PRINCIPLES OF MANAGEMENT CASES

CASE 1: BHARAT ENGINEERING WORkS LIMITED

Bharat Engineering Works Limited is a major manufacturer of industrial machines besides other engineering products. It has enjoyed considerable market preference for its machines because of limited competition in the field. Usually, there has 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 machines 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 departments to have first hand information. However, he emphasized 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 departmental heads to Identify major problems and issues concerning them. The marketing manager indicated that in order to achieve higher sales, he needed more sales managers and sales professionals. His main concern was a lack of engineering support to sales and marketing efforts. The company had adequate engineers but they were spread under three separate engineering groups. Sales people had no central organization which had responsibility to provide sales support. Therefore, some Jobs were being done from outside at higher costs or with lower quality. Besides, he needed a generous budget for demonstration system which could be sent on a trial basis to customers to win business.

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

Director of research and development did not have any 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 short-term research projects which could easily increase production efficiency to the extent of at least 20 per cent within a very short period. Moreover, such projects did not involve any major capital outlay.

Mr. Kumar got himself convinced about the management process going on in the division and the type of problems being faced.

Questions

1. Discuss the nature and characteristics of management process followed in the company.

2. What are the real problems of industrial machinery division of the company?

3. What steps should be taken by Mr. Kumar to overcome these problems?

 CASE 2: MILK PRODUCTS LIMITED

Milk Products Limited is engaged in collecting, processing, and distributing milk and milk products in a large city in South India. Most of the products of the company are such that these have to be distributed on daily basis. The company has a crew of distributors who approach the fixed customers, both bulk buyers and individuals. Mr. K. Ramesh Joined the crew of distributors after graduating in Commerce. The distribution manager was quite impressed by Mr. Ramesh but initially could not offer him a better Job than that of a distributor. However, he promised to give him better opportunity whenever available. Mr. Ramesh joined gladly.

The distributors are employed on monthly salary basis. In order to ensure distribution of the products, the company has a provision of overtime pay. Normally, crew members work slowly in the beginning just to accumulate overtime pay. The pace becomes hectic towards the end of the day with some overtime to meet the distribution schedule. There is no group leader but there are several old- timers who Influence newcomers regarding the work rules. Mr. Ramesh did not like this method of working but had to follow the group to be a good team mate. He gathered that over the years, the company had paid around sixty per cent overtime unnecessarily.

After a year. Impressed by the work of Mr. Ramesh and his overall suitability; the distribution manager offered him the position of distribution supervisor. The basic duty of supervisor was to look after the distribution system and to develop new customers in a given area. Beside Mr. Ramesh, there were four other supervisors also. Ramesh was sure of making distribution system effective as he was aware about the delaying tactics of the crew. He was quite sure about cutting the overtime cost and impressing upon the manager about fixing the quota of work per day in two parts—before lunch and after lunch. The distribution manager was convinced and introduced the system. However, the efficiency dropped down considerably and no crew member was near the target.

Questions

1. Discuss the nature of control system of Milk Products Limited and its efficacy.

2. What control system will you like to suggest to the company?

CASE 3: KAVERY LIMITED

Kavery Limited publishes fortnightly magazine titled Kavery. The magazine is published in four regional languages. The company has its own printing press wi, M.S. Subramanian as press manager. He is responsible for the overall working of the press. T press runs on two-shift basis for six days per week and performs all activities related to magazine printing, that is, starting from typesetting stage to binding stage. For making magazine successful, ifs timely publication Is one of the crucial factors. The press manager has a total employee strength of nearly 300 with six persons at the senior management level who work in the day shift and 25 supervisors and 120 operators for each of two shifts. Each supervisor has 4 to 10 operators directly reporting to him. The number of operators reporting directly to a supervisor varies according to nature of work involved in different sections.

One day, the press manager attended a seminar on management by objectives organized by the local management association and addressed by a consultant on management by objectives. He was highly inspired by the theme of management by objectives and intended to install this system in the press. He was very much sure that he would make performance evaluation of the employees easier and improve their productivity

Subramanian worked several days on what the output objective of the press would be. After finishing this work, he called a meeting of his senior staff. He gave a written statement containing the objectives of each functional area of the press to senior staff members and requested each member to review the objectives, ask questions for clarification, and then prepare specific operational plans and quotas for his respective departments, supervisors, and operators.

Questions

1.      Is this a workable MBO system? Explain your stand.

2.      Had you been the press manager, would you have proceeded to install MBO differently? Why?

3.      As the press manager, how will you proceed to define press’s objectives?

 CASE 4: STYLOTEX LIMITED

Stylotex Limited was the manufacturer of high fashion dresses, both for domestic and international markets. Its emphasis was to develop latest and unique designs specially for ladies and children. Design was the main strength of the company’s business success. The company employed about 600 employees out of which 20 (all females) were in design department. The main function of design department was to collect information about the prevailing fashion in international and home markets, to analyze the information, and to suggest and prepare suitable design for the company.

Miss Sangeeta joined the company as chief designer. Prior to joining this Job, she received M.Sc. degree in Clothing and Textile with specialization in dress design. She also received dress design training for six months from a reputed institute in the USA. She also received her summer training for two months in Stylotex as part of her M.Sc. degree. During her training, she impressed the ‘management with her creative thinking about dress design. Many designs suggested by her during this period were accepted by the management and were appreciated by the customers. Therefore, When the chief designer of the company retired and Sangeeta applied for the position, she was taken

by the management to fill the vacancy.

Since Miss Sangeeta was with the company for two months as summer trainee, she knew the work culture of the company. She was knowing most of the employees of design department. She was also aware about the likely resistance that she could meet on her joining the position as she was replacing a very experienced and highly esteemed lady. Though she could not expect direct resistance from others, she was very serious about the resistance to be shown by one designer, Mrs. Vimala who was in her fifties and was designer in the company for the last fifteen years. That ‘grand old lady’, as

she used to be called by her colleagues, carried lot of weight with the group members. She did not have liking for a young girl directing and controlling them. Therefore, Sangeeta thought rightly that without her active cooperation, she could not succeed in her career. However, she was determined to get her career off on the right foot. As a result, she was giving serious thought to win over Mrs. Vimala and other members of the group but was not sure how to proceed in the matter.

Question

Advise Miss Sangeeta about how she should proceed in the matter.

CASE 5: SUPER ENGINEERING COMPANY

Super Engineering Company was a multi-locational light engineering company. It had manufacturing facilities at Hyderabad, Pondicherry; and Indore. The company adopted budgetary system with main emphasis on production and expense budgets. The budget targets used to be set on the basis of analysis of production facilities and production operations. While two units located at Hyderabad and Pondicherry were working properly and were able to meet their budget targets. Indore unit was not able to do so.

Mr. P Manohar was transferred to Indore unit as plant manager. He joined the company about eight years back as engineer trainee and became the assistant plant manager at Hyderabad unit, the bl of the three units. Mr. Manohar was very ambitious and a little bit autocratic. He believed in the exercise of authority and control to carry out his Instructions. He was high achiever and believed in getting things done He got quick promotions In the company.

Immediately after Joining at Indore unit as plant manager. Mr. Manohar made preliminary study of the plant and issued Instructions to all departments to Increase production by ten per cent. He also instructed all supervisors to strictly adhere to budgets. He introduced several new reports and watched the operations very closely. He suspended two supervisors in the second month for not meeting the budget targets. Subsequently, two supervisors left the plant.

With all his efforts, the unit was very much on the right track and within six months exceeded the new budgeted figures by eight per cent. On setting the plant right, he was called back at Hyderabad unit as plant manager where vacancy arose. However, shortly after he left for Hyderabad, the productivity at Indore unit fell below the earlier level and the budget was again in trouble.

Questions

1. Analyze the type of organizational climate created by Mr. Manohar at Indore unit.

2. Why was there a drop in productivity at the unit after Mr. Manohar left It?

CASE 6: SWETAL FINANCE LIMITED

Swetal Finance Limited is a non-banking finance company (NBFC). It is engaged in financing hire- purchase of transport vehicles, more particularly heavy and medium trucks. It has its branches in most of the large cities of Northern India. Raxnesh joined this company after doing MBA with finance major. After serving for six months at the head office of the company, he was appointed as branch manager in a city having population of about 10 lakh. Alter joining this branch. Ramesh found that the branch was not working with its full potential. He further realized that the staff members were not adequately motivated to get the things done. There were five staff members, four of them being office personnel while one person was working a class four employee. Ramesh was eager to motivate these four office personnel to improve the working of the branch. In order to do so, he analyzed the personality features and need patterns of these four employees. His analysis revealed the following conclusions about them:

Arvind, the senior most employees, is quite creative and may be called as genious to some extent. However, he is highly emotional and always looks for praise from others. Most of the time, he talks about himself and wants to become centre of attention. He tends to live In fantasies and day-dreaming. His work behavior shows that as long as others praise his work, he comes up with Innovative and creative Ideas. For every success, he tries to grab all the credit and when there is a sign of failure, he tends to push the responsibility on his colleagues.

Mohan, the next senior most employees, appears to care more about himself and his family consisting of his wife and the only son. His thinking is that he is doing the job to support and provide happiness to his family. He believes that at least minimal job performance standard should be maintained so that the company does not have any negative perception about his work performance. He is very social and creates friendly atmosphere whenever he meets anyone including the company’s customers.

Rajesh, the third employee in seniority Is quite opposite to Mohan. Rajesh is quite loyal to the company and responds well to its rules and incentive plans. However, he lacks initiative. He does not do anything independently though he does the work well which is assigned to him by the branch manager.

Sohan, the fourth employee, is quite intelligent and assertive. He works for earning more money and believes in job hopping implying that he would readily change his Job if offered more money from someone else, In his present job, he works over-time to earn more money. Ramesh informally collected the information about Sohan from his previous employer. This information content is “Sohan is very adamant and has a forceful and driving personality With us, he performed very well but his personality was so strong that we were glad to get rid of this argumentative, adamant, and arrogant fellow.”

  

Questions

1. Analyze the need patterns of these four employees of Swetal Finance Limited in the light of content theories of motivation.

2. How will you describe the motivation of each of these employees in terms of process theories of motivation?

3. Advise Ramesh about the strategies that he should adopt for motivating his subordinates for better performance.