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MASTER’S PROGRAM IN BUSINESS ADMINISTRATION

Case I

McDonald’s: Serving Fast Food Around the World

Ray Kroc opened the first McDonald’s restaurant in 1955.  He offered a limited menu of high-quality, moderately-priced food served fast in spotless surroundings. McDonald’s “QSC&V” (quality, service, cleanliness, and value) was a hit.  The chain expanded into every state in the nation.  By 1983 it had more than 6000 restaurants in the United States and by 1995 it had more than 18,000 restaurants in 89 countries, located in six continents.  In 1995 alone, the company built 2,400 restaurants.
    In 1967 McDonald’s opened its first restaurant outside the United States, in Canada.  Since then, the international growth accelerated.  In 1995, the “Big Six” countries that provide about 80 percent of the international operating income are: Canada, Japan, Germany, Australia, France, and England.  In the same year, more that 7000 restaurants in 89 countries generated sales of $14 billion. Yet fast food has barely touched many cultures.  The opportunities for expanding the market are great when one realizes that 99 percent of the world population is not yet McDonald’s customers.  For example, in China, with a population of 1.2 billion people, there are only 62 McDonald’s restaurants (1995).  McDonald’s vision is to be the major player in food services around the world.
    In Europe, McDonald maintains a small percentage of restaurant sales but commands a large share of the fast food market.  It took the company 14 years of planning before it opened a restaurant in Moscow in 1990.  But the planning paid off.  After the opening, people were standing in line up to 2 hours for a hamburger.  It has been said that McDonald’s restaurant in Moscow attracts
more visitors – on an average 27,000 daily than Lenin’s mausoleum (about  9,000 people)  which used to be the place to see.  The Beijing opening in 1982 ….
(halt the Japanese market) in 1996 compared to only 43 Burger King restaurants.  However, the British food conglomerate Grand Metropolitan PLC that owns Burger King has an aggressive strategy for Asia.  Although McDonald’s is in a very favourable competitive position at this time, can this success continue ?

Questions :
1.    What opportunities and threats did McDonald’s face ? How did it     handle them  ? What alternatives could it have chosen ?
2.    Before McDonald’s entered the European market, few people     believed that fast food could be successful in Europe. Why do you     think McDonald’s has succeeded ?  What strategies did it follow ?      How did these differ from its strategies in Asia ?
3.    What is McDonald’s basic philosophy ? How does it enforce this     philosophy and adapt to different environments ?
4.    Should McDonald’s expand its menu ? If you say no, then why not ?     If you say yes, what kinds of precuts should it add ?
5.    Why is McDonald’s successful in many countries around the world ?

















Case No. :2
 Developing Verifiable Goals
The division manager had recently heard a lecture on management by objectives.  His enthusiasm, kindled at that time, tended to grow the more …..
for finance, marketing, production, engineering, and administration. However you state them, I will expect them to add up to the realization of the division goals.’’

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

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

Case No. :3
The Daimler-Chrysler Merger: A New World Order?

In May 1998, Daimler-Benz, the biggest industrial firm in Europe and Chrysler, the third largest carmaker in the US merged. The carefully planned merger seemed to be a ``strategic fit.’’ Chrysler with its lower-priced cars, light trucks, pickups, and its successful minivans appeared to complement Daimler’s luxury cars, commercial vehicles, and sport utilities. There was little product-line overlap with the exception of the Chrysler’s Jeep and Daimler’s Mercedes M-Class sport utility vehicles.
    The merger followed a trend of other consolidations. General Motors owns 50 percent of Swedish Saab AB and has subsidiaries Opel in Germany and Vaxuhall in England. Ford acquired British Jaguar and Aston Martin. The German carmaker BMW acquired British Rover, and Rolls Royce successfully sold its interests to Volkswagen and BMW…..
 only one – in Germany.
Both the Americans and Germans can learn from each other. Germans need to write shorter reports, be more flexible, reduce bureaucracy, and speed up managerial decision making. American mangers, on the other hand, hope to learn from the Germans. As one Chrysler employee said: ``One of the real benefits to us is instilling some discipline that we know we needed but weren’t able to inflict on ourselves.’’

Questions :
1.    Evaluate the formulation of the merger between Daimler and     Chrysler. Discuss the strategic fit and the different product lines.
2.    Assess the international perspectives of Eaton and Schrempp.
3.    What are the difficulties in merging the organizational cultures of     the two companies?
4.    What is the probability of success of failure of the merger? What other mergers do you foresee in the car industry?









Case : 4
Re-engineering the Business Process at Procter & Gamble
Procter & Gamble (P&G), a multinational corporation, known for its products that include diapers, shampoo, soap, and tooth-paste, was committed to improve value to the customer. Its products were sold through various chanels such as grocery retailers, wholesalers, mass merchandisers, and club stores. The flow of goods in the retail grocery channel was from the factory’s warehouse to the distributor’s warehouses, to the stores where the grocery stores where customers selected the merchandise from the shelves.
The improvement-driven company was not satisfied with its performance and developed a variety of programs to improve the service and efficiency of its operation. One such program was the electronic data inter-change (EDI) that provided daily information about shipments from the retail stores to P & G. the installation of the system resulted in better service, reduced inventory levels, and labor cost savings. Another approach, the continuous replenishment program (CRP), provided additional benefits for P & G as ….
similar brands. The category managers were also held responsible for profits of a product categories for all stores. The switch to category management required not only new skills, but also a new attitude.

Questions :
1.    The re-engineering efforts focused on the business process system. Do you think other processes, such as the human system, or other managerial policies need to be considered in a process redesign?
2.    What do you think was the reaction of the brand managers, who may have worked under the old system for many years, when the     category management structure was installed?
3.    As a consultant, would you have recommended a top-down or     bottom-up approach, or both, to process redesign and     organizational change? What are the advantages and disadvantages of each approach?

Case No. : 5
Managing the Hewlett Packard Way

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

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

    The values of the founders – who withdrew from active management in 1978 – still permeate the organization. The HP Way emphasizes honesty, a strong belief in the value of people, and customer satisfaction. The managerial style also emphasizes an open-door policy, which promotes team effort. Informality in personal relationships is illustrated by the use of first names. Management by objectives is supplemented by what is known as managing by wandering around. By strolling through the organization, top managers keep in touch with what is really going on in the company.
    This informal organizational climate does not mean that the organization structure has not changed. Indeed, the organizational changes in the 1980s in response to environmental changes were quite painful. However, these changes resulted in extraordinary company growth during the 1980s.

Questions:
1.    Is the Hewlett – Packard way of managing creating a climate in which employees are motivated to contribute to the aims of the organization? What is unique about the HP Way?
2.    Would the HP managerial style work in any organization? Why, or     why not? What are the conditions for such a style to work?

Case No.: 6
 Quality as the Key Success Factor In Winning the Global Car War
Massachusetts institute of Technology (MIT) conducted an extensive study of the global car industry that compared operations at General Motors, Toyota, and the joint venture between GM and Toyota, the New United Motor Manufacturing Inc. (NUMMI) plaint in Fremont, California. The result of the study should raise some very disturbing questions about the quality and productivity of American operations, namely:
•    Why did GM’s Framingham plant require 31 hours to assemble a car when the Toyota plant only required 16 hours- or roughly half the time?
•    Why did the GM plant average ….
operating in Japan. Clearly, U.S. and especially European firms need much improvement in productivity and quality to be competitive in the global market.

Questions:
1.    In the NUMMI joint venture, what did Toyota gain? What were the     benefits for General Motors?
2.    As a consultant, what strategies would you recommend for European     carmakers     to improve their competitive position in the     global car industry?

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ATTEMPT ONLY FOUR CASE SUDY

Case 1:
Want to be More Efficient, Spread Risk, and Learn and Innovate at the same Time? Try Building a “World Car”
Japanese car companies like Toyota and Honda Motor Company are pioneering the auto industries truly global manufacturing system. The companies aim is to perfect a cars design and production in one place and then churn out thousands of “world” cars each year that can be made in one place and sold worldwide. ……..
global production levels on a quarterly basis in response to economic conditions in different markets.
Questions:
1.    Discuss the strategies implemented by Toyota and Honda to achieve greater efficiency in car production.
2.    How do the automobile companies plan to simultaneously manage risk and gain efficiencies?
3.    Discuss how the car companies use national differences to gain a strategic advantage in the global car industry.

Case 2: Can Little Fish Swim in a Big Pond? Strategic Alliance with a Big Fish
Globalization and the ……………….
is going to say, ‘hey, I can do this by myself,’” Ms. Metayer says. The last thing any company needs is a rival who has intimate knowledge of its internal operations.
Questions:
1.    Why would small companies want to form alliances with much bigger companies?
2.    What risks do small companies face in forming such alliances?
3.    Discuss how a company should approach the opportunity to form an alliance with another company.
Case 3: The new Organizational Structure of Sumitomo Mitsui Financial Group
Sumitomo Mitsui Banking Corporation [SMBC] announced its plan for the organization structure of Sumitomo Mitsui Financial Group (SMFG), the holding company, which will be established on December 2, 2002. It also announced its plan …………………….
Planning Department will be abolished  and its functions for defined contribution pension funds will be transferred to the Corporate Employees Promotion Department of the Consumer Banking Unit.
Questions:
1.    Why is Sumitomo Mitsui Banking Corporation changing its organization structure?
2.    What type of structure is Sumitomo Mitsui Banking Corporation implementing? What are the main characteristics of the design?
3.    In your opinion, does the proposed structure fit with the global environment in which the company is operating? Why or why not?

Case 4    conflict Resolution for Contrasting Cultures
An American sales manager of a large Japanese manufacturing firm in the United States sold a multi-million-dollar order to an American customer. The order was to be filled by headquarters in Tokyo. The customer requested some changes to the product’s standard specifications and a specified dead-line for delivery.
……………………Also, we are concerned that the sales force has not worked hard enough to make customers understand our commitment to them.”

Questions:

1.    How are the managers of the Japanese manufacturing firm different from the American managers in the way they approach conflict resolution and decision making?
2.    Why do the Japanese consider the Americans managers impatient?
3.    What would you do to increase the amount of cooperation between the two parties?
4.    Why did the Japanese not respond to the e-mails and written messages from the Americans?






Case 5        All Eyes On the Corner Office
After more than a decade at the head of Siemens, the icon of German industry, Chief Executive Heinrich von Pierer is something of an icon himself.
In 2003, his name was floated briefly as a candidate for the German presidency. After years of investor criticism that he moved too slowly to transform the $93 billion electronics conglomerate into a global competitor, von ……………
“It could be someone who is not the strongest but has the strongest consensus among the gray heads,” says a source who works closely with Siemens. Still, it’s clear that at Siemens, gray heads are becoming ever more scarce.

Questions:
1.    What leadership skills have contributed to the success of the incumbent CEO, Heinrich Von Pierer? Describe his leadership style.
2.    Siemens faces challenges in the global marketplace. The company will likely require a different leadership style than Von Pierer’s to face these challenges. What style would you recommend to Siemens?
3.    Why would the age of the leader be an important consideration in a global company? Would it be important in your consideration of the candidates for CEO of Siemens? Why?

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Note: Solve any 4 Cases


CASE: I    UNFAIR PROTECTION OR VALID DEFENSE?

Mexico Widens Anti-dumping Measure…Steel at the Core of US-Japan Trade Tensions…Competitors in Other Countries Are Destroying an American Success Story…It Must Be Stopped”, scream headlines around the world.

International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, ………………
charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lost marketshare—forcing consumers to pay more for their goods.


Questions

1.    “You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair. They’re not concerned with the profits of companies. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement? Do you think that people from different cultures would respond differently to this statement? Explain your answers.

2.    As we’ve seen, the WTO cannot currently get involved in punishing individual companies for dumping—its actions can only be directed towards governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given the authority to charge individual companies with dumping? Explain.
3.    Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, product(s), and potential punitive measures involved. Supposing you were part of the WTO’s Dispute Settlement Body, would you vote in favour of the measures taken by the retailing nation? Why or why not? 



CASE: II   WAITING IN NEW DELHI

Richard was a 30-year-old American, sent by his Chicago-based company to set up a buying office in India. The new office’s main mission was to source large quantities of consumer goods in India: cotton piecegoods, garments, accessories and shoes, as well as industrial products such as tent fabrics and cast iron components.

India’s Ministry of Foreign Trade (MFT) had invited Richard’s company to open this buying office because they knew it would promote exports, bring in badly-needed foreign exchange and provide manufacturing ………………………..
to deal with?


Questions

1.    Why did Richard not able to jell with local conditions?

2.    If you were Richard, what would you do?




CASE: III   THE P&G FIASCO

The break-up of the joint venture between the American FMCG (Fast Moving Consumer Goods) giant, Procter and Gamble (P&G) and the leading Indian business group, Godrej in 1996 is a case that goes down in the history of corporate India as an event  few would like to forget. It was a shortlived marriage. The year was 1992 and the two ………………………….
would be taken over by P&G, which would also retain the detergent brands, Trilo, Key, and Ezee. Most of PGG’s 550 people and the distribution network consisting of some 3000 stockists would stay with P&G. Godrej would absorb about 100 salespeople and get back its seven soap brands, which had been leased to PGG.


Questions

1.    What according to you, are the factors that favoured the alliance between P&G and Godrej?

2.    What went wrong with the joint venture? Why did it break up within four years of its formation?

3.    What signal s does this joint venture fiasco send to other foreign investors?


CASE: IV    CHINESE EVOLVING ACCOUNTING SYSTEM

Attracted by its rapid transformation from a socialist planned economy into a market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years favoured China as a site for foreign direct investment. Most see China as an emerging economic superpower, ……………….
accounting principles assumed the state always paid its debts—eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the west.

Questions

1.    What factors have shaped the accounting system currently in use in China?

2.    What problems does the accounting system, currently in use in China, present to foreign investors in joint ventures with Chinese companies?

3.    If the evolving Chinese system does not adhere to IASC standards, but instead to standards that the Chinese governments deem appropriate to China’s “special situation”, how might this affect foreign firms with operations in China?


CASE: V THE JUGGERNAUT ROLLS ON – BUT THE ROAD AHEAD IS HUMPY AND BUMPY

It al started with the takeover of Tetly in 2000.Then became Daewoo Commercial Vehicles (2004); Tyco Global (2004); Natsteel (2005); Teleglobe (2005); Brunner Mond (2006); Millienniums Steel (2006); Eight O’Clock (2006); Ritz Carlton (2006); Corus (2007); PT Bumi Resources with 30 per cent stake (2007); and General Chem Partners (2008)……………………
. The company today has R&D centres in Pune, Jamshedpur, Lucknow, in India, and in South Korea, Spain, and the UK.
With the announcement of the launch of one lakh rupee car Nano, Tata Motors has gained the attention of people around the world.

Questions

1.    Do you think the challenges listed above are genuine? If yes, how do you think the Tatas will face them?

2.    With the widest range of cars (from the cheapest to the costliest) under its belt, how do you think Tata Motors will manage and sustain?

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Case 1: Zip Zap Zoom Car Company
   
Zip Zap Zoom Company Ltd is into manufacturing cars in the small car (800 cc) segment.  It was set up 15 years back and since its establishment it has seen a phenomenal growth in both its market and profitability.  Its financial statements are shown in Exhibits 1 and 2 respectively.
    ……………..
    To maintain an annual dividend of 10 per cent, an additional Rs. 35 crore has to be kept aside.  Hence, the expected available net cash inflow is Rs. 185.27 crore (i.e. Rs. 220.27 – Rs. 35 crore)
Question:
Analyse the debt capacity of the company. 



CASE – 2   GREAVES LIMITED

Started as trading firm in 1922, Greaves Limited has diversified into manufacturing and marketing of high technology engineering products and systems. The company’s mission is “manufacture and market a wide range of high quality products………………



Questions

1.    How profitable are its operations? What are the trends in it? How has growth affected the profitability of the company?
2.    What factors have contributed to the operating performance of Greaves Limited? What is the role of profitability margin, asset utilisation, and non-operating income?
3.    How has Greaves performed in terms of return on equity? What is the contribution of return on investment, the way of the business has been financed over the period?


















CASE – 3   CHOOSING BETWEEN PROJECTS IN ABC COMPANY

ABC Company, has three projects to choose from. The Finance Manager, the operations manager are discussing and they are not able to come to a proper decision. Then they are meeting a consultant to get proper advice. As a consultant, what advice you will give?

The cash flows are as follows. All amounts are in lakhs of Rupees.

Project 1:
Duration 5 Years
Beginning cash outflow = Rs. 100
Cash inflows (at the end of the year)
Yr. 1 – Rs 30; Yr. 2 – Rs 30; Yr. 3 – Rs 30; Yr.4 – 10; Yr.5 – 10

Project 2:
Duration 5 Years
Beginning Cash outflow Rs. 3763
Cash inflows (at the end of the year)
Yr. 1 – 200; Yr. 2 – 600; Yr. 3 – 1000; Yr. 4 – 1000; Yr. 5 – 2000.

Project 3:
Duration 15 Years
Beginning Cash Outflow – Rs. 100
Cash Inflows (at the end of the year)
Yrs. 1 to 10 – Rs. 20 (for 10 continuous years)
Yrs. 11 to 15 – Rs. 10 (For the next 5 years)

Question:
If the cost of capital is 8%, which of the 3 projects should the ABC Company accept?




















CASE – 4   STAR ENGINEERING COMPANY

Star Engineering Company (SEC) produces electrical accessories like meters, transformers, switchgears, and automobile accessories like taximeters and speedometers.
    SEC buys the electrical components, but manufactures all mechanical parts within its factory which is divided into four production departments Machining, Fabrication, Assembly, and Painting—and three service departments—Stores, Maintenance, and Works Office.
    …………………
    The accountant who had to visit the company’s banker, passed on the papers to you for the required analysis and cost computations.

REQUIRED

Based on the data given in Exhibits A and B, you are required to:

1.    Complete the attached “overhead cost distribution sheet” (Exhibit C).
Note: Wherever possible, identify the overhead costs chared directly to the production and service departments. If such direct identification is not possible, distribute the costs on some “rational basis.

2.    Calculate the overhead cost (per direct labour hour) for each of the four producing departments. This should include share of the service departments’ costs.

3.    Do you agree with:
a.   The procedure adopted by the company for the distribution of overhead costs?
b.   The choice of the base for overhead absorption, i.e. labour-hour rate?



Case 5: EASTERN MACHINES COMPANY

Raj, who was in charge production felt that there are many problems to be attended to. But Quality Control was the main problem, he thought, as he found there were more complaints and litigations as compared to last year. With the demand increasing, he does not want to take any chances.

……………………
Namdeo: We should ask somebody from our statistics dept. to attend to this problem.

As a Statistician, advice what kind of Sampling schemes can we consider, and what factors will influence choice of scheme. What are the questions we should ask Mr. Namdeo, who works in the assembly line?

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N.B: 1} Attempt all the questions.
        2} All Questions Carries Equal Marks

1.    Explain how the Customer life time value can be calculated and the customer life cycle can be managed effectively?

2.    Explain about the performance of reporting tools and write down the advantages of the same in sales forecasting.


3.    Explain how the response management is effectively used in E-Marketing and compare the closed loop system with the traditional system.

4.    Discuss the necessity of requirement gathering phase during the implementation of CRM.


5.    What are the characteristics of BAT and how it is effectively used for personalization and retention of customers?

6.    What is customer knowledge management (CKM)?


7.    Write a note on successful CRM implementation in Indian Companies.

8.    Explain emerging impact of E-Commerce on CRM.

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SECTION I                                        
Any four:                                                 Marks: 20
1.    What a note on tender and tender notices.
2.    Discuss the different types of tenders?
3.    Write a note on EMD and SD.
4.    What are the procedures followed after the opening of a tender?
5.    Write a note on tender document.

Answer any two:                                      Marks:40
1.    Explain the importance of organization in construction activities.
2.    Enumerate the general principles to be followed in forming an organization system.
3.    Under what situations, a functional organization is suitable for construction management?

Compulsory question:                                 Marks: 40
4.    A multi-purpose river valley project across a major river is planned for construction. Irrigation, power development, fisheries and picnic development are all planned. Suggest a suitable organization structure for construction and maintenance of this project.

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Attempt All the case

Case - 1
GlaxoSmitbKine, Bristol – Myers Squibb, and AIDS in Africa 1

In 2004, the United Nations estimated that the previous year 5 million more people around the world had contracted the AIDS virus, 3 million had died, and a total of 40 million people were living with the infection. Seventy percent, or about 28 million of these, lived in sub – Saharan Africa, where the epidemic was at its worst. Sub – Saharan Africa consists of the 48 countries and 643 million people who reside south of the Saharan desert. In 16 of these countries, 10 percent are infected with the virus, in 6 other nation, 20 percent are infected. The UN predicted that in these 6 nations two – thirds of all 15 – year olds would eventually die of AIDS and in those where 10 percent were infected, half of all 15 – year – olds would die of AIDS.
        For the entire sub –Saharan region, the average level of infection among adults was 8.8 percent of Botswana’s population was infected, 34 percent of  Zimbabwe’s, 31 percent of Lesotho’s, and 33 percent of Swaziland’s. Family life had been destroyed by the deaths of hundreds of thousands of married couples, who left more than 11 million orphans to fend for themselves. Gangs and rebel armies forced thousands of orphans to join them. While crime and violence were rising, agriculture was in decline as orphaned farm children tried desperately to remember had to manage on their own. Labor productivity had been cut by 50 percent in the hardest – hit nations, school and hospital systems were decimated, and entire national economies were on the verge of collapse.
         With its huge burden of AIDS illnesses, African nation desperately needed medicines, both antibiotics to treat the many opportunistic diseases that strike …….
nounced in 2003 that it would try to collect from governments the funds needed to bring antiretrovirals to at least 3 million people by the end of 2005.
Questions
1.    Explain, in light of their theories, what Locke, Smith, Ricardo, and Marx would probably say about the events in this case.
2.    Explain which view of property-Locke’s or Marx’s- lies behind the positions of the drug companies GlaxoSmithKline and Bristol-Myers Squibb and of the Indian companies such as Cipla. Which of the two group-GlaxoSmithKline and Bristol-Myers Squibb on the one hand, and the Indian companies on the other –do you think holds the correct view of property in this case? Explain your answer.
3.    Evaluate the position of Cipla and of GlaxoSmithKline in terms of utilitarianism, right, justice, and caring. Which of these two positions do you think is correct from an ethical point of view?

Case - 2
Playing Monopoly: Microsoft

On November 5, 1999, then the richest man in the world, learned that a federal judge, Thomas Jackson, had just issued “findings of fact” declaring that his company, Microsoft, “enjoys monopoly power” and that it had used its monopoly power to “harm consumers” and crush competitors to maintain its Windows monopoly and to establish a new monopoly in Web browsers by bundling its Internet Explorer with Windows. On the day the judgment was issued, Microsoft stock began its decline. The decline was hastened by an announcement in February  2000 that the European Commission, which enforces European Union lows on competition and monopolization, had been investigating Microsoft’ …….
          Meanwhile, some government had stopped purchasing Windows and had instead adopted Linux, a free “open source” operating system. Among these were Italy, Germany, Great Britain, France, India, South Korea, China, Brazil and South Africa. Several Companies, including Amazon.com, FedEx, and Google, had moved to Linux. A study by Forrester Research found that 72 percent of companies it surveyed were increasing their use of Linux, and over half of them were planning to replace Windows with Linux.
  
Questions                                         
1.    Identify the behaviors that you think are ethically questionable in the history of Microsoft. Evaluate the ethics of these behaviors.
2.    What characteristics of the market for operating systems do you think created the monopoly market that Microsoft’s operating system enjoyed? Evaluate this market in terms of utilitarianism, rights, and justice (your analysis should make use of the textbook’s discussion of the effects of monopoly markets on the utility of participants in the market, on the moral rights of participants in the market, and on the distribution of benefits and burdens among participants in the market), giving explicit examples from the operating systems industry to illustrate your points.                                                
3.    In your view, should the government have sued Microsoft for violation of the antitrust laws? In your view, was Judge Jackson’s order that Microsoft be broken into two companies fair to Microsoft? Was Judge Kollar-Kotelly’s November 1, 2004 decision fair? Was the April 2004 decision of the European Commission fair to Microsoft? Explain your answers.
4.      Who, if anyone, is harmed by the kind of market that Microsoft’s operating system has enjoyed? Explain your answer. What kind of public policies, if any, should we have to deal with industries like the operating system industry?

Case - 3
Gas or Grouse?

The Pinedale Mesa (sometime called the Pinedale Anticline) is a 40-mile-long mesa extending north and south along the eastern side of Wyoming’s Green River Basin, an area that is famous as the gateway to the hunting, fishing, and hiking treasures of the Bridger-Teton wilderness. The city of Pinedale sits below the mesa, a short distance from its northern end, surrounded by hundreds of recently drilled wells ceaselessly pumping natural gas from the vast pockets that are buried underneath the long mesa. Questar Corporation, an energy company with assets valued at about $4 billion, is the main developer of the gas wells around the city and up on the mesa overlooking the city. Occasionally elk, mule deer, pronghorn antelope, and other wildlife, including the imperiled greater sage grouse, descend from their habitats atop the mesa and gingerly make their way around and between the Questar wells around Pinedale. Not surprisingly, environmentalists are at war with …..
In a preliminary report on the study, the Bureau of Land Management said there was “no conclusive data to indicate quantifiable, adverse effects to deer” from the drilling. The Upper Green River Vslley Coslition, however, sued the bureau for failing to adhere to its own rules when it allowed Questar and other companies to drill on mule deer range on the mesa during winter and for failing to conduct an analysis of the potential impact before granting the permits, as required by the National Environmental Policy Act. As of this writing, the suit has not been resolved.
   Question
1. What are the systemic, corporate, and individual issues raised in this case?
2. How should wildlife species like grouse or deer be valued, and how should that value be balanced against                           
    the economic interests of the of company like Questar?
3. In light of the U.S. economy’s dependence on oil, and in light of the environmental impact of Questar                    drilling operation, is Questar morally obligated to cease its drilling operation on the Pinedale Mesa? Explain
4. What, if anything, should Questar be doing differently?
5. In your view, have the environmental interest groups identified in the case behaved ethically?   `                                      
Case - 4
Becton Dickinson and Needle Sticks
During the 1990s, the AIDS epidemic posed peculiarly acute dilemmas for health workers. After routinely removing an intravenous system, drawing blood, or delivering an injection to an AIDS patient, nurses could easily stick themselves with the needle they were using. “Rarely a day goes by in any large hospital where a needle stick incident is not reported. “ In fact, needlestick injuries accounted for about 80 percent of reported occupational exposure to the AIDS virus among health care workers.2 It was conservatively estimated in 1991 that about 64 health care workers were infected with the AIDS virus each year as a result of needlestick injuries.3
AIDS was not the only risk posed by needlestick injuries. ……

         Continuing to find itself locked out of the market by Becton Dickinson’s contracts with Premier and Novation, Retractable sued Premier, Novation and Becton Dickinson in federal court alleging that they violated antitrust laws and harmed consumers and numerous health care workers by using the GPO system to monopolize the safety needle market.19 In 2003, Premier and Novation settled with Retractable out of court, agreeing to henceforth allow its member hospitals to purchase Retractable’s safety syringes when they wanted. In 2004, Becton Dickinson also settled out of court, agreeing to pay Retractable $ 100 million in compensation for the damage Becton Dickinson inflicted on Retractable. During the 6 years that Becton Dickinson’s contracts prevented Retractable and other manufacturers from selling their safety needles to hospitals and clinics, thousands of health workers continued to be infected by needlesticks each year.
            
     Questions    
1.    In your judgment, did Becton Dickinson have an obligation to provide the safety syringe in all its sizes in 1991? Explain your position, using the materials from this chapter and the principles of utilitarianism, rights, justice, and caring.
2.    Should manufacturers be held liable for failing to market all the products for which they hold exclusive patents when someone’s injury would have been avoided if they had marketed those products? Explain your answer. 
3.    In your judgment, who was morally responsible for Maryann Rockwood’s accidental needlestick: Maryann Rockwood? The clinic that employed her? The government agencies that merely issued guidelines? Becton Dickinson?
4.    Evaluate the ethics of Becton Dickinson’s use of the GPO system in the late 1990s. Are the GPO’s monopolies? Are they ethical? Explain.

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Case I
THE STRATEGIC ASPIRATIONS OF THE RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) is India's central bank or 'the bank of the bankers'. It was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Central Office of the RBI, initially set up at Kolkata, is at Mumbai. The RBI is fully owned by the Government of India.
    The history of the RBI is closely aligned with the economic and financial history of India. Most cen¬tral banks around the world were established around the beginning of the twentieth century. The Bank was established on the basis of the Hilton Young Commission. It began its operations by tak¬ing over from the Government the functions so far being performed by the Controller of Currency and from the Imperial Bank of India, the management of Government accounts and public debt. After inde¬pendence, RBI gradually strengthened its institu¬tion-building capabilities and evolved in terms of functions from central banking to that of develop¬ment. There have been several attempts at reor-ganisation, restructuring and creation of specialised institutions to cater to emerging needs.

    The Preamble of the RBI describes its basic functions like this: '...to regulate the issue of Bank Notes and keeping of reserves with a view to secur¬ing monetary stability in India and generally to op-erate the currency and credit system of the country to its advantage.' The vision states that the RBI '...aims to be a leading central bank with credible, transparent, proactive and contemporaneous poli-cies and seeks to be a catalyst for the emergence of a globally competitive financial system that helps deliver a high quality of life to the people in the country.' The mission states that 'RBI seeks to de¬velop a sound and efficient financial system with monetary stability conducive to balanced and sus-tained growth of the Indian economy'. The corporate values underlining the mission statement include public interest, integrity, excellence, independence of views and responsiveness and dynamism.

    The three areas in which objectives of the RBI can be stated are as below.
1.    Monetary policy objectives such as containing inflation and promoting economic growth, management of foreign exchange reserves and making currency available.
2.    Objectives set for managing financial sector developments such as supervision of systems and information access and assisting banking and financial institutions to become competitive globally.
3.    Organisational development objectives such as development of economic research facilities, creating information system for supporting economic decision-making, financial management and human resource management.

Strategic actions taken to realise the objectives fall under four categories:
1.    The thrust area of monetary policy formulation and managing financial sector;
2.    Evolving the legal framework to support the thrust area;
2.    Customer services for providing support and creation of positive relationship; and
3.    Organisational support such as structure, systems, human resource development and adoption of modern technology.
The major functions performed by the RBI are:
•    Acting as the monetary authority
•    Acting as the regulator and supervisor of the financial system
•    Discharging responsibilities as the manager of foreign exchange
•    Issue currency
•    Play a developmental role
•    Related functions such as acting as the banker to the government and     scheduled banks

The management of the RBI is the responsibility of the central board of directors headed by the governor and consisting of deputy governors and other directors, all of whom are appointed by the government. There are four local boards based at Chennai, Kolkata, Mumbai and New Delhi. The day-to-day management of RBI is in the hands of the executive directors, managers at various levels and the support staff. There are about 22000 employees at RBI, working in 25 departments and training colleges.

    The RBI identified its strengths and weaknesses as under.
•     Strengths A large body of competent offers and staff; access to key data on the economy; wide organisational network with 22 regional offices; established infrastructure; ability to attract talent; and financial self sufficiency.
•     Weaknesses Structural rigidity, lack of accountability and slow decision-making; eroded specialist know-how; strong employee unions with rigid     industrial relations stance; surplus staff; and weak market intelligence.

Over the years, the RBI has evolved in terms of structure and functions, in response to the role as signed to it. There have been sweeping changes in the economic, social and political environment. The RBI has had to respond to it even in the absence of a systematic strategic plan. In 1992, the RBI, with the assistance of a private consultancy firm, embarked on a massive strategic planning exercise. The objective was to establish a roadmap to redefine RBI's role and to review internal organisational and managerial efficacy, address the changing expectations from external stakeholders and reposition the bank in the global context. The strategic planning exercise was buttressed by departmental position papers and documents on various subjects such as technology, human resources and environmental trends. The strategic plan of the RBI emerged with four sections dealing with the statement of mission, objectives and policy, a review of RBI's strengths and weaknesses and strategic actions required with an implementation plan. The strategic plan reiterates anticipation of evolving external environment in the medium-term; revisiting strengths and weaknesses (evaluation of capabilities); and doing away with the outdated mandates for enhancing efficiency in operations in furtherance of best public interests. The results of these efforts are likely to manifest in attaining a visible focus, reinforced proficiency, realisation of shared sense of purpose, optimising resource use and build-up of momentum to achieve goals.

    Historically, the RBI adopted the time-tested technique of responding to external environment in a pragmatic manner and making piecemeal changes. The dilemma in adoption of a comprehensive strategic plan was the risk of trading off the flexibility of the pragmatic approach to creating rigidity imposed by a set model of planning.

Questions
1.    Consider the vision and mission statements of the Reserve Bank of India.     Comment on the quality of both these statements.

2.    Should the RBI go for a systematic and comprehensive strategic plan in place of its earlier pragmatic approach of responding to environmental events as and when they occur? Why?


Case II
WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?*

India is not known as the 'nation of shopkeepers', yet it has as many as 5 million retail outlets of all shapes and sizes. Some other optimistic estimates "place the number at as high as 12 million. Whatever be the number, India can claim to have the highest number of retail outlets per capita in the world. But almost all of these are small outfits occupying an average of 500 square feet in size, managed by family members, having negligible investment in land and assets, paying little or no tax and known as the kirana dukaan ('mom and pop' stores in the U.S or the corner grocery stores in the U.K.). These outlets offer mainly food items and groceries—the staple of retailing in India. Customer contact is personal and one-on-one, often running through generations. There are a limited number of items offered! often sold on credit—the payment to be collected at the end of the month. The quality of items standard, with moderate pricing.
    There is great hype about the growth and prospects of organised retailing industry in India. It must be noted, however, that organised retailing constitutes barely 2 per cent of the total retailing industry in India, the rest 98 percent being under the control of the unorganised, informal sector of' kirana dukaans. Market research agencies and consultants come up with encouraging forecasts about this segment of the retailing industry. For instance, AT. Kearney's Global Retail Development Index ranks 30 emerging countries on a 100- point scale. Its 2007-ranking places India at number one for the third consecutive year, with 92 points, fol¬lowed by Russia and China. The size of the organised retailing industry is estimated at US $8 billion and projected to grow at a compound annual growth rate of 40 per cent to US $22 billion by 2010. Overall, the Indian retailing industry is expected to grow from the current US $350 billion to US $427 billion by 2010 and US $635 billion by 2015.
   
The economic environment in the post-liberalisation period after 1991, has created several factors that have made this high growth of the organised retailing industry possible. India's impressive economic growth rate of 9 per cent is the prime driver of increasing disposable incomes in the hands of the consumer. The growing size of the consuming class in India, in tandem with the entry and expansion of the organised sector players in recent years, has set the pace for corporate investment in retail business. Practically, every major Indian business group is looking for opportunities in the growing retailing industry. Among them are the big names in the Indian corporate sector such as the AV Birla group, Bharti, Godrej, ITC group, Mahindras, Reliance, Tatas and the Wadia group.
The international environment presently is replete with examples of the fast-paced growth of the retailing industry in many developing countries around the world. In the post-liberalisation period, there is more openness and awareness of the international developments among Indians. The ease of travel abroad and the exposure through television and Internet have increase the awareness of the urban Indian consumer to the convenience of modern shopping. The modern retail formats thus have gained acceptance in India. Carrefour, Tesco and Wal-Mart are the international players already operating in India, with several others like Euroset, Supervalue and Starbucks having plans to enter soon. These international companies bring to India the latest developments in the retailing industry and help to set up a benchmark for the domestic player.

    The market environment is one of the most significant in terms of the growth and prospects of the retailing industry in India. In terms of geography, the reach of the organised retailing industry has been growing. In addition to the mega-cities of Mumbai and Delhi, cities such as Bangalore, Pune, Hyderabad, Kolkata and Chennai are also witnessing a boom in organised retail activity. Retailers are now trying to focus on smaller cities such as Nagpur, Indore, Chandigarh, Lucknow or Cochin. There are interesting possibilities regarding the re¬tail formats. Traditionally, street carts, pavement shops, kirana stores, public distribution systems, kiosks, weekly markets and such other formats unique to India, have been in existence for a long time. At present, most organised retail formers are imitations of those used abroad. These include hyper and supermarkets, convenience store, department stores and specialty chains. Among these formats, a notable trend has been the development of integrated retail-cum-entertainment centres and malls as opposed to stand-alone developments. Besides these, there are some attempts at indigenous formats aimed at the rural markets-such as those by ITC's Choupal Sagar, DSCL's Hairyali Kisaan Bazaar and Godrej group's Godrej Aadhar. Pricing is an important issue in the retailing industry. Generally, the bulk buying yield lower costs of procurement for the big retailers—a part of which they pass on to the customer in the form of lower prices. In food retailing, for instance, there is a clear trend of low prices being the determining factor in purchase decisions by the cost-conscious Indian consumer. But, lower prices may not be a major issue with the higher-income groups that may place greater emphasis on the quality of products and retail service, store ambience and convenience of shopping. For the majority of Indian consumers however, price is likely to remain a significantly important issue in the purchase decision. Competition has already accelerated with many Indian business groups having entered or likely to enter this booming industry.
The political environment in India is ambiguous! in terms of its support to the organised retailing industry. This is obvious as the unorganised sector employs nearly 8per cent of the Indian population and is widely spread geographically. The whelming presence in terms of 98 per cent of the total retailing industry also is a significant political issue. In a democracy, the politics of numbers makes it imperative for the political class to adopt an ambiguous stand. In some cases, politicians have acted in favour of the unorganised sector by disallowing the setting up of large retail some states. Overall, however, there is ambiguity as there are several environmental trends in favor of the development of the organised retailing industry.
    In the regulatory environment, there has gradual easing of the restrictions albeit at a slow pace, in view of the ambiguous political stance as indicated above. Interestingly, the retailing industry, is still not recognised as an industry in India, Foreign direct investment of up to 100 per cent is not permitted though it is possible for foreign players to enter through the routes of agreements, cash-and-carry wholesale trading and strategic licensing agreements. Another problem area is of the real estate laws at the level of state governments that are yet to be clear on the issue of allowing large stores. Restructuring of the tax structure for the retailing industry is another regulatory issue requiring governmental action. However, tariffs on imported consumer items have been gradually aligned to meet the prescribed WTO norms and reduction of import restrictions are likely to help the growing organised retailing industry.
    The socio-cultural environment offers many interesting insights into the changing tastes and references of the urban and semi-urban Indian consumer. There is a large rural market consisting of nearly 720 million consumers, spread over more 600,000 villages. India's consumers are young: 70 percent of the country's citizens are low the age of 36 and half of those are under 18 years of age. These people have deep roots in the local culture and traditions, yet are eager to get connected with and know the outside world. According to a DSP Merrill Lynch report, the key factor providing a thrust to the retail boom in India the changing age profile of spenders. A group of seven million young Indians in their mid-twenties, learning over US$ 5000 per year, is emerging every year. This group constitutes people who are enthusiastic spenders and like to visit the new format retail outlets for the convenience and time saving they offer. Malls are also being perceived as just places for shopping, but for spending leisure time and as meeting places. There has been an emergence of a combination of the retail outlet and entertainment centres having multiplexes, with food courts and video game parlours.
    But there are some pitfalls too. For instance, organised retailing in India has had to deal with the misconception among middle-class consumers that the modern retail formats being air conditioned, sophisticated places are bound to be more expensive.
    The supplier environment probably offers the biggest constraint on the growth of the retailing industry in India. Reaching India's consumers cost effectively is a distribution nightmare, owing to the sheer geographical size of the country and the presence of traditional, fragmented distribution and retailing networks and erratic logistics. For instance, the apparel segment that is one of the two top segments, the other being food, have had to invest in back-end processes to support supply chains. Supply chain management and merchandising practices are increasingly converging and apparel retailers are establishing collaborations with their vendors. Another area of concern is the severe shortage of skills in retailing. Human resource development for the retailing industry has picked up lately but may take time to fill the gap caused due to the shortage of personnel.
    The technological environment for the organised retailing industry straddles many areas such as IT support to supply chain management, logistics, transportation and store operations. Some global retailers have demonstrated that an innovative use of technology can provide a substantial strategic advantage. The large number of store items, the diversity of sourcing and the gigantic effort required to coordinate actions in a large retail context is ideal for using IT as a support function. For instance, an innovative use of IT can help in a wide variety of functions such as quick information processing and timely decision-making, reduction in processing costs, real-time monitoring and control of opera¬tions, security of transactions and operations inte¬gration. The availability of supply chain management, customer relationship management an merchandising software can help much while performing activities such as ordering and tracking inventory items, warehousing, transportation and customer profiling.
    Overall, the Indian scenario offers an interesting mix of possibilities and challenges. A successful model of large-scale retailing appropriate for the Indian context is yet to emerge. The modern retail formats accepted globally are in the process of implementation and their acceptability is yet to be established.

Questions:

1.    Identify the opportunities and threats that the retailing industry in India offers to local and foreign companies.
2.    Prepare an ETOP for a company interested in entering the retailing industry in India.


Case III
HELPAGE INDIA
   
The developments in medical sciences—the lowering of mortality rates and the increase in life expectancy—have ironically led to a situation where there are increasingly, a larger number of aged people in the society. The situation in most countries of the world is that the number of ageing people is increasing. India too, like other developing countries, experiences a rapid ageing of the population, with estimated 80 million aged people. Almost eight out of ten of these aged people live in rural areas.

    The challenges that the elderly people in society face are many. For instance, a report in the Indian context indicates the following challenges:
?    90% of senior citizens receive no social se¬curity or medical care.
?    73% of senior citizens are illiterate and can only earn a livelihood through physical labour, which is possible only if they are healthy in their old age.
?    80% of senior citizens live in rural areas with inadequate or inaccessible medical facilities; many are unable to access the medical facilities because of reduced mobility in the old age.
?    55% of women over the age of 60 are widows with no means of support

The elderly people, or senior citizens, are the fastest growing segment of the Indian society. By 2025, the population of the elderly is expected to reach 177 million.

    Unlike many developed countries, India does not have an effective security net for the elderly people. There have been sporadic attempts by governments at the central and state levels to pay old age pensions, but like most government schemes, there is a lot of leakage of funds and inefficiency. There is also a lack of post-retirement avenues for re-employment.
    Socio-economic developments such as urbanization modernisation and globalisation have impacted the economic structure and led to an erosion of societal values and the weakening of social institutions such as the joint family. The changing mores of society have created a chasm between generations. The intergenerational differences have created a situation where the younger people are involved in education, career building and establishing themselves in life, ending up ignoring the needs of the elderly among them. The older generation is caught between a society which cares little for them and the absence of social security, leading them to a situation where they are left to fend for themselves. It is in this context that institutions such as HelpAge India play a positive role in society.

    HelpAge India, established in 1978, is a secular, not-for-profit, non-governmental organisation, registered under the Societies Registration Act of 1860. Its mission is stated as 'to work for the cause and care of the disadvantaged older persons and to improve their quality of life'. The three core values that guide HelpAge India's work are rights, relief and resources. HelpAge India is one of the founder members of HelpAge International, a body of 51 nations representing the cause of the elderly at the United Nations. It is also a member of the International Federation on Ageing.
    The organisation of HelpAge India consists of a head office at New Delhi, with four regional and thirty-three area offices situated all over India. The governing body of the organisation consists of ten distinguished people from different walks of life. Besides the governing body, there are three committees: the operations committee, the business development committee, and the audit committee. The CEO, Mr Mathew Cherian oversees the planning and implementation of policies and programmes, with the support of five electors. The regional directors are responsible for their own regions. The program division at the head office chooses the partner agencies to provide the services to the elderly people.

HelpAge India raises resources to perform three types of functions:
?    Advocacy about policies for the elderly persons with the national and local governments
?    Creating awareness in society about the concerns of the aged and promote better understanding of ageing issues
?    Help the elderly persons become aware of their own rights so that they get their due and are able to play an active role in society

The major programmes undertaken by HelpAge India include mobile medicare units, ophthalmic care for performing cataract surgeries, Adopt-a-Gran, support to old-age homes, day care centres, income generation and disaster relief.

    The business model of HelpAge India is based on revenue generation through grants and donations from international and national source. Nearly half of the donations come from international donors. About a fifth of the donors are individuals. The sources of contributions come from fundraising activities that include direct mail, school fundraising corporate fundraising, sale of greeting cards, acting as corporate agent for insurance, organizing event and establishing a shop-for-a-cause that sells gift made by disadvantaged people. A review report on the activities of HelpAge India enumerates its strong points as below:
?    Wide Reach and Impact HelpAge India has been able to impact the lives of a large number of elderly people and their families by adopting a holistic approach that provide immediate relief as well as long-tern sustainable improvement.
?    Effective Partnerships in Development HelpAge India has evolved as a development support agency through creating partner agencies, that is funded to implement the projects.
?    High Degree of Charitable Commitment Typically non-profit organisations spend a loft; on overhead and administrative costs. But3 HelpAge India is able to put nearly eighty-five, per cent of the funds towards actual project implementation.   
?    Focus on Efficiency and Transparency The partner agencies are chosen carefully and monitored thoroughly. This results in increased efficiency and low overheads. Project implementation through partnerships increases efficiency and cuts down on 3overhead costs.
?    Quality of Management The management; quality of HelpAge India is good and there are a lot of committed people. New employees are also trained to be sensitive to the mission of the organisation.

    With a wide spread of activities and being a non-governmental organisation having limited funding, HelpAge India has adopted modern means of information technology and networking. Most of the HelpAge executives work in the field and have no direct access to the office network. They have to use e-mail in order to maintain contact with their regional or area offices. They use cyber-cafes or handheld devices for sending and receiving e-mails. HelpAge has installed a secure connection at an initial cost of Rs. 4 lakh and annual upgradation cost of Rs. 75,000 to access e-mail from anywhere, with a high level of security and protection of data and contents.

    The nature of non-profit organisations demands certain requirements. Among these, transparency of operations and funds management is a major one. There are many NGOs that are accused or suspected of misappropriating funds for personal benefit. HelpAge India is conscious of this fact and gives high priority to information disclosure. The audited financial statements and the annual report are available on its website. The financial statements give a detailed account of the expenditure on individual projects. The expenses on travel and salaries of its employees and CEO are also mentioned. The individual donors are provided information regarding the use of the funds donated by them.

    The functional approach at HelpAge India consists of developing projects based on the assessment of the needs of its target community rather than on implementing them directly. The implementation takes place through the partner agencies. Rather than outright grants, it supports income generation projects for the elderly people. The success of implementation critically depends on the identification and appointment of partner agencies. The officers of HelpAge India physically inspect the proposed agencies and check on their management to ensure that they are not family-run set-ups established for personal gains. HelpAge India works presently, with nearly 400 partner agencies. These include, for instance, about 150 charitable eye hospitals that act as partner agencies for the ophthalmic care programme.

    HelpAge India with its slogan of 'fighting isolation, poverty and neglect' moves on its mission of providing 'equal rights, dignity for elders'. It foresees its future activities in the area of rights based advocacy for a better life for the elderly people by bringing them into the mainstream of society rather than being marginalised to the fringes.

Questions
1. In your opinion, what is the distinctive competence of HelpAge India?
2. Prepare a strategic advantage profile for HelpAge India.



Case IV
BHARAT HEAVY ELECTRICALS LIMITED CONCENTRATES ON THE EQUIPMENT INDUSTRY

Bharat Heavy Electricals Limited (BHEL) is India's largest engineering and manufacturing enterprise, operating in the energy sector, employing more than 42000 people. Established in 1956, it has established its presence in the heavy electrical equipments industry nationally as well as globally. BHEL is one of the navaratnas (lit. nine gems) among the public sector enterprises in India. Its vision is to be 'a world class enterprise committed to enhancing stakeholder value'. Its mission statement is: 'to be an Indian multinational engineering enterprise providing total business solutions through quality products, systems, and services in the fields of energy, industry, transportation, infrastructure, and other potential areas'.

    BHEL is a huge organisation, manufacturing over 180 products categorised into 30 major product groups, catering to the core sectors of power generation and transmission, industry, transportation, telecommunications and renewable energy. It has 14 manufacturing divisions, four power sector regional centres, over 100 project sites, eight service centres and 18 regional offices. It acquires technology from abroad and develops its own technology at its research and development centres. The operations of BHEL are organised into three business sectors of power, industry and overseas business. Besides the business sector departments, there are the corporate functional departments of engineering and R&D, human resource development, finance and corporate planning and development.
    BHEL's turnover hit an all-time high of Rs. 18,739 crore, registering a growth of 29 per cent, while net profit increased by 44 per cent to touch Rs. 2,415 crore in 2006-07. The company has a comfortable order book position of Rs. 55,000 crore for 2007-8 and beyond. The company booked ex¬port orders worth Rs. 1,903 crore in 2006-07. It is looking toward to US$10 billion exports by 2012 from the present US$ 4 billion. The capital investment plan of BHEL for the 11th National Plan period envisages an investment of Rs 3,200 crore, mainly to enhance its manufacturing capacity from 10000 MW to 15000 MW.

    BHEL has formulated a five-year strategic plan with the aim of achieving a sustainable profitable growth, targeting at a turnover of Rs. 45,000 crore by 2012. The strategy is driven by a combination of organic and inorganic growth. Organic growth is planned through capacity and capability enhancement, designed to leverage the company's core are s of power, supported by the industry, transmission, exports and spares and services businesses. For the purpose of inorganic growth, BHEL plans to pursue mergers and acquisition and joint ventures and grow operations both in domestic and export markets.

    BHEL is involved in several strategic business initiatives at present for internationalisation. These include targeting the export markets, positioning itself as a reputed engineering, procurement and construction (EPC) contractor globally, and looking for opportunities for overseas joint ventures.

    An example of a concentration strategy of BHEL in the power sector is the joint venture with another public Enterprise, National Thermal Power Corporation, to perform EPC activities in the power sector. It is to be noted that NTPC as a power generation utility and BHEL as an EPC contractor have worked together on several domestic projects earlier, but without a forma partnership. BHEL also has join1 ventures with GE of the US and Siemens AG of Germany. Other strategic initiatives include management contract for Bharat Pumps and Compressors Ltd. and a proposed takeover of Bharat Heavy Plates and Vessels, both being sister publics enterprises.

    Despite its impressive performance, BHEL is unable to fulfil the requirements for power equipment in the country. The demand for power has been exceeding the growth and availability. There are serious concerns about energy shortages owing to inadequate generation and transmission, as well as inefficiencies in the power sector. Since this sector is a major part of the national infrastructure, problems in the fibwer sector affect the overall economic growth the country as well as its attractiveness as a destination for foreign investments. BHEL also faces stiff competition from international players in the power equipment sector, mainly of Korean; and Chinese origin. There seems to be an undercurrent of conflict between the two governmental ministries of power and heavy industries. BHEL operates administratively under the Ministry of Heavy Industries, but supplies mainly to the power sector that is under the Ministry of Power. There has been talk of establishing another power equipment company as a part of the NTPC for some time, with the purpose of lessening the burden on BHEL.

Questions
1.    BHEL is mainly formulating and implementing concentration strategies nationally as well as globally, in the power equipment sector. Do you think it should broaden the scope of its strategies to include integration or diversification? Why?
2.    Suppose BHEL plans to diversify its business. What areas should it diversify into? Give reasons to justify your choice.


Case V

THE INTERNATIONALISATION OF KALYANI GROUP

    The Kalyani Group is a large family-business group of India, employing more than 10000 employees. It has diverse businesses in engineering, steel, forgings, auto components, non-conventional energy and specialty chemicals. The annual turnover) of the Group is over US$ 2.1 billion. The Group is known for its impressive internationalisation achievements. It has nine manufacturing locations ad over six countries. Over the years, it has established joint ventures with many global companies such as ArvinMeritor, USA, Carpenter Technology Corporation, USA, Hayes Lemmerz, USA and FAW Corporation, China.

    The flagship company of the Group is Bharat Forge Limited that is claimed to be the second largest forging company in the world and the largest nationally, with about 80 per cent share in axle and engine components. The other major companies of the Group are Kalyani Steels, Kalyani Carpenter Special Steels, Kalyani Lemmerz, Automotive Axles Kalyani Thermal Systems, BF Utilities, Hikal Limited, Epicenter and Synise Technologies.

    The emphasis on internationalisation is reflected in the vision statement of the Group where two of the five points relate to the Group trying to be world-class organisation and achieving growth aggressively by accessing global markets. The Group is led by Mr. B.N. Kalyani, who is considered to be the major force behind the Group's aggres¬sive internationalisation drive. Mr. Kalyani joined the Group in 1972 when it was a small-scale diesel engine component business.

    The corporate strategy of the Group is a combination of concentration on its core competence in its businesses with efforts at building, nurturing and sustaining mutually beneficial partnerships with alliance partners and customers. The value of these partnerships essentially lies in collaborative product development with the partners who are the original equipment manufacturers. The foreign partners are not intended to provide expansion in capacity, but enable the Kalyani Group to extend its global marketing reach.

    In achieving its successful status, the Kalyani Group has followed the path of integration, extending from the upstream steel making to downstream machining for auto components such as crankshafts, front axle beams, steering knuckles, camshafts, connecting rods and rocker arms. In all these products, the Group has tried to move up the value chain instead of providing just the raw forgings. In the 1990s, it undertook a restructuring exercise to trim its unrelated businesses such as television and video products and concentrate on its core business of auto components
    Four factors are supposed to have influenced the growth of the Group over the years. These are mentioned below:
    •    Focussing on crore businesses to maximize growth potential
    •     Attaining aggressive cost savings
    •    Expanding geographically to build global capacity and establishing leading positions
    •    Achieving external growth through acquisitions

    The Group companies are claimed to be positioned at either number one or two in their respective businesses. For instance, the Group claims to be number one in forging and machined components, axle aggregates, wheels and alloy steel. The technology used by the Group in its mainline business of auto components and other businesses, is claimed to be state-of-the-art. The Group invests in forging technology to enhance efficiency, production quality and design capabilities. The Group's emphasis on technology can be gauged from the fact that in the 1990s, it took the risky decision of investing Rs. 100 crore in the then latest forging technology, when the total Group turnover was barely Rs. 230 crore. Information technology is applied for product development, reducing 3 production and product development time, supply-chain management and marketing of products. The Group lays high emphasis on research and development for providing engineering support, advanced metallurgical analysis and latest testing equipment in tandem with its high-class manufacturing facilities.

    Being a top-driven group, the pattern of strategic decision-making within seems to be entrepreneurial. There was an attempt to formulate a five-year strategic plan in 1997, with the participation of the company executives. But not much is mentioned in the business press about that collaborative strategic decision-making after that.

    Recent strategic moves include Kalyani Steels, a Group company, entering into a joint venture agreement in May 2007, with Gerdau S.A. Brazil for installation of rolling mills. An attempt to move out of the mainstream forging business was made when the Group strengthened its position in the prospective business of wind energy through 100 percent acquisition of RSB consult GmbH (RSB) of Germany. Prior to the acquisition, the Group was just a wind farm, operator and supplier of components.

Questions
1.    What is the motive for internationalization by the Kalyani Group? Discuss.

2.    Which type of international strategy is Kalyani Group adopting?         Explain.

Case VI
CORPORATE RESTRUCTURING OF THE INDIAN REAILWAYS

On 16 April 1853, a locomotive pulling 14 carriages and 400 people left what was then Bombay, to a 21-gun salute, and shuttled to Thane, 34 km away. The journey took about 75 minutes. That was the way Indian Railways was born. Some estimates consider the Indian Railways as the world's largest commercial enterprise in terms of the number of employees.

    Indian Railways is a departmental undertaking of the Government of India. The Central Ministry of Railways oversees the policy making for the Indian Railways and is headed by a union minister. There are some ministers of state holding specific responsibilities. The administration of Indian Railways is done through the Railway Board headed by a chairman and having six members.

    There are 16 railway zones, each headed by a General Manager who reports to the Railway Board. The zones are divided into divisions under the control of divisional railway managers. There are 44 functional departments, including those of engineering, mechanical, electrical, signal and telecommunications, accounts, personnel and operating, commercial and safety branches. At the operational levels, there are station superintendents and station masters who control individual railway stations. Apart from the Indian Railways, the Ministry also has a number of public sector enterprises under its administrative control. There is an autonomous organization called the Centre for Railway information System, dedicated to developing specialized application software for the railways.

    The financial matters of the Indian Railways are dealt with through an elaborate system involving the parliament of India down to the accounts departments at the divisional headquarters. The Railway budget is presented every year and passed by both houses of the parliament. The budget is based on the expected traffic and the projected tariff and capital and revenue expenditure. Dividends are paid to the Central government on the capital invested. Indian Railways is subjected to the same audit control as other government ministries and departments.

    The Indian Railways is Asia's largest and the world's second largest rail network under a single management. It is a multi-gauge, multi-traction system covering over 60,000 route kilometers, with 300 railways yards and 700 repair shops and covers most of the country's vast geographical spread. The rolling stock fleet of the Indian Railways comprises 7,566 locomotives, 37,840 coaches and 222 million freight wagons. With a workforce of around 1.4 million, it runs more than 11,000 trains daily.

The Indian Railways has evolved into a vertically integrated organization. Various units are engaged in designing, manufacturing and maintaining the rolling stock, running institutions such as hospitals, schools, housing estates and hotels and catering. It issues licenses to a large number of uniformed porters and authorized hawkers. These are only some of the major activities that the Indian Railways perform.
There are many problems facing the Indian Railways. Among these, the major ones are:
•    Cross-subsidisation of passenger and freight tariff
•    High energy and fuel costs
•    High accident rate
•    Antiquated communication, safety and signaling equipment.
•    Ageing infrastructure including rail tracks and bridges.
•    High establishment and personnel costs.
•    Emerging competition from low-cost airlines.

Many areas of the Indian Railways are in need of improvement. Several actions have been taken over the years that include:
•    Upgrading technology, especially the application of IT
•    Improving the quality of railway services
•    Production of better quality locomotives and
•    Introduction of fast long-distance trains
•    Addition of value-added services such as introducing banking facilities on trains.

    A Status Paper on the Indian Railways was issued May 1998, followed by another in 2002. These status papers underlined issues confronting the Indian Railways and possible options. The Status Paper-1998, for instance, focused on the strategies related to honing the marketing capability for bulk and non-bulk freight and passenger services, reducing operating costs, evolving a financial strategy, bringing about cultural change and addressed issues of concern in areas such as research and development and IT. Similarly, the status paper of 2002 presented several issues and posed several questions related to its functioning.

    A report published in 2001 by a government appointed group chaired by Rakesh Mohan, now the deputy governor of Reserve Bank of India, called for a radical restructuring of the Indian Railways. The main thrust of its recommendations was on shedding the non-core activities such as catering and manufacturing not related to its main activities of passenger and freight transportation and becoming a focussed organisation.

    Freight has been the key revenue earner for Indian Railways. The target for 2007-08 is at 785 million tonnes. The market share of freight traffic had been on the decline over the last few decades, owing to improvements in road infrastructure. To arrest this decline, it became imperative to: enhance customer responsiveness through cargo visibility and information dissemination, reduce operating expenses and improve asset utilisation. In order to achieve these aims, the Indian Railways installed a computerised Freight Operations Information System, with the assistance of CMC Limited.

    There is much hype around the financial turnaround of the Indian Railways. Here, the major achievements have been in the areas of improved freight and passenger earnings, gross traffic revenue, higher cash surplus, higher net revenue, better operating ratio and return on capital. For instance, the Indian Railways is proud of its achievements in terms of an above 78 per cent operating ratio and a 20 per cent return on capital in 2006- 2007.

    Overall, the Indian Railways have benefited from several managerial initiatives taken over the recent past, such as corporatisation of many of its activities and hiving off, separate companies to perform functions performed in-house earlier. For example, the Indian Railways Catering and Tourism Corporation took over the non-core activities of catering while Rail Tel Corporation was formed to create the optic fibre network for communications. Another subtle manner of change seems to be the creeping nature of privatisation of non-core services and adoption of modern business methods of marketing and human resource management to improve operational efficiency. These seem to be working though critics say that the increase in the general economic activity and overloading of wagons is the cause of this improved short-term performance.

    Certain inherent issues have become a part of the Indian Railways heritage. Among these are: overdependence on freight business, much of freight business arising from a select few commodities, passenger traffic being concentrated in low-yield suburban traffic and high density of traffic in the certain areas coupled with under-utilised assets and facilities in others. The fundamental issues of the dilemma whether Indian Railways is an organisation in the nature of a public utility, designed to discharge social obligations, or is it a commercial orgarnisation for which financial performance and operational efficiency are imperative still remain.

Questions
1.    Comment on the steps taken to reduce the extent of vertical integration at the Indian Railways. Suggest a few more measures that could be taken.

2.    Discuss the measures taken for corporate restructuring of the Indian Railways, in your opinion, are these adequate for dealing with the problems faced? Why?

3.    Propose the basic elements of a corporate turnaround for the Indian Railways.

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Note: Solve any 8 Questions out of 10

1.    Explain in detail Methods or Modes of Transportation? Also comment on Importance of International Transportation


2.    Comment on Aviation is an “Economics” or a “Management”


3.    Explain in brief about “New Generation Aircraft A-380” in your words?


4.    Write Short Notes on:
a.    Economic Importance of Aviation Industry
b.    Benefits of Air Transport
c.    Air Transport and Foreign Direct Investment


5.    Explain in detail “Steps in preparing Airport Master Plan” with examples?


6.    Explain ICAO’s (International Civil Aviation Organization) Objectives in your words?


7.    Comment on “World Trade Organization (WTO)”


8.    Explain in detail Functions of Civil Aviation Authority, UK?


9.    Explain in detail Functions of DGCA (Directorate General of Civil Aviation)?


10.    What you think are the major factors that Converge Private Sector Initiatives in the Civil Aviation Industry?

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CASE I

EMPLOYEE MOTIVATION IN A GOVERNMENT ORGANIZATION"

Bhumika Services Ltd., one of the largest public sector companies of India, was serving more than 31 million customers. Along with its vast customer base, BSNL's financial and asset bases too were vast and strong. Changing regulations, converging markets, competition and ever demanding customers had generated challenges for BSNL. The Indore division of BSNL was the first in the country, which faced competition in basic telecom services from 1998. In spite of being a government department, Indore telephones had to face the competition, and relentless efforts were put in to improve the services and provide world¬class telecom services to its customers. Among the various services offered by Indore Telecom, 197 and 183 were two special services. 197 provided non-metered enquiry services to obtain telephone numbers by simply giving the name of person/name of organization/ name and designation of person, or by giving address. 183 on the other hand, was a non¬metered enquiry service that provided similar services for distant stations. ……
He wondered whether this change was a permanent phenomenon or he would have to strategize further.

QUESTIONS

1.    Discuss the long-term relevance of motivational techniques used by Baheti in the light of prevailing environment in the organization.
2.    Had you been Baheti, what other techniques you would have used to improve the special services provided by the organization?


CASE II

EMPLOYEE RELATIONS AUDIT

Triveni Foods Pvt. Ltd., a multinational confectionary company, having its branches in more than 50 countries and marketing its products in about 135 countries, established one of its production units in 1988 at Mathura near Delhi. It had a workforce of nearly 320 employees and sales turnover was more than Rs. 150 crores. Being a confectionary unit, hygiene was given the upper most priority to the extent that no one was allowed to enter the production area without taking bath and wearing sterilized clothes provided by the company. The entire process was automatic and required only food specialists and labor. In order to match the required standards, emphasis was given on training and welfare of employees on regular basis. Facilities like transportation were also provided since delay by ten minutes could cause production losses at the time of shift changes.

…….Due to these practices, a lot of improvement was observed. Better working conditions, increased productivity, rise in employees' commitment towards their goals and better superior -subordinate relationship could be seen. In 2001, the percentage of the performance rose to seventy two. While reviewing the Employee relation audit, Alok Trivedi was quite satisfied to note the steady though slow improvement in the figures of performance.


QUESTIONS

1. Had you been in place of Alok Trivedi, what additional measures would you have taken?
2. Critically analyze the Employee Relations Audit in the light of its contribution to self motivation of employees.


CA S E III

EMPLOYEE TURNOVER AT XYZ MOON LIFE INSURANCE

In 1950, with the enactment of the Insurance Act, Government of India decided to bring all the insurance companies under one umbrella of the Life Insurance Corporation of India (LIC). Despite the monopoly of LIC, the insurance sector was not doing well. Till 1995, only 12% of the country's people had insurance cover. The need for exploring the insurance market was felt and consequently the Government of India set up the Malhotra Committee. On the basis of their recommendations, Insurance Development and Regulatory Authority (IRDA) Act was passed in parliament in 2000. This move allowed the private insurers in the market with the stop foreign players with 74:26% stake. XYZ- Moon life was one of the first three private players getting the license to operate in India in the year 2000.

XYZ Moon Life Insurance was a joint venture between the XYZ Group and Moon Inc. of US. XYZ starred off its operations in 1965, providing finance for industrial development and since then it had diversified into housing finance, consumer finance, mutual funds and now its latest venture was Life Insurance. Its foreign partner Moon Inc. was established in 1858 and had grown to be the largest life insurance and mutual fund company in the U.S. Moon Inc. had its presence in Asia since the past 75 years catering to over 1 million customers across 11 Asian countries.

….He wanted to increase the commitment level and integrity of his young dynamic team by facilitating proper civilization of their energy. He believed that proper training could give his team a proper understanding of the business and the dynamics of insurance industry.


QUESTIONS:

1.    If you were Malik, what strategies would you adopt to solve the problem?
2.    With high employee turnover in insurance industry, how can the company retain a person like Malik?



CASE IV

FRAGRANCE COMPANY LIMITED

Petals Company Limited (PCL) was initiated in the year 1919. Since then, it had produced a number of brands which enjoyed customer loyalty. It had adapted well with the changing environment and had entered into a strategic alliance with the S & G Limited, the producer of personal care products. The new company Fragrance Company Limited Was formed as a result in 1993 with equity participation from S& G and Petals Company Limited. This company marketed the products manufactured by the PCL. This alliance had given PCL access to the latest international technology in soaps and detergents. Thus, Fragrance Company Limited was now ideally placed to offer high value, international quality products at competitive prices. It was already an exporter of toilet soaps, detergents and cosmetics. It was a private organisation headed by Dharamchand, with its company's headquarters at Mumbai and seven units all over the country with one of the units at Faridabad. The turnover of the company was Rs 900 crores. The company marketed the products using the latest international technology in soaps and detergents.

….After one year, Gyanchand was highly perplexed to see only a negligible improvement in the report of the survey conducted by the personnel administration department. The rate of absenteeism had dropped by only 3%, i.e. from. 20% to 17% in spite of introducing the aforesaid schemes.

QUESTIONS:

1.    What role do the non-financial incentives play in motivating the workers and minimizing the rate of absenteeism?
2.    What innovative solutions would you suggest to minimize the rate of absenteeism?




C A S E V

Vetements Ltee


Vetements Ltee is a chain of men’s retail clothing stores located throughout the province of Quebec, Canada. Two years ago, the company introduced new incentive systems for both store managers and sales employees. Store managers receive a salary with annual merit increasing based on sales above targeted goals, store appearance, store inventory management, customer complaints, and several other performance measures. Some of this information (e.g., store appearance) is gathered during visits by senior management, while other information is based on company records (e.g., sales volume).

          Sales employees are paid a fixed salary plus a commission based on the percentage of sales credited to that employee over the pay period. The commission represents about 30 per cent of a typical paycheck and is intended to encourage employees to actively serve customers and to increase sales volume. Because returned merchandise is discounted from commission, sales staff are discouraged from selling products that customers do not really want.


…Some staff openly complained of lower paychecks because they were assigned to a slow area of the store or were given more than their share of inventory duties.



Question

1.    What symptom(s) exist in this case to suggest that something has gone wrong?

2.    What are the root causes that have led to these symptoms?


3.    What actions should the organization take to correct these problems?