Note: Solve any 4 Cases Study’s
CASE: I Conceptualise and Get Sacked
HSS Ltd. is a leader in high-end textiles having headquarters in Bangalore.
The company records a turnover of Rs 1,000 cr. Plus a year. A year back, HSS set up a unit at Hassan (250 km away from Bangalore) to spin home textiles. The firm hired Maniyam as GM-HR and asked him to operationalise the Hassan unit.
Maniyam has a vision. Being a firm believer in affirmative actions, he plans to reach out to the rural areas and tap the potentials of teenaged girls with plus two educational background. Having completed their 12th standard, these girls are sitting at homes, idling their time, watching TV serials endlessly and probably dreaming about their marriages. Junior colleges are located in their respective villages and it is easy for these girls to get enrolled in them. But degree colleges are not nearby. The nearest degree college is minimum 10 km and no parents dare send their daughters on such long distances and that too for obtaining degrees, which would not guarantee them jobs but could make searching for suitable boys highly difficult.
These are the girls to whom Maniyam wants to reach out. How to go about hiring 1500 people from a large number who can be hired? And Karnataka is a big state with 27 districts. The GM-HR studies the geography of all the 27 districts and zeroes in on nine of them known for backwardness and industriousness.
Maniyam then thinks of the principals of Junior Colleges in all the nine districts as contact persons to identify potential candidates. This route is sure to ensure desirability and authenticity of the candidates. The girls are raw hands. Except the little educational background, they know nothing else. They need to be trained. Maniyam plans to set up a training centre at Hassan with hostel facilities for new hires. He even hires Anil, an MBA from UK, to head the training centre.
All is set. It is bright day in October 2006. MD and the newly hired VP-HR came to Hassan from Bangalore. 50 principals from different parts of the nine districts also came on invitation from Maniyam and Anil. Discussions, involving all, go on upto 2 PM. At that time, MD and VP-HR ask Maniyam to meet them at the guest house to discuss some confidential matter.
In this meeting, Maniyam is told that his style of functioning does not jell with the culture of HSS. He gets the shock of life. He responds on expected by submitting his papers.
Back in his room, Maniyam wonders what has gone wrong. Probably, the VP-HR being the same age as he is, is feeling jealous and insecure since the MD has all appreciation for the concept and the way things are happening. Maniyam does not have regrets. On the contrary he is happy that his concept is being followed though he has been sacked. After all, HSS has already hired 500 girls. With Rs 3,000 plus a month each, these girls and their parents now find it easy to find suitable boys.
Question:
1. What mad the MD change his mind and go against Maniyam? What role might the VP-HR have played in the episode?
2. If you were Maniyam, what would you do?
CASE: II A Tale of Twists and Turns
Rudely shaken, Vijay came home in the evening. He was not in a mood to talk to his wife. Bolted inside, he sat in his room, lit a cigarette, and brooded over his experience with a company he loved most.
Vijay, an M.Com and an ICWA, joined the finance department of a Bangalore-based electric company (Unit 1), which boasts of an annual turnover of Rs. 400 crores. He is smart, intelligent, but conscientious. He introduced several new systems in record-keeping and was responsible for cost reduction in several areas. Being a loner, Vijay developed few friends in and outside the organization. He also missed promotions four times though he richly deserved them.
G.M. Finance saw to it that Vijay was shifted to Unit 2 where he was posted in purchasing. Though purchasing was not his cup of tea, Vijay went into it whole hog, streamlined the purchasing function, and introduced new systems, particularly in vendor development. Being honest himself, Vijay ensured that nobody else made money through questionable means.
After two years in purchasing, Vijay was shifted to stores. From finance to purchasing to stores was too much for Vijay to swallow.
He burst out before the unit head, and unable to control his anger, Vijay put in his papers too. The unit head was aghast at this development but did nothing to console Vijay. He forwarded the papers to the V.P. Finance, Unit 1.
The V.P. Finance called in Vijay, heard him for a couple of hours, advised him not to lose heart, assured him that his interests would be taken care of and requested him to resume duties in purchasing Unit 2. Vijay was also assured that no action would be taken on the papers he had put in.
Six months passed by. Then came the time to effect promotions. The list of promotees was announced and to his dismay, Vijay found that his name was missing. Angered, Vijay met the unit head who coolly told Vijay that he could collect his dues and pack off to his house for good. It was great betrayal for Vijay.
Question:
1. What should Vijay do?
CASE: III Mechanist’s Indisciplined Behaviour
Dinesh, a machine operator, worked as a mechanist for Ganesh, the supervisor. Ganesh told Dinesh to pick up some trash that had fallen from Dinesh’s work area, and Dinesh replied, “I won’t do the janitor’s work.”
Ganesh replied, “when you drop it, you pick it up”. Dinesh became angry and abusive, calling Ganesh a number of names in a loud voice and refusing to pick up the trash. All employees in the department heard Dinesh’s comments.
Ganesh had been trying for two weeks to get his employees to pick up trash in order to have cleaner workplace and prevent accidents. He talked to all employees in a weekly departmental meeting and to each employee individually at least once. He stated that he was following the instructions of the general manager. The only objection came from Dinesh.
Dinesh has been with the company for five years, and in this department for six months. Ganesh had spoken to him twice about excessive alcoholism, but otherwise his record was good. He was known to have quick temper.
This outburst by Dinesh hurt Ganesh badly, Ganesh told Dinesh to come to the office and suspended him for one day for insubordination and abusive language to a supervisor. The decision was within company policy, and similar behaviours had been punished in other departments.
After Dinesh left Ganesh’s office, Ganesh phoned the HR manager, reported what he had done, and said that he was sending a copy of the suspension order for Dinesh’s file.
Question:
1. How would you rate Dinesh’s behaviour? What method of appraisal would you use? Why?
2. Do you assess any training needs of employees? If yes, what inputs should be embodied in the training programme?
CASE: IV A Case of Misunderstood Message
Indane Biscuits is located in an industrial area. The biscuit factory employs labour on a daily basis. The management does not follow statutory regulations, and are able to get away with violations by keeping the concerned inspectors in good books.
The factory has a designated room to which employees are periodically called either to hire or to fire.
On the National Safety Day, the Industries Association, of which Indane Biscuits is a member, decided to celebrate collectively at a central place. Each of the member was given a specific task. The Personnel Manager, Indane Biscuits, desired to consult his supervisors and to inform everybody through them about the safety day celebrations. He sent a memo requesting them to be present in the room meant for hiring and firing. As soon as the supervisors read the memo, they all got panicky thinking that now it was their turn to get fired. They started having ‘hush-hush’ consultations. The workers also learnt about it, and since they had a lot of scores to settle with the management they extended their sympathy and support to the supervisors. As a consequence, everybody struck work and the factory came to a grinding halt.
In the meantime, the personnel manager was unaware of the developments and when he came to know of it he went immediately and tried to convince the supervisors about the purpose of inviting them and the reason why that particular room was chosen. To be fair to the Personnel Manager, he selected the room because no other room was available. But the supervisors and the workers were in no mood to listen.
The Managing Director, who rushed to the factory on hearing about the strike, also couldn’t convince the workers.
The matter was referred to the labour department. The enquiry that followed resulted in all irregularities of the factory getting exposed and imposition of heavy penalties. The Personnel Manager was sacked. The factory opened after prolonged negotiations and settlements.
Question:
1. In the case of the Indane Biscuits, bring out the importance of ‘context’ and ‘credibility’ in communication.
2. List the direct and indirect causes for the escalation of tension at Indane Biscuits.
3. If you were the Personnel Manager what would you do?
CASE: V Rise and Fall
Jagannath (Jaggu to his friends) is an over ambitious young man. For him ends justify means.
With a diploma in engineering. Jaggu joined, in 1977, a Bangalore-based company as a Technical Assistant. He got himself enrolled as a student in a evening college and obtained his degree in engineering in 1982. Recognising his improved qualification, Jaggu was promoted as Engineer-Sales in 1984.
Jaggu excelled himself in the new role and became the blue-eyed boy of the management. Promotions came to him in quick succession. He was made Manager-Sales in 1986 and Senior Manager-Marketing in 1988.
Jaggu did not forget his academic pursuits. After being promoted as Engineer-Sales, he joined an MBA (part-time) programme. After completing MBA, Jaggu became a Ph.D. scholar and obtained his doctoral degree in 1989.
Functioning as Senior Manager-Marketing, Jaggu eyed on things beyond his jurisdiction. He started complaining Suresh—the Section Head and Phahalad the Unit Chief (both production) with Ravi, the EVP (Executive-Vice President). The complaints included delay in executing orders, poor quality and customer rejections. Most of the complaints were concocted.
Ravi was convinced and requested Jaggu to head the production section so that things could be straightened up there. Jaggu became the Section head and Suresh was shifted to sales.
Jaggu started spreading wings. He prevailed upon Ravi and got sales and quality under his control, in addition to production. Suresh, an equal in status, was now subordinated to Jaggu. Success had gone to Jaggu’s head. He had everything going in his favour—position, power, money and qualification. He divided workers and used them as pawns. He ignored Prahalad and established direct link with Ravi. Unable to bear the humiliation, Prahalad quit the company. Jaggu was promoted as General Manager. He became a megalomaniac.
Things had to end at some point. It happened in Jaggu’s life too. There were complaints against him. He had inducted his brother-in-law, Ganesh, as an engineer. Ganesh was by nature corrupt. He stole copper worth Rs.5 lakh and was suspended. Jaggu tried to defend Ganesh but failed in his effort. Corruption charges were also leveled against Jaggu who was reported to have made nearly Rs.20 lakh himself.
On the new-year day of 1993, Jaggu was reverted to his old position—sales. Suresh was promoted and was asked to head production. Roles got reversed. Suresh became the boss to Jaggu.
Unable to swallow the insult, Jaggu put in his papers.
From 1977 to 1993, Jaggu’s career graph has a steep rise and sudden fall. Whether there would be another hump in the curve is a big question.
Question:
1. Bring out the principles of promotion that were employed in promoting Jaggu.
2. What would you do if you were (i) Suresh, (ii) Prahalad or (iii) Ravi?
3. Bring out the ethical issues involved in Jaggu’s behaviour.
CASE: VI Chairman and CEO Seeking a Solution and Finding It
Sitting on 50-plus year old ION Tyres, the Kolkata-based tyres and tubes manufacturing company with a turnover of more than Rs.1,000 crore, both A.K. Mathur, and Raman Kumar, the CEO are searching for solutions to problems which their company started unfolding.
Financial performance of ION Tyres, is poor as reflected in its falling PBT. Performance gap between the top performer in tyres and tubes and ION Tyres ranges from 4 per cent to 5 per cent. The company has aging managerial people and equally old plant and equipment. High cost of production keeps the company in a disadvantaged position. “Boss is always right” culture has permeated everywhere. Common thread binding all the departments is missing. Each department is a stand alone entity.
There are positives nevertheless. ION Tyres and tubes are famous world-wide for durability, and superior quality. The company offers a wide range of bias tyres and tubes catering to all users segments like heavy and light commercial vehicles, motorbikes, scooters, and autos. The firm has state-of-the-art radial plant. The client list of ION comprises several big guns in Indian corporate sector. Tata Motors, Hero Honda, TVS Motors, Mahindra and Mahindra, L&T, Eicher, Swaraj Mazda, Maruti Udyog and Bajaj are the regularly buying ION’s tyres and tubes.
ION seems to have everything going in its favour. It is the market leader in the Indian market enjoying 19 per cent of the market share; manufactures 5.6 m tyres per year, has a network of 50 regional offices with over 4,000 dealers and 180 C&F agents.
Suddenly both Chairman and CEO have realised that there are too many road blocks ahead of them and the journey to be rough and bumpy.
Realisation dawned on Mathur and Raman Kumar way back in 2001 when they both attended a two-day seminar on “Enhancing Organisational Capability through Balanced Scorecard” organised by CII at Kolkotta. The duo had personal talk with Sanjeev Kumar, the then Chairman of CII. They are now convinced that Balanced Score card is ideal performance assessment tool that could be used in ION with greater benefits.
Mathur and Raman Kumar acted fast. They soon organised a workshop on “Balanced Score” to educate in-house managers about the concept and the procedural aspects of its implementation. There was initial resistance to accept the scorecard as the managers felt that they were already burdened since they were busy implementing other quality improvement initiatives. Deliberations in the workshop changed them. They are now convinced and enthusiastic about the positives of the scorecard. They are ready to implement the system.
A two member task force was constituted comprising Director—HRD and G.M.—Strategy and Planning. The task force travelled to all three factories as well as zonal headquarters to unfold the implementation of scorecard. The scorecard principles were implemented successfully from November 2002 and completed by March 2003. Figures 1 to 4 show the scorecards adopted by ION Tyres.
Financial
“To succeed financially how should we appear to our shareholder Objectives Measure Target Initiatives
To achieve turnover of Rs.1850 crs by FY05 • Sales turnover
• PBIDT • To achieve turnover of Rs.1850 crs by FY05
• PBIDT of Rs.150 crs (FY05)
• Decrease in conversion cost from Rs.25 to Rs.21/kg in Bhopal plant and Rs.25/kg in Mysore plant • Develop acceptable 1000-20 lug tyres
• Increasing number of sales offices from 180 to 220
• 7 day work week to be introduced at Bhopal plant
• Improve fuel wastage and ensure lower power
• VP Technology and MD to initiate technology tie-ups
Fig. 1
Customer
“To achieve our vision, how should we appear to out customers” Objectives Measure Target Initiatives
Improvement in customer satisfaction • Customer satisfaction survey (by external agency) • To improve from 65% to 70%
• Customer engagement at 30% • Claim settlement to be reduced from 8 to 2 days
• Improvement of casing value of used tyres, atleast by 15%
• Cost per Kilometer of tyre comparable to competitors
Fig. 2
Outcomes of scorecard implementation have been very encouraging. PBT improved and the gap between ION Tyres and the toppers in the industry reduced by 50 per cent. A transparent and objective performance assessment system came to be kept in place. With inertia and the ennui being broken, both Mathur and Kumar felt galvanized and realised that the road ahead of them was no more bumpy and rough. Thus, solutions to the problems were found.
Learning and Growth
“To achieve our vision, how will we sustain our ability to change an improve” Objectives Measure Target Initiatives
Identification of “high-fliers”; Talents to be identified through development workshops • Job enrichment, job enlargement, job rotation
• Competency Assessment
• Potential Appraisals • Career planning for the High-Fliers (expected to be around 30 managers)
• Successions planning for all key positions
• 5 manday’s training/manager/year • Move people within same functions, in the first two years and at the year two move them to another function
• Variable pay component in the ration 1:4 for the “high-fliers”
• Non-financial rewards
• Felicitation by company chairman in presence of family members for recognizing extraordinary contributions
Fig. 3
Internal Business Processes
“To satisfy our shareholders and customers, what business processes must we excel at” Objectives Measure Target Initiatives
Introduction of new products in the commercial tyre segment
Reduction of development time
Quarterly reconciliation of accounts receivables from dealers
Annual increases on-time to employees • Introduction of 3-4 new products per year in commercial tyre segment
• Reduction of development time from 18 months to 6 months
• Achieve 100% reconciliation
• Annual increases by on time by 1st July • Introduction of 3-4 new products per year in commercial tyre segment
• Reduction of development time from 18 months to 6 months
• Achieve 100% reconciliation
• Annual increases by on time by 1st July • Regular quarterly review of performance
• KRA targets to be ready by 1st April
• European certification for tyres
Fig.4
Question:
1. Do you agree with the conclusion drawn at the end of the case that scorecard system has galvanised ION Tyres? In other words, does scorecard system deserve all the credit?
2. Will quality improvement initiatives clash with scorecard implementation? If yes, how to avoid the clashes?
CASE: I Conceptualise and Get Sacked
HSS Ltd. is a leader in high-end textiles having headquarters in Bangalore.
The company records a turnover of Rs 1,000 cr. Plus a year. A year back, HSS set up a unit at Hassan (250 km away from Bangalore) to spin home textiles. The firm hired Maniyam as GM-HR and asked him to operationalise the Hassan unit.
Maniyam has a vision. Being a firm believer in affirmative actions, he plans to reach out to the rural areas and tap the potentials of teenaged girls with plus two educational background. Having completed their 12th standard, these girls are sitting at homes, idling their time, watching TV serials endlessly and probably dreaming about their marriages. Junior colleges are located in their respective villages and it is easy for these girls to get enrolled in them. But degree colleges are not nearby. The nearest degree college is minimum 10 km and no parents dare send their daughters on such long distances and that too for obtaining degrees, which would not guarantee them jobs but could make searching for suitable boys highly difficult.
These are the girls to whom Maniyam wants to reach out. How to go about hiring 1500 people from a large number who can be hired? And Karnataka is a big state with 27 districts. The GM-HR studies the geography of all the 27 districts and zeroes in on nine of them known for backwardness and industriousness.
Maniyam then thinks of the principals of Junior Colleges in all the nine districts as contact persons to identify potential candidates. This route is sure to ensure desirability and authenticity of the candidates. The girls are raw hands. Except the little educational background, they know nothing else. They need to be trained. Maniyam plans to set up a training centre at Hassan with hostel facilities for new hires. He even hires Anil, an MBA from UK, to head the training centre.
All is set. It is bright day in October 2006. MD and the newly hired VP-HR came to Hassan from Bangalore. 50 principals from different parts of the nine districts also came on invitation from Maniyam and Anil. Discussions, involving all, go on upto 2 PM. At that time, MD and VP-HR ask Maniyam to meet them at the guest house to discuss some confidential matter.
In this meeting, Maniyam is told that his style of functioning does not jell with the culture of HSS. He gets the shock of life. He responds on expected by submitting his papers.
Back in his room, Maniyam wonders what has gone wrong. Probably, the VP-HR being the same age as he is, is feeling jealous and insecure since the MD has all appreciation for the concept and the way things are happening. Maniyam does not have regrets. On the contrary he is happy that his concept is being followed though he has been sacked. After all, HSS has already hired 500 girls. With Rs 3,000 plus a month each, these girls and their parents now find it easy to find suitable boys.
Question:
1. What mad the MD change his mind and go against Maniyam? What role might the VP-HR have played in the episode?
2. If you were Maniyam, what would you do?
CASE: II A Tale of Twists and Turns
Rudely shaken, Vijay came home in the evening. He was not in a mood to talk to his wife. Bolted inside, he sat in his room, lit a cigarette, and brooded over his experience with a company he loved most.
Vijay, an M.Com and an ICWA, joined the finance department of a Bangalore-based electric company (Unit 1), which boasts of an annual turnover of Rs. 400 crores. He is smart, intelligent, but conscientious. He introduced several new systems in record-keeping and was responsible for cost reduction in several areas. Being a loner, Vijay developed few friends in and outside the organization. He also missed promotions four times though he richly deserved them.
G.M. Finance saw to it that Vijay was shifted to Unit 2 where he was posted in purchasing. Though purchasing was not his cup of tea, Vijay went into it whole hog, streamlined the purchasing function, and introduced new systems, particularly in vendor development. Being honest himself, Vijay ensured that nobody else made money through questionable means.
After two years in purchasing, Vijay was shifted to stores. From finance to purchasing to stores was too much for Vijay to swallow.
He burst out before the unit head, and unable to control his anger, Vijay put in his papers too. The unit head was aghast at this development but did nothing to console Vijay. He forwarded the papers to the V.P. Finance, Unit 1.
The V.P. Finance called in Vijay, heard him for a couple of hours, advised him not to lose heart, assured him that his interests would be taken care of and requested him to resume duties in purchasing Unit 2. Vijay was also assured that no action would be taken on the papers he had put in.
Six months passed by. Then came the time to effect promotions. The list of promotees was announced and to his dismay, Vijay found that his name was missing. Angered, Vijay met the unit head who coolly told Vijay that he could collect his dues and pack off to his house for good. It was great betrayal for Vijay.
Question:
1. What should Vijay do?
CASE: III Mechanist’s Indisciplined Behaviour
Dinesh, a machine operator, worked as a mechanist for Ganesh, the supervisor. Ganesh told Dinesh to pick up some trash that had fallen from Dinesh’s work area, and Dinesh replied, “I won’t do the janitor’s work.”
Ganesh replied, “when you drop it, you pick it up”. Dinesh became angry and abusive, calling Ganesh a number of names in a loud voice and refusing to pick up the trash. All employees in the department heard Dinesh’s comments.
Ganesh had been trying for two weeks to get his employees to pick up trash in order to have cleaner workplace and prevent accidents. He talked to all employees in a weekly departmental meeting and to each employee individually at least once. He stated that he was following the instructions of the general manager. The only objection came from Dinesh.
Dinesh has been with the company for five years, and in this department for six months. Ganesh had spoken to him twice about excessive alcoholism, but otherwise his record was good. He was known to have quick temper.
This outburst by Dinesh hurt Ganesh badly, Ganesh told Dinesh to come to the office and suspended him for one day for insubordination and abusive language to a supervisor. The decision was within company policy, and similar behaviours had been punished in other departments.
After Dinesh left Ganesh’s office, Ganesh phoned the HR manager, reported what he had done, and said that he was sending a copy of the suspension order for Dinesh’s file.
Question:
1. How would you rate Dinesh’s behaviour? What method of appraisal would you use? Why?
2. Do you assess any training needs of employees? If yes, what inputs should be embodied in the training programme?
CASE: IV A Case of Misunderstood Message
Indane Biscuits is located in an industrial area. The biscuit factory employs labour on a daily basis. The management does not follow statutory regulations, and are able to get away with violations by keeping the concerned inspectors in good books.
The factory has a designated room to which employees are periodically called either to hire or to fire.
On the National Safety Day, the Industries Association, of which Indane Biscuits is a member, decided to celebrate collectively at a central place. Each of the member was given a specific task. The Personnel Manager, Indane Biscuits, desired to consult his supervisors and to inform everybody through them about the safety day celebrations. He sent a memo requesting them to be present in the room meant for hiring and firing. As soon as the supervisors read the memo, they all got panicky thinking that now it was their turn to get fired. They started having ‘hush-hush’ consultations. The workers also learnt about it, and since they had a lot of scores to settle with the management they extended their sympathy and support to the supervisors. As a consequence, everybody struck work and the factory came to a grinding halt.
In the meantime, the personnel manager was unaware of the developments and when he came to know of it he went immediately and tried to convince the supervisors about the purpose of inviting them and the reason why that particular room was chosen. To be fair to the Personnel Manager, he selected the room because no other room was available. But the supervisors and the workers were in no mood to listen.
The Managing Director, who rushed to the factory on hearing about the strike, also couldn’t convince the workers.
The matter was referred to the labour department. The enquiry that followed resulted in all irregularities of the factory getting exposed and imposition of heavy penalties. The Personnel Manager was sacked. The factory opened after prolonged negotiations and settlements.
Question:
1. In the case of the Indane Biscuits, bring out the importance of ‘context’ and ‘credibility’ in communication.
2. List the direct and indirect causes for the escalation of tension at Indane Biscuits.
3. If you were the Personnel Manager what would you do?
CASE: V Rise and Fall
Jagannath (Jaggu to his friends) is an over ambitious young man. For him ends justify means.
With a diploma in engineering. Jaggu joined, in 1977, a Bangalore-based company as a Technical Assistant. He got himself enrolled as a student in a evening college and obtained his degree in engineering in 1982. Recognising his improved qualification, Jaggu was promoted as Engineer-Sales in 1984.
Jaggu excelled himself in the new role and became the blue-eyed boy of the management. Promotions came to him in quick succession. He was made Manager-Sales in 1986 and Senior Manager-Marketing in 1988.
Jaggu did not forget his academic pursuits. After being promoted as Engineer-Sales, he joined an MBA (part-time) programme. After completing MBA, Jaggu became a Ph.D. scholar and obtained his doctoral degree in 1989.
Functioning as Senior Manager-Marketing, Jaggu eyed on things beyond his jurisdiction. He started complaining Suresh—the Section Head and Phahalad the Unit Chief (both production) with Ravi, the EVP (Executive-Vice President). The complaints included delay in executing orders, poor quality and customer rejections. Most of the complaints were concocted.
Ravi was convinced and requested Jaggu to head the production section so that things could be straightened up there. Jaggu became the Section head and Suresh was shifted to sales.
Jaggu started spreading wings. He prevailed upon Ravi and got sales and quality under his control, in addition to production. Suresh, an equal in status, was now subordinated to Jaggu. Success had gone to Jaggu’s head. He had everything going in his favour—position, power, money and qualification. He divided workers and used them as pawns. He ignored Prahalad and established direct link with Ravi. Unable to bear the humiliation, Prahalad quit the company. Jaggu was promoted as General Manager. He became a megalomaniac.
Things had to end at some point. It happened in Jaggu’s life too. There were complaints against him. He had inducted his brother-in-law, Ganesh, as an engineer. Ganesh was by nature corrupt. He stole copper worth Rs.5 lakh and was suspended. Jaggu tried to defend Ganesh but failed in his effort. Corruption charges were also leveled against Jaggu who was reported to have made nearly Rs.20 lakh himself.
On the new-year day of 1993, Jaggu was reverted to his old position—sales. Suresh was promoted and was asked to head production. Roles got reversed. Suresh became the boss to Jaggu.
Unable to swallow the insult, Jaggu put in his papers.
From 1977 to 1993, Jaggu’s career graph has a steep rise and sudden fall. Whether there would be another hump in the curve is a big question.
Question:
1. Bring out the principles of promotion that were employed in promoting Jaggu.
2. What would you do if you were (i) Suresh, (ii) Prahalad or (iii) Ravi?
3. Bring out the ethical issues involved in Jaggu’s behaviour.
CASE: VI Chairman and CEO Seeking a Solution and Finding It
Sitting on 50-plus year old ION Tyres, the Kolkata-based tyres and tubes manufacturing company with a turnover of more than Rs.1,000 crore, both A.K. Mathur, and Raman Kumar, the CEO are searching for solutions to problems which their company started unfolding.
Financial performance of ION Tyres, is poor as reflected in its falling PBT. Performance gap between the top performer in tyres and tubes and ION Tyres ranges from 4 per cent to 5 per cent. The company has aging managerial people and equally old plant and equipment. High cost of production keeps the company in a disadvantaged position. “Boss is always right” culture has permeated everywhere. Common thread binding all the departments is missing. Each department is a stand alone entity.
There are positives nevertheless. ION Tyres and tubes are famous world-wide for durability, and superior quality. The company offers a wide range of bias tyres and tubes catering to all users segments like heavy and light commercial vehicles, motorbikes, scooters, and autos. The firm has state-of-the-art radial plant. The client list of ION comprises several big guns in Indian corporate sector. Tata Motors, Hero Honda, TVS Motors, Mahindra and Mahindra, L&T, Eicher, Swaraj Mazda, Maruti Udyog and Bajaj are the regularly buying ION’s tyres and tubes.
ION seems to have everything going in its favour. It is the market leader in the Indian market enjoying 19 per cent of the market share; manufactures 5.6 m tyres per year, has a network of 50 regional offices with over 4,000 dealers and 180 C&F agents.
Suddenly both Chairman and CEO have realised that there are too many road blocks ahead of them and the journey to be rough and bumpy.
Realisation dawned on Mathur and Raman Kumar way back in 2001 when they both attended a two-day seminar on “Enhancing Organisational Capability through Balanced Scorecard” organised by CII at Kolkotta. The duo had personal talk with Sanjeev Kumar, the then Chairman of CII. They are now convinced that Balanced Score card is ideal performance assessment tool that could be used in ION with greater benefits.
Mathur and Raman Kumar acted fast. They soon organised a workshop on “Balanced Score” to educate in-house managers about the concept and the procedural aspects of its implementation. There was initial resistance to accept the scorecard as the managers felt that they were already burdened since they were busy implementing other quality improvement initiatives. Deliberations in the workshop changed them. They are now convinced and enthusiastic about the positives of the scorecard. They are ready to implement the system.
A two member task force was constituted comprising Director—HRD and G.M.—Strategy and Planning. The task force travelled to all three factories as well as zonal headquarters to unfold the implementation of scorecard. The scorecard principles were implemented successfully from November 2002 and completed by March 2003. Figures 1 to 4 show the scorecards adopted by ION Tyres.
Financial
“To succeed financially how should we appear to our shareholder Objectives Measure Target Initiatives
To achieve turnover of Rs.1850 crs by FY05 • Sales turnover
• PBIDT • To achieve turnover of Rs.1850 crs by FY05
• PBIDT of Rs.150 crs (FY05)
• Decrease in conversion cost from Rs.25 to Rs.21/kg in Bhopal plant and Rs.25/kg in Mysore plant • Develop acceptable 1000-20 lug tyres
• Increasing number of sales offices from 180 to 220
• 7 day work week to be introduced at Bhopal plant
• Improve fuel wastage and ensure lower power
• VP Technology and MD to initiate technology tie-ups
Fig. 1
Customer
“To achieve our vision, how should we appear to out customers” Objectives Measure Target Initiatives
Improvement in customer satisfaction • Customer satisfaction survey (by external agency) • To improve from 65% to 70%
• Customer engagement at 30% • Claim settlement to be reduced from 8 to 2 days
• Improvement of casing value of used tyres, atleast by 15%
• Cost per Kilometer of tyre comparable to competitors
Fig. 2
Outcomes of scorecard implementation have been very encouraging. PBT improved and the gap between ION Tyres and the toppers in the industry reduced by 50 per cent. A transparent and objective performance assessment system came to be kept in place. With inertia and the ennui being broken, both Mathur and Kumar felt galvanized and realised that the road ahead of them was no more bumpy and rough. Thus, solutions to the problems were found.
Learning and Growth
“To achieve our vision, how will we sustain our ability to change an improve” Objectives Measure Target Initiatives
Identification of “high-fliers”; Talents to be identified through development workshops • Job enrichment, job enlargement, job rotation
• Competency Assessment
• Potential Appraisals • Career planning for the High-Fliers (expected to be around 30 managers)
• Successions planning for all key positions
• 5 manday’s training/manager/year • Move people within same functions, in the first two years and at the year two move them to another function
• Variable pay component in the ration 1:4 for the “high-fliers”
• Non-financial rewards
• Felicitation by company chairman in presence of family members for recognizing extraordinary contributions
Fig. 3
Internal Business Processes
“To satisfy our shareholders and customers, what business processes must we excel at” Objectives Measure Target Initiatives
Introduction of new products in the commercial tyre segment
Reduction of development time
Quarterly reconciliation of accounts receivables from dealers
Annual increases on-time to employees • Introduction of 3-4 new products per year in commercial tyre segment
• Reduction of development time from 18 months to 6 months
• Achieve 100% reconciliation
• Annual increases by on time by 1st July • Introduction of 3-4 new products per year in commercial tyre segment
• Reduction of development time from 18 months to 6 months
• Achieve 100% reconciliation
• Annual increases by on time by 1st July • Regular quarterly review of performance
• KRA targets to be ready by 1st April
• European certification for tyres
Fig.4
Question:
1. Do you agree with the conclusion drawn at the end of the case that scorecard system has galvanised ION Tyres? In other words, does scorecard system deserve all the credit?
2. Will quality improvement initiatives clash with scorecard implementation? If yes, how to avoid the clashes?
No comments:
Post a Comment