops did, while directing, controlling and executing. The party with the vehicle, reached the unit location on the evening of the second day after starting from a high altitude area. The problem of recovery of the vehicle being resolved, the question of enquiry into the caused embarrassment to all those in authority in the unit and also the officers and jawans of the sub-unit/battery. Meanwhile, the inspection of the vehicle was carried out to assess the extent of damage. It was found that the engine and chasis were intact and the rest of the items of the body or fitment were damaged, either lightly or severely. To avoid embarrassment to the unit and loss to the exchequer, as well as in view of the administrative difficulties, the BC decided to have the vehicle put on road with the units’ efforts and at the earliest. Meanwhile, the cabin-hood of the vehicle had been purchased for about Rs 650 and was paid for by the BC, from his own pocket, thus setting an example to others. The JCO and jawans were also keen to pay for other damages. The offer was appreciated but declined. The Officer-in-charge of the local Army Workshop happened to be an officer with commendable helping attitude, positive bent of mind and with an understanding of peculiarities and problems of the area where such accidents were quite frequent and possible. When approached to assist, he listened to the whole incident very sympathetically and promised to assist in whatever way he could. This officer was a contemporary of the unit in a previous station and had excellent relations and interaction with the unit. Some items were offered by the workshop officer and replaced accordingly. The vehicle was made roadworthy again within a fortnight and put on road for duty. All the enquiries were dispensed with and there was no loss of face by anyone at any level. It is pertinent to mention that it had snowed in that location as soon as the recovery party came out of the hills.


1. What are the qualities of a good leader? In this case, how were they applied?

2. Which factors contributed to motivate the troops to go ahead for such a difficult task as recovering a damaged vehicle from such a difficult and treacherous terrain and getting it repaired in such a short time?

3. Which incidents indicate the importance of good interpersonal relationships with juniors, peers and superiors and what is the importance of good interpersonal relationships?


Case II

Checking Out a Guest

A guest walked up to the front desk agent in an upscale hotel, ready to check out. As she would normally do when checking out a guest, the agent asked the guest what his room number was. The guest was in a hurry and showed his anxiety by responding, “I stay in a hundred hotel rooms and you expect me to remember my room number?”

The agent then asked for the guest’s name, to which he responded, “My name is Mr. Johnstein.” After thanking him, the agent began to look for the guest’s last name, but the name was not listed in the computer. Because the man had a heavy accent and the agent assumed that she had misunderstood him, she politely asked the guest to spell his last name. He answered, “What? Are you an idiot? The person who checked me in last night had no problem checking me in.” Again, the agent looked on the computer to find the guest.

The guest, becoming even more frustrated, said, “I have a plane to catch and it is ridiculous that it has to take this long to check me out. I also need to fax these papers off, but I need to have them photocopied first.” The agent responded, “There is a business center at the end of the counter that will fax and photocopy what you for it. Haven’t you ever heard of customer service? Isn’t this a five-star hotel? With your bad attitude, you should be working in a three-star hotel. I can’t believe they let you work here at the front desk. Haven’t you found my name yet?”

The agent, who was beginning to get upset, asked the guest again to spell out his full name. The guest only replied, “Here are my papers I want faxed if you are capable of faxing them.” The agent reached to take the papers, and the guest shouted, “Don’t grab them from my hand! You have a bad attitude, and if I had more time, I would talk to someone about getting you removed from your position to a hotel where they don’t require such a level of customer service.” The agent was very upset, but kept herself calm in order to prevent the guest from getting angrier.

The agent continued to provide service to the guest, sending the faxes and making the photocopies he had requested. Upon her return, the agent again asked the guest to repeat his last name, since he had failed to spell it out. The guest replied by spelling out his name, “J-o-h-n-s-t-o-n-e.” The agent was finally able to find his name on the computer and checked him out, while he continued to verbally attack her. The agent finished by telling the guest to have a nice flight.


1. Is it appropriate to have the manager finish the check-out? Or, should the front desk agent just take the heat?

2. Would you have handled the situation in the same manner?

3. What would you have done differently?

4. Communication improvement is required for both of the parties involved or any one of them? Justify your opinion.




Mr. R P Sinha is a MBA.  He is being interviewed for the position of Management Trainee at a reputed company.  The selection committee’s is chaired by a lady Vice – President.  Mr. Sinha’s interview was as follows :

Committee : Good morning !

Mr. Sinha : Good morning to Sirs and Madam !

Chairperson : Please, sit down.

Mr. Sinha : Thank you (sits down at the edge of the chair, keeps his portfolio on the table)

  1. Chairperson : You are Mr. R. P. Sinha

A Sinha : Yes, Madam.  This is how I am called.

  1. Chairperson : You have passed MBA with 1st Division.
  2. Sinha : Yes, Madam.
  3. Chairperson : Why do you want to work in our organization ?

A Sinha : It is just like that.  Also, because it has good reputation.

  1. Member A : This job is considered to be quite stressful. Do you think you can manage the stress involved.
  2. Sinha : I think there is too much talk about stress these days. Sir, would you tell clearly what you mean by stress ? I am very strong for any stress.
  3. Member B : What are your strengths ?
  4. Sinha : Sir, who am I talk boastfully about my strengths. You should tell me my strengths.
  5. Member C : What are your weaknesses ?
  6. Sinha : I become angry very fast.
  7. Member A : Do you want to ask us any questions ?

A Sinha : Yes Sir !  What are the future chances for one who starts as a management trainee ?

The member tells M. Sinha the typical career path for those starting as Management Trainee.  The Chairperson thanks Mr. Sinha.  Mr. Sinha promptly says in reply, “you are welcome,” and comes out.


1. Do you find Mr. Sinha’s responses to various questions effective? Give reasons for your view on each answer given by Mr. Sinha.

2. Rewrite the responses that you consider most effective to the above questions in a job interview.

3. Mr. Sinha has observed the norm of respectful behaviour and polite conversation. But, do you think there is something gone wrong in his case? Account for your general impression of Mr. Sinha’s performance at the interview.


Case IV

Outsourcing Backlash Gets Abusive, Ugly

I don’t want to speak to you. Connect to your boss in the US,” hissed the American on the phone. The young girl at a Bangalore call centre tried to be as polite as she could.

At another call centre, another day, another yound girl had a Londoner unleashing himself on her, “ Yound lady do you know that because of you Indians we are losing jobs.”

The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young men and women taking calls at these outsourced job centers. Supervisors tell them to be “cool”.

Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm says,” Companies involved in outsourcing both in the US and India are already getting a lot of hate mail against outsourcing and it is hardly surprising that some people should behave like this on the telephone.” Vashistha says Indian call centers should train their operators how to handle such calls.

Indeed, the furore raised by the western media over job losses because of outsourcing has made ordinary citizens there sensitive to the fact that their call are being taken not from their midst but in countries, such as India and the Philippines.

The angry outbursts the operators face border on the racist and sexist, says the manager of a call center in Hyderabad. But operators and senior executives of call centers reguse to go on record for fear of kicking up a controversy that might result in their companies’ losing clients overseas.

“It’s happening often enough and so let’s face it,” says a senior executive of a Gurgaon call centre, adding, “This doesn’t have any impact on business.”


1. Assume you are working as an operator at a call centre in India and are receiving irate calls from Americans and Lodoners. How would you handle such calls? Conceive a short conversation between you and your client, and put it on paper.

2. “Keep your cool.” What does this mean in term of conversation control?

3. Do you agree with the view that such abusive happenings on the telephone do not have any impact on business? Justify.

Production Planning & Inventory

02 Sep

1. In your Opinion, where is India on the trajectory of the changing operations management function? Discuss.

2. How are people important in an operations strategy? Discuss what needs to be done in your organizationand in India, in general.

3. Suppose the average cost of maintenance for a piece of equipment is related to its life as follows:

Period Cost, Rs. Period Cost, Rs.
1 50 7 230
2 70 8 270
3 90 9 340
4 120 10 410
5 150 11 480
6 190 12 560

If the purchase price of the new equipment is Rs.1,600, what is the optimal life of the equipment (whenreplacement with new equipment is done)?

(Assume that there is no salvage value. The firm uses 10% discount rate per period.)

4. Read through the literature and find out what Technology Assessment‘ is? How is it useful tooperations management?

5. What is organizational learning? Is it important for quality? Discuss.

6. How does one ensure that ‘job evaluation evaluates the job and not the man’?

7. Discuss the importance of training in the context of job redesign.

8. Group Technology as applied to a operations system is a human relations technology.‘ Would youagree with this statement? Discuss

9. Should cost be the primary criterion in operations planning? Explain.

10. What role for production and operations management do you foresee in another 15-20 years time in India?

Production Management

02 Sep

Q.1: Identify the appropriate level of risk for the following items and justify your answer.

(a) Space Shuttle

(b) X-ray machine

(c) Camera

(d) Canned soup

(e) Pencil

(f) Computer keyboard

(g) Chair

(h)Running shoe

(i) Automobile

(j) Fresh vegetables

(k) Child‘s toy

(l) Golf club

(m) Baby food

(n) Restaurant food

Q.2: The bearing department is planning their schedule for the following week. They need an understanding of last week’s performance. The schedule called for two 8-hour shifts per day for five days. Downtime charged toproduction averaged 76 minutes per day. Downtime charged to maintenance averaged 135 minutes per day.

Calculate the actual running time and the percentage of available time.

Q.3: (a) Does exponential smoothing track a trend in the demand satisfactorily? What is the reason?

(b) How would forecasting be useful for operations in a BPO unit? What factors may be important for thisindustry? Discuss

Q.4: (a) Would a six sigma implementation involve significant financial investment? Discuss

(b) Can total organizational satisfaction be achieved while a company is also aiming for key businessresults? Is there a conflict in these two goals? Discuss.

Q.5: How would have good production & Operations Management Practices averted the terrible Bhopal Gasstrategy? Research & Discuss

Q.6: Differentiate between Loading and Scheduling. Is a clear-cut distinction between the two possible underall production situations? If so where is it possible & where is it not possible?

Q.7: What are the advantages of the HMMS model over the Linear programming model? The HMMS.and othersophisticated models have not been very popular in practice. What may be the reasons?

Q.8: What is the scope of purchasing activities? Where would you fit purchasing in the materials managementfunction? In the Organizational structure, where should purchasing be fitted?

(i) in a single plant situation (ii) in a multiple plant situation

Q.9: Some say that we need a ―national level job evaluation‖ in India. Can you envisage the issues involved? Isit possible to do such a national level exercise? How would you proceed in this regard?

Q.10: How can work study be used for arriving at (i) Manufacturing Budget (ii) Production Plan (iii) PersonnelPolicies (iv) Materials Planning? Explain.

Principles of Practice Management

02 Sep

CASE – 1 

Aravali Hospital was built two years ago, and currently has a workforce of 215 people. The hospital is small, but because it is new, it is extremely efficient. The board has voted to increase its capacity from 60 to 180 beds. By this time next year, the hospital will over three times as large as now, in terms of both beds and personnel.

The administrator, Maya Joshi, feels that the major problem with this proposed increase is that hospital will lose its efficiency. “I want to hire people who are just like our current team of personnel—hardworking, dedicated talented, and able to interact well with patients. If we triple the number of employees, I do not see how it will be possible to maintain our quality of patient care. We are going to lose our family atmosphere. We will be inundated with mediocrity, and we will end up being like every other institution in the local area—large and uncaring.”

The chairman of the board is also concerned about the effect of hiring such a large number of employees. However, he believes that Joshi is over-reacting. “It cannot be that hard to find people who are like our current staff. There must be a lot of people out there who are just as good. What you need to do is develop a plan of action that will allow you to carefully screen those who will fit into your current organisational culture, and those who will not. It is not going to be as difficult as you believe. Trust me. Everything will work out just fine”.

As a result of the chairman’s comments, Joshi had decided that the most effective way of dealing with the situation is to develop a plan of action. She intends to meet with her administrative group and determine the best way of screening incoming candidates, and then helping those who are hired to become socialised in terms of the hospital’s culture. Joshi has called a meeting for day after tomorrow. At that time, she intends to discuss her ideas, get suggestions from her people, and then formulate a plan of action.


1. What can Joshi and her staff do to select the type of entry-level candidates they want?

2. How can Joshi ensure that those who are hired come to accept the core cultural values of the hospital? What steps would you recommend?


CASE – 2

Leo Medical Diagnostic and Research Center has patented its new invention of poly fiber cardiovascular valve. The product developed is a novel one and can be manufactured at a very low cost. The utility and life of the product in laboratory testing was found to be more than the life of the patients. The product could enhance the life of patient by at least five years. Considering all these factors Leo Medical Diagnostic and Research Center chose to set a unit to manufacture the product. However, the company has a dilemma. As the product is new and requires the acceptance of medical community, it is considering appointing a promotion and sales co-coordinator to manage the promotional and communication efforts of the firm.


(a) Do you think the number of units of a product to be manufactured is a random number? Explain your reasoning.

(b) How does one determine the number of units of a product to be manufactured in an organisation?

(c) What are the elements you would take into consideration for forecasting the production and sales requirement of the product developed by Leo Medical Center?

(d) How would you go about planning and organising the manufacturing and selling efforts of the organisation?


CASE – 3

Hari Mohan has a position on the corporate planning staff of a large company in a high technology industry. Although he has spent most of his time on long-range, strategic planning for the company, he has been appointed to a task force to reorganize the company. The president and the board of directors are concerned that they are losing their competitive position in the industry because of an outdated organisation structure. Being a planning expert, Hari Mohan convinced the task force that they should proceed by first determining exactly what type of structure they have now, then determining what type of environment the company faces, now and in the future, and then designing the organisation structure accordingly. In the first phase, they discovered that the organisation is currently structured along classic bureaucratic lines. In the second phase, they found that they are competing in a highly dynamic, rapidly growing and uncertain environment that requires a great deal of flexibility and response to change.


(a) What type or types of organisation design do you feel this task force should recommend in the third and final phase of the approach to their assignment?

(b) Explain how the systems and the contingency theories of organisation can each contribute to the analysis of this case.

(c) Do you think Hari Mohan was correct in his suggestion of how the task force should proceed? What types of problems might develop as by-products of the recommendation you made in question 1?


CASE – 4

Bharat Engineering Works Limited is a major industrial machineries besides other engineering products. It has enjoyed market preference for its machineries because of limited competition in the field. Usually there have been more orders than what the company could supply. However, the scenario changed quickly because of the entry of two new competitors in the field with foreign technological collaboration. For the first time, the company faced problem in marketing its products with usual profit margin. Sensing the likely problem, the chief executive appointed Mr Arvind Kumar as general manager to direct the operations of industrial machinery division. Mr Kumar had similar assignment abroad before coming back to India.

Mr Kumar had a discussion with the chief executive about the nature of the problem being faced by the company so that he could fix up his priority. The chief executive advised him to consult various heads of department to have first hand information. However, he emphasised that the company lacked an integrated planning system while members of the Board of Directors insisted on introducing this in several meetings both formally and informally.

After joining as General Manager, Mr Kumar got briefings from the heads of all departments. He asked all heads to identify major problems and issues concerning them. The marketing manager indicated that in order to achieve higher sales, he needed more sales support. Sales people had no central organisation to provide sales support nor was there a generous budget for demonstration teams which could be sent to customers to win business.

The production manager complained about the old machines and equipments used in manufacturing. Therefore, cost of production was high but without corresponding quality. While competitors had better equipments and machinery, Bharat Engineering had neither replaced its age-old plant nor reconditioned it. Therefore to reduced the cost, it was essential to automate production lines by installing new equipment.

Director of research and development did not have specific problem and therefore, did not indicate for any change. However, a principal scientist in R&D indicated on one day that the director of R&D, though very nice in his approach, did not emphasize on short-term research projects, which could easily increase production efficiency by at least 20 per cent within a very short period without any major capital outlay.


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

(b) What steps should be taken by Mr Kumar to overcome these problems?


CASE – 5  

The president of Simplex Mills sat at his desk in the hushed atmosphere, so typical of business offices, after the close of working hours. He was thinking about Rehman, the manager in-charge of purchasing, and his ability to work with George, the production manager, and Vipulabh, the marketing and sales manager in the firm.

When the purchasing department was established two years ago, both George and Vipulabh agreed with the need to centralise this function and place a specialist in charge. George was of the view that this would free his supervisors from detailed ordering activities. Vipulabh opined that the flow of materials into the firm was important enough to warrant a specialised management assignment. Yet since the purchasing department began operating it has been precisely these two managers who have had a number of confrontations with the new purchase manager, and occasionally with one another, in regard to the way the purchasing function in being carried out.

From George’s point of view, instead of simplifying his job as production manager by taking care of purchasing for him, the purchasing department has developed a formal set of procedures that has resulted in as much time commitment on his part as he had previously spent in placing his orders directly with vendors. Further, he is specially irritated by the fact that his need for particular items or particular specification is constantly being questioned by the purchasing department. When the department was established, George assumed that the purchasing manager was there to fill his needs, not to question them.

As Vipulabh sees it, the purchasing function is an integral part of marketing function, and the two therefore need to be jointly managed as a unified process. Purchasing function cannot be separated from a firm’s overall marketing strategy. However, Rehman has attempted to carry out the purchasing function without regard for this obvious relationship between his responsibilities and those of Vipulabh, thus making a unified marketing strategy impossible.

In his previous position, Rehman had worked in the purchasing department of a firm considerably larger than Simplex. Before being hired, he was interviewed by all the top managers, including George and Vipulabh, but it was the president himself who negotiated the details of the job offer. As Rehman sees it, he was hired as a professional to do a professional job. Both George and Vipulabh have been distracting him from this goal by presuming that he is somehow subordinate to them, which he believes is not the case. The people in the production department, who use the purchasing function most, have complained about the detail that he requires on their requisitions. But he has documented proof that materials are now being purchased much more economically than they were under the former decentralised system. He finds Vipulabh’s interests more difficult to understand, since he sees no particular relationship between his responsibilities for efficient procurement, and Vipulabh’s responsibilities to market the firm’s products.

The president has been aware of the continuing conflict among three managers for some time, but on the theory that a little rivalry is healthy and stimulating, he has felt that it was nothing to be unduly concerned about. But now that much of his time is being taken up by much of what he considers to be petty bickering, the time has come to take some positive action.


1. Is George’s view of the situation realistic?

2. How do you evaluate Vipulabh’s position?

3. How might this conflict be associated with factors in the formal organisation?

4. What should the president of Simplex Mills do now?

Principles and Practice of Management

02 Sep

Case I

McDonald’s: Serving Fast Food Around the World

Ray Kroc opened the first McDonald’s restaurant in 1955.  He offered a limited menu of high-quality, moderately-priced food served fast 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 6000 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.

In 1967 McDonald’s opened its first restaurant outside the United States, in Canada.  Since then, the international growth accelerated.  In 1995, the “Big Six” countries that provide about 80 percent of the international operating income are: Canada, Japan, Germany, Australia, France, and England.  In the same year, more that 7000 restaurants in 89 countries generated sales of $14 billion. Yet fast food has barely touched many cultures.  The opportunities for expanding the market are great when one realizes that 99 percent of the world population is not yet McDonald’s customers.  For example, in China, with a population of 1.2 billion people, there are only 62 McDonald’s restaurants (1995).  McDonald’s vision is to be the major player in food services around the world.

In Europe, McDonald 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 1982 attracted some 40,000 people to the largest (28,000 square-foot) restaurant at a location where some 8, 00,000 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 995, 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 the United States.

The prices vary considerably around the world ranging from $5.20 in Switzerland to $1.05 in China for the Big Mac that costs in the United States $2.32.  The Economist magazine even devised a “Big Mac Index” to estimate whether a currency is over or undervalued.  Thus, the $1.05 Chinese Mac translates into an implied Purchasing Power Parity of $3.88.  The inference is that the Chinese currency is undervalued while the Swiss Franc is overvalued.  Here are other prices for the $2.32 U.S. Big Mac. Britain, $2.80, Denmark $4,92, France $3.23, Japan $4.65, and Russia $1.62.

Its traditional menu has been surprisingly successful.  People with diverse dining habits have adopted burgers and fries whole heartedly.  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 with frankfurter 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’s stays in close contact with its customers who want good taste, fast and friendly service, clean surroundings, and quality.  To attain quality, the so called Quality Assurance Centers (QACs) , are located in the U.S., Europe, and Asia.  In addition, training plays an important part in serving the customers.  Besides day-to-day coaching, Hamburger Universities in the U.S., Germany, England, Japan, and Australia, teach the skills in 22 languages with the aim of providing 100 percent 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 also in many restaurants they are also entertained with crayons and paper , a playland, and the clown Ronald McDonald’s , who can speak twenty languages.

With the 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 franchises 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 manager 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 OSC&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 precuts by controlling every stage of the distribution.  Regional distribution centers purchase precuts and distribute them to individual restaurants.  The centers will buy from local suppliers if the suppliers can meet detailed specifications.  McDonald’s has had to make some concessions to available products.  For example,  it is difficult to introduce the Idaho potato in Europe.

McDonald’s uses essentially the same competitive strategy in every country: Be first in a market, and establish its 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 restaurants 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 U.S. 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 abroad have been recommended by the local restaurants.

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

European and South American restaurants are generally company-operated or franchised (although there are many affiliates – joint ventures – in France).  Like the U.S. franchises, restaurants abroad 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 reheatable containers is now also sold in supermarkets, delicatessens (a store selling foods already prepared or requiring little preparation for serving) 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 (halt the Japanese market) in 1996 compared to only 43 Burger King restaurants.  However, the British food conglomerate Grand Metropolitan PLC that owns Burger King has an aggressive strategy for Asia.  Although McDonald’s is in a very favourable competitive position at this time, can this success continue ?

Questions :

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 has 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. Should McDonald’s expand its menu? If you say no, then why not? If you say yes, what kinds of precuts should it add?

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


Case No. :2

 Developing Verifiable Goals

The division manager had recently heard a lecture on management by objectives.  His enthusiasm, kindled at that time, tended to grow the more the thought about it.  He finally decided to introduce the concept and see what headway he could make at his next staff meeting.

He recounted the theoretical developments in this technique, cited the advantages to the division of its application, and asked his subordinates to think about adopting it.

It was not as easy as everyone had thought.  At the next meeting, several questions were raised. “Do you have division goals assigned by the president to you for next year ?” the finance  manager wanted to know.

“No, I do not,” the division manager replied. “I have been waiting for the president’s office to tell me what is expected, but they act as if they will do nothing about the matter.”

“What is the division to do, then?” the manager of production asked, rather hoping that no action would be indicted.

“I intend to list my expectations for the division,” the division manager said. “There is not much mystery about them.  I expect $30 million in sales; a profit on sales before taxes of 8 percent; a return on investment of 15 percent; an ongoing program in effect by June 30, with specific characteristics I will list later, to develop our own future managers; the completion of development work on our XZ model by the end of the year; and stabilization of employee turnover at 5 percent.’’

The staff was stunned that their superior had thought through to these verifiable objectives and stated them with such clarity and assurance. They were also surprised about his sincerity in wanting to achieve them.

During the next month I want each of you to translate these objectives into verifiable goals for your own functions. Naturally they will be different for finance, marketing, production, engineering, and administration. However you state them, I will expect them to add up to the realization of the division goals.’’

Questions :

1. Can a division manager develop verifiable goals, or objectives, when the president has not assigned them to him or her? How? What king of information or help do you believe is important for the division manager to have from headquarters?

2. Was the division manager setting goals in the best way? What would you have done?


Case No. :3

The Daimler-Chrysler Merger: A New World Order?

In May 1998, Daimler-Benz, the biggest industrial firm in Europe and Chrysler, the third largest carmaker in the US merged. The carefully planned merger seemed to be a “strategic fit.’’ Chrysler with its lower-priced cars, light trucks, pickups, and its successful minivans appeared to complement Daimler’s luxury cars, commercial vehicles, and sport utilities. There was little product-line overlap with the exception of the Chrysler’s Jeep and Daimler’s Mercedes M-Class sport utility vehicles.

The merger followed a trend of other consolidations. General Motors owns 50 percent of Swedish Saab AB and has subsidiaries Opel in Germany and Vaxuhall in England. Ford acquired British Jaguar and Aston Martin. The German carmaker BMW acquired British Rover, and Rolls Royce successfully sold its interests to Volkswagen and BMW. On the other hand, the attempted merger of Volvo and Renault failed and Ford later acquired Volvo.

The Daimler-Chrysler cross-cultural merger has the advantage of both CEO’s having international experience and knowledge of both German and American cultures. Chrysler’s Robert Eaton had experience in restyling Opel cars in GM’s European operation. Mr. Lutz, the co-chair at Chrysler, speaks fluent German, English, French, and Italian, and has past work experience with BMW, GM, and Ford. Daimler’s CEO Juergen Schrempp worked in the US with Euclid Inc. and has experience in South Africa giving him a global perspective.


Lee lacocca, the colorful Chrysler Chairman left Ford for Chrysler because of a clash with Henry  Ford II in 1978. He is credited with saving Chrysler from bankruptcy in 1979/1980, when he negotiated a loan guaranty from the US government. Iacocca also led Chrysler’s CEO who negotiated the 1998 merger with Daimler, replaced Iacocca in 1992.

At the time of the merger, Daimler was selling fewer vehicles than Chrysler, but had higher revenues. Daimler’s  300,000 employees worldwide produced 715,000 cars and 417,000 trucks and commercial vehicles in 1997. The company

was also in the business of airplanes, trains, and helicopters, and two thirds of its revenue came from outside Germany.

So, why would Daimler in Stuttgart go to Chrysler in Detroit? The companies had complementary product lines and Chrysler saw the merger as an opportunity to over come some of the European trade barriers; but the primary reasons for mergers in the auto industry are technology (high fixed costs) and overcapacity. Only those companies with economies of scale can survive. Mr. Park, the President of Hyundai Motor Company stated that the production lines in Korea operate at about 50 percent of capacity in 1998. The auto industry could produce about 1/3 more cars. It has been predicted that only six or seven major carmakers will be able to survive in the next century. This makes merger more of a competitive necessity than a competitive or strategic advantage.

Daimler + Chrysler = New Car Company

In the late 1980s and the early 1990s, the Japanese made great strides in the auto industry through efficient production and high quality. Now the German carmaker changes the car industry with the Daimler-Chrysler merger in which the former having 53 percent ownership and the latter the rest. The new car company is now the fifth largest in the world and could become the volume producer in the whole product line range.

The respective strengths are that Daimler is known for its luxury cars and its innovation in small cars (A-Class, Smart Car). Chrysler, on the other hand, has an average profit per vehicle that is the highest among the Big 3 (GM, Ford, and Chrysler) in Detroit, thanks to the high margins on minivans and Jeeps. Chrysler is also known for its highly skilled management and efficient production. Low cost and simplicity (e.g. Neon model) are other hallmarks of Chrysler.

Juergen Schrempp – A Shake-Up Artist?

Besides arranging for the Daimler-Chrysler merger, Juergen Schrempp initiated many changes in the German operation. When he took office, he felt that the company was without purpose and direction. Consequently, he divested AEF and reduced the number of businesses from 35 to 23. His emphasis on shareholder value is counter to traditional German business culture. Schrempp models his

managerial style after General Electric CEO Jack Welch. Welch believes the GE should be No. 1 or No. 2 (or have a plan aimed at getting there) in a given market or business, or the company should get out of this market.

Yet, Schrempp faces many challenges. In the next century, Mercedes will face tough competition from the Japanese Lexus, infinity, and Acura as well as BMW and Ford’s Jagur. Germany’s labor cost is the highest in the world and it requires 60 to 80 hours to build a Mercedes while to takes only 20 labor hours to build a Lexus. Schrempp needs to cut costs and improve productivity in order to survive. To remain competitive in a global market with fewer, but larger automakers, Daimler-Chrysler has to grow and introduce new models. At the Frankfurt Auto Show in 1999, the company announced that it would invest $48 billion to introduce 64 new models in the next five years.

Strategy Implementation: The Achilles’

Heed of the Merger?

The formulation of the merger strategy was carefully planned. The global perspectives of Schrempp and Eaton as well as the product line indicate a fit. Yet, implementing a well conceived strategy provides its own challenges. Some Chrysler designers and mangers saw the merger more as a takeover by Daimler, and consequently left the firm to join GM and Ford. Mr. Eaton, who is the American moral booster, will soon retire. While there is a mutual understanding of the country and corporate culture on the highest organizational level, incorporating the different cultures and managerial styles on lower levels may be more difficult.

German top managers may rely on the 50 page report for discussion and decision making. Americans prefer one-to-one communication. Below the board level, subordinates typically research an issue and present it to their German boss, who usually accepts the recommendation. American managers frequently accept the report and file it away, frustrating German subordinates. Also, Chrysler designers are frustrated with not being involved in the design of Mercedes cars. Although there are at this time two headquarters (Detroit and Stuttgart), a top manager predicted that in the near future there would be only one – in Germany.

Both the Americans and Germans can learn from each other. Germans need to write shorter reports, be more flexible, reduce bureaucracy, and speed up managerial decision making. American mangers, on the other hand, hope to learn from the Germans. As one Chrysler employee said: “One of the real benefits to us is instilling some discipline that we know we needed but weren’t able to inflict on ourselves.’’

Questions :

1. Evaluate the formulation of the merger between Daimler and Chrysler. Discuss the strategic fit and the different product lines.

2. Assess the international perspectives of Eaton and Schrempp.

3. What are the difficulties in merging the organizational cultures of the two companies?

4. What is the probability of success of failure of the merger? What other mergers do you foresee in the car industry?


Case : 4

Re-engineering the Business Process at Procter & Gamble

Procter & Gamble (P&G), a multinational corporation, known for its products that include diapers, shampoo, soap, and tooth-paste, was committed to improve value to the customer. Its products were sold through various chanels such as grocery retailers, wholesalers, mass merchandisers, and club stores. The flow of goods in the retail grocery channel was from the factory’s warehouse to the distributor’s warehouses, to the stores where the grocery stores where customers selected the merchandise from the shelves.

The improvement-driven company was not satisfied with its performance and developed a variety of programs to improve the service and efficiency of its operation. One such program was the electronic data inter-change (EDI) that provided daily information about shipments from the retail stores to P & G. the installation of the system resulted in better service, reduced inventory levels, and labor cost savings. Another approach, the continuous replenishment program (CRP), provided additional benefits for P & G as well as its customer retailers. Eventually, the total ordering system was redesigned with the result in dramatic performance improvements.

The re-engineering efforts also required restructuring the organization. P & G has been known for its brand management for more than 50 years. But in the late 1980s and early 1990s, the brand management approach pioneered by the company in the 1930s required a rethinking and restructuring. In a drive to improve efficiency and coordination, several brands were combined with authority and responsibility given to category managers. Such as manager would determine overall pricing and product policies. Moreover, the category managers were given the authority to delete weak brands and thus avoid conflicts between similar brands. The category managers were also held responsible for profits of a product categories for all stores. The switch to category management required not only new skills, but also a new attitude.

Questions :

1. The re-engineering efforts focused on the business process system. Do you think other processes, such as the human system, or other managerial policies need to be considered in a process redesign?

2. What do you think was the reaction of the brand managers, who may have worked under the old system for many years, when the category management structure was installed?

3. As a consultant, would you have recommended a top-down or bottom-up approach, or both, to process redesign and organizational change? What are the advantages and disadvantages of each approach?


Case No. : 5

Managing the Hewlett Packard Way

William R. Hewlett and David Packard are two organizational leaders who demonstrated a unique managerial style. They began their operation in a one-car garage in 1939 with $538 and eventually built a very successful company that now produces more than 10,000 products, such as computers, peripheral equipment, test and measuring instruments, and handheld calculators. Perhaps even better known than its products is the distinct managerial style preached and practiced at Hewlett-Packard (HP). It is known as the HP Way.

“What is the HP Way?

I feel that in general terms it is the policies and actions that flow from the belief that men and women want to do a good job, a creative job, and that if they are provided the proper environment they will do so.’’ Bill Hewlett, HP CoFounder

The values of the founders – who withdrew from active management in 1978 – still permeate the organization. The HP Way emphasizes honesty, a strong belief in the value of people, and customer satisfaction. The managerial style also emphasizes an open-door policy, which promotes team effort. Informality in personal relationships is illustrated by the use of first names. Management by objectives is supplemented by what is known as managing by wandering around. By strolling through the organization, top managers keep in touch with what is really going on in the company.

This informal organizational climate does not mean that the organization structure has not changed. Indeed, the organizational changes in the 1980s in response to environmental changes were quite painful. However, these changes resulted in extraordinary company growth during the 1980s.


1. Is the Hewlett – Packard way of managing creating a climate in which employees are motivated to contribute to the aims of the organization? What is unique about the HP Way?

2. Would the HP managerial style work in any organization? Why, or why not? What are the conditions for such a style to work?


Case No.: 6

 Quality as the Key Success Factor In Winning the Global Car War

Massachusetts institute of Technology (MIT) conducted an extensive study of the global car industry that compared operations at General Motors, Toyota, and the joint venture between GM and Toyota, the New United Motor Manufacturing Inc. (NUMMI) plaint in Fremont, California. The result of the study should raise some very disturbing questions about the quality and productivity of American operations, namely:

  • Why did GM’s Framingham plant require 31 hours to assemble a car when the Toyota plant only required 16 hours- or roughly half the time?
  • Why did the GM plant average 135 defects per car when Toyota had only 45 defects – or about one-third the number?
  • Why did GM require almost twice as much assembly space as the Toyota facility?
  • Why did GM require to a two-week parts inventory when Toyota only needed a two-hour supply of parts for its assembly line? As one might suspect, the cost of maintaining a large parts inventory inflates product costs.

Obviously GM did not fare well in the direct comparison to Toyota, but there are also signs of encouragement in the MIT study. Although American auto makers had fallen behind their foreign rivals, they have taken active steps to improve product quality and respond to customer wants. These companies have not been defeated; rather they have been revitalized by the competition.

GM joined forces with Toyota to create the NUMMI plant in order to improve the quality and efficiency of its manufacturing operations. The old GM plant in Fremont, California, was one of the car maker’s worst performing facilities before the NUMMI operation was initiated. As a result of the joint venture, assembly time has been greatly reduced and quality, measured in terms of total number of defects per car, has equaled the performance of Toyota in Japan.

Although assembly space is still relatively high by Japanese standards, NUMMI’s inventories have been reduced from two weeks to just two days. In short, the solution to many of GM’s production problems could be traced to a need of eliminating waste, focusing on value-added process, and enforcing more stringent quality controls.

In some ways, the European car industry is even in a less competitive position than U.S. companies. The quality, measured by assembly defects for 100 vehicles, is worse in Europe. European car manufacturers had 97 defects per 100 cars, compared to 82.3 by American firms operating in the United States. Japanese companies operating in North America had only 65 such defects and Japanese firms in Japan had only 60.

In productivity, European car firms also did poorly, requiring 36.3 hours to assemble a car compared with 25.1 hours of U.S. companies in North America, 21.2 hours of Japanese car makers in North America and only 16.8 hours of Japanese firms operating in Japan. Clearly, U.S. and especially European firms need much improvement in productivity and quality to be competitive in the global market.


1. In the NUMMI joint venture, what did Toyota gain? What were the benefits for General Motors?

2. As a consultant, what strategies would you recommend for European carmakers to improve their competitive position in the global car industry?


Principal Practice Management

02 Sep

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 baat Nai, 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 Vikas Telenet (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?