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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. There were a large number of complaints related to these services. Complaints were either directly forwarded to the district office by customers or raised during Telephone Adalats or pointed out by correspondents during press conferences, which were conducted quarterly. Complaints ranged from non-response, long waiting time to rude responses.

S. Baheti took charge as Area Manager (North) on July 25, 2001 In the Indore Division. Immediately after taking charge, he realized that special services like 197 and 183 required urgent attention as they were directly affecting the image of the organization amongst customers. Since most of the complaints during Telephone Adalats and press conferences were related to these services, Baheti wanted to reach the root cause of the problem, to solve it forever. In this process, he looked at the background of the employees involved in the special services and found that most of the employees were office bearers of various unions that were active in the organization. The problem was more complicated than it seemed to during interactions, the employees indicated that they were not to be blamed for poor services since they were facing a number of problems in providing services and senior officials were not paying enough attention to alleviate their problems. Defective handsets, non-operating telephone lines, disturbance in lines, jacks not making proper connections, fans and air conditioners not working properly and non availability of typewriter/computer terminals were some of the problems brought to the notice of Baheti by operators.


Further investigation revealed that in addition to these technical problems, there were some Human Resource Management problems as well, such as frequent short leave, extended breaks, uninformed leave and indifferent attitude of employees towards customers. Baheti identified that despite technical problems, some operators were sincere towards their viork and tried their best to provide better services. To improve these services, Baheti decided to use multipronged strategies. Most of the technical problems were solved immediately, other problems that could not be solved at his level were forwarded to higher authorities and pursued rigorously. As the technical problems were taken care of, efficiency of sincere employees went up. Moreover, Baheti also began regular interaction with the operators, appreciating their good work, listening to their problems and explaining them the;-i. importance of their jobs. The employees were made aware of the facts that B5NL did not enjoy a sole monopolistic position any more and had to compete with private players. So the laidback attitude towards customer complaints was not only detrimental to the image of the organization, but also could lead to a reduced market share.

After gaining the confidence of operators, the next step was to motivate them. Towards this end, Baheti started announcing the best operator of the month and recognition was given to the operator by displaying his name on the board of honor. The criteria for award were minimum 200 calls attended per day and 20 days' attendance. In addition, based on last six months performance, three best performers were identified. Appreciation letters from Area Manager and General Manager were conferred upon these operators in a public function and prizes of their own choice were given to them. These efforts had a desired result and the performance of all the operators showed a marked improvement. The number of calls attended by some operators increased from 200 to 700 calls per day. Further, quick and polite response had reduced customer complaints. While reviewing the situation, Baheti was quite contended to see a remarkable change in the behavior of operators just four months. 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.
Over a period of time due to start and workers' redundancy, it was observed that problems like lethargy, absenteeism, violation of work practices were increasing. Absenteeism rate went up to 18 percent. Employees visited canteen for drinking water and started gossiping during working hours. Buses did not arrive on time due to which production suffered. Operators came late and left shop floor early without waiting for relievers. Employees were found hovering in administration building without any reason. It was also found that employees were violating personal hygiene standards. Malpractices were also reported with attendance process and records. These activities were having a negative impact on managerial effectiveness and performance of the unit. The management tried to take number of initiatives to overcome these problems. However, these initiatives seemed ad hoc solutions and did not serve the purpose in the long run.
In 1996, Alok Trivedi joined the company as Head of the Department H.R. While facing these problems, he realized that the causes of these problems were deep rooted and required a proactive approach. He started with an approach called Employee Relation Audit, developed by him, where everything was to be monitored, regulated and reported on regular intervals. He along with his team prepared an action plan (Appendix 1) and corrective measures were taken accordingly. Facilities of drinking water were arranged at 3 to 4 places in the production area which stopped employees from going to canteen for this purpose. Action was taken against the late arrivals of the buses. A proper time study was done and they were given ten minutes margin so that they could report on time. Operators were frequently questioned and stringent vigilance was kept for amenities. Regular counseling was also arranged. A grievance register was also kept and effective grievance redressal was undertaken. Groups were formed called 'Pragati' groups for solving work related problems. Employees were frequently checked for ensuring their strict adherence to personal hygiene standards. For ensuring timely processing and printing of attendance records, training was given to al! line officers and production of records was made mandatory on shift basis.
It was further decided that based on this action plan an audit should be carried out at regular periods so that actual performance could be measured. For quantification, a 5 point. scale 0- poor, 2-below average, 3-average, 4-good, 5-v.good) audit report was prepared featuring practices, criteria for evaluation, standards, observations/comments and rating :Appendix 2). For example, in canteen criteria for evaluation there were food quality, menu, timings and unauthorized presence of the employees in the kitchen. The standards were strict adherence to the rules defined. For transportation, arrival, departure and punching of cards by drivers were the criteria for evaluation. Internal teams of auditors were asked to observe and comment against the set standards and give the rating accordingly. Performance vas evaluated on the basis of percentage, the highest point being 215. For example, if the total points scored on various parameters in a audit report was one hundred and fifty five, hen percentage score would be seventy-two (l55/215xl00 = 72 per cent). The first audit "as carried out in August 1999 and percentage of performance was sixty two.
In the year 2000, the performance rose to sixty-five per cent. Proactive approach of solving le problems was adopted. For example, registers were maintained at different work areas, write down the complaints experienced by employees and action was taken by the concerned person. A complaint of tap leaking in a bathroom was recorded in register by a workman. It was attended by a supervisor in charge and he got it repaired immediately. At times these were reviewed and signed by H.R. department and the higher management. 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.

Within a span of two years, twelve private players obtained the license from IRDA. IRDA had provided certain base policies like, Endowment Policies, Money back Policies, Retirement Policies, Term Policies, Whole Life Policies, and Health Policies. They were free to customize their products by adding on the riders. In the year 2003, the company became one of the market leaders amongst the private players. Till 2003, total market share of private insurers was about 4%, but Moon Life was performing well and had the market share of about 30% of the private insurance business.
   
In June 2002, XYZ Moon Life started its operations at Nagpur with one Sales Manager (SM) and ten Development Officers (DO). The role of a DO was to recruit the agents and sell a career to those who have an inclination towards insurance and could work either on part time or full time basis. They were very specific in recruiting the agents, because their contribution directly reflected their performance. All DOs faced three challenges such as Case Rate (number of policies), Case Size (amount of premium), and Recruitment of advisors by natural market, personal observations, nominators, and centre of influence. Incentives offered by the company to development officers and agents were based on their performance, which resulted into internal competition and finally converted into rivalry.
   
In August 2002, ,a Branch Manager joined along with one more Sales Manager and ten Development Officers. Initially, the branch was performing well and was able to build their image in the local market. As the industry was dynamic in nature, there were frequent opportunities bubbling in the market. In order to capitalize the outside opportunities, one sales manager left the organization in January 2003. As the sales manager was a real performer, he was able to convince all the good performers at XYZ Moon Life Insurance to join the new company. As a result of this, the organizational structure got disturbed and the development officers, who were earlier reporting to the SM had started reporting directly to the branch manager. Now, nepotism crept in and the branch manager began reallocating good agents to his favorite development officers. The sales team of another sales manager became weak (low performer). Seeing the low performance of the sales manager and his development officers, the company decided to terminate their services. As the employees' turnover rate of the organization was more than the industry rate, the company had to continuously recruit sales agents as well as development officers to sustain itself in a highly competitive environment. The internal competition among development officers resulted into problems like, high employee turnover and dissatisfaction. Hence the branch was not able to perform as per the benchmarks set by the company. Its performance was not even comparable to that of other branches of the same company.

In April 2004, the company faced a grave problem, when the Branch Manager left the organization for greener pastures. To fill the position, in May 2004, the company appointed a new Branch Manager, Shashank Malik, and a Sales Manager, Rohit Pandey. The Branch Manager in his early thirties had an experience of sales and training of about 12 years and was looking after two branches i.e., Nagpur and Nasik.

Malik was given one Assistant Manager and 25 Development Officers. Out of that, ten were reporting to Assistant Manager and remaining fifteen were directly reporting to him. He was given the responsibility of handling all the operations and the authority to make all the decisions, while informing the Branch Manager. Malik opined that the insurance industry is a sunrise industry where manpower plays an important role as the business is based on relationship. He wanted to encourage one-to-one interaction, transparency and 4iscipline in his organization. While managing his team, he wanted his co-workers to analyze themselves i.e., to understand their own strengths and weaknesses. He wanted them to be result-oriented and was willing to extend his full support. Finally, he wanted to introduce weekly analysis in his game plan along with inflow of new blood in his organization. Using his vast experience, he began informal interactions among .the employees, by organizing outings and parties, to inculcate the feelings of friendliness and belonging. 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.

The organization structure was traditionally hierarchical with the senior vice president at the top of the management, the supervisory heads at the middle level and the workers at the shop floor. The company had 450 permanent workers, and 150 contract workers, with an average age of 32 years. The recruitment policy framed was to employ freshers. The various departments in the organization were: purchase, finance, systems, engineering services, excise and dispatch, operations and personnel department. The personnel and administration department were headed by Gyanchand and the functions of the personnel administration department were: recruitment, selection, training, counseling, performance appraisal, internal mobility of employees, negotiation With workers, fixation and implementation of rules and regulations regarding wages, salary, allowances and benefits to the workers. The philosophy of the company was based on Total Quality Management (TQM) and Kaizen. The company was highly environment-friendly and was oriented towards customer’s satisfaction.

Fragrance was facing an acute crisis due to high rate of absenteeism among its permanent workers. The losses were soaring high. There was loss in production, and high expenses and indiscipline were also observed. The personnel administration department conducted a survey in the year 1998. They found that the rate of absenteeism was about 20% on an average. The rules and regulations regarding leave were-12-17 days of leave with pay, 7 days casual leave with pay, 5 day sick leave with pay, extra leave without any pay. The benefits were provided as per the Employees State Insurance Act. The data collected revealed that 36% of the absenteeism was due to transportation problem, 48% was because of the workers staying away from their families, 52% due to festivals, 32% due to farming, 48% on account of alcholism, 80% on account of social occasions/marriages and 76% due to sickness of family members.

The other findings were that approximately 80% of the workers were married and they had children to look after and hence had a greater tendency towards taking leave, 8% of workers possessed dual jobs ,e.g., driving for others, mechanic work etc., so they felt that they could earn more on a particular day by remaining absent; 96% of the workers did not like night shifts and they remained absent from duty; 28% of the workers were not satisfied with the working conditions i.e. canteen facilities, drinking water, social and cultural activities and cleanliness. In 1998, the company tried to reduce absenteeism by introducing conveyance allowance for attendance and night shift allowance. The scheme called Inaam; was launched in which a worker who did not avail leave in three months, received Rs 200 per month. In¬house training was imparted to workers In order to educate them about the consequences of absenteeism. They were also sent for 3-6 months training to the Central Board of Workers Education on rotation.

Counseling sessions were held for the workers in order to increase their awareness. The company also introduced the philosophy of workers participation in the management to increase their involvement and commitment towards the work. The practice of organizing picnics, festival celebration, informal get-togethers, and sports activities were also adopted to increase the commitment. Regularity was made an important component of performance appraisal and promotion. 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
HE WHO RIDES A TIGER

In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector. While the latter was started a decade later than the former, it had achieved greater expansion. Both were located in the same state.

After we obtained necessary permission to conduct our study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a matter of principle, we wanted to meet the General Secretary of the workers' union. The Personnel Department was not willing for this. On our insistence they called the union official. We talked to him for about half an hour but Personnel Department people were all the time hovering around. So we fixed a time in the evening to meet him in the union office in the town. We visited the union office in the evening. The union was having problem regarding wage deduction of some workers who did not show up for overtime. The overtime notice was short and they had not consented either, even then the management was threatening wage deduction for one week. The union could hardly do a thing' as they in the past had burnt their hands when they had to unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide. They were scared to the extent that they had productivity linked bonus agreement for even 12% bonus. Moreover, a new minuscue union was recently started in the company.

We visited the new union's office next evening and held a long discussion. They asked for' our suggestions. The union believed in legal battles more than agitations. After a visit to the industry the author visited the state headquarters of the new union. There every office bearer was surprisingly a lawyer. In the HQ we learnt that after we left, their union took out a procession and held a meeting in the temple. Perhaps this was the result of our discussion. While the older union was a prisoner of its past, the new union was free to write its own history. Workers' interests were being served perhaps by both.

QUESTIONS:
1.    Discuss merits/demerits of the role of strike, agitation and legal approach in union¬management relations.
2.    What role does mutual trust play in building union-management relations?

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              N. B.:     1)    Attempt all Cases.
                2)    All Cases carry equal marks.

Case 1:

PROMOTING THE PROTÉGÉ

The die was cast.  Prem Nath Divan, executive chairman of Vertigo, the country’s largest engineering project organization, decided to switch tracks for a career in academics.  Divan was still six years short of the company’s retirement age of 65.  His premature exit was bound to create a flutter at the Vertigo board.  Having joined Vertigo as a management trainee soon after college, he had gradually risen through the hierarchy to take a board position as the marketing director of the firm at 32.  He had become …
of it all had missed me completely.  There is no way I can allow a split at the top just before I quit.  I must leave on a high note in my own interest.  I must find a way out of he imminent mess.”

Question:
1.     What should Divan do?
   














Case 2:

PREJUDICES IN WORKPLACES : REAL OR PERCEIVED ?

Manjula Srivastav had been head of marketing for the last four years at Blue Chips, a computer products firm.  The company’s turnover had increased by two – and a half times during the period and its market share in a number of precuts had also moved up marginally.  What was creditable was that all this had happened in an environment in which computer prices had been crashing.
    Although she had a talent for striking an instant report with people – particularly with the company’s dealers – Srivastav often found herself battling …
    “I need to think about this.  I will let you know tomorrow,” said Srivastav and left the office.
    What should she do?











Case 3:

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 ..
Questions:
1.    How would you rate Dinesh’s behaviour?  What method of     appraisal     would you use?
2.    Do you assess any training needs of employees?  If yes, what     inputs should be embodied in the training programme?



Case 4:

 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 an evening college and obtained his degree in engineering in 1982.  Recognizing 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 ..
Questions:
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.

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CASE 1

COMPANY BACKGROUND
The Bronson Insurance Group was originally founded in 1900 in Auxvasse, Missouri, by James Bronson. The Bronson Group owns a variety of companies that underwrite personal and commercial insurance policies. Annual sales of the Bronson Group are $100 million. In recent years, the company has suffered operating losses. In 1990, the company was heavily invested in computer hardware and software. One of the problems the Bronson Group faced (as well as many insurance companies) was a conflict …
would require underwriters to go to a single keyboard to request paper copies of files. The cost of a microfilm system was $5 million.

1. What do you recommend? Should the company implement one of the new technologies? Why or why not?

2. An operations analyst suggested that company employees shared a “dump on the clerks”
mentality. Explain.

CASE 2
Harrison T. Wenk III is 43, married, and has two children, ages 10 and 14. He has a master’s degree in education and teachers junior high school music in a small town in Ohio. Harrison’s father passed away two months ago, leaving his only child an …interested in finding out as much as possible about operations. Harrison believes he owes it to his wife and children to fairly evaluate this opportunity.

1. Prepare a worksheet of operations activities that Harrison should inquire about this summer.

2. If you were Harrison, what would you do? Why?

CASE 3
Trust them with knee-jerk reactions," said Vikram Koshy, CEO, Delta Software India, as he looked at the quarterly report of Top Line Securities, a well-known equity research firm. The firm had announced a downgrade of Delta, a company listed both on Indian bourses and the NASDAQ. The reason? "One out of every six development …
nd the US and strike alliances with firms in Europe- and also Japan-as part of developing new products for global markets."

1. Should benching be a matter of concern at Delta?

2. What are the risks involved in moving from a project-centric mode to a mix of projects and products?

CASE 4
The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or sell illegal drugs on the black market, prosecuting them in court, and housing them in jail. These costs seem particularly exorbitant when dealing with the drug marijuana, as it is widely used, and is likely no more harmful than currently legal drugs such as tobacco and alcohol. There's another cost to the war on drugs, however, which is the revenue lost by governments who cannot collect taxes on illegal drugs. In a recent study for the Fraser Institute, Canada, Economist Stephen T. Easton attempted to calculate how much tax revenue the government of the country could gain by …care and education expect to see the idea raised in Parliament sooner rather than later.

1. Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.

2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in

CASE 5

Companies that attend to productivity and growth simultaneously manage cost reductions very differently
from companies that focus on cost cutting alone and they drive …
to Rs 170 at the
end of 1994. Unfortunately, Arvind's deteriorating financial returns over the last few years is also typical
of the Indian textile industry. The top three Indian companies actually showed a decline in their return
ratios in contrast to the international majors. Nike, VF Corp and Coats Viyella showed a growth in their
returns on capital employed of 6.2 per cent, while the ROCE of Grasim and Coats Viyella (India) fell by
almost 2 per cent per annum. Even in absolute returns on assets or on capital employed, Indian companies
fare a lot worse. While Indian textile companies just about cover their WACC, their international rivals
earn about 8 per cent in excess of their cost of capital.



1.  Is Indian companies running a risk by not giving attention to cost cutting?
2.  Discuss whether Indian Consumer goods industry is growing at the cost of future profitability.
3.  Discuss capital and labour productivity in engineering context and pharmaceutical industries in India.
4.  Is textile industry in India performing better than its global competitors?


CASE 6
Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the price tag on the piece selected by him. At the counter, while making the payment he asked for the price. Rs. 950 was the answer. Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She was glad that he had selected a nice black shirt for himself. She pointed out that there was a 25% discount on that item. The counter person nodded in agreement. Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That’s fantastic”, said Mr. Sharma. He decided to buy one more shirt in blue color. In no time, he returned with the second shirt and asked them to be packed. When he received the cash memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs. 1,424. Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted the discounted price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.


1. What should Mr. Sharma have done to avoid the misunderstanding?
2. Discuss the main features involved in this case.


CASE 7
The Benson Hotel, a mid-sized independent property required new leadership. Mike Schwartz,
Vice-president of operations, pondered his next move as he reviewed last month’s financial
statements. The Benson was an eighty-five-room three-star property with a full-service
restaurant, lounge, banquet and health club facilities. The rapidly changing marketplace and
new competition from well-established franchises had made Mike’s job and the Benson’s
position more tenuous. Mike decided to commission a consultant’s report on the property. He
called up his longtime friend Jim Burke, who had worked for major chains across the country
and was now a hospitality consultant.
“Jim, how are you old buddy?” Mike asked.
“I am doing very well Mike. This consulting work has run me off my feet. What can I do for you?”
Jim Asked.
“Well Jim, I need an independent review of the Benson. We’re holding our own but these
franchise guys with their management contracts are really getting aggressive,” Mike said.
“Yes, I know what you mean Mike. I ….
the
actions of a general manager with this type of comportment and still maintain a workable
relationship with its employees. My opinion at this point is that something has to change.”

1. Do you feel it was necessary for Mike to commission a consultant’s report on the Benson? Why
or why not? How would you have approached the situation?
2. Identify and propose solutions for the supervisory challenges in the kitchen and dining areas of Benson Hotel.
CASE 8
The Rainbow Golf resort had something to celebrate. The 120- unit golf resort consisting of villas and
condominiums had recently been “re-branded” from a franchise to an independent property. The new
owner, Ken Okura, was reviewing the present organizational structure of the Rainbow along with the
files of key personnel presently running the operation. During the transition period Ken had recruited his
own team including a Vice-President of operations, Director of sales and ….
• It is difficult to know who to go if someone has a problem with his or her manager. There should
be someone designated as the resort manager so that employees have someone to
communicate with should the need to do so arise.
Ken assembled his new team to map out strategies to address the operational challenges and employee
concerns.

1. Identify and describe four short-term operational strategies Ken should implement immediately
at the Rainbow Golf Resort?
2. Which form of top-down communication would be most suitable for the Rainbow Golf Resort to
achieve its objectives?


CASE 9
The Pierre has been able to maximize profitability through a sales program that realigned its sales mix.
The Pierre, a luxury hotel in New York City, experienced high demand and periods of limited availability.
An analysis of the business indicated that gross operating profit was not as much as it could be because
groups were occupying rooms at discounted rates during peak periods of the year. As a result, new track
rate business (nondiscounted) was often turned away.
It was calculated that The Pierre sells out for at least 100 days a year. During these dates the hotel could
command rack rate. Group business was then targeted for the shoulder and softer time periods. Based
on historic patterns of business, a limitation was placed on the …
nd in the city as well as for the
past five years of hotel occupancy, and keeping tight tabs on room sales, yield, and revenue per
available room (REVPAR).


1. Would this kind of plan work for any sort of hotel chain?
2. Does this type of strategy helps in increasing the revenues of the hotel.
CASE 10
The climate dimensions described relates to a specific management strategy.
Clarity:
?? Dana Corporation has a corporate policy that, in part, says “The people who know best how the
job should be done are the ones doing it.”
Commitment:
• Boston’s New England Securities Corporation issues T-shirts to its employees with the slogan
“See it, Do it, Own it.”
• To develop a shared vision, United Technologies Corporation says:

?? Talk honestly and directly to employees about their performance;
?? Give people the information they need to do the job;
?? Let employees influence their own performance objectives;
?? Walk around-be visible;
?? Listen to others before evaluating their ideas;
?? Demonstrate high performance standards in your own behavior;
?? Let people know your long-term direction.
Standards:
• The quality of written reports increased after the CEO of Winter Gardens Salad Company stamps
“Read by Harry” on the report before sending it back to employees.
• Supervisors at the Mirage Treasure Island …
and free
dinner coupons to the spouses or significant others of the employees.

1. How does the organizational climate in a hotel translate into total satisfaction of guests?
2. What can managers do to ensure that such a climate is being created in his or her operations?

CASE 11
THE EU’S LAGGING COMPETITIVENESS
In a report produced for the European Commission, published in November 1998, it was argued that
the EU lags behind the USA and Japan on most measures of international competitiveness. Gross
domestic product per capita, sometimes used as an indicator of international competitiveness at the
country level, was 33 per cent lower in the EU as a whole than in the USA and 13 per cent lower
than in Japan. The EU’s poor record in creating employment was singled out for particular criticism.
As this appeared to apply across the board in most industrial sectors, it suggested that the EU’s poor
performance related to the business environment in general and, in particular, to the inflexibility of
Europe’s labour markets for goods and services. A shortage of risk …


1. Is gross domestic product per capita a useful indicator of International competitiveness in the EU?
2. Is it fair to point the blame for the EU’s poor international competitiveness at inflexible labour
markets, regulated goods and services markets, and a general lack of competition? What
alternative explanations might be suggested?


CASE 12
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after
Brazil and Argentina), and covers almost 500,000 square miles (about 14 per cent of the size of the
United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering
snow-capped Andes mountains, sparkling grass-covered plateaus, and thick rain forests. Peru has
approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians
(one half of the population) live in Peru than in any other country in the western hemisphere. The
ancestors of Peru’s Indians were the famous Incas, who built a great empire. The rest of the
population is mixed and a small percentage is white. The economy depends heavily on agriculture,
fishing, mining, and services. GDP is approximately $115 billion and per capita income in recent
years has been around $4,300. In recent years the economy has gained some relative strength and
multinationals are now beginning to consider investing in the country. One of these potential
investors is a large New York based that is considering a $25 million loan to the owner of a Peruvian
fishing fleet. The owner wants to refurbish the fleet and add one more ship. During the 1970s, the
Peruvian government nationalised a number of industries and factories and began running them for
the profit of the state. In most cases, these state-run ventures became disasters. In the late 1970s, the
fishing fleet owner was given back his ships and are getting old and he needs an influx of capital to
make repairs and add new technology. As he explained it to the NEW YORK banker: “fishing is no
longer just un art. There is a great deal of technology involved. And to keep costs low and be
competitive on the world market , you have to have the latest equipment for both locating as well
as catching and then loading and unloading the fish.”Having reviewed the fleet owner’ operation, the
large multinational bank believes that the loan is justified. The financial institution is concerned ,
however , that the Peruvian government might step in during the next couple of years and again
take over the business . If this were to happen, it might take an additional decade, for the loan to be
repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the
last decade, the loan could be rapid within seven years. Right now, the bank is deciding on the
specific terms of the agreement. Once these have been worked out , either a loan officer will fly
down to lima and close the deal or the owner will be asked to come to NEW YORK for the signing.
Whichever approach is used, the bank realize that final adjustments in the agreement will have
to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have
to the authority to commit the bank to specific terms. These final matters should be worked out within
the next ten days.

1. What are some current issues Facing Peru? What is the climate for doing business in Peru today?
2. Would the bank be better off negotiating the loan in New York or in Lima? Why?
CASE 13
Which Company Is Transnational?
Four senior executives of companies operating in many countries speaks:
COMPANY A
We are transnational company. We sell our products in over 80 countries, and we manufacturer in 14
countries. Our overseas subsidiaries manage our business in their respective countries. They have
complete responsibility for their country operations including strategy formulation. Most of the key
executives in our subsidiaries are host-country nationals, although we still rely on home-country
persons for the CEO and often the CFO (chief financial officer) slots. Recently, we have divided the
world regions and the United States. Each of the world regions reports to our world trade
organization, which is responsible for all of our business ….
low
income to lower middle, or from lower middle to upper middle, or from upper middle to high income
we commit our best effort to expand our positions, or, if we don’t have a positions, to establish a
position. Since our objective is to achieve an undisputed leadership position in our industry, we
simply cannot afford not to be in every growing market in the world.
We have always had a European CEO, and this will probably not change. The executives in this
company from Europe tend to serve all over the world, whereas the executives from the United States
and Japan serve only in their home countries. They are very able and valuable executives, but they
lack the necessary perspective of the world required for the top jobs here at headquarters.

1. Which company is transnational?
2. What are the attributes of a transnational company?
3. What is the difference between a domestic, international, multinational, global, and transnational
company?
4. At what stage of development are your company and your line of business today? Where should you be.

CASE 14


Parker Pen Co. (A)
INTRODUCTION
The meeting at sunny Palm Beach concluded with nary a whimper of dissent from its participants.
After years of being run as a completely decentralized company whose managers in all corners of the
world enjoyed a high degree of flexibility, Parker Pen Co., Janesville, Wisconsin, was forced to
reexamine itself. The company had enjoyed decade after decade of success until the early 1980s. By
this time, Parker faced strong competitive threats and a deteriorating internal situation. A new
management team was bought in from outside the company – an unprecedented step for what had
been until then an essentially family-run business. At the March 1984 Palm Beach meeting, this new
group of decision makers would outline a course of action that would hopefully set Parker back on a
path to success.
The men behind the new strategy were supremely confident of its chances for success – and with
good reason. Each was recognized as a highly skilled practitioner of international business and their
combined extensive experience gave them an air of invincibility. They had been recruited from larger
companies, had left high-paying, rewarding jobs, and each had come to Janesville with a grand sense
of purpose. For decades, Parker had been a dominant player in the pen industry. In the early 1980s,
hoe-ever, the company had seen its market share dwindle to a mere 6 percent and, in 1982, net
income plunged a whopping 60 percent.
To reverse this decline, Parker recruited James Peterson, an executive vice president at R.L.
Reynolds, as the new president and CEO. Peterson hired Manville Smith as president of the writing
instruments group at Parker Smith, who was born in Ecuador and had a broad international
background, came from 3M where he had been appointed division president at the tender age of 30.
Richard Swart was vice president/marketing of the writing instruments group. He spent 11 years at
the advertising agency BBDO and was an expert on marketing planning and theory. Jack Marks was
head of writing instruments advertising. Marks came to Parker from Gillette, where, among other
things, he assisted in the worldwide marketing of Paper Mate pens. Rounding out the team was Carlos
Del Nero, manager of global marketing planning, who brought with him considerable international
experience at Fisher-Price. Each of these men was convinced that Parker would right itself by
following the plan they unveiled at Palm Beach.
A BRIEF HISTORY OF PARKER PEN
The “Rolls Royce” of the Pen Industry
The Parker name has been identified with pens since 1888 when George S. Parker delighted inksplotched
pen users everywhere by introducing a leakproof fountain model called the Parker Lucky
Curve. Parker Pen would eventually blossom into America’s, if not the world’s, largest and bestknown
pen market. Parker’s products, which …
examined, not the least of which was Parker’s decentralization of global operations.


1. What would you do if you were in James Peterson’s shoes in January 1982?
2. What changes, if any, would you make in Parker’s marketing strategy?
3. Which aspects of Parker’s structure would you discard? Which would you keep?
4. Assume that you are James Peterson and you have just hired a new management team composed
of highly qualified executives from outside companies. You and your new team are convinced
that you have the solution to Parker’s problems but there are many hold overs who disagree with
you. How would you implement your plan? To what extent would you incorporate the views of
Parker management into your plan?



Detailed information should form the part of your answer (Word limit 200 to 250 words).


1. Consider the equation Y=f(A,B,C,D,E,F,G), where Y stands for consumption of soft drinks
and D is the variable for cultural elements. How would this equation help a soft-drink
marketer understand demand for soft drinks in global markets?

2. The president of XYZ Manufacturing Company of Buffalo, New York, comes to you with a
license offer from a company in Osaka. In return for sharing the company’s patents and
know-how, the Japanese company will pay a license fee of 5percent of the ex-factory price of
all products sold based on the U.S. Company’s license. The president wants your advice what
would you tell him?

3. Imagine that you are the director of a major international lending institution supported by funds
from member countries. What one area in newly industrialized and developing economics would
be your priority for receiving development aid? Do you suspect that any member country will be
politically opposed to aid in this area? Why or Why not?

4. The principle problem in analyzing different forms of export financing is the distribution of risks
between the exporter and the importer. Analyze the following export financing instruments in this
respect:
(a) Letter of Credit
(b) Cash in advance
(c) Draft
(d) Consignment
(e) Open Account

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Case I

PANDIT TO AFAUZI
The case is based on an actual incident which took place in an Army unit operationally deployed in a field area just a few months before the 1971 showdown with Pakistan. The opposing forces of India and Pakistan were taking their respective positions in a pre-war scenario. The clouds of showdown were looming large over the horizons of both the countries. The rumbling of own tanks and guns, the reconnaissance, leaders of different arms and services establishing liaison with one another in the process of formulating plans for both defence and attack, digging of main and contingency positions was in progress, complete war machinery was being mobilized, camouflaged, and concealed. Ammunition and other explosives were being unloaded and dug down. Junior leaders were being briefed and rebriefed, communications were being checked, and troops were being motivated and looked after as most of them were green because of their sudden induction in the Army in post war days of 1965. Such was the scene which convinced all and sundry that war was imminent. Most of the troops looked forward to a showdown mainly because they wanted to get rid of the heavy ……
The cadre was conducted for the whole sub-unit with a view to eradicate any apprehensions from the minds of others too, in case there were any, and to educate all. The cadre proved to be a great success. It motivated the whole lot, made them more confident and ready to face the challenge bravely. This was subsequently apparent when the hostilities started.
QUESTIONS:
1.    What was the cause of fear in RBM?
2.    What were the symptoms of fear displayed by RBM?
3.    How did the RMO come to know of the war phobia of RBM?
4.    What actions should be taken to avoid building up of fear among the troops? Which of these steps were taken by the officer?






Case II

HE WHO RIDES A TIGER

In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector. While the latter was started a decade later than the former, it had achieved greater expansion. Both were located in the same state.

After we obtained necessary permission to conduct our study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a matter of principle, we wanted to meet the General Secretary of the workers' union. The Personnel Department was not willing for this. On our insistence they called the union official. We talked to him for about half an hour but Personnel Department people were all the time hovering around.

………While the older union was a prisoner of its past, the new union was free to write its own history. Workers' interests were being served perhaps by both.



QUESTIONS FOR DISCUSSION
1.    Discuss merits/demerits of the role of strike, agitation and legal approach in union¬management relations.
2.    What role does mutual trust play in building union-management relations?


CASE III

COMPETITION AHEAD: VSNL AT CROSS ROADS

The telecom sector had been functioning as a typical government department right from its inception. With the Department of Telephones (DoT) being under the exclusive control of the Ministry of Communications, Government of India (GO!), the system functioned more as a monopoly., With the advent of the LPG process (liberalization, privatization and globalization) in the early nineties, the telecom department went through a phase of modernization. A number of new and sophisticated electronic exchanges were installed which enhanced the capacity and lead to the disappearance of waiting list for telephone connections. In a landmark decision in 1995-96, the Government of ………………….
•    was outlined for launching a comprehensive promotion programme using both indoor and outdoor media ensuring a good coverage of the market.


VSNL – Tariff Structure
Scheme     Rental (Rs.)     Free Colis     Facilities
Business Plan - 500-700*     500 (Monthly)     700     Without STD
Economy Plan **     160 (Monthly)     Nil     With STD
Standard Plan*     500 (Bimonthly)     150     With STD
* 0.80 Per Call     ** Rs.1 .20 Per Call        

VTNL – Tariff Structure
Scheme     Rental (Rs.)     Free Calls
Silver 300     349 (Monthly)     300
Golden – 500     499 (Monthly)     500


Questions:

1.    What were the strengths and weaknesses of VSNL?
2.    Do you think that VSNL should have changed its thrust from basic telephony to cellular services?
3.    If you were the Deputy General Manager, what strategies would you have undertaken to deal with the competition?

Case IV
DISNEY’S DESIGN
The Walt Disney Company is heralded as the world’s largest entertainment company.  It has earned this astounding reputation through tight control over the entire operation : control over the open – ended brainstorming that takes place 24 hours a day ; control over the engineers who construct the fabulous theme – park rides; control over the animators who create and design beloved characters and adventurous scenarios ; and control over the talent that brings the many concepts and characters to life.  Although control pervades the company, it is not too strong a grip.  Employees in each department are well aware of their objectives and the parameters established to meet those objectives.  But in conjunction with the pre-determined responsibilities, managers at Disney encourage independent and innovative thinking.
    People at the company have adopted the phrase “Dream as a Team” as a reminder that whimsical thoughts, adventurous ideas, and all – out dreaming are at the core of the company philosophy.  The over all control over each department is tempered by this concept.  …….
where it comes from.”

Questions :
1.    What environmental factors influenced management style at Disney?
2.    What kind(s) of organizational structure seem to be consistent     with “Dream as a Team” ?
3.    How and where might the informal organization be a real asset at Disney ?




1.    Case V
 “THAT’S NOT MY JOB” – LEARNING DELEGATION AT CIN-MADE
When Robert Frey purchased Cin – Made in 1984, the company was near ruin.  The Cincinnati, Ohi-based manufacturer of paper packaging had not altered its product line in 20 years.  Labor costs had hit the ceiling, while profits were falling through the floor.  A solid quarter of the company’s shipments were late and absenteeism was high.  Management and workers were at each other’s throats.
    Ten years later, Cin – Made is producing a new assortment of highly differentiated composite cans, and pre-tax profits have increased more than five times.  The Cin – Made workforce is both flexible and deeply committed to the success of the company.  ……………
s workers, have a lot of opportunities,” said Williams. “If we want to take leadership, it’s offered to us.”


Questions:
1.    How were principles of delegation and decentralization incorporated into Cine – Made operations?
2.    What are the sources and uses of power at Cin – Made?
3.    What were some of the barriers to delegation and empowerment at Cin –Made?
4.    What lessons about management in a rapidly changing marketplace can be learned from the experience of Cin – Made? 

   

Case VI
HIGH-TECH ANSWERS TO DISTRIBUTION PROBLEMS AT ROLLERBLADE
When a manger finds that demand exceeds inventory, the answer lies in making more goods. When a manager finds that inventory exceeds demand, the answer lies in making fewer goods.  But what if a company management finds that they just do not know which situation applies?
    This is the situation that recently confronted management at Rollerblade, the popular skate manufacturer based in Minnetonka, …………………
eliminate order backlog.  “Now we have a different business,” says Ellis. “The new layout has taken us from being in a crunch, to being able to plan.

Questions:
1.    With retailers as their primary customers, what customer competitive imperatives could be affected by Rollerblade’s inventory problems?
2.    How appropriate might a just – in – time inventory system be for a product such as roller skates?”
3.    What opportunities are therefore Rollerblade managers to see FOR themselves as selling services, instead of simply roller skates?

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MANAGEMENT PROBLEMS 1

Marsha Jackson is a recent MBA graduate with a degree in marketing. She has accepted a position with General America, a large firm selling a number of consumer products. Her first assignment is to conduct research on the sales of one of her company’s products versus sales of competing products.

    This division is responsible for sales of over-the-counter drugs such as headache remedies, indigestion cures, and similar products. In business school, Marsha had worked with a personal computer in her MBA program and was happy to see that General America had a local area network (LAN) for the marketing department subscribed to several different services that provided sales results for over-the-counter drugs. Some of her fellow workers had private databases, and a few even keyed data into their PCs from lengthy printouts they had purchased.

    Marsha feels that there must be a better way to conduct market research, particularly given the fact that the department has a LAN with a lot of capacity. What solutions to this problem can you recommend?

MANAGEMENT PROBLEMS 2

Assume you have just been appointed to chair the board of a medium sized manufacturing firm that makes small consumer appliances. The company has experienced stagnant growth over the past five years, and a new board of directors was recently elected by dissident stockholders.

    One of your first tasks is to help top management discover why sales are constant and profits have been declining. Currently, the firm is faced with excessive inventory and problems in acquiring raw materials. Prices for these materials have been fluctuating widely in recent months; the previous management seems to have been unable to cope with this problem.

    How will you approach this task? What sources of information will you seek to help understand and solve problems in the company?

MANAGEMENT PROBLEMS 3

The governor of a state is confronted with a series of conflicting recommendations from his staff. Recently welfare costs have been dropping, and he is concerned that they will start to rise again.

    The director of the state welfare department suggested in her report that the new reduced payments schedule passed by the legislature has reduced overall expenditures and so the downward trend will continue. The governor’s advisor for economic affairs indicated that the recent improvement in the state’s economy had resulted in large increases in employment. These new jobs are attracting people and taking them off the welfare roles. A state senate leader, however, felt that most of the change resulted from enforcing requirements for welfare, limits on how long one can collect payments, and requirements to work.

    Who is right? What is responsible for so many different positions? How can the governor reconcile these conflicting viewpoints and arrive at the true cause of the problem?



MANAGEMENT PROBLEMS 4

Dave Masters in vice president of manufacturing for Siliconix, an electronic components manufacturer. Siliconix runs most of its production control and factory systems on an IBM mainframe computer. The firm has just purchased another company that makes similar components, but the newly purchased another company that makes similar components, but the newly purchased division runs its applications using a package called SAP R/3 on a client-server computer configuration.

    Masters has to decide what to do about the different computer applications. The staff of the corporate management department wants to make the new division feel welcome and does not want to upset its employees. Staff members argue that SAP is probably better than their old custom-programmed system on the mainframe. However, the implementation of SAP is a major task, and they do not recommend undertaking it right now. They are content to run the two systems separately.

    Masters is concerned because he feels the entire company would be better off with a single production control system. However, he recognizes that the merger will cause some disruptions, and he questions the wisdom of undertaking a major systems conversion at the same time.

    What do you recommend? How should Masters go about making his decision?









MANAGEMENT PROBLEM 5

Block and Thomas, a regional stockbrokerage firm, hired a chief information officer (CIO), a senior manager who is responsible for all technology in the firm. The brokerage firm uses technology heavily as is typical in the industry. Block and Thomas has a number of systems to process stock trades and support its brokers. It also subscribes to a broker workstation system provided by a market data vendor. Each broker has a personal computer that provides a great deal of data and analytic capabilities in different windows on the screen.

    The new CIO surveyed users and potential users at Block and Thomas. He concluded that in the past, users had very negative attitudes toward systems. However, the interviews he conducted convinced him that users’ attitudes were now different. The users described problems but also mentioned that they were very optimistic about the potential of technology and wished they could implement the technology faster. The new CIO was surprised by the creative suggestions that came from users during the interviews.

    What events do you think are responsible for the new attitudes on the part of users? How can the CIO take advantage of them?


MANAGEMENT PROBLEM 6

The traditional organization is characterized by tacit understandings among managers and subordinates. In some instances, the rights and responsibilities of each group are contained in a detailed contract, such as the one between a union and management. Under a tacit understanding, an employee responds to a supervisor for a number of reasons. Custom or habit is a very important reason; organizations throughout history have functional through a hierarchical relationship like that found in the armed forces. A manager usually has the ability to determine the subordinate’s pay and can even arrange to have the subordinate dismissed. Because there is a long history of this type of relationship, most people in organizations are quite comfortable with it.

    In some of the organizations described in this chapter, managers form alliances with various partners. These alliance firms may provide a virtual component for your organization. However, the employees involved in this alliance do work for two different firms. How does a manager manage under these conditions? Suppose that your firm enters into a relationship with another firm to take over its inventory of raw materials and to become a just-in-time supplier. The partner firm hires your former inventory employees so they no longer work directly for you. Describe the role of a manager in working with an alliance partner that provides you with a virtual component of your firm?














MANAGEMENT PROBLEM 7

Boats-R-Us operates a group of 50 discount marine supply houses throughout the U.S., primarily on the east and west coasts and around the Great Lakes. The company has both walk-in and mail-order business. It has been organized traditionally as a retail store and several warehouses. A central order processing site accepts orders over 800 numbers and by mail and fax: this site distributes the order to the warehouse that is closest to the customer and that has the products requested in stock. A large number of purchasing agents is involved in determining what to stock and in negotiating purchases.

    The president of the company has read about new organizational forms enabled by information technology. The only technology in place now is the order entry and warehouse inventory system. The president would like to make Boats-R-Us both more efficient and more responsive to its customers. What new kinds of organization forms for Boats-R-Us might be enabled by information technology?




MANAGEMENT PROBLEM 8

Harold Rubin has spent a career in banking. He how works for a large money-center bank that has global presence. However, Harold is worried: He has been the explosion in interest in the Internet and World Wide Web, and he thinks there will be profound implications from IT for banking. The picture is confused, however. Some banks are reducing the number of physical branches as they are expensive in terms of real estate and labor. The banks replace branches with ATMs and phone banking; other banks offer PC banking so that customers can do almost everything they can in a branch from home. They are usually able to pay bills via their home computers as well.

    To Rubin, these changes seem evolutionary and rather mild. He has read articles about electronic commerce and even shopped on the Web to try it out. He also sees small firms becoming global as they advertise their products on the Web. What kinds of banking services will these firms want? How will changes in commerce and life styles influence what customers, both individual and corporations, want from a bank? Will a bank become “a piece of computer software on a network,” a statement attributed to the chairman of Citibank?


MANAGEMENT PROBLEM 9

Standard International (SI) is the subsidiary of a large manufacturing firm; it is responsible for marketing, sales, and distribution outside the United States. Standard International does not develop products; the parent firm creates all products it sells. SI has operations in 30 countries. In virtually all these countries the local SI operations in treated legally as a subsidiary of Standard International.

    Recently a new president took control of SI. Historically the firm’s systems were oriented to finance and accounting because the technology group reports to the vice president of finance. Accounting applications are important because so many different currencies are involved. The new president, however, is impatient and feels that technology should be able to do something for marketing and sales.

    She asked you to consult with SI in the hope of finding a strategic application for information technology: “I want something that will give us a competitive edge,” she said. What kind of process would you follow to try to identify a strategic application? What applications areas look promising? How does a firm like SI develop a strategic system? How does it establish and maintain a competitive advantage?





MANAGEMENT PROBLEM 10

Autozip sells accessories for cars through a chain of stores on the West Coast. The company started a catalog sales division 4 years ago that now accounts for 25 percent of sales. Customers like the convenience of calling a toll-free number and having the parts they order delivered via USP or an overnight carrier such as Federal Express.

    The president of Autozip realizes that the firm needs to have a presence on the Internet. He is trying to decide whether to accept orders on the Internet. He is trying so decide whether to accept orders on the Web, and if so, how. He is caught between two positions offered by his staff. The marketing vice president advocates taking orders on the Web. Her reasoning is: What have we got to lose? We have everything to gain; it’s another market channel and our competitors are already there or will be soon. We save money because customers act as their own order entry personnel.

    The controller disagrees. His reasoning is: Any advantage we gain will be temporary; it is so easy to set up a system to order on the Web that everyone will take Web orders and we won’t gain a sustainable advantage.

    The president has to make a decision. First, should Autozip accept orders on the Web, and second, if so, how? Should it go to a firm that hosts Web marketplaces, buy software and set up its own site, or develop its own software?





MANAGEMENT PROBLEM 11

Hershey and Sherman is a medium-sized consulting firm that specializes in helping clients install “enterprise software,” the kind of applications packages that automate all aspects of a company’s operations. The company has always stayed at a high level, and according to Sheila Hershey, “We deal with management to prepare a change program. We are not programmers.” However, the tremendous success of several enterprise software packages, most notably SAP’s R/3 and a series of applications from Oracle and PeopleSoft, have created a problem for Hershey and Sherman.

    Clients are asking for recommendations from the firm on whether to purchase one of these packages, and then they want help implementing it. Sheila is confronted with several choices for responding. “We can try to hire more technical people, but everything we read and hear says that it is very difficult to find consultants with expertise in these systems. The demand is very high, and all of the big consulting firms have practices devoted to installing SAP. Hiring specialists would also change the character of our firm.

    “Another option is to form an alliance with a firm that does have technical capabilities. We can continue to do our high-level management consulting and then bring in a firm appropriate to the client’s needs. The problem here is that we may be helping provide our competitors with business—one day we are partners, the next day we are after the same client.”

    What advice would you give Hershey and Sherman? What are the pros and cons of strategic alliances in this situation?






MANAGEMENT PROBLEM 12

Bill Roberts is the chief information officer for a multinational company. He reports to the company president and has a staff of 50 at headquarters. This group runs systems for the headquarters operation and also tries to provide standards for subsidiaries in foreign countries.

    Headquarters has developed a standard library of financial and accounting applications that runs on most of the computers in the subsidiaries. (Bill was successful a few years ago in getting all the subsidiaries expect the largest to agree on one model of computer.) Since many of the subsidiaries are not large and have trouble recruiting skilled technology staff members, they are quite happy with the library of programs.

    Each Country has its own information services department manager, generally reporting to the controller or possibly the president of the subsidiary. Bill and his staff travel extensively to try to help each subsidiary better manage its technology effort.

    Bill is facing a major problem in at least two countries; he and his staff think the local person in charge of information systems is not doing a good job. “After several years of working with the people in charge in two countries, I have come to the conclusion that we really should let them go. However, I have no real responsibility; these people report to a manager in the country, not to me.”

    How can Bill help the company solve this problem? Do you think they need to reorganize the structure of their IT units? Does it make sense to have foreign operations reporting to Bill? If not, how can he influence what goes on in subsidiaries outside the U.S.?

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CASE 1:    Spirituality in the workplace

Traditionally, the workplace and spirituality did not mix in America. But things are changing. Andre Delbecq, a Professor in Santa Clara University, a Jesuit institution, said: “There were two things I thought I’d never see in my life, the fall of the Russian empire and God being spoken about in a business school.” Now management books and conferences (including the annual meeting of the Academy of Management) deal with the various aspects of how God can be brought into the organizational environment. To be sure, people who want to integrate spiritual dimensions into the workplace are still considered rebels. But ServiceMaster, a Fortune 500 company with some 75,000 employees, created a spiritual organization culture many years ago. Indeed, Peter Drucker, one of the most prolific writers on management, had high regards for the company that is known for its products such as Terminix (pest control), TruGreen, Merry Maids, and others.
    When people in the US were asked if they believe in God, some 95 per cent said yes. It is in a spiritual context that business people under the daily pressure can discuss their inner feelings. As the baby boomers, now in their 50s, are reaching the top in the organizational life, they begin to wonder what life is all about. They lived through the youth culture of the 1960s and the 1980s that was dominated by greed. They are now questioning the real meaning of life and the ethical dimension of work. Jose Zeilstra, an executive at Price WaterhouseCoopers worked around the world, practicing her Christian principles in different cultures. During her assignment in China, she strongly argued against the practice of giving “very expensive gifts.” As a result the business transaction did not work out. Yet, in the long run, while integrating her personal beliefs with her work, resulted in a very successful career. Academic institutions such a the University of St. Thomas, the University of Denver, and the Harvard Divinity School are following and studying the movement of spirituality. Other schools such as Antioch University in Los Angeles, the University of New Haven in Connecticut, the University of Scranton in Pennsylvania, Santa Clara University in California as well as institutions abroad such as the University of Bath in England and the Indian Centre for Encouraging Excellence in Bombay, India, are conducting research, conferences, or lecture on spirituality.
    The cover story of Business week (November 1, 1999) discussed how company outlets such as Taco Bell, Pizza Hut, and McDonald’s as well as the Xerox Corporation pay attention to spiritual needs of their employees. Some companies claim an increase in productivity, decrease in turnover, and a reduction in fear. A research study by the consulting firm McKinsey & Co. in Australia showed that firms with spiritual programmes showed reduced turnover and improved productivity. Professor Ian I Mitroff at the University of Southern California even stated, “Spirituality could be the ultimate competitive advantage.” But there is also the concern that cult members and groups with a radical perspective could use the workplace for their own aims. Still, employees in companies that integrate spirituality in their work place count on the potential benefits of greater respect for individuals, a more humane treatment of their fellow workers, and an environment that permeates their organization with greater trust.

Question:
1.    What is spirituality?
2.    Is this topic appropriate for businesses?
3.    What are the arguments for and against its inclusion in business?































CASE  2:  Coke’s European Scare

What seemed like an isolated incident of a few bad cans of Coca-Cola at a school in Belgium turned into near disaster for the soft drink giant’s European operations. In June 1999, Coke experienced its worst nightmare—a contamination scare resulting in the recall of 14 million cases of Coke products in five European countries and a huge blow to consumer confidence in the quality and safety of the world’s most recognizable brand.
    After the initial scare in Bornem, Belgium, Coke and Coca-Cola Enterprises (CCE), a bottler 40 per cent owned by Coca-Cola, thought they isolated the problem. Scientists at the CCE bottling plant in Antwerp found that lapses in quality control had led to contaminated carbon dioxide that were used in the bottling of a recent batch of Coke. Company officials saw the contamination as minor problem and they issued an apology to the school.
    At the same time that the problems were being dealt with an Antwerp, things were breaking down at Coke’s Dunkirk, France, bottling plant. In Belsele, 10 miles from Bornem, children and teachers were complaining of illnesses related to drinking Coke products. The vending machines at the school were stocked with Coke from the company’s Dunkirk plant and were thought to be safe. Now a second bottling plant’s practices were being questioned. What initially seemed like an isolated incident was now a crisis.
    Immediately following the second scare, Belgium’s health minister banned the sale of all products produced in the Antwerp and Dunkirk plants. Things got worse when Coke gave an incomplete set of recall codes to a school in Lochristi, Belgium, resulting in 38 children being rushed to the hospital. Immediately following this incident, French officials banned the sale of soft drinks produced in the Dunkirk plant. It was believed that fungicide on wooden shipping pallets were the cause of the illnesses at the Dunkirk plant.
    On June 15, 1999, 11 days after the initial scare in Bornem, Coke finally issued an explanation to the public. Most Europeans were not satisfied. Coca-Cola officials used vague language and often contradicted one another when making statements. France’s health minister, Bernard Kouchner, stated, “That a company so very expert in advertising and marketing should be so poor in communicating on this matter is astonishing”
    After three weeks of testing by both Coke officials and French government scientists, it was concluded that the plants were safe and that there was no immediate threat to the health of consumers. Coke has destroyed all of the pallets in Dunkirk and tightened quality control on co2.
    How could this happen to the company that is revered worldwide for its quality control and the superiority of its products? Coke has spent decades building its reputation overseas and the European market now represent 73 per cent of total profits. While the scare has had some effect on Coke’s profits in Europe, the company is more concerned with damages to its reputation and consumer confidence in its products.
    Many critics say that Coke’s slow response time, insisting that no real problem existed and belated apology have severely damaged the company’s reputation in Europe. Some would disagree and feel that Coke handled the situation as best it could. “I think that Coke acted in a responsible, diligent way,” says John Sitcher, editor of Beverage Digest. “Their first responsibility was to ascertain the facts in a clear and unequivocal way. And as soon as Coke knew what the facts were, they put out a statement to the Belgium people.”
    The character and quality of a company can often be measured by how it responds to adversity. Coca-Cola believes that this crisis has forced the company to re-examine both its marketing and management strategies in Europe. Coke executives in Brussels are predicting that the company will double its European sales in the next decade and that this setback will only make the company stronger. Wall Street analysts seem to agree. Only time will tell.


Question:
1.    What are the management issues in this case?
2.    What did Coke do and what could have been done differently?
What are the key factors that were or should have been considered by management?













CASE  3  Trials and Challenges For Barrett at Intel
Intel Corporation is best known for its processors. The sign “Intel Inside” is familiar to most people using a computer. There is, for example, the Pentium 3 and 4 and the new generation Itanium. For servers and workstations, Intel produces Xeon. The colorful CEO Andy Grove led the company for many years. By 2001,  however, the Chief Executive Officer Craig R. Barrett faces many challenges, including criticism.
    The new strategy of moving into new markets such as information appliances, communications, and Internet services was costly and so far less than successful. In fact, the move beyond its core businesses may have detracted from its core business of computer chips. These new directions resulted in frequent reorganizations resulting in organizational uncertainties for the managers. While some think that the frequent changes were necessary to adapt to new situations and to keep the organization agile, others disagree.
    Barrett’s leadership and his moves into various directions is quite different from Grove’s carefully crafted strategy that focused on chips. Barrett’s personal strengths lie in manufacturing. He invested heavily in research and development. But new products such as the Itanium require several years before they show results, and Barrett has only a few more years before his retirement. Investing in new manufacturing technologies with the aim of achieving virtually automated plants results in the reduction of manufacturing costs of chips. But the PC market is stagnated in the early 21st century and wireless communication and cell phones are becoming important in the market. In the cell phone market, for example, Motorola and Texas Instruments are developing new digital signal processors and Intel would have to work hard to catch up. A key to success of Intel may be whether the company can become an important player in the wireless market. Barrett made a number of costly acquisitions, including Level One Communications. But the question remains if the heavy investments in new technologies will result in profitable businesses. This may determine the legacy of Craig Barrett.
Question:
1.    What is your assessment of Barrett’s performance and his vision for Intel? Is he the right person for the job at Intel?
2.    What are some problems associated with frequent reorganization?
3.    What are the pros and cons for focusing on the distant futures and the heavy investments in new technologies?


CASE: 4   Profiles of Two Visionaries—Bill Gates & Steve Jobs
Two men have their hearts and souls for developing their visions have driven the personal computer revolution. However, the way in which each of these men went about this quest has been different. Steve Jobs and Bill Gates have changed the way the world does business, but the story of their leadership styles is even more compelling than the success spawned Apple and Microsoft.
    Gates and Jobs: The Early Years  Bill Gates started developing his computer skills with his childhood friend Paul Allen at Lakeside School in Seattle. At the age of 14, the two had formed their first computer company. After high school, Allen and Gates left Seattle for Boston. Gates was off to Harvard and Allen began working for Honeywell. After only two years at Harvard, Gates and Allen left Boston for Albuquerque to develop a computer language for the new Altair 8080 personal computer. This computer language would become BASIC and was the foundation for Microsoft, which was created as a partnership in 1975.
    After five years in New Mexico, Microsoft relocated to Bellevue, Washington in 1980 with BASIC and two other computer languages (COBOL and FORTRAN) in its arsenal. Later that year IBM began developing its first PC and was in need of an operating system. Microsoft developed the Microsoft Disk Operating System (MS-DOS) for IBM while two other companies created competing systems. Gates’ determination and persuasion of other software firms to develop programs for MS-DOS made it the default IBM platform.
    As Microsoft became more successful, Gates realized that he needed help managing Microsoft. His enthusiasm, vision, and hard work were the driving force behind the company’s growth, but he recognized the need for professional management. Gates brought in another one of his friends from Harvard, Steve Ballmer. Ballmer had worked for Proctor & Gamble after graduating from Harvard and was pursuing his MBA at Stanford University. Gates persuaded Ballmer to leave school and join Microsoft. Over the years, Ballmer has become an indispensable asset to both Gates and Microsoft. In 1983, Gates continued to show his brilliance by hiring Jon Shirley who brought order to Microsoft and streamlined the organizational structure, while Ballmer served as an advisor and sounding board for Gates. Microsoft continued to grow and prosper in the 1990s and Gates became the richest man in the world with Microsoft dominating the operating systems market and the office suite software market with Microsoft Office.
    Gates recognized that his role was to be the visionary of the company, but that he needed professional managers to run the operations of Microsoft. He combined his unyielding determination and passion with a well-structured management team to make Microsoft the giant it is today.
    The other visionary, Steve Jobs, and his friend Steve Wosniak started Apple Computer in Job’s garage in Los Altos, California in 1976. In contrast to Bill Gates, Jobs and Wosniak were hardware experts and started with the vision for a personal computer that was affordable and easy to use. When Microsoft offered BASIC to Apple, Jobs immediately dismissed the idea on the basis that he and Wosniak could create their own version of BASIC in a weekend. This was typical Jobs: decisive and almost maniacal at times. However, Jobs eventually agreed to license Microsoft’s BASIC while pursuing his vision of developing a more usable and friendly interface for the PC.
    Jobs, seen by some as the anti-Gates, is a trailblazer and a creator as opposed to Gates who is more of a consolidator of industry standards. Jobs, whose goal was to change the world with his computers, was very demanding of his employees. Jobs was not a hard-core computer programmer, but he sold the idea of the personal computer to the public. He changed the direction of Apple by developing the Macintosh (Mac) that used a new Graphical User Interface (GUI) that introduced the world to the mouse and on-screen icons. With all this success, there was a major problem developing at Apple: Steve Jobs was overconfident and did not see Gates and Microsoft as a serious threat to Apple.
    Soon after the release of the Macintosh computer, Jobs asked Microsoft to develop software for the Mac operating system. Gates obliged and proceeded to launch a project copying and improving Apple’s user interface. The result of this venture was what became Microsoft Windows.
     Jobs’ cocky attitude and the lack of management skills contributed to Apple’s problems. He never bothered to develop budgets and neglected his relationship with his employees. Wosniak left Apple due to differences with Jobs. In 1985, John Scully, formerly CEO of PepsiCo, was hired to replace Steve Jobs as president and CEO of Apple Computers. Differences between Scully and Jobs developed which eventually resulted in the dismissal of Jobs.
Microsoft and Apple at the turn of the Century: An Industry Giant and a Revitalized Leader      With the success of Windows, the Office application suite, the Internet Explorer, Microsoft has become a household name and Bill Gates has been hailed as a business genius. The fact that Microsoft’s competitors, the press, and the US Justice Department have called Microsoft a monopoly reinforces Gates’s determination to succeed. Some people even questioned whether Microsoft can survive the Justice Department’s decision. But Bill Gates has shown that he is the master of adapting to changing market conditions and technologies.
    In the 1990s, Apple went in the opposite direction. The outdated operating system and falling market share eventually led to a decrease in software development for the Mac. Something needed to be done. In 1998 Steve Jobs returned to Apple as the “interim” CEO. His vision, once again, resulted in an innovative product: the iMac. In the 80s he created the simple-to-operate Macintosh to attract people who were using IBM PCs and their clones. Now he developed a simple, stylish, and Internet-friendly computer that added some much-needed excitement to the computer market. Jobs had also changed as a manager and a leader. He had matured and looked to his professional staff for advice and ideas. The Mac is an expression of his creativity and Apple as a whole is an expression of Steve, leading to continuing the success for Apple and a renewed battle between Gates and Jobs.
Gates and Jobs in 2006   Bill Gates, one of the richest men, has also become one of the biggest charitable givers. He and his wife Linda have donated some $31 billion to philanthropic causes. When Bill Gates read the World Development Report by the World Bank, he realized that he could improve the health of people in poor countries by supplying drugs and treatment. The Bill and Melinda Gates Foundation also provides scholarships for students with different backgrounds. While Gates is very much in philanthropy, Microsoft is preparing the new Windows Vista which helps users in enhancing their computing experience.
    Steve Jobs’ career also took some interesting turns. After he was fired by Scully (the person he hired), he started a company called NeXT and Pixar, the firm that created the first computer animated feature film. When Apple got into trouble, Jobs was rehired, doing some amazing things. When he was diagnosed with cancer—which fortunately could be successfully treated—his outlook on life changed. In the 2005 commencement address at Stanford University he said: “Because almost everything—all external expectations, all pride, all fear of embarrassment or failure—these things just fall away in the face of death, leaving only what is truly important.” In 2006, Jobs can look back with exciting new products such as computers and the best selling iPods: the Nano and the Video. Now, the pundits are wondering, what will be Steve’s next innovation?
Question:
1.    Compare and contrast the careers of Bill Gates and Steve Jobs.
2.    Compare and contrast the leadership styles and managerial practices of Gates and Jobs.
3.    What do you think about the future of Microsoft and Apple Computers?
What is the outlook on life of the two computer nerds?

CASE 5:   INFORMATION TECHNOLOGY AT AMERICAN AIRLINES
The information system at American Airlines has become an integral part of the overall strategy to gain a competitive edge in the industry. The extensive use of computers began in the 1950s in payroll and inventory control and extended to customer service. In the early 1960s, American developed the widely known SABRE system (SABRE stands for Semi-Automated Business Research Environment). It is one of the most sophisticated passenger reservation system used by travel agents and customers.
    Shortly after implementing SABRE, American also used the system for other tasks, such as controlling freight shipments, as well as dispatching and tracking flights. When the government deregulated the airline industry in 1978, the information system became an even more important tool for competing against the low-cost airlines whose labour costs were as much as 40 to 50 per cent lower. American Airlines’ strategy was to use the information technology to compete in a variety of ways. One application was to have as many aircrafts seats as possible filled without having many passengers “bumped” through overbooking. Another application was to obtain the proper balance between discount and regular fares. It was estimated that revenues could be increased dramatically by shifting only one per cent of discount fares to the full fare—clearly a competitive advantage in a market where price change occur daily and even hourly. Still another application of the information system was to find the most efficient way to fly in order to reduce fuel cost, which is the second largest expense. Some airplanes have sensors on board to monitor essential equipment; the operational information is sent to the ground station. Maintenance can then be planned effectively and performed more efficiently when the aircraft lands. Still another application of the computer was to determine the most profitable routes. The complexity of scheduling over 13,000 pilots and flight attendants on 1300 daily flights is horrendous. The high cost of overtime can put an airline at a competitive disadvantage.
    Robert L Crandall, the former chairman and president of American Airlines, thinks that information systems are the key for success. He stated: “We have taken what was once a basic reservation system and built it into an integrated information system that drives our corporate strategy as much as it is driven by that strategy.” While American Airlines has been the industry leader in the use of information technology, competition developed. The 1992 program of the European Community (EC, now the European Union or EU) was designed to eliminate trade and many political barriers. The European airline industry also became deregulated than engaging in mergers, some airlines are now integrated into a network linking selected carriers together. An illustration of the cooperation among airlines involves the two computer reservation systems called Galileo and Amadeus. Thus, American Airlines—with a strategy of expanding in the European market, the largest market in the industrialized world—has ample competition. Recently, the five biggest US Airlines (Continental, Delta, Northeast, United Airlines, and now also American Airlines) developed a common website called Orbitz.com (www.orbitz.com), which could also affect SABRE.
    Technology that may have given once a competitive advantage to a company may, in time, become obsolete unless it adapts to new demands and develops new applications. Max Hopper, the architect of the SABRE system, suggests that old models are no longer sufficient. Those who can use the available tools and modify them will gain a competitive edge. The trend is away from stand-alone applications to platforms that facilitate new approaches to problem solving and decision making. SABRE is not only a reservation system, but also a system for inventory control, making flight plans, and scheduling flight crews. Other data-basses were added for car rentals, hotel reservations, and theatre shows. SABRE has become an electronic travel supermarket.
Questions:
1.    Discuss the evolving use of information technology at American Airlines?
2.    Should American Airlines expand its position in Europe? What are the arguments for and against this expansion?