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Masters Program in Business Administration (MBA)

Sub :- Business Administration

Note :-

(i) Attempt any four Cases (ii) All Cases carry equal marks.

Case 1 :-

“ Left or Right?”

Rajinder Kumar was a production worker at Competent Motors Limited (CML), which made components and accessories for the automotive industry. He had worked at CML for almost seven years as a welder, along with fifteen other men in the plant. All had received training in welding, both on the job and through company-sponsored external programmes. They had friendly relations and got along very well with one another. They played volleyball in the playground regularly before retiring to the quarters allotted by the company. They ate together in the company canteen, cutting jokes on each other and making fun of anyone who dared to peep into their privacy during lunch hour. Most of the fellows had been there for quite some time, except for two men who had joined the ranks only two months back.

Rajinder was generally considered to be the leader of the group, so it was no surprise that when the foreman of the department was transferred and his vacancy was announced, Rajinder applied for the job and got it.

There were only four other applicants for the job, two from mechanical section and two from outside. When there was a formal announcement of the appointment on a Friday afternoon, everyone in the group congratulated Rajinder. They literally carried him snacks and celebrated the event enthusiastically.

On Monday morning, Rajinder joined duty as Foreman. It was company practice for all foremen to wear blue jacket and a white shirt. Each man’s coat had his name badge sewn onto the left side pocket. The company had given two pairs to Raijnder. He was proud to wear the coat to work on Monday.

People who saw him from a distance went upto him and admired the new blue coat. There was a lot of kidding around calling Rajinder as ‘Hero’, ‘Raja Babu’ and ‘Officer’ etc. One of the guys went back to his locker and returned with a long brush and acted as though he were removing dust particles on the new coat. After about five minutes of horseplay, all of the men went back to work.

Rajinder went back to his office to get more familiar with his new job and environment there.

At noon, all the men broke for lunch and went to the canteen to eat and enjoy fun as usual. Rajinder was busy when they left but followed after them a few minutes, later. He bought the food coupon, took the snacks and tea and turned to face the open canteen. Back in the left side corner of the room was his old work group; on the right hand side of the canteen sat all the other foremen in the plant all observed in their blue coats.

At that point of time, silence descended on the canteen. Suddenly both groups looked at Rajinder anxiously, waiting to see which group he would eat with.

QUESTIONS:

1. Whom do you think Rajinder will eat with? Why?2. If you were one of the other foremen, what could you do to make Rajinder’s transition easier?3. What would you have done if you were in Rajinder’s shoes? Why?

Case 2 :-

“Naughty Rule”

Dr. Reddy Instruments is a medium-sized the Industrial Estate on the outskirts of Hyderabad. The company is basically involved with manufacturing surgical instruments and supplies for medical professionals and hospitals.

About a year ago, Madhuri, aged 23, niece of the firm’s founder, Dr. Raja Reddy, was hired to replace Ranga Rao quality control inspector, who had reached the age of retirement. Madhuri had recently graduated from the Delhi College of Engineering where she had majored in Industrial Engineering.

Balraj Gupta, aged 52, is the production manager of the prosthesis dept., where artificial devices designed to replace missing parts of the human body are manufactured. Gupta has worked for Dr.

Reddy Instruments for 20 years, having previously been a production line supervisor and, prior to that, a worker on the production line. Gupta, being the eldest in his family, has taken up the job quite early in life and completed his education mostly through correspondence courses.

From their first meeting, it looked as though Gupta and Madhuri could not get along together. There seemed to be an underlying animosity between them, but it was never too clear what the problem was.

Venkat Kumar, age 44, is the plant manager of Dr. Reddy instruments. He has occasionally observed disagreements between Madhuri and Gupta on the production line, Absenteeism has risen in Gupta’s department since Madhuri was hired as quality control inspector. Venkat secretly decided to issue a circular calling for a meeting of all supervisory personnel in the production and twelve quality control departments. The circular was worked thus:

Attention: All Supervisors Production Quality Control Departments

A meeting is schedule on Monday, Feb 20, at 10 a.m. in room 18. The purpose is to sort out misunderstanding and differences that seem to exist between production and QC personnel.

Sd. Venkat Kumar

Plant Manager

Venkat starred the meeting by explaining why he had called it and then asked Gupta for his opinion of the problem. The conversation took the following shape:

Gupta: That Delhi girl you recruited is a ‘fault finding machine’ in our dept. Until she was hired, we hardly even stopped production. And when we did, it was only because of a mechanical defect. But Madhuri has been stopping everything even if ‘one’ defective part comes down the line.

Madhuri: That’s not true. You have fabricated the story well.

Gupta: Venkat, our quality has not undergone any change in recent times. It’s still the same, consistently good quality it was before she came but all she wants to do is to trouble us.

Madhuri: May I clarify my position at this stage? Mr. Gupta, you have never relished my presence in the company. I still remember some of the derisive remarks you used to make behind my back. I did take note of them quite clearly!

Suresh (another quality control supervisor): I agree with Madhuri Venkat. I think that everyone knows that the rules permit quality control to stop production if rejections exceed three an hour. This is all Madhuri has been doing.

Gupta: Now listen to me. Madhuri starts counting the hour from the moment she gets the first reject. Ranga Rao never really worried about absolute reject rule when he was here. She wants to paint my department in black. Is not that true Riaz Ahmed?

Ahmed (another production supervisor): It sure is Gupta. Every time Maduri stops production, she is virtually putting the company on fire. The production losses would affect our bonuses as well. How long can we allow this ‘nuisance’ to continue?

Thirty minutes later Madhuri and Gupta were still lashing out at each other. Venkat decided that ending the meeting might be appropriate under the circumstances. He promised to clarify the issue, after discussion with management, sometime next weel.

QUESTIONS:

1. Should Venkat have called a meeting to sort out this problem? Why or Why not? 2. What do you say about the rule calling for production to halt if there are more than three rejects

in an hour? Should it have been enforced? Explain.3. What do you feel is the major problem in this case? The solution?

Note :- Solve any 4 Case Study

All Case Carry equal Marks.

CASE I

Sunder Singh

Sunder Singh had studied only up to high school. He was 32-years of age, lived alone in a

rented room, and worked eight-hour shift at one petrol pump, then went to the other one for

another eight-hour shift. He had a girl friend and was planning to marry.

One day when he returned from work, he got a note from his girl friend that she was

getting married to someone else and he need not bother her. This was a terrible shock to

Sunder Singh and he fell apart. He stopped going to work, spent sleepless nights, and was

very depressed. After a month, he was running Iowan his savings and approached his earlier

employers to get back his job, but they would not give him a second chance. He had to quit

his rented room, and sold few things that he had. He would do some odd jobs at the railway

station or the bus terminal.

One day, nearly two years ago, he was very hungry and did not have any money and

saw a young man selling newspapers. He asked him what he was selling and he told him

about Guzara (an independent, non-profit, independent newspaper sold by the homeless,

and economically disadvantaged men and women of this metro city). Sunder Singh

approached the office and started selling the newspaper. He did not make a lot of money,

but was good at saving it. He started saving money for a warm jacket for next winter.

He was reasonably happy; he had money to buy food, and no longer homeless and

shared a room with two others. One day, with his savings he bought a pair of second-hand

Nike shoes from flea market.

Sunder Singh is not unique among low-income consumers, especially in large cities,

in wanting and buying Nike shoes. Some experts believe that low-income consumers too

want the same products and service that other consumers want.

The working poor are forced to spend a disproportionate percent of their income on

food, housing, utilities, and healthcare. They solely rely on public transportation, spend very

little on entertainment of any kind, and have no security of any kind. Their fight is mainly

day-to-day survival.

QUESTIONS

1. What does the purchase of a product like Nike mean to Sunder Singh?

2. What does the story say about our society and the impact of marketing on

consumer behavior?

CASE II

Key to Buyers' Minds

Consumer buying research has turned a new leaf in India. The era of demographics seems to

be on the backbench. Now, Marketing Research people are less likely to first ask you about

your age, income, and education etc. Instead, there is a distinct shift towards inquiries about

attitudes, interests, lifestyles, and behaviour - in short towards a study of consumers' minds

called psychographics.

Pathfinders, the marketing research wing of Lintas, occasionally came out with its

highly respected "Study on Nation's Attitudes and Psychographics (P:SNAP). The first

in this series was released in 1987 with an objective to develop a database of lifestyles and

psychographics information on the modem Indian women. The second was in 1993, and the

third in 1998. Pathfinders choose woman for the study because of the belief that more often

than not, in urban areas, it is the woman who makes buying decision.

The Pathfinders' study involves interviewing over 10,000 women over the entire

country and segmenting them in clusters according to their beliefs, attitudes, lifestyles, and

lastly their demographics profile. The idea is to identify groups of consumers with similar

lifestyles who are likely to behave towards products or services.

For advertisers and advertising agencies, this profile helps enormously. For example,

an advertiser may want to give a westernised touch to a commercial. The profile of the

target customer, as revealed by this study, tells the advertising people the perimeter within

which she/he must stay, otherwise the ad may become an exaggerated version of

westernised India.

For the purpose of this study, Pathfinders divided the Indian women in 8 distinct

cluster of varying values and lifestyles. Figures from two studies are available publicly and

are given below:

Cluster 1987 (%) 1993 (%)

Troubled homebody 15.9 18.3

Tight-fisted traditionalist 14.8 10.0

Contended conservative 7.0 9.3

Archetypal provider 13.0 8.8

Anxious rebel 14.1 15.8

Contemporary housewife 19.2 22.1

Gregarious hedonist 8.7 6.6

Affluent sophisticate 7.3 9.1

The studies seek to track the macro level changes and movements within these 8

clusters in a period of time.

We note from the table that in 1987, 8.7% of the women could be classified as

"gregarious hedonist" - those who consider their own pleasure to be supreme in life. 'In

1993, this figure fell to 6.6%. The "troubled homebody" segment - those with large families

and low-income, increased from 15.9% in 1987 to 18.3% in 1993.

Information, such as this, is obviously useful to assess the collective mood. That's

why Pathfinders have an impressive list of clients fort heir P:SNAP, which includes Hindustan

Lever, Cadbury, Johnson and Johnson, and Gillette.

SOME PSYCHOGRAPHICS PROFILES OF INDIAN WOMEN

Rama Devi, the Contended Conservative

The lady lives a 'good' life - she is a devoted wife, a dotting mother of two school-going sons,

and a God fearing housewife. She has been living her life by the traditional values she

cherishes - getting up at the crack of dawn, getting the house cleaned up, having the

breakfast of 'Aloo Parathas' ready in time before the children's school-bus honks its horn,

laying down the dress her 'government servant' husband will put on after his bath, and

doing her daily one-hour Puja. She fasts every Monday for the welfare of her family, looks at

the 'freely mixing' and 'sexually liberal' youngsters with deep disdain and cannot understand

the modem young woman' s 19reed' for money, jewellery, and jobs.

Her one abiding interest outside the household is the Ganesh Mandir that she has

visited every Wednesday, ever since she got married. She lacks higher education and hence

has little appreciation for the arts, the literature, and the sciences. Her ample spare time is

spent watching the TV, which is her prime source of entertainment and information.

Shobha, the Troubled Homebody

Shobha married young to the first person she fell in love with, Prakash. Four children came

quickly before she was quite ready to raise a family. Now, she is unhappy. She

is having trouble in making ends meet on her husband's salary who is employed as clerk in a

private business and is often required to work up to late hours. She is frustrated, as her

desire for an idyllic life has turned sour. She could not get education beyond high school and

hence there are hardly any job opportunities for her. Her husband also keeps on complaining

of the long hours of backbreaking work he has to put in. He consumes country-made liquor

routinely.

Shobha finds escape in Black and White TV soap operas and films that transport her

into the world of her dreams. She watches TV almost all through the day and her children

roam around in the locality streets and cannot expect any help from their' ever-grumbling'

mother. Purchases are mostly limited to 'essentials' and any discretionary purchases are

postponed till it becomes possible.

Neeru, the Archetypal Provider

Neeru epitomises simplicity. Her life is untangled. It runs on a set timetable with almost

clockwork precision. She works as a primary school teacher in a rural government school

about 50 kilometers from her district town residence. She is married to a social worker in an

NGO whose income is erratic. Her three children, two teenaged sons and l0-year old

daughter are getting school education.

The day begins with the lady getting up before anybody else and finishing the

household chores as fast as she can. There is no room for delay as the State government

'Express' bus, on which she ravels to her school will be at the bus stop across the road

precisely at 8.00 A.M. If she misses that, the next ordinary bus comes at 11.15 A.M, quite

useless as it will reach her school only at 1.00 P.M. The school closes at 2.00 P.M. There are

private Jeeps running sporadically, but the fare is high and Neeru does not believe in wasting

hard earned money. Besides, she travels on husband's 'free pass'. Neeru prides herself on

her monthly savings ofRs.1000 for the last many years. The money will go toward the

wedding of her daughter.

Vandana, the tight-fisted traditionalist

For Vandana, saving money is 'in-born' discipline. When she was young and unmarried, she

remembers her mother was extremely tight-fisted and ran the household in under Rs.800

per month. It was the necessity of those times as her father retired at a princely salary of

Rs.1800 per month. All through her childhood, she saw deprivation and hardship. She would

not join the annual class picnic in her school days as it meant' avoidable expenditure'.

Now she is married and mother of two school going children. The husband works in a

bank as a clerk. He has taken all the loans that he could from the bank and invested the

money in real estate. As a result of monthly deductions toward repayment of loans, his take

home salary is now very little. But Vandana can manage. The school dresses are sewn by

her at home, the stationary required comes from a wholesale market, and the books are

second-hand from 'friends', cultivated for the purpose. On birthdays, Vandana prepares a

sweet dish at home and they spend on a film. There is a cow and calf at home, being kept as

a source of revenue and milk. She sells half the milk to a neighbour and the family

consumes the rest. Life in general is hard and frugal. There is a colour TV at home, but they

disconnected the cable connection ever since the rates went up. Now they watch

Doordarshan only.

Aditi, the Anxious Rebel

Daughter of a Freedom Fighter, Aditi has always fought her values and principles.

People still remember when she walked out of the exam half in a huff as a mark of protest

against mass cheating' sanctioned' by the centre superintendent in a tough paper. While

every body else passed with high marks, Aditi failed.

Even though she repeated the paper, Aditi never learned to swim along the flow. She

always swam against the current. She joined the Communist Party in her college and gave

rousing speeches against the teachers and authorities. This resulted in her getting very poor

marks and left her jobless.

Later, Aditi joined an NGO and now works on social issues. She says she is a creature

of the mind, not materialism. Her favourite dress is a long flowing Kurta, and slacks. She

wears loosened hair and chappals. She reads voraciously. Financially, she is independent

and lives with her parents. Her disdain for the institution of marriage and contempt for the

modern Indian male keep her single and unattached. She will continue-to be so as she

prefers this status, but may adopt a baby later in life.

Reema, the Gregarious Hedonist

Just 19, and Reema is already divorced. Her father is a wealthy businessman. During

Reema's childhood, her father was mostly away in Dubai and Africa, trying to amass a

fortune. That he did but he lost on his chance to be a good father. Both his children started

feeling like' orphans' after their mother got involved with another man.

Reema was ever longing for her family when alone came Harsh, her private high

school tuition teacher. Harsh was all of 22 and very caring. He was tall, handsome, and very

popular in school and many girls had a crush on him. Reema was sixteen then and a great

fan of Harsh. For her, Harsh was a prize catch as he combined the loving qualities of a father

with a mix of being a good teacher. She was soon dazzled and surrendered in a physical

relationship.

Marriage followed. She never understood how Harsh changed overnight from a caring

father figure to a demanding husband. And she could never cope with the six hours she had

to spend in the kitchen everyday. Why should she do the cooking, she asked Harsh, as it was

something that the 'Ayas' did? The reality of a humdrum middle-class existence hit her hard

and she soon walked out of 'the hell'.

Her father understood her need to recover and made her allowance rather generous.

He bought her a Red Sports Car and got her an admission in a private college.

College is entertainment for her. She attends college only on days when there is

some function like a cultural evening or the sports meet. Now, Reema spends on alcohol,

dresses, parties, and holidays. She consumes a mood elevating drug every evening and

keeps sending SMS messages on her mobile to her friends all through the night. For her, life

means 'buying pleasure endlessly'.

Shruti, the Contemporary Housewife

Shruti is an urbane woman. She is well educated and genteel. She is an officer in a national

bank, and active in her club affairs and community activities. Socialising is an important part

of her life. She is a doer, interested in watching cricket, politics, and current affairs. Her life

is hectic as she has a lot to do for home and office everyday. Still she often enjoys viewing

movies on TV every week.

Shruti shops for Sarees, jewellery, and cosmetics for herself on a regular basis.

However, family needs come before her own needs. Her home is a double income household

and she has one kid. All the modern gadgets are present and the standard of living is upper

middle-class.

Momeeta, the Affluent Sophisticate

Momeeta was born Mamta, but elevated herself to Momeeta after marriage to a business

tycoon. Momeeta is an elegant woman with style. She lives in Mumbai because that is where

she wants to be. She likes the economic and social aspects of big city living and takes

advantage of her' contacts'. She has built up friendship and cultivated the city bigwigs by

inviting them to the numerous parties she throws in her luxurious penthouse.

Momeeta is a self-confident, on-the-go woman, and not a homebody. She is fashion

conscious and clothes herself in the latest designer dresses. Even at 40, she can carry off a

mini with aplomb. She is financial very secure and hence does not shop with care. She shops

for quality, exclusivity, and the brand name, not the price. She frequently travels abroad,

buys expensive gifts for friends, and has an international understanding on what is "chic" at

the moment.

Three psychographics profiles of Indian women and their food shopping habits:

Type I Type II Type III

Money conscious Careful shopper Gourmet/satisfaction

Food shopping is done on necessity and is postponed as long as possible.

Makes out shopping lists and makes weekly/ monthly purchases.

General liking for food shopping and food related activities.

Minimum amount of money spent. This is enabled through comparative evaluation of many shops, even if it takes more time.

Can purchase larger quantities if there is an incentive like lower prices or a gift scheme. Food budget is flexible.

Collects and files food recipes. Experiments with new food products and methods of cooking. Likes to exhibit her culinary skills to her friends and family.

Operates within the food budget. Does not buy larger quantities to save money.

Checks labelling for price, nutrition and expiry date information

Spends a lot of time in kitchen as preparing food is an enjoyable activity.

Price and immediate outflow of cash is the dominant purchase concern.

Goes for tried and trusted brands even if they cost a little more. This is an important purchase concern.

Food items are bought either based on the past satisfaction from them or for their novelty value. Unknown food items are purchased if they excite the senses. This is the dominant purchase concern.

Who fits in where?

Shobha, Neeru, and Vandana,

Shruti, Aditi, and

Rama Devi

Momeeta (she is a food lover).

(Prof Deepak Khanna, colleague, has developed these profiles based on his perceptions of

certain personality types).

QUESTIONS

1. Explain how the above-mentioned information is likely to benefit a marketer?

2. Which of the above mentioned types are likely to respond to sales

promotion? Explain.

3. A manufacturer of personal care products in the premium segment starts

frequent sales promotions. What is likely to be the impact on the above-

mentioned types?

Masters program in Business Administration (MBA )

Note :- Solve any 4 case study

All case carries equal marks

Case I

PANDIT TO AFAUZI

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.

QUESTIONS:

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

HE WHO RIDES A TIGER

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.

QUESTIONS FOR DISCUSSION

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

unionmanagement relations.

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




CASE I

A GLOBAL PLAYER?

This is one game that India has permanently lost to its arch-rival Pakistan -

manufacturing and exporting sports goods. Historically, when India and Pakistan were one

before 1947, Sialkot, now in Pakistan, used to be the world's largest production centre for

badminton, hockey, football, volleyball, basketball, and cricket equipment. After the creation

of Pakistan, Jalandhar became the second centre after Hindus in the trade migrated to India.

Soon Jalandhar overtook Sialkot and till the early 1980s it remained so. However when the

face of the trade began to change in the 1980s and import of quality leather and

manufacturing equipment became a necessity for quality production, Pakistan wrested the

initiative as India clung it its policies of discouraging imports through high duties and

restrictions. As it was, the availability of labor and skills was a common factor in both Sialkot

and Jalandhar, but with Sialkot having the advantage of easier entry, most of the world's top

sports manufactures and procedures developed an association with local industry in Sialkot

that continues even today. Ten years later, in the early 1990s, when Manmohan Singh

liberalised the norms for importing equipment and raw material required for producing

sports goods, it was too late as majority of the global majors had already shifted base to

Sialkot.

In 1961 the late Narinder Mayor started the first large scale sports goods manufacturing

unit, Mayor & Company, thereby laying the foundation of an organized industry. Even today,

more than 70 percent of the industry functions in an unorganized manner. Starting with

soccer balls, Mayor expanded to produce inflatable balls like volleyballs, basketballs, and

rugby balls. Today his two sons Rajan & Rajesh have built it up into five companies engaged

in a wide array of businesses, though sports goods remain the group's core business. While

the parent trading company, Mayor & Company, remains the leading revenue-earner to the

tune of Rs. 55 crore annually out of a total group turnover of Rs. 85 crore-plus, Mayor's

second venture, the Indo-Australian Mayor International Limited, is spinning another Rs. 15

crore. Mayor International is a 100 per cent export-oriented unit (EOU) exclusively

manufacturing and exporting golf and tennis balls.

The product portfolio of the company comprises the following:

Inflatable Balls

Soccer balls and footballs (Professional, Indoor, Match and Training, leisure toy)

Volley balls, rugby balls (Volley balls and Beach Volley Balls)

Australian rugby, hand balls (English League, Union and touch) (Australian rules,

Australian Rugby League balls with laces)

Boxing Equipment

Boxing and punching balls (Boxing and Punching Balls, Head Gear, Gloves, Punching

Mitts and Kits Punching Bags & Bag Sets)

Gloves

Goal keeper's gloves (Football / Soccer)

Boxing gloves

Cricket Equipment

Worldwide distributor for Spading Cricket Bats, Balls and Protective equipment.

HOCKEY EQUIPMENT

Worldwide distributor for Spading Hokey Sticks, Balls & Protective equipment

Based in Delhi, Rajan Mayor, 41 is the CMD of the group, which also comprises an IT division

working on B2B and B2C solutions; Voyaguer World Travels in the tourism sector; a

houseware exports division specializing in stainless steel kitchenware, ceramics, and

textiles; and a high school. Younger brother Rajesh, 34, is the executive director and looks

after all the divisions operating in Jalandhar. Technical director Katz Nowaskowski divides his

time equally between India and Australia, where he looks after the group’s interests. “While

inflatable balls are our prime competence in our core business, we are presently focusing on

golf balls, for which we are the sole producers in South Asia. Out of a total Rs. 300 crore of

sports goods business generated in domestic market, most of which is supplied by the

unorganized players, golf balls constitute a miniscule amount and therefore we came up

with a 100 per cent EOU for producing golf balls. Later the same facility was utilized with

little moderation for tennis balls too,” says Nowaskowaski.

Clarifying that the sports good industry in India only includes playing equipment and

not apparels or shoes, D K Mittal, chairman of the Sports Goods Export Promotion Council

and joint secretary in the Ministry of Commerce, has certified Mayor group as the number

one exporter since 1993 till date, barring 1996. However, SGEPC secretary Tarun Dewan

points out that being the number one exporter does not mean that Mayor is the number one

brand being exported. “Actually we have tie ups Dunlop, Arnold Palmer, and Fila for

manufacturing golf balls. For footballs and volleyballs we have association with Adidas,

Mitre, Puma, Umbro, and Dunlop. We manufacture soccer World Cup and European Cup

replicas for Adidas, which is a huge market. Only 400 balls used for actual play in the World

Cup are manufactured in Europe & that too only for sentimental reason, otherwise we are

capable of delivering products of the same, if not better quality. Now since we manufacture

balls for them, we cannot antimonies them by producing balls of similar quality with our own

brand name. Secondly, I agree that competing with such big quaint in the world market in

terms of branding is a task that is well beyond our reach at the moment. However, we are

trying to brand ourselves in the domestic market and that is one of the prime focus in the

coming year,” says Rajan.

Coca-Cola, Unilever, McDonald’s, American Airlines, Disney club, and other such big

brands come up with huge orders at tines for golf balls with their logos for promotional

schemes. However, there is no mention of the producing country since these companies do

not want to show that balls they deliver in the US are being produced in Asia, “Not only is

our quality good enough; labour in India is cheap enough to churn out a much less

expensive product in the end. Yet, the main threat to our industry comes from countries like

Taiwan and China, who have already cornered a chunk of world markets in tennis,

badminton, and squash rackets. This is primarily because of two reasons – slow response to

our needs in tune with the market requirements from the government and lack of

infrastructure. And most importantly, tags ‘Made in China’ or ‘Made in Taiwan’ are more

acceptable in the West than ‘Made in India’ or ‘Made in Pakistan’. One of the mottos of the

Mayor group has been to make ‘Made in India’ an acceptable label in the West. For that we

stress quality, timely delivery, and competent rates. Yet, a lot depends on perception value,

which in our case is sadly on the negative side, much owing to our government’s stance

over the years. Things might be improving, but the pace is very slow and as our economy

drifts towards a free market scenario supinely, it might just prove to be too little too late in

the end,” says Rajesh.

Today, Mayor group is sitting pretty as its competitors, Soccer International Sakay

Trades, Savi, Wasan, Cosco, Nivia and Spartan are only trying to catch up in the inflatables

category. With 1.2 million dozen golf balls, Mayor is way ahead of its competitors. The

company is planning to enhance its manufacturing capacity to 1.5 million dozen golf next

fiscal. With approval from the world’s two top golf associations – the US PGA and RNA of

Scotland, demand for its product is not a problem, the company’s senior marketing officials

point out. With the markets in Mayor’s current export destinations – Europe, North America,

Australia, and Nw Zealand – all set to expand in the coming years after the present slump,

Mayor wants to expand its sports goods business that caters to 60 per cent of its overall

exports. Though 40 per cent of exports come from house ware manufactured in Delhi and

Mumbai, with export centres in the same countries for its sports goods, just about

maintaining this business at its present state, and concerning entirely on sports goods is

what the mayors are intent on.

With nearly 2000 skilled workforce; quality certification from ISO 9001:2000 and ISO

14001: 2004; and having spread to more than 40 countries, Mayor and Company is

obviously sitting pretty.

Questions

1. What routes of globalization has the Mayor group chosen to go global?

What other routes could it have taken?

2. What impediments are coming in the Mayor group’s way becoming a major

and active player in international business?

3. Why is ‘Made in India’ not liked in foreign markets? What can be done to

erase the perception?

CASE II

ARROW AND THE APPAREL INDUSTRY

Ten years ago, Arvind Clothing Ltd., a subsidery of Arvind Brands Ltd., a member of

the Ahmedabad based Lalbhai Group, signed up with the 150-year old Arrow Company, a

division of Cutlet Peabody & Co. Inc., US, for licensed manufacture of Arrow shirts in India.

What this brought to India was not just another premium dress shirt brand but new

manufacturing philosophy to its garment industry which combined high productivity,

stringent in-line quality control, and a conducive factory ambience.

Arrow’s first plant, with a 55,000 sq. ft. area and capacity to make 3,000 to 4,000

shirts a day, was established at Bangalore in 1993 with an investment of Rs. 18 crore. The

conditions inside – with good lighting on the workbenches, high ceilings, ample elbow room

for each worker, and plenty of ventilation, were a decided contrast to the poky, crowded,

and confined sweatshops characterizing the usual Indian apparel factory in those days. It

employed a computer system for translating the designed shirt’s dimensions to

automatically mark the master pattern for initial cutting of the fabric layers. This was

installed, not to save labour but to ensure cutting accuracy and low wastage of cloth.

The over two-dozen quality checkpoints during the conversion of fabric to finished

shirt was unique to the industry. It is among the very few plants in the world that makes

shirts with 2 ply 140s and 3 ply 100s cotton fabrics using 16 to 18 stitches per inch. In March

2003, the Bangalore plant could produce stain-repellant shirts based on nanotechnology.

The reputation of this plant has spread far and wide and now it is loaded mostly with

export orders from renowed global brands such as GAR, Next, Espiri, and the like. Recently

the plant was identified by Tommy Hilfiger to make its brand of shirts for the Indian market.

As a result, Arvind Brands has had to take over four other factories in Bangalore on wet

lease to make the Arrow brand of garments for the domestic market.

In fact, the demand pressure from global brands which want to out outscore from

Arvind Brands, is so great that the company has had to set up another large for export jobs

on the outskirts of Bangalore. The new unit of 75,000 sq. ft. has cost Rs. 16 crore and can

turn out 8,000 to 9,000 shirts per day. The technical collaborates are the renowned C&F

Italia of Italy.

Among the cutting edge technologies deployed here are a Gerber make CNC fabric

cutting machine, automatic collar and cuff stitching machines, pneumatic holding for tasks

like shoulder joining, threat trimming and bottom hemming, a special machine to attach and

edge stitch the back yoke, foam finishers which use air and steam to remove creases in the

finished garment, and many others. The stitching machines in this plant can deliver up to 25

stitches per inch. A continuous monitoring of the production process in the entire factory is

done through a computerized apparel production management system, which is hooked to

every machine. Because of the use of such technology, this plant will need only 800 persons

for a capacity which is three that of the first plant which employs 580 persons.

Exports of garments made for global brands fetched Arvind Brands over Rs. 60 crore

in 2002, and this can double in the next few years, when the new factory goes on full

stream. In fact, with the lifting of the country-wise quota regime in 2005, there will be a

surge in demand for high quality garments from India and Arvind is already considering

setting up two more such high tech export-oriented factories.

It is not just in the area of manufacture but also retailing that the arrow brand

brought a wind of change on the Indian scene. Prior to its coming, the usual Indian shirt shop

used to be a clutter of racks with little by way of display. What Arvind Brands did was to set

up exclusive showrooms for Arrow shirts in which the functional was combined with the

aesthetic. Stuffed racks and clutter were eschewed. The products were displayed in such a

manner that the customer could spot their qualities from a distance. Of course, today this

has become standard practice with many other brands in the country, but Arrow showed the

way. Arrow today has the largest network of 64 exclusive outlets across India. It is also

present in 30 retail chains. It branched into multi-brand outlets in 2001, and is present in

over 200 select outlets.

From just formal dress shirts in the beginning, the product range of Arvind Brands

has expanded in the last ten years to include casual shirts, T-shirts, and trousers. In the

pipeline are light jackets and jeans engineered for the middle age paunch. Arrow also tied up

with the renowed Italian designer, Renato Grande, who has worked with names like Versace

and Marlboro, to design its Spring / Summer Collection 2003. The company has also

announced its intention to license the Arrow brand for other lifestyle accessories like

footwear, watches, undergarments, fragrances, and leather goods. According to Darshan

Mehta, President, Arvind Brands Ltd., the current turnover at retail price of the Arrow brand

in India is about Rs. 85 crore. He expects the turnover to cross Rs. 100 crore in the next few

years, of which about 15 per cent will be from the licensed non-clothing products.

In 2005, Arvind Brands launched a major retail initiative fir all its brands. Arvind

Brands licensed brands (Arrow, Lee and Wrangler) had grown at a healthy 35 per cent rate in

2004 and the company planned to sustain the growth by increasing their retail presence.

Arvind Brands also widened the geographical presence of its home-grown brands, such as

Newport and Ruf-n-Tuf, targeting small towns across India. The company planned to increase

the number of outlets where its domestic brands would be available, and draw in new

customers for readymades. To improve its presence in the high – end market, the firm

started negotiating with an international brand and is likely to launch the brand.

The company has plans to expand its retail presence of Newport Jeans, from 1200

outlets across 480 towns to 3000 outlets covering 800 towns.

For a company ranked as one of the world’s largest manufacturers of denim cloth

and owners of world famous brands, the future looks bright certain for Arvind Brands Ltd.

Company Profile

Name of the Company : Arvind Mills

Year of Establishments : 1931

Promoters : Three brothers – Katurbhai, Narottam Bhai and

Chimnabhai

Divisions : Arvind Mills was spilt in 1993 into three units –

textiles, telecom and garments. Arvind Brands Ltd.

(textile unit) is 100 per cent subsidiary of Arvind

Mills.

Growth Strategy : Arvind Mills has grown through buying – up of sick

units, going global and acquisition of Germanand

US brand names.

Questions

1. Why did Arvind Mills choose globalization as major route to achieve growth

when domestic market was huge?

2. Hoe does lifting of Country-wise quota regime’ help Arvind Mills?

3. What lessons can other Indain business learn from the experience of Arvind

Mills?

Master Program in Business Administration (MBA)



CASE I

A DIAMOND PERSONALITY

Ask Suraj bhai about the dot-com burst and he may grin at you as if to say, ``What

burst?’’ Suraj bhai, a 38-year-old entrepreneur, owns an Internet business that sells loose

diamonds to various buyers. Business is becoming for Suraj bhai. In 2004, he had sales of

INR 3,500 million. Needless to say, Suraj bhai is optimistic about his business venture.

The future wasn’t always to bright for Suraj bhai, however. In 1985, Suraj bhai moved

from his native town Suraj, to New Delhi, with little ability to speak English. There, he

attended language courses and worked at the local mall to support himself. After

graduation, his roommate’s girlfriend suggested that he work at a local jeweler. `Ì thought

she was crazy. I didn’t know anything about jewelry,’’ says Suraj bhai, who took her advice.

Though he worked hard and received his Diamonds and Diamonds Grading certification from

the Gemological Institute, he wasn’t satisfied with his progress. Ì quickly realized that

working there, I was just going to get a salary with a raise here and there. I would never

become anything. That drove me to explore other business ventures. I also came to really

known diamonds – their pricing and their quality.’’

In 1997, tired of working for someone else, Suraj bhai decided to open his own

jewelry store. However, business didn’t boom. `Some of my customers were telling me they

could find diamonds for less on the Interest. It blew my mind’’ Surajy bhai recognized an

opportunity and began contacting well-known diamond dealers to see if they would be

interested in selling their gems online. Suraj bhai recalls one conversation with a prominent

dealer who told him, `You cannot sell diamonds on the Internet. You will not survive.’’

Discouraged, Suraj bhai then says that he made a mistake. `Ì stopped working on it. If you

have a dream, you have to keep working harder at it.’’

A year later, Suraj bhai did work harder at his dream and found a dealer who agreed

to provide him with some diamonds. Says Suray bhai, `Ònce I had one. I could approach

others. Business started to build. The first 3 months I sold INR 20 million worth of diamonds

right off the bat. And that was just me. I started to add employees and eventually closed the

jewelry store and got out of retail.’’ Although Suraj bhai does have some diamonds in

inventory, he primarily acts as a connection point between buyers and suppliers, giving his

customers an extraordinary selection from which to choose.

Suraj bhai is now a savvy entrepreneur, and his company, Abhisaz.com, went public

in October 2003.

Why is Suraj bhai successful? Just ask two people who have known Suraj bhai over

the years. Yogesh bhai, a realtor who helped build Suraj bhai building, says, ``Suraj bhai is a

very ambitious young man. I am not surprised at all how successful he is. He is an

entrepreneur in the truest sense of the world.’’ One of Suraj bhai former real-estate

instructors, Arun Jain, concurs. Ì am not surprised at all at his success,’’ says Arun. ``Suraj

bhai has always been an extremely motivated individual with a lot of resources. He has a

wonderful personality and pays close attention to detail. He also has an ability to stick to

things. You could tell from the beginning that he was going to persevere, and I am proud of

him.’’

Suraj bhai is keeping his success in perspective, but he also realizes his business’

potential: `Ì take a very small salary, and our overhead in INR 25 million a year. I am not in

debt, and the business is breaking ever. I care about the company. I want to keep

everything even until we take off, and then it may be another ball game.’’

Questions:

1. What factors do you think attributed to Suraj bhai’s success? Was he merely

`ìn the right place at the right time’’, or are there characteristics about him that

contribute to his success?

2. How do you believe Suraj bhai would score on the Big Five dimensions of

personality (extroversion, agreeableness, conscientiousness, emotional stability,

openness to experience)? Which ones would he score high on? Which ones might

he score low on?

3. Do you believe that Suraj bhai is high or low on core self-evaluations? On what

information did you base your decision?

4. What information about Suraj bhai suggests that he has a proactive

personality?

CASE II

BULLYING BOSSES

It got to where I was twitching, literally, on the way into work,’’ states Carrie Clark, a

52-year-old retired teacher and administrator. After enduring 10 months of repeated insults

and mistreatment from her supervisor, she finally quit her job. `Ì had to take care of my

health.’’

Though many individuals recall bullies from their elementary school days, some are

realizing that bullies can exist in the workplace as well. And these bullies do not just pick on

the weakest in the group, rather, any subordinate in their path may fall prey to their

torment, according to Dr. Gary Namie, director of the Workplace Bullying and Trauma

Institute. Dr. Namie further says workplace bullies are not limited to men-women are at least

as likely to be bullies. However, gender discrepancies are found in victims of bullying, as

women are more likely to be targets.

What motivates a boss to be a bully? Dr. Harvey Hornstein, a retired professor from

Teachers College at Columbia University, suggests that supervisors may use bullying as a

means to subdue a subordinate that poses a threat to the supervisor’s status. Additionally,

supervisors may bully individuals to vent frustrations. Many times however, the sheer desire

to wield power may be the primary reason for bullying.

What is the impact of bullying on employee motivation and behavior? Surprisingly,

even though victims of workplace bullies may feel less motivated to go to work every day, it

does not appear that they discontinue performing their required job duties. However, it does

appear that victims of bullies are less motivated to perform extra-role or citizenship

behaviors. Helping others, speaking positively about the organization, and going beyond the

call of duty are behaviors that are reduced as a result of bullying. According to Dr. Bennett

Tepper of the University of North Carolina, fear may be the reason that many workers

continue to perform their job duties. And not all individuals reduce their citizenship

behaviors. Some continue to engage in extra-role behaviors to make themselves look better

than their colleagues.

What should you do if your boss is bullying you? Don’t necessarily expect help from

coworkers. As Emelise Aleandri, an actress and producer from New York who left her job

after being bullied, stated, ``Some people were afraid to do anything. But others didn’t mind

what was happening at all, because they wanted my job.’’ Moreover, according to Dr.

Michelle Duffy of the University of Kentucky, coworkers often blame victims of bullying in

order to resolve their guilt. ``they do this by wondering whether maybe the person deserved

the treatment, that he or she has been annoying, or lazy, they did something to earn it,’’

states Dr. Duffy. One example of an employee who observed this phenomenon firsthand is

Sherry Hamby, who was frequently verbally abused by her boss and then eventually fired.

She stated, ``This was a man who insulted me, who insulted by family, who would lay into

me while everyone else in the office just sat there and let it happen. The people in my office

eventually started blaming me.’’

What can a bullied employee do? Dr. Hornstein suggests that employees try to ignore

the insults and respond only to the substance of the bully’s grip. `stick with the substance,

not the process, and often it won’t escalate,’’ he states. Of course, that is easier said than

done.

Questions:

1) Of the three types of organizational justice, which one does workplace

bullying most closely resemble?

2) What aspects of motivation might workplace bullying reduce? For example,

are there likely to be effects on an employee’s self-efficacy? If so, what might

those effects be?

3) If you were a victim of workplace bullying, what steps would you take to try

to reduce its occurrence? What strategies would be most effective? What

strategies might be ineffective? What would you do if one of your colleagues was

a victim of an abusive supervisor?

4) What factors do you believe contribute to workplace bullying? Are bullies a

product of the situation, or are they flawed personalities? What situations and

what personality factors might contribute to the presence of bullies?




CASE I

NAVEEN FISHERIES LTD.

The managing director of Naveen Fisheries Ltd. (NFL) received a message from one of the

members of the crew that their mechanized boats had sunk at sea off Paradeep Port Trust due to

unfavorable weather. The other directors of NFL ascertained the detailed information regarding the

incident. All the promoters were fresh graduates.

Naveem, Praveen, Nagain, Ravi and Chandra were the promoters of the organization (NFL at

Vishakhapattanam) with a capital contribution of Rs. 25 lakh each. Three of them had an engineering

background. The other two were commerce graduates. They had thought of designing the vessels

themselves so that the cost each mechanized boat would be reduced from Rs. 30 lakhs (if they bought

them) to Rs. 22 Lakh. They designed three boats and these were sent out with a newly – appointed

crew. Two vessels were sent to Paradeep and the third to Kakinada. Unfortunately, the weather was

unfavourable. All the vessels sank. The crew also did not have experience. Two workers were injured

and the rest arrived sagely. There was significant damage to the vessels and the residue was

considered scrap. The cost of scrap of the vessels was nominal. As their working capital was scarce,

and they were unable to invest more capital, they were in a dilemma whether to continue the business

or not.

Case I Questions:

1. What were the reasons for the sinking of the vessels?

2. How could they reorganize the businesses?

CASE II

MNC CORPORATION

At MNC Corporation, a foreman of inspection noticed a mistake in the assembly of transmitter cases.

The foreman, a shy man when speaking to his immediate superiors, mentioned this matter to the

senior supervisor in a weak, ineffectual manner. The senior supervisor nodded his head and continued

to work on a report that he was writing. Later, a production slowdown occurred, and it was discovered

that this flaw in the transmitter was the cause. The chief of production engineering, upset because this

error had passed inspection unnoticed, reproved the senior supervisor in a brusque manner.

The senior supervisor called in the foreman of inspection and asked why this error had not been

brought to his attention. The foreman said, “I told you the other day they were missing same of the

punch-outs in those transmitter cases.” The senior supervisor said, “Yes, but you did not pound the

desk when you told me!”

Case II Questions:

1. Why did the communication problem arise?

2. What do you suggest to prevent the communication problem?




CASE I

A GLOBAL PLAYER?

This is one game that India has permanently lost to its arch-rival Pakistan -

manufacturing and exporting sports goods. Historically, when India and Pakistan were one

before 1947, Sialkot, now in Pakistan, used to be the world's largest production centre for

badminton, hockey, football, volleyball, basketball, and cricket equipment. After the creation

of Pakistan, Jalandhar became the second centre after Hindus in the trade migrated to India.

Soon Jalandhar overtook Sialkot and till the early 1980s it remained so. However when the

face of the trade began to change in the 1980s and import of quality leather and

manufacturing equipment became a necessity for quality production, Pakistan wrested the

initiative as India clung it its policies of discouraging imports through high duties and

restrictions. As it was, the availability of labor and skills was a common factor in both Sialkot

and Jalandhar, but with Sialkot having the advantage of easier entry, most of the world's top

sports manufactures and procedures developed an association with local industry in Sialkot

that continues even today. Ten years later, in the early 1990s, when Manmohan Singh

liberalised the norms for importing equipment and raw material required for producing

sports goods, it was too late as majority of the global majors had already shifted base to

Sialkot.

In 1961 the late Narinder Mayor started the first large scale sports goods manufacturing

unit, Mayor & Company, thereby laying the foundation of an organized industry. Even today,

more than 70 percent of the industry functions in an unorganized manner. Starting with

soccer balls, Mayor expanded to produce inflatable balls like volleyballs, basketballs, and

rugby balls. Today his two sons Rajan & Rajesh have built it up into five companies engaged

in a wide array of businesses, though sports goods remain the group's core business. While

the parent trading company, Mayor & Company, remains the leading revenue-earner to the

tune of Rs. 55 crore annually out of a total group turnover of Rs. 85 crore-plus, Mayor's

second venture, the Indo-Australian Mayor International Limited, is spinning another Rs. 15

crore. Mayor International is a 100 per cent export-oriented unit (EOU) exclusively

manufacturing and exporting golf and tennis balls.

The product portfolio of the company comprises the following:

Inflatable Balls

Soccer balls and footballs (Professional, Indoor, Match and Training, leisure toy)

Volley balls, rugby balls (Volley balls and Beach Volley Balls)

Australian rugby, hand balls (English League, Union and touch) (Australian rules,

Australian Rugby League balls with laces)

Boxing Equipment

Boxing and punching balls (Boxing and Punching Balls, Head Gear, Gloves, Punching

Mitts and Kits Punching Bags & Bag Sets)

Gloves

Goal keeper's gloves (Football / Soccer)

Boxing gloves

Cricket Equipment

Worldwide distributor for Spading Cricket Bats, Balls and Protective equipment.

HOCKEY EQUIPMENT

Worldwide distributor for Spading Hokey Sticks, Balls & Protective equipment

Based in Delhi, Rajan Mayor, 41 is the CMD of the group, which also comprises an IT division

working on B2B and B2C solutions; Voyaguer World Travels in the tourism sector; a

houseware exports division specializing in stainless steel kitchenware, ceramics, and

textiles; and a high school. Younger brother Rajesh, 34, is the executive director and looks

after all the divisions operating in Jalandhar. Technical director Katz Nowaskowski divides his

time equally between India and Australia, where he looks after the group’s interests. “While

inflatable balls are our prime competence in our core business, we are presently focusing on

golf balls, for which we are the sole producers in South Asia. Out of a total Rs. 300 crore of

sports goods business generated in domestic market, most of which is supplied by the

unorganized players, golf balls constitute a miniscule amount and therefore we came up

with a 100 per cent EOU for producing golf balls. Later the same facility was utilized with

little moderation for tennis balls too,” says Nowaskowaski.

Clarifying that the sports good industry in India only includes playing equipment and

not apparels or shoes, D K Mittal, chairman of the Sports Goods Export Promotion Council

and joint secretary in the Ministry of Commerce, has certified Mayor group as the number

one exporter since 1993 till date, barring 1996. However, SGEPC secretary Tarun Dewan

points out that being the number one exporter does not mean that Mayor is the number one

brand being exported. “Actually we have tie ups Dunlop, Arnold Palmer, and Fila for

manufacturing golf balls. For footballs and volleyballs we have association with Adidas,

Mitre, Puma, Umbro, and Dunlop. We manufacture soccer World Cup and European Cup

replicas for Adidas, which is a huge market. Only 400 balls used for actual play in the World

Cup are manufactured in Europe & that too only for sentimental reason, otherwise we are

capable of delivering products of the same, if not better quality. Now since we manufacture

balls for them, we cannot antimonies them by producing balls of similar quality with our own

brand name. Secondly, I agree that competing with such big quaint in the world market in

terms of branding is a task that is well beyond our reach at the moment. However, we are

trying to brand ourselves in the domestic market and that is one of the prime focus in the

coming year,” says Rajan.

Coca-Cola, Unilever, McDonald’s, American Airlines, Disney club, and other such big

brands come up with huge orders at tines for golf balls with their logos for promotional

schemes. However, there is no mention of the producing country since these companies do

not want to show that balls they deliver in the US are being produced in Asia, “Not only is

our quality good enough; labour in India is cheap enough to churn out a much less

expensive product in the end. Yet, the main threat to our industry comes from countries like

Taiwan and China, who have already cornered a chunk of world markets in tennis,

badminton, and squash rackets. This is primarily because of two reasons – slow response to

our needs in tune with the market requirements from the government and lack of

infrastructure. And most importantly, tags ‘Made in China’ or ‘Made in Taiwan’ are more

acceptable in the West than ‘Made in India’ or ‘Made in Pakistan’. One of the mottos of the

Mayor group has been to make ‘Made in India’ an acceptable label in the West. For that we

stress quality, timely delivery, and competent rates. Yet, a lot depends on perception value,

which in our case is sadly on the negative side, much owing to our government’s stance

over the years. Things might be improving, but the pace is very slow and as our economy

drifts towards a free market scenario supinely, it might just prove to be too little too late in

the end,” says Rajesh.

Today, Mayor group is sitting pretty as its competitors, Soccer International Sakay

Trades, Savi, Wasan, Cosco, Nivia and Spartan are only trying to catch up in the inflatables

category. With 1.2 million dozen golf balls, Mayor is way ahead of its competitors. The

company is planning to enhance its manufacturing capacity to 1.5 million dozen golf next

fiscal. With approval from the world’s two top golf associations – the US PGA and RNA of

Scotland, demand for its product is not a problem, the company’s senior marketing officials

point out. With the markets in Mayor’s current export destinations – Europe, North America,

Australia, and Nw Zealand – all set to expand in the coming years after the present slump,

Mayor wants to expand its sports goods business that caters to 60 per cent of its overall

exports. Though 40 per cent of exports come from house ware manufactured in Delhi and

Mumbai, with export centres in the same countries for its sports goods, just about

maintaining this business at its present state, and concerning entirely on sports goods is

what the mayors are intent on.

With nearly 2000 skilled workforce; quality certification from ISO 9001:2000 and ISO

14001: 2004; and having spread to more than 40 countries, Mayor and Company is

obviously sitting pretty.

Questions

4. What routes of globalization has the Mayor group chosen to go global?

What other routes could it have taken?

5. What impediments are coming in the Mayor group’s way becoming a major

and active player in international business?

6. Why is ‘Made in India’ not liked in foreign markets? What can be done to

erase the perception?

Case NO. 2

COOKING LPG LTD

DETERMINATION OF WORKING CAPTIAL

Introduction :-

Cooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for

household consumption since 1995. The firm has a network of distributors in the districts of Gurgaon

and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur),

approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its

market to include the whole National Capital Region.

The production process of the plant consists of receipt of the bulk LPG through tank trucks,

storage in tanks, bottling operations and distribution to dealers. During the bottling process, the

cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as

weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched

to dealers through trucks. The supply and distribution section of the plant prepares the invoice which

goes along with the truck to the distributor.

Statement of the Problem :

Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of the company

during the current year. The various profitability ratios and parameters of the company indicated a very

satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the

working capital by the company. He could recall that during the past year, in spite of stable demand

pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making

various payments. He is aware that such aberrations in the finances have a cost and adversely affects

the performance of the company. However, he was unable to pinpoint the cause of the problem.

He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically

examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as

approximation by some rule of thumb without any proper computation based on sound financial policies

and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the

task of determination of WC to him.

Profile of Cooking LPG Ltd.

1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai and Kandla,

@ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT

capacity tank trucks (called bullets), hired on annual contract basis. The average transportation

cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the

plant. The company make payments for bulk supplies once in a month, resulting in average

time-lag of 15 days.

2) Storage and Bottling : The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks)

and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days

per month on an average. The desired level of inventory at various stages is as under.

LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales.

Filled Cylinders – 2 days average sales.

Work-in Process inventory – zero.

2) Marketing : The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per

cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per

cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on

company’s expense at the distributor’s godown, in exchange of equal number of empty

cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250

cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of

the draft, the cylinders are normally dispatched on the same day. However, for every truck

purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one

truck-load.

4) Salaries and Wages : The following payments are made :

Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month.

Security agency – Rs. 30,000 per month paid on 10th of subsequent month.

Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last

working day.

5) Overheads :

Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10 th of

subsequent month.

Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month.

Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at

the beginning of the year.

Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year.

Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month.

Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the

vendors. This includes expenditure on account of lubricants, spares and other stores.

Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly

basis on the 15th of the subsequent month.

All transportation charges as per contracts – paid on the 10th subsequent month.

Sales tax as per applicable rates is deposited on the 7th of the subsequent month.

6) Sales : Average sales are 2,500 cylinders per day during the year. However, during the winter

months (December to February), there is an incremental demand of 20 per cent.

7) Average Inventories : The average stocks maintained by the company as per its policy guidelines :

Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days

consumption.

Maintenance spares – Rs. 1 lakh

Lubricants – Rs. 20,000

Diesel (for DG sets and fire engines) – Rs. 15,000

Other stores (stationary, safety items) – Rs. 20,000

8) Minimum cash balance including bank balance required is Rs. 5 lakh.

9) Additional Information for Calculating Incremental Working Capital During Winter.

No increase in any inventories take place except in the inventory of bulk LPG, which increases in

the same proportion as the increase of the demand. The actual requirements of LPG for

additional supplies are procured under the same terms and conditions from the suppliers.

The labour cost for additional production is paid at double the rate during wintes.

No changes in other administrative overheads.

The expenditure on power consumption during winter increased by 10 per cent. However,

during other months the power consumption remains the same as the decrease owing to

reduced production is offset by increased consumption on account of compressors /Acs.

Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter.

No change in time schedules for any payables / receivables.

The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to

statutory requirements.

Case NO. 3

M/S HI-TECH ELECTRONICS

M/s. Hi – tech Electronics, a consumer electronics outlet, was opened two years ago in Dwarka, New

Delhi. Hard work and personal attention shown by the proprietor, Mr. Sony, has brought success.

However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank

credit cards. Mr. Sony is now considering a new policy of offering installment sales on terms of 25 per

cent down payment and 25 per cent per month for three months as well as continuing to accept cash

and bank credit cards.

Mr. Sony feels this policy will boost sales by 50 percent. All the increases in sales will be credit

sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales

projections for this year without the new policy are given in Exhibit 1.

Exhibit 1 Sales Projections and Fixed costs

Month Projected sales without instalment option Projected sales with instalment

option

January Rs. 6,00,000 Rs. 9,00,000

February 4,00,000 6,00,000

March 3,00,000 4,50,000

April 2,00,000 3,00,000

May 2,00,000 3,00,000

June 1,50,000 2,25,000

July 1,50,000 2,25,000

August 2,00,000 3,00,000

September 3,00,000 4,50,000

October 5,00,000 7,50,000

November 5,00,000 15,00,000

December 8,00,000 12,00,000

Total Sales 48,00,000 72,00,000

Fixed cost 2,40,000 2,40,000

He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2

per cent fee is paid, and 33.33 per cent on instalment sales. Also, for short term seasonal requirements,

the film takes loan from chit fund to which Mr. Sony subscribes @ 1.8 per cent per month.




CASE I

NAVEEN FISHERIES LTD.

The managing director of Naveen Fisheries Ltd. (NFL) received a message from one of the

members of the crew that their mechanized boats had sunk at sea off Paradeep Port Trust due to

unfavorable weather. The other directors of NFL ascertained the detailed information regarding the

incident. All the promoters were fresh graduates.

Naveem, Praveen, Nagain, Ravi and Chandra were the promoters of the organization (NFL at

Vishakhapattanam) with a capital contribution of Rs. 25 lakh each. Three of them had an engineering

background. The other two were commerce graduates. They had thought of designing the vessels

themselves so that the cost each mechanized boat would be reduced from Rs. 30 lakhs (if they bought

them) to Rs. 22 Lakh. They designed three boats and these were sent out with a newly – appointed

crew. Two vessels were sent to Paradeep and the third to Kakinada. Unfortunately, the weather was

unfavourable. All the vessels sank. The crew also did not have experience. Two workers were injured

and the rest arrived sagely. There was significant damage to the vessels and the residue was

considered scrap. The cost of scrap of the vessels was nominal. As their working capital was scarce,

and they were unable to invest more capital, they were in a dilemma whether to continue the business

or not.

Case I Questions:

3. What were the reasons for the sinking of the vessels?

4. How could they reorganize the businesses?

CASE II

MNC CORPORATION

At MNC Corporation, a foreman of inspection noticed a mistake in the assembly of transmitter cases.

The foreman, a shy man when speaking to his immediate superiors, mentioned this matter to the

senior supervisor in a weak, ineffectual manner. The senior supervisor nodded his head and continued

to work on a report that he was writing. Later, a production slowdown occurred, and it was discovered

that this flaw in the transmitter was the cause. The chief of production engineering, upset because this

error had passed inspection unnoticed, reproved the senior supervisor in a brusque manner.

The senior supervisor called in the foreman of inspection and asked why this error had not been

brought to his attention. The foreman said, “I told you the other day they were missing same of the

punch-outs in those transmitter cases.” The senior supervisor said, “Yes, but you did not pound the

desk when you told me!”

Case II Questions:

3. Why did the communication problem arise?

4. What do you suggest to prevent the communication problem?

MASTER’S PROGRAM IN BUSINESS ADMINISTRATION

CASE I

A DIAMOND PERSONALITY

Ask Suraj bhai about the dot-com burst and he may grin at you as if to say, ``What

burst?’’ Suraj bhai, a 38-year-old entrepreneur, owns an Internet business that sells loose

diamonds to various buyers. Business is becoming for Suraj bhai. In 2004, he had sales of

INR 3,500 million. Needless to say, Suraj bhai is optimistic about his business venture.

The future wasn’t always to bright for Suraj bhai, however. In 1985, Suraj bhai moved

from his native town Suraj, to New Delhi, with little ability to speak English. There, he

attended language courses and worked at the local mall to support himself. After

graduation, his roommate’s girlfriend suggested that he work at a local jeweler. `Ì thought

she was crazy. I didn’t know anything about jewelry,’’ says Suraj bhai, who took her advice.

Though he worked hard and received his Diamonds and Diamonds Grading certification from

the Gemological Institute, he wasn’t satisfied with his progress. Ì quickly realized that

working there, I was just going to get a salary with a raise here and there. I would never

become anything. That drove me to explore other business ventures. I also came to really

known diamonds – their pricing and their quality.’’

In 1997, tired of working for someone else, Suraj bhai decided to open his own

jewelry store. However, business didn’t boom. `Some of my customers were telling me they

could find diamonds for less on the Interest. It blew my mind’’ Surajy bhai recognized an

opportunity and began contacting well-known diamond dealers to see if they would be

interested in selling their gems online. Suraj bhai recalls one conversation with a prominent

dealer who told him, `You cannot sell diamonds on the Internet. You will not survive.’’

Discouraged, Suraj bhai then says that he made a mistake. `Ì stopped working on it. If you

have a dream, you have to keep working harder at it.’’

A year later, Suraj bhai did work harder at his dream and found a dealer who agreed

to provide him with some diamonds. Says Suray bhai, `Ònce I had one. I could approach

others. Business started to build. The first 3 months I sold INR 20 million worth of diamonds

right off the bat. And that was just me. I started to add employees and eventually closed the

jewelry store and got out of retail.’’ Although Suraj bhai does have some diamonds in

inventory, he primarily acts as a connection point between buyers and suppliers, giving his

customers an extraordinary selection from which to choose.

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