PRINCIPLES OF PRACTICE MANAGEMENT
PROFESSIONAL COMMUNICATION
CASE I
A Reply Sent to an Erring Customer
Case II
Advertising Radio FM Brand
ORGANISATIONAL BEHAVIOR
OPERATION MANAGEMENT
CONSUMER BEHAVIOUR
BUSINESS MANAGEMENT
Attempt
Only 4 case study
CASE – 1
Aravali Hospital was built two years ago, and
currently has a workforce of 215 people. The hospital is small, but because it
is new, it is extremely efficient. The board has voted to increase its capacity
from 60 to 180 beds. By this time next year, the hospital will over three times
as large as now, in terms of both beds and personnel.
The administrator, Maya Joshi, feels that the major problem with this proposed increase is that hospital will lose its efficiency. “I want to hire people who are just like our current team of personnel—hardworking, dedicated talented, and able to interact well with patients. If we triple the number of employees, I do not see how it will be possible to maintain our quality of patient care. We are going to lose our family atmosphere. We will be inundated with mediocrity, and we will end up being like every other institution in the local area—large and uncaring.”
The chairman of the board is also concerned about the effect of hiring such a large number of employees. However, he believes that Joshi is over-reacting. “It cannot be that hard to find people who are like our current staff. There must be a lot of people out there who are just as good. What you need to do is develop a plan of action that will allow you to carefully screen those who will fit into your current organisational culture, and those who will not. It is not going to be as difficult as you believe. Trust me. Everything will work out just fine”.
As a result of the chairman’s comments, Joshi had decided that the most effective way of dealing with the situation is to develop a plan of action. She intends to meet with her administrative group and determine the best way of screening incoming candidates, and then helping those who are hired to become socialised in terms of the hospital’s culture. Joshi has called a meeting for day after tomorrow. At that time, she intends to discuss her ideas, get suggestions from her people, and then formulate a plan of action.
The administrator, Maya Joshi, feels that the major problem with this proposed increase is that hospital will lose its efficiency. “I want to hire people who are just like our current team of personnel—hardworking, dedicated talented, and able to interact well with patients. If we triple the number of employees, I do not see how it will be possible to maintain our quality of patient care. We are going to lose our family atmosphere. We will be inundated with mediocrity, and we will end up being like every other institution in the local area—large and uncaring.”
The chairman of the board is also concerned about the effect of hiring such a large number of employees. However, he believes that Joshi is over-reacting. “It cannot be that hard to find people who are like our current staff. There must be a lot of people out there who are just as good. What you need to do is develop a plan of action that will allow you to carefully screen those who will fit into your current organisational culture, and those who will not. It is not going to be as difficult as you believe. Trust me. Everything will work out just fine”.
As a result of the chairman’s comments, Joshi had decided that the most effective way of dealing with the situation is to develop a plan of action. She intends to meet with her administrative group and determine the best way of screening incoming candidates, and then helping those who are hired to become socialised in terms of the hospital’s culture. Joshi has called a meeting for day after tomorrow. At that time, she intends to discuss her ideas, get suggestions from her people, and then formulate a plan of action.
Questions
1.
What can
Joshi and her staff do to select the type of entry-level candidates they want?
2.
How can
Joshi ensure that those who are hired come to accept the core cultural values
of the hospital? What steps would you recommend?
CASE – 2
Leo Medical Diagnostic and Research Center has patented its new
invention of poly fiber cardiovascular valve. The product developed is a novel
one and can be manufactured at a very low cost. The utility and life of the
product in laboratory testing was found to be more than the life of the
patients. The product could enhance the life of patient by at least five years.
Considering all these factors Leo Medical Diagnostic and Research Center chose
to set a unit to manufacture the product. However, the company has a dilemma.
As the product is new and requires the acceptance of medical community, it is
considering appointing a promotion and sales co-coordinator to manage the
promotional and communication efforts of the firm.
Questions
(a)
Do you
think the number of units of a product to be manufactured is a random number?
Explain your reasoning.
(b)
How does
one determine the number of units of a product to be manufactured in an
organisation?
(c)
What are
the elements you would take into consideration for forecasting the production
and sales requirement of the product developed by Leo Medical Center?
(d)
How
would you go about planning and organising the manufacturing and selling
efforts of the organisation?
CASE – 3
Hari Mohan has a position on the corporate planning staff of a large
company in a high technology industry. Although he has spent most of his time
on long-range, strategic planning for the company, he has been appointed to a
task force to reorganize the company. The president and the board of directors
are concerned that they are losing their competitive position in the industry
because of an outdated organisation structure. Being a planning expert, Hari
Mohan convinced the task force that they should proceed by first determining
exactly what type of structure they have now, then determining what type of
environment the company faces, now and in the future, and then designing the
organisation structure accordingly. In the first phase, they discovered that
the organisation is currently structured along classic bureaucratic lines. In
the second phase, they found that they are competing in a highly dynamic,
rapidly growing and uncertain environment that requires a great deal of
flexibility and response to change.
Questions
(a)
What
type or types of organisation design do you feel this task force should
recommend in the third and final phase of the approach to their assignment?
(b)
Explain
how the systems and the contingency theories of organisation can each
contribute to the analysis of this case.
(c)
Do you
think Hari Mohan was correct in his suggestion of how the task force should
proceed? What types of problems might develop as by-products of the
recommendation you made in question 1?
CASE – 4
Bharat Engineering Works Limited is a major industrial machineries
besides other engineering products. It has enjoyed market preference for its
machineries because of limited competition in the field. Usually there have
been more orders than what the company could supply. However, the scenario
changed quickly because of the entry of two new competitors in the field with
foreign technological collaboration. For the first time, the company faced
problem in marketing its products with usual profit margin. Sensing the likely
problem, the chief executive appointed Mr Arvind Kumar as general manager to
direct the operations of industrial machinery division. Mr Kumar had similar
assignment abroad before coming back to India.
Mr Kumar had a discussion with the chief
executive about the nature of the problem being faced by the company so that he
could fix up his priority. The chief executive advised him to consult various
heads of department to have first hand information. However, he emphasised that
the company lacked an integrated planning system while members of the Board of
Directors insisted on introducing this in several meetings both formally and
informally.
After joining as General Manager, Mr Kumar
got briefings from the heads of all departments. He asked all heads to identify
major problems and issues concerning them. The marketing manager indicated that
in order to achieve higher sales, he needed more sales support. Sales people
had no central organisation to provide sales support nor was there a generous
budget for demonstration teams which could be sent to customers to win
business.
The production manager complained about the
old machines and equipments used in manufacturing. Therefore, cost of
production was high but without corresponding quality. While competitors had
better equipments and machinery, Bharat Engineering had neither replaced its
age-old plant nor reconditioned it. Therefore to reduced the cost, it was
essential to automate production lines by installing new equipment.
Director of research and development did not
have specific problem and therefore, did not indicate for any change. However,
a principal scientist in R&D indicated on one day that the director of
R&D, though very nice in his approach, did not emphasize on short-term
research projects, which could easily increase production efficiency by at
least 20 per cent within a very short period without any major capital outlay.
Questions
(a)
Discuss
the nature and characteristics of the problems in this case.
(b)
What
steps should be taken by Mr Kumar to overcome these problems?
CASE – 5
The president of Simplex Mills sat at his desk in the hushed
atmosphere, so typical of business offices, after the close of working hours.
He was thinking about Rehman, the manager in-charge of purchasing, and his
ability to work with George, the production manager, and Vipulabh, the
marketing and sales manager in the firm.
When the purchasing department was
established two years ago, both George and Vipulabh agreed with the need to
centralise this function and place a specialist in charge. George was of the
view that this would free his supervisors from detailed ordering activities.
Vipulabh opined that the flow of materials into the firm was important enough
to warrant a specialised management assignment. Yet since the purchasing
department began operating it has been precisely these two managers who have
had a number of confrontations with the new purchase manager, and occasionally
with one another, in regard to the way the purchasing function in being carried
out.
From George’s point of view, instead of
simplifying his job as production manager by taking care of purchasing for him,
the purchasing department has developed a formal set of procedures that has
resulted in as much time commitment on his part as he had previously spent in
placing his orders directly with vendors. Further, he is specially irritated by
the fact that his need for particular items or particular specification is
constantly being questioned by the purchasing department. When the department
was established, George assumed that the purchasing manager was there to fill
his needs, not to question them.
As Vipulabh sees it, the purchasing function
is an integral part of marketing function, and the two therefore need to be
jointly managed as a unified process. Purchasing function cannot be separated
from a firm’s overall marketing strategy. However, Rehman has attempted to
carry out the purchasing function without regard for this obvious relationship
between his responsibilities and those of Vipulabh, thus making a unified
marketing strategy impossible.
In his previous position, Rehman had worked
in the purchasing department of a firm considerably larger than Simplex. Before
being hired, he was interviewed by all the top managers, including George and
Vipulabh, but it was the president himself who negotiated the details of the
job offer. As Rehman sees it, he was hired as a professional to do a
professional job. Both George and Vipulabh have been distracting him from this
goal by presuming that he is somehow subordinate to them, which he believes is
not the case. The people in the production department, who use the purchasing
function most, have complained about the detail that he requires on their
requisitions. But he has documented proof that materials are now being
purchased much more economically than they were under the former decentralised
system. He finds Vipulabh’s interests more difficult to understand, since he
sees no particular relationship between his responsibilities for efficient
procurement, and Vipulabh’s responsibilities to market the firm’s products.
The president has been aware of the
continuing conflict among three managers for some time, but on the theory that
a little rivalry is healthy and stimulating, he has felt that it was nothing to
be unduly concerned about. But now that much of his time is being taken up by
much of what he considers to be petty bickering, the time has come to take some
positive action.
Questions:
1.
Is
George’s view of the situation realistic?
2.
How do
you evaluate Vipulabh’s position?
3.
How
might this conflict be associated with factors in the formal organisation?
4.
What
should the president of Simplex Mills do now?
PROFESSIONAL COMMUNICATION
CASE I
A Reply Sent to an Erring Customer
Dear
Sir,
Your
letter of the 23rd, with a cheque for Rs. 25,000/- on account, is to hand. We
note what you say as to the difficulty you experience in collecting your
outstanding accounts, but we are compelled to remark that we do not think you
are treating us with the consideration we have a right to expect.
It
is true that small remittances have been forwarded from time to time, but the
debit balance against you has been steadily increasing during the past twelve
months until it now stands at the considerable total of Rs. 85,000/-
Having
regard to the many years during which you have been a customer of this house
and the, generally speaking, satisfactory character of your account, we are
reluctant to resort to harsh measures.
We
must, however, insist that the existing balance should be cleared off by
regular installments of say Rs. 10,000/- per month, the first installment to
reach us by the 7th. In the meantime you
shall pay cash for all further goods; we are allowing you an extra 3% discount
in lieu of credit. We shall be glad to hear from you about this arrangement, as
otherwise we shall have no alternative but definitely to close your account and
place the matter in other hands.
Yours
truly,
Questions:
1. Comment
on the appropriateness of the sender’s tone to a customer.
2. Point
out the old – fashioned phrases and expressions.
3. Rewrite the reply according to the
principles of effective writing in business.
Case II
Advertising Radio FM Brand
A young, gorgeous woman is
standing in front of her apartment window dancing to the 1970s tune, “All Right
Now” by the one – hit band free. Across
the street a young man looks out of his apartment window and notices her. He moves closer to the window, taking
interest. She cranks up the volume and
continues dancing, looking out the window at the fellow, who smiles hopefully
and waves meekly. He holds up a bottle
of wine and waves it, apparently inviting her over for a drink. The lady waves back. He kisses the bottle and excitedly says,
“Yesss.” Then, he gazes around his
apartment and realizes that it is a mess. “No!” he exclaims in a worried tone
of voice.
Frantically, he does his
best to quickly clean up the place, stuffing papers under the sofa and putting
old food back in the refrigerator, He slips on a black shirt, slicks back his hair, sniffs his armpit, and lets
out an excited , “Yeahhh!” in eager anticipation of entertaining the young
lady. He goes back to the window and
sees the woman still dancing away. He
points to his watch, as if to say “Come on.
It is getting late.” As she just
continues dancing, he looks confused.
Then a look of sudden insight appears on his face, “Five,” he says to
himself. He turns on his radio, and it
too is playing “All Right Now.” The man
goes to his window and starts dancing as he watches his lady friend continue
stepping. “Five, yeah,” he says as he
makes the “okay” sign with his thumb and forefinger. He waves again. Everyone in the apartment building is dancing
by their window to “All Right Now.” A
super appears on the screen: “Are you on the right wavelength?”
Questions:
1.
What is non – verbal communication? Why
do you suppose that this commercial relies primarily on non-verbal communication
between a young man and a gorgeous woman?
What types of non – verbal communication are being used in this case?
2.
Would any of the non-verbal communications in this spot (ad) not work well in
another culture?
3.
What role does music play in this spot? Who is the target market?
4.
Is the music at all distracting from the message?
5.
How else are radio stations advertised on TV?
CASE
III
EMPLOYMENT
INTERVIEW OF R P SINHA
Mr. R P Sinha is a MBA. He is being interviewed for the position of
Management Trainee at a reputed company.
The selection committee’s is chaired by a lady Vice – President. Mr. Sinha’s interview was as follows:
Committee:
Good morning!
Mr.
Sinha: Good morning to Sirs and Madam!
Chairperson:
Please, sit down.
Mr.
Sinha : Thank you (sits down at the edge of the chair, keeps his portfolio on
the table)
Q.
Chairperson: You are Mr. R. P. Sinha
A
Sinha: Yes, Madam. This is how I am
called.
Q.
Chairperson: You have passed MBA with 1st Division.
A.
Sinha: Yes, Madam.
Q.
Chairperson: Why do you want to work in our organization?
A
Sinha: It is just like that. Also,
because it has good reputation.
Q.
Member A: This job is considered to be quite stressful. Do you think you can manage the stress
involved.
A.
Sinha: I think there is too much talk about stress these days. Sir, would you tell clearly what you mean by stress?
I am very strong for any stress.
Q.
Member B: What are your strengths?
A.
Sinha: Sir, who am I talk boastfully about my strengths. You should tell me my strengths.
Q.
Member C: What are your weaknesses?
A.
Sinha: I become angry very fast.
Q.
Member A: Do you want to ask us any questions?
A
Sinha: Yes Sir! What are the future
chances for one who starts as a management trainee?
The member tells M. Sinha the
typical career path for those starting as Management Trainee. The Chairperson thanks Mr. Sinha. Mr. Sinha promptly says in reply, “you are
welcome,” and comes out.
Questions:
1. Do you
find Mr. Sinha’s responses to various questions effective? Give reasons for your view on each answer given by
Mr. Sinha.
2. Rewrite
the responses that you consider most effective to the above questions in a job
interview.
3. Mr.
Sinha has observed the norm of respectful behavior and polite
conversation. But, do you think there is something gone wrong in his case? Account for your general impression of Mr. Sinha’s performance at the interview.
conversation. But, do you think there is something gone wrong in his case? Account for your general impression of Mr. Sinha’s performance at the interview.
Case
IV
Outsourcing
Backlash Gets Abusive, Ugly
I don’t want to speak to
you. Connect to your boss in the US,” hissed the American on the phone. The
young girl at a Bangalore call centre tried to be as polite as she could.
At another call centre,
another day, another young girl had a Londoner unleashing himself on her, “Young
lady do you know that because of you Indians we are losing jobs.”
The outsourcing backlash
is getting ugly. Handling irate callers is the new brief for the young men and
women taking calls at these outsourced job centers. Supervisors tell them to be
“cool”.
Avinash Vashistha,
managing partner of NEOIT, a leading US-based consultancy firm says,” Companies
involved in outsourcing both in the US and India are already getting a lot of
hate mail against outsourcing and it is hardly surprising that some people
should behave like this on the telephone.” Vashistha says Indian call centers
should train their operators how to handle such calls.
Indeed, the furore raised
by the western media over job losses because of outsourcing has made ordinary
citizens there sensitive to the fact that their call are being taken not from
their midst but in countries, such as India and the Philippines.
The angry outbursts the
operators face border on the racist and sexist, says the manager of a call
center in Hyderabad. But operators and senior executives of call centers reguse
to go on record for fear of kicking up a controversy that might result in their
companies’ losing clients overseas.
“It’s happening often
enough and so let’s face it,” says a senior executive of a Gurgaon call centre,
adding, “This doesn’t have any impact on business.”
Questions:
1. Assume you are working as an operator
at a call centre in India and are receiving irate calls from Americans and
Lodoners. How would you handle such calls? Conceive a short conversation
between you and your client, and put it on paper.
2. “Keep your cool.” What does this mean
in term of conversation control?
3. Do you agree with the view that such
abusive happenings on the telephone do not have any impact on business?
Justify.
Note: Solve any 4 Cases Study’s
CASE: I Pushing Paper Can Be Fun
A large city government was putting on a number of seminars for
managers of various departments throughout the city. At one of these sessions
the topic discussed was motivation—how to motivate public servants to do a good
job. The plight of a police captain became the central focus of the discussion:
I’ve got a real problem with my officers.
They come on the force as young, inexperienced rookies, and we send them out on
the street, either in cars or on a beat. They seem to like the contact they
have with the public, the action involved in crime prevention, and the
apprehension of criminals. They also like helping people out at fires,
accidents, and other emergencies.
The problem occurs when they get back to the
station. They hate to do the paperwork, and because they dislike it, the job is
frequently put off or done inadequately. This lack of attention hurts us later
on when we get to court. We need clear, factual reports. They must be highly
detailed and unambiguous. As soon as one part of a report is shown to be
inadequate or incorrect, the rest of the report is suspect. Poor reporting
probably causes us to lose more cases than any other factor.
I just don’t know how to motivate them to do
a better job. We’re in a budget crunch, and I have absolutely no financial
rewards at my disposal. In fact, we’ll probably have to lay some people off in
the near future. It’s hard for me to make the job interesting and challenging
because it isn’t-it’s boring, routine paperwork, and there isn’t much you can
do about it.
Finally, I can’t say to them that their
promotions will hinge on the excellence of their paperwork. First at all, they
know it’s not true. If their performance is adequate, most are more likely to
get promoted just by staying on the force a certain number of years than for
some specific outstanding act. Second, they were trained to do the job they do
out in the streets, not to fill out forms. All through their careers the
arrests and interventions are what get noticed.
Some people have suggested a number of
things, like using conviction records as a performance criterion. However, we
know that’s not fair—too many other things are involved. Bad paperwork increases the chance that you lose in court,
but good paperwork doesn’t necessarily mean you’ll win. We tried setting up the
team competitions based on the excellence of the reports, but the officers
caught on to that pretty quickly. No one was getting any type of reward for
winning the competition, and they figured why should they bust a gut when there
was on payoff.
I just don’t know what to do.
Question:
1.
What performance problems is the captain trying to correct?
2.
Use the MARS model of individual behavior and performance to
diagnose the possible causes of the unacceptable behavior.
3.
Has the captain considered all possible solutions to the
problem? If not, what else might be done?
CASE: II How Did I Get Here?
Something was not right. John Breckenridge opened his eyes, saw the
nurse’s face, and closed them once more. Cobwebs slowly cleared from his brain
as he woke up from his brain as he woke up from the operation. He felt a hard
tube in his nostril, and tried to lift his hand to pull it out, but it was
strapped down to the bed. John tried to speak but could make only a croaking
sound. Nurse Thompson spoke soothingly, “Just try to relax, Mr. Breckenridge.
You had a heart attack and emergency surgery, but you’re going to be OK.”
Heart attack? How did I get here? As the anesthesia wore off
and the pain set in, John began to recall the events of the past year; and with
the memories came another sort of pain – that of remembering a life where
success was measured in hours worked and things accomplished, but which of late
had not measured up.
John recalled his years in college, where
getting good grades had been important, but not so much as his newly developing
love for Karen, the girl with auburn hair who got her nursing degree the same
year as he graduated with a degree in software engineering. They married the
summer after graduation and moved from their sleepy university town in Indiana
to Aspen, Colorado. There John got a job with a new software company while
Karen worked evenings as a nurse. Although they didn’t see much of each other
during the week, weekends were a special time, and the surrounding mountains
and nature provided a superb quality of life.
Life was good to the Breckenridges. Two years
after they were married, Karen gave birth to Josh and two years later to Linda.
Karen reduced her nursing to the minimum hours required to maintain her
license, and concentrated on rearing the kids. John, on the other hand, was
busy providing for the lifestyle they increasingly became used to, which
included a house, car, SUV, ski trips, and all of the things a successful
engineering career could bring. The company grew in leaps and bounds, and John
was one of the main reasons it grew fast. Work was fun. The company was
growing, his responsibilities increased, and he and his team were real buddies.
With Karen’s help at home, he juggled work, travel, and evening classes that
led to a master’s degree. The master’s degree brought another promotion—this
time to vice president of technology at the young (for this company) age of 39.
The promotion had one drawback: It would
require working out of the New York office. Karen sadly said goodbye to her
friends, convinced the kids that the move would be good to them, and left the
ranch house for another one, much more expensive and newer, but smaller and
just across the river in New Jersey from the skyscraper where her husband
worked. Newark was not much like Aspen, and the kids had a hard time making
friends, especially Josh, who was now 16. He grew sullen and withdrawn and
began hanging around with a crowd that Karen thought looked very tough. Linda,
always the quiet one, stuck mostly to her room.
John’s new job brought with it money and
recognition, as well as added responsibilities. He now had to not only lead
software development but also actively participate in steering the company in
the right direction for the future, tailoring its offerings to market trends.
Mergers and acquisitions were the big things in the software business, and John
found a special thrill in picking small companies with promising software,
buying them out, and adding them to the corporate portfolio. Karen had
everything a woman could want and went regularly to a health club. The family
lacked for no material need.
At age 41 John felt he had the world by its
tail. Sure, he was a bit overweight, but who wouldn’t be with the amount of
work and entertaining that he did? He drank some, a habit he had developed
early in his career. Karen worried about that, but he reassured her by
reminding her that he had been really drunk only twice and would never drink
and drive. Josh’s friends were a worry, but nothing had yet come of it.
Not all was well, however. John had been
successful in Colorado because he thought fast on his feet, expressed his
opinions, and got people to buy into his decisions. In the New York corporate
office things were different. All of the top brass except the president and
John had Ivy League, moneyed backgrounds. They spoke of strategy but would take
only risks that would further their personal careers. He valued passion,
integrity, and action, with little regard for personal advancement. They
resented him, rightly surmising that the only reason he had been promoted was
because he was more like he president than they were, and he was being groomed
as heir apparent.
On November 2, 2004, John Breckenridge’s
world began to unravel. The company he worked for, the one he had given so much
of his life to build was acquired in a hostile takeover. The president who had
been his friend and mentor was let go, and the backstabbing began in earnest.
John found himself the odd man out in the office as the others jostled to build
status in the new firm. Although his stellar record allowed him to survive the
first round of job cuts, that survival only made him more of a pariah to those
around him. Going to work was a chore now, and John had no friends like those
he had left in Aspen.
Karen was little help. John had spent nearly
two decades married more to his job than his wife, and he found she was more of
a stranger than a comforter as he struggled in his new role. When he spoke
about changing jobs, she blew up. “Why did I have to give up nursing for your
career?” she said. “Why do we have to move again, just because you can’t get
along at work? Can’t you see what the move did to our kids?”
Seeing the hurt and anger in Karen’s eyes,
John stopped sharing and turned to his bottle for comfort. In time that caused
even more tension in the home, and it slowed him down at work when he really
needed to excel. John would often drink himself into oblivion when on business
trips rather than thinking about where his life and career were going. On his
last trip he hadn’t slept much and had worked far too hard. Midmorning he had
been felled by a massive heart attack.
All of this history passed through John
Breckenridge’s mind as he woke after the operation. It was time for a change.
Question:
1.
Identify
the stressors in John Breckenridge’s life. Which ones could he have prevented?
2.
What
were the results of the stress? Would you consider these to be typical to
stress situations and lifestyle choices John made, or was John Breckenridge
unlucky?
3.
Assume
you are a career coach retained by John Breckenridge to guide him through his
next decisions. How would you recommend that John modify his lifestyle and
behavior to reduce stress? Should he change jobs? Do you believe he is capable
of reducing his stress alone? If not, where should he seek help?
CASE: III The
Shipping Industry Accounting Team
For the past five years I have been working at McKay, Sanderson, and
Smith Associates, a mid-sized accounting firm in Boston that specializes in
commercial accounting and audits. My particular specialty in accounting
practices for shipping companies, ranging from small fishing fleets to a couple
of the big firms with ships along the East Coast.
About 18 months ago McKay, Sanderson, and
Smith Associates became part of a large merger involving two other accounting
firms. These firms have offices in Miami, Seattle, Baton Rouge, and Los
Angeles. Although the other two accounting firms were much larger than McKay,
all three firms agreed to avoid centralizing the business around one office in
Los Angeles. Instead the new firm—called Goldberg, Choo, and McKay
Associates—would rely on teams across the country to “leverage the synergies of
our collective knowledge” (an often-cited statement from the managing partner
soon after the merger).
The merger affected me a year ago when my
boss (a senior partner and vice president of the merger) announced that I would
be working more closely with three people from the other two firms to become
the firm’s new shipping industry accounting team. The other team members were
Elias in Miami, Susan in Seattle, and Brad in Los Angeles. I had met Elias
briefly at a meeting in New York City during the merger but had never met Susan
or Brad, although I knew that they were shipping accounting professionals at
the other firms.
Initially the shipping team activities
involved e-mailing each other about new contracts and prospective clients. Later
we were asked to submit joint monthly reports on accounting statements and
issues. Normally I submitted my own monthly reports to summarize activities
involving my own clients. Coordinating the monthly report with three other
people took much more time, particularly because different accounting
documentation procedures across the three firms were still being resolved. It
took numerous e-mail messages an a few telephone calls to work out a reasonable
monthly report style.
During this aggravating process it became
apparent—to me at least—that this team business was costing me more time than
it was worth. Moreover, Brad in Los Angeles didn’t have a clue about how to
communicate with the rest of us. He rarely replied to e-mail. Instead he often
used the telephone tag. Brad arrived at work at 9:30 a.m. in Los Angeles (and
was often late), which is early afternoon in Boston. I typically have a
flexible work schedule from 7:30 a.m. to 3:30 p.m. so I can chauffeur my kids
after school to sports and music lessons. So Brad and I have a window of less
than three hours to share information.
The biggest nuisance with the shipping
specialist accounting team started two weeks ago when the firm asked the four
of us to develop a new strategy for attracting more shipping firm business.
This new strategic plan is a messy business. Somehow we have to share our
thoughts on various approaches, agree on a new plan, and write a unified
submission to the managing partner. Already the project is taking most of my
time just writing and responding to e-mail and talking in conference calls
(which none of us did much before the team formed).
Susan and Brad have already had two or three
misunderstandings via e-mail about their different perspectives on delicate
matters in the strategic plan. The worst of these disagreements required a
conference call with all of us to resolve. Except for the most basic matters,
it seems that we can’t understand each other, let alone agree on key issues. I
have come to the conclusion that I would never want Brad to work in my Boston
office (thanks goodness he’s on the other side of the country). Although Elias
and I seem to agree on most points, the overall team can’t form a common vision
or strategy. I don’t know how Elias, Susan, or Brad feel, but I would be quite
happy to work somewhere that did not require any of these long-distance team
headaches.
Question:
1.
What
type of team was formed here? Was it necessary, in your opinion?
2.
Use the
team effectiveness model in Chapter 9 and related information in this chapter
to identify the strengths and weaknesses of this team’s environment, design,
and processes.
3.
Assuming
that these four people must continue to work as a team, recommend ways to
improve the team’s effectiveness.
CASE: IV Conflict In
Close Quarters
A team of psychologists at Moscow’s Institute for Biomedical Problems
(IBMP) wanted to learn more about the dynamics of long-term isolation in space.
This knowledge would be applied to the International Space Station, a joint
project of several countries that would send people into space for more than
six months. It would eventually include a trip to Mars taking up to three
years.
IBMP set up a replica of the Mir space
station in Moscow. They then arranged for three international researchers from
Japan, Canada, and Austria 110 days isolated in a chamber the size of a train
car. This chamber joined a smaller chamber where four Russian cosmonauts had
already completed half of their 240 days of isolation. This was the first time
an international crew was involved in the studies. None of the participants
spoke English as their first language, yet they communicated throughout their
stay in English at varying levels of proficiency.
Judith Lapierre, a French-Canadian, was the
only female in the experiment. Along with obtaining a PhD in public health and
social medicine, Lapierre had studied space sociology at the International
Space University in France and conducted isolation research in the Antarctic.
This was her fourth trip to Russia, where she had learned the language. The
mission was supposed to have a second female participant from the Japanese
space program, but she was not selected by IBMP.
The Japanese and Austrian participants viewed
the participation of a woman as a favorable factor, says Lapierre. For example,
to make the surroundings more comfortable, they rearranged the furniture, hung
posters on the walls, and put a tablecloth on the kitchen table. “We adapted
our environment, whereas Russians just viewed it as something to be endured,”
she explains. “We decorated for Christmas because I’m the kind of person who
likes to host people.”
New Year’s Eve Turmoil
Ironically, it was at one of those social
events, the New Year’s Eve party, that events took a turn for the worse. After
drinking vodka (allowed by the Russian space agency), two of the Russian
cosmonauts got into a fistfight that left blood splattered on the chamber
walls. At one point a colleague hid the knives in the station’s kitchen because
of fears that the two Russians were about to stab each other. The two
cosmonauts, who generally did not get along, had to be restrained by other men.
Soon after that brawl, the Russian commander grabbed Lapierre, dragged her out
of view of the television monitoring cameras, and kissed her aggressively—twice.
Lapierre fought him off, but the message didn’t register. He tried to kiss her
again the next morning.
The next day the international crew
complained to IBMP about the behavior of the Russian cosmonauts. The Russian
institute apparently took no against the aggressors. Instead the institute’s
psychologists replied that the incidents were part of the experiment. They
wanted crew members to solve their personal problems with mature discussion
without asking for outside help. “You have to understand that Mir is an
autonomous object, far away from anything,” Vadim Gushin, the IBMP psychologist
in charge of project, explained after the experiment had ended in March. “If
the crew can’t solve problems among themselves, they can’t work together.”
Following IBMP’s response, the international
crew wrote a scathing letter to the Russian institute and the space agencies
involved in the experiment. “We had never expected such events to take place in
a highly controlled scientific experiment where individuals go through a
multistep selection process,” they wrote. “If we had known… we would not have
joined it as subjects.” The letter also complained about IBMP’s response to
their concerns.
Informed about the New Year’s Eve incident,
the Japanese space program convened an emergency meeting on January 2 to
address the incidents. Soon after the Japanese team member quit, apparently
shocked by IBMP’s inaction. He was replaced with a Russian researcher on the
international team. Ten days after the fight—a little over the month the
international team began the mission—the doors between the Russian and
international crews’ chambers were barred at the request of the international
research team. Lapierre later emphasized that this action was taken because of
concerns about violence, not the incident involving her.
A Stolen Kiss or Sexual Harassment
By the end of experiment in March, news of
the fistfight between the cosmonauts and the commander’s attempts to kiss
Lapierre had reached the public. Russian scientists attempted to play down the
kissing incident by saying that it was one fleeting kiss, a clash of cultures,
and a female participant who was too emotional.
“In the West, some kinds of kissing are
regarded as sexual harassment. In our culture it’s nothing,” said Russian scientist
Vadim Gushin in one interview. In another interview he explained, “The problem
of sexual harassment is given a lot of attention in North America but less in
Europe. In Russia it is even less of an issue, not because we are more or less
moral than the rest of the world; we just have different priorities.”
Judith Lapierre says the kissing incident was
tolerable compared to this reaction from the Russian scientists who conducted
the experiment. “They don’t get it at all,” she complains. “They don’t think
anything is wrong. I’m more frustrated than ever. The worst thing is that they
don’t realize it was wrong.”
Norbert Kraft, the Austrian scientist on the
international team, also disagreed with the Russian interpretation of events.
“They’re trying to protect themselves,” he says. “They’re trying to put the
fault on others. But this is not a cultural issue. If a woman doesn’t want to
be kissed, it is not acceptable.”
Question:
1.
Identify
the different conflict episodes that exist in this case. Who was in conflict
with whom?
2.
What are
the sources of conflict for these conflict incidents?
3.
What
conflict management style(s) did Lapierre, the international team, and Gushin
use to resolve these conflicts? What style(s) would have worked best in the
situation?
CASE: V Hillton’s Transformation
Twenty years ago Hillton was a small city (about 70,000 residents) that
served as an outer to a large Midwest metropolitan area. The city treated
employees like family and gave them a great deal of autonomy in their work.
Everyone in the organization (including the two labor unions representing
employees) implicitly agreed that the leaders and supervisors of the
organization should rise through the ranks based on their experience. Few
people were ever hired from the outside into middle or senior positions. The
rule of employment at Hillton was to learn the job skills, maintain a
reasonably good work record, and wait your turn for promotion.
Hillton had grown rapidly since the
mid-1970s. As the population grew, so did the municipality’s workforce to keep
pace with the increasing demand for municipal services. This meant that
employees were promoted fairly quickly and were almost guaranteed employment.
In fact, until recently Hillton had never laid off any employee. The organization’s
culture could be described as one of entitlement and comfort. Neither the
elected city council members nor the city manager bothered the department
managers about their work. There were few costs controls because rapid growth
forced emphasis on keeping up with the population expansion. The public became
somewhat more critical of the city’s poor services, including road construction
at inconvenient times and the apparent lack of respect some employees showed
towards taxpayers.
During these expansion years Hillton put most
of its money into “outside” (also called “hard”) municipal services such as
road building, utility construction and maintenance, fire and police
protection, recreational facilities, and land use control. This emphasis
occurred because an expanding population demanded more of these services, and
most of Hillton’s senior people came from the outside services group. For
example, Hillton’s city manager for many years was a road development engineer.
The “inside” workers (taxation, community services, and the like) tended to
have less seniority, and their departments were given less priority.
As commuter and road systems developed,
Hillton attracted more upwardly mobile professionals to the community. Some
infrastructure demands continued, but now these suburban dwellers wanted more
“soft” services, such as libraries, social activities, and community services.
They also began complaining about how the municipality was being run. The
population had more than doubled between the 1970s and 1990s, and it was
increasingly apparent that the city organization needed more corporate
planning, information systems, organization development, and cost control
systems. Resident voiced their concerns in various ways that the municipality
was not providing the quality of management that they would expect from a city
of its size.
In 1996 a new mayor and council replaced most
of the previous incumbents, mainly on the platform of improving the
municipality’s management structure. The new council gave the city manager,
along with two other senior managers, an early retirement buyout package.
Rather than promoting form the lower ranks, council decided to fill all three
positions with qualified candidates from large municipal corporations in the
region. The following year several long-term managers left Hillton, and at
least half of those positions were filled by people from outside the
organization.
In less than two years Hillton had eight
senior or departmental managers hired from other municipalities who played a
key role in changing the organization’s value system. These eight managers
became known (often with negative connotations) as the “professionals.” They
worked closely with each other to change the way middle and lower-level
managers had operated for many years. They brought in a new computer system and
emphasized cost controls where managers previously had complete autonomy.
Promotions were increasingly based more on merit than seniority.
These managers frequently announced in
meetings and newsletters that municipal employees must provide superlative
customer service, and that Hillton would become one of the most
customer-friendly places for citizens and those doing business with the
municipality. To this end these managers were quick to support the public’s
increasing demand for more soft services, including expanded library services
and recreational activities. And when population growth flattened for a few
years, the city manager and the other professionals gained council support to
lay off a few outside workers due to lack of demand for hard services.
One of the most significant changes was that
the outside departments no longer held dominant positions in city management.
Most of the professional managers had worked exclusively in administrative and
related inside jobs. Two had Master of Business Administration degrees. This
led to some tension between the professional managers and the older outside
managers.
Even before the layoffs, managers of outside
departments resisted the changes more than others. These managers complained
that their employees with the highest seniority were turned down for
promotions. They argued for more budget and warned that infrastructure problems
would cause liability problems. Informally these outside managers were supported
by the labor union representing outside workers. The union leaders tried to
bargain for more job guarantees, whereas the union representing inside workers
focused more on improving wages and benefits. Leaders of the outside union made
several statements in the local media that the city had “lost its heart” and
that the public would suffer from the actions of the new professionals.
Question:
1.
Contrast
Hillton’s earlier corporate culture with the emerging set of cultural values.
2.
Considering
the difficulty in changing organizational culture, why did Hillton’s management
seem to be successful at this transformation?
3.
Identify
two other strategies that the city might consider to reinforce the new set of
corporate values.
OPERATION MANAGEMENT
Attempt Only Eight Question:-
1. How
would operations strategy for a service industry be different if any from that
for a manufacturing industry ? (Its an
example & explain)
2. Consider
the following two mutually exclusive projects.
The net cash flows are given below:
|
YEAR
|
NET CASH FLOWS FROM PROJECT A
|
NET CASH FLOWS FROM PROJECT B
|
|
0
|
- Rs.
1,00,000
|
- Rs. 1,00,000/-
|
|
1
|
+ Rs. 30,000
|
+ Rs. 15,000/-
|
|
2
|
+ Rs. 35,000
|
+ Rs. 17,500/-
|
|
3
|
+ Rs. 40,000
|
+ Rs. 20,000/-
|
|
4
|
+ Rs. 45,000
|
+ Rs. 22,500/-
|
|
5
|
|
+ Rs. 25,000/-
|
|
6
|
|
+ Rs. 27,500/-
|
|
7
|
|
+ Rs. 30,000/-
|
|
8
|
|
+ Rs. 32,500/-
|
If the desired
rate of return is 10% which project should be chosen?
3. What
are the levels of aggregation in forecasting for a manufacturing
organization? How should this hierarchy
of forecasts be linked and used ?
4. How
would forecasting be useful for operations in a BPO (Business processes
outsourcing) unit ? What factors may be
important for this industry ? Discuss .
5. A
good work study should be followed by good supervision for getting good
results. Explain with an example.
6. What
is job evaluation ? Can it be
alternatively used as job ranking ? How
does one ensure that job evaluation evaluates the job and not the man ? Explain with examples ?
7. What
is the impact of technology on jobs ?
What are the similarities between job enlargement & job rotation ? Discuss the importance of training in the
content of job redesign ? Explain with
examples ?
8. What
is an internet connectivity ? How is it
important in to days business would with respect to materials requirement
planning & purchasing. Explain with
examples ?
9. Would
a project management organization be different from an organization for regular
manufacturing in what ways. Examples.
10. How
project evaluation different from project appraisal? Explain with examples.
LOGISTIC MANAGEMENT
Note: Solve ANY THREE case studies.
CASE I
A CASE OF ALPHA TELENET LIMITED
Alpha Telecom Ltd., a part of Alpha Group was established in 1976 by its
visionary Chairman and Managing Director, A. S. Verma. The company started with
manufacturing of Electronic Push Button Telephones (EPBT) and Cordless phones
in 1985 in Allahabad
Till 1994, fixed telephone services were provided by
Department of Telecommunications (DoT) which had a monopoly in this business. This was
regarded as self-defeating because DoT was a regulator as well as a competitor. With increasing pressure for privatisation, the government agreed to give license to private operators. Finally in
December 1996, the bill of privatisation of fixed telephone services was
passed. The New Telecom Policy (NTP) with its targets for improving tele-density was
an ambitious policy. The NTP planned to achieve a tele-density (number of telephones
per 100 people) of 7 by the year 2005 and 15 by the year 2010, which translated into 130 mn lines. The policy also planned an
investment of Rs. 4000 billion by the year 2010. The above
factors combined with the fact that the domestic long distance telephony was
open to private players, led to considerable demand for the company's products. But to get the tenders from Ministry of Telecommunication,
Government of India, a license fee was to be paid over a period of 15 years and
the viability of telecom projects was also affected by the guidelines that
required private operators to earmark at least 10% of their telephone lines for
villages. The operating companies did not like the idea of
having to pay for the maintenance of lines that might not be used most of the times. The license fee of Maharashtra state was
minimum at Rs.643 crores. Thus, Alpha Telenet, a pioneer in every field
wanted to avail this opportunity and started the survey for extending the
services in Pune. Their marketing survey team provided the statistics of
existing customers of DoT, the waiting list of DoT, potential of users for
successive years and so on.
Alpha Telenet Ltd. (ATL)
decided to start their fixed line telephone operations in technical collaboration with Telecom Italia at Pune in Maharashtra .
Initially, they received permission for installing their exchanges covering 0.5
km. of radius which was too small with respect to the cost involved and thus
difficult to achieve lucrative returns. After struggling for a year, they
finally got permission to set up exchanges covering 1 km. of radius. They set
up their exchanges in potential areas in the city. Another problem was that the
consumer's mindset fixated was with DoT and they were not ready to accept the
services of Alpha Telenet Ltd. This was due to opposite tariff rates for
household consumers. Consumers did not rely on ATL as they were private players. ATL
initially had attracted the customers from the areas where the waiting line for
DoT connections was high. Further, they had provided the connections with
wireless CDMA receivers for only Rs. 3000 (movable within the area of 5 km
radius) though its actual cost was Rs.15,000. The connection between exchanges
by optical fibre ensured high quality of voice and data transmission, which was
later to be shifted to the conventional copper wires for consumer connections.
The company made the connection using Ring Topology stay connected even in case
of line disturbances.
They also installed a
Submarine Optical Fibre Cable to Singapore India
In 1997, Alpha Telenet Ltd. obtained a license for providing fixed-line services in Maharashtra state circle and formed a joint venture with Behrin
Telecom, Alpha BT, for providing VSAT services. On June 4, 1998 they started the
first private fixed-line services launched in Pune in the Maharashtra
circle and thereby ending fixed-:-line services monopoly of DoT (now TSNL).
Alpha entered into a license agreement with DoT in 2002 to provide
international long distance services in India Delhi
With the start of
basic telephony services in the .state of Maharashtra ,
residents of the area and others felt a great sense of breaking away from the
old and traditional government monopoly. The kind of ill-treatment of customers
and also the red-tapism and bureaucracy which prevailed earlier, was about to
end. It was observed that no private telecom company wanted to start their
operations in less profitable areas like Bihar
and other eastern states .
. The tariff plans of the TSNL and Alpha Telenet
Ltd. were opposite to each other. TSNLS tariff structure was upwards i.e., price per unit increase with number of calls and vice versa for Alpha
Telenet. This was the beginning of the entry of private players in the sector.
Questions:
1. Give
a critical analysis of the privatisation of telecom sector in India.?
2.
Highlight the secrets of success of Alpha
Telenet Ltd. in terms of technological advancements and service provided?
CASE II
GEARING· FOR GROWTH
Premier Differential Gears Pvt. Ltd. (PDGL) was formed in the year 1991
near Noida in the state of Uttar Pradesh (India
PDGL was manufacturing
a wide range of Crown Wheel and Pinions, Bevel Gears, Bevel Pinions, and Spider Kit
Assemblies. The installed capacity was 20,000 sets per month. PDGLs focus on quality, fast product development and customer service had
enabled it to become an OEM supplier to many car and tractor companies in India , the EU, and Asia . Almost 75% of the total production was exported to a number of countries like
Germany , Russia , USA ,
China , Japan , South Mrica ,
etc. The domestic OEM and replacement market accounted
for the remaining 25% of the company's sales and in a short span of time, the
company had become one of the major players in the Indian replacement market.
The use of latest technology and comprehensive quality control systems at PDGL
go a long way to ensure that customers get exactly what they want.
PDGL was using world
class Gleason machines in its manufacturing programme. The raw material for manufacturing gears was in the form of
forgings, which were procured from various parts of the country for
manufacturing crown wheels and pinions. These forgings were subjected to
turning followed by drilling. The drilled crowns and pinions were taken for
tapping, which were then rimmed. After this, the teeth cutting procedure was applied which was called broaching. The broached units were then
heat-treated. Heat treatment was very critical in producing gears having
short tolerance levels. To meet this end, the company had two rotary furnaces
and one state-of-the-art Continuous Gas Carburizing Furnace (CGCF) from
Aichelin ALD of Austria
The upstream portion
of the supply chain at PDGL included a number of forgers located at "geographically dispersed locations in various
parts of the country. These forgers were supplying the forgings to PDGL, which
were then used in manufacturing the differential gears. All of the raw material was routed to the POGL works through road transport and"" due to large distances, transportation costs were a major
issue in increasing the efficiency of this upstream portion of the supply
chain. The forgings were supplied according to the drawings and dimensions set
by design engineers at the company. The company indeed tried some local
suppliers to cope up with the increasing transportation costs but the results
on quality front wet satisfactory. To serve this end, the
company was planning to develop some local suppliers. It had planned
to provide them support in the areas of procuring good material for producing
forgings, procuring good quality machines and" training
their workforce in the required technical know-how. This was considered as an
investment by the company to reduce its inbound transportation costs. To meet
the small lot requirements of the forgings, the company was also contemplating
to share the truckloads with the parent company. This was feasible because of
the geographical proximity of the parent company, which was
situated at a distance of less than 15 kms, the similar nature of raw material
and same suppliers supplying to both the units.
The internal supply
chain at PDGL comprised of various processing stations/lines" through which the forgings were transformed into finished differential
gears. The movement of the work-in-progress between various stations was semi-automatic
in which the workers manually placed the goods on trolleys/carts. Even the
finished units were manually placed on a conveyer; which needed to be pushed to
send the units to the packing section. There was a risk of units being damaged
in this process. To minimize this risk, the company was planning to have
automatic systems for moving the material from one place to another. It was
decided to have hydraulic lifts, cranes, electronic escalators and the likes for progression of material from forging to packing. The packing
material was stored on first floor as and when it arrived, with the help of
casual laborers, which was inefficient and also involved a: risk of some· casualty.
The downstream portion
of the supply chain at PDGL included around 10 distributors located evenly in
various parts of the country. These distributors were supplying the products of
PDGL to number of car, truck, jeep and tractor manufacturers. This portion of
the supply chain also included a large replacement market, which accounted for
almost half of the company's domestic sales. To meet its distribution
needs the company had a panel of transporters, who used to distribute the finished
goods. At times, the consignments scheduled for distributors were delayed
because of lack of full truckload. One possible solution to this problem was
sharing of truckload with the parent company. This was feasible because both
the companies shared the same distribution network. The distribution of export
consignments was through an intermediary who helped the company in exporting
its products to the US, UK, Germany, China, Italy, Turkey, Saudi Arabia, Singapore, Malaysia, Thailand, Indonesia, and Nigeria,
amongst other countries. The company's wide export range included replacement gears for internationally renowned automotive manufacturers like MercedesBenz, Mitsubishi, Toyota, Nissan, Clark,
Eaton, Fuller, New Process, ZP, Hino, Fuso, Tong Feng, Tata, Leyland, Massey
Ferguson, Magirus - Deutz and various others.
There was a shortage
of skilled employees. Therefore, the company has recently started training
input for all their 400 employees. These training programmes
are being conducted in the organization to enhance the skills of the employees
and the duration of these programmes were 20 hours per month. On the financial
front, the company is continuously moving on the growth track showing better
financial results year after year. It has embarked on an ambitious plan to
double its turnover by the end of this financial year and to become the world's
numero-uno in the automotive gear-manufacturing segment. The current capacity
utilization was at a meager 6000 sets against a total installed capacity of
20,000 sets per month.
Questions:
1. Comment
on the upstream and downstream supply chain portions operating in the company.
2.
How far are the plans to improve the supply
chain efficiency in the company feasible?
3.
"Internal supply chain at the company
can be characterized by the lack of it". Comment.
CASE
III
INTELLIGENT MOVEMENTS: ANYWHERE ANYTIME
Deepak Pai, an engineering graduate and a postgraduate in management from United States Hyderabad Hitachi
Speed Cargo Limited (SCL), a leader in the express cargo movement pioneered
in distribution and supply chain management solutions in India India
The international wing of SCL took care of the SAARC countries and Asia
Pacific region covering 220 countries with a specialized India-centric
perspective. The company had gone online by connecting 90 percent of its
offices to provide web-centric solutions to its customers.
The company also offered money back guarantee to express cargo services.
The services offered were customized for corporate, small and medium
enterprises, cluster markets, wholesale markets and individuals. The state-of-the-art technology made things easier for the customers whose cargo could be tracked and traced in the
simplest manner, because SCL had an effective tracking system. SCL believed
that best of technology enabled best of service, and its outlays on providing
the IT edge had always resulted in innovative services and solutions. SCL, in
its day-to-day operations, used technologically advanced equipments like Fork Lifters, Hydraulic Trucks, Hand Trolly, Drum Trolly, Rubber Pads
cushioning, Taper Rollers to move big crates, color codes for identification to
delivery what it promised.
Between 1989, when company was born, and 1995, SCL started a unique value
added service called Cash-On-Delivery for the advantage of its customers. SCL
introduced Call Free Number for the first time in the logistics industry in India Bhutan Speed Cargo Development Center
was set up at Pune in India
An exclusive cargo train in association with Indian Railways between Mumbai and Kolkata was launched in 2001. Based on a survey conducted by Frost
and Sullivan, SCL was conferred the Voice of Customer Award for being the best
logistics company in 2003. After simplifying the internal process for faster and better communication, and a smarter way
to work, SCL set up its corporate office at Singapore
SCL was sensitive to the avenues where it could contribute to building a
better society. Displaying continuous social responsibility, SCL associated
itself with several community development programs and contributed generously
to many social causes. SCL was the first to build makeshift
houses for 400 families who were affected during a massive earthquake in Bhuj
district of Gujarat in India
In 2003, SCL accepted to develop one of the government schools located at
Banjara Hills in Hyderabad South East Asia in
December 2004 leaving over 10 lakh people dead and over 4 million displaced,
SCL was on the rescue scene as it brought in food, water, clothing, medication, a team of doctors and cooks, and provided the affected people
with essential utensils. After rehabilitating the people in Nagapattnam and
Cuddalore, it took up the development of a high school in Nagore where 500
students came in from the Tsunami affected families. SCL also actively
participated in Kargil contributions and other rescue and rehabilitation works
in India
LOOKING AHEAD
SCL believed that in
the age of convergence, it had kept pace with time with its infrastructure,
people and technological capabilities for moving cargo to its destination on
time, by making intelligent movements in air and sea, as well as on road and
rail. The company had experience of handling wide range of materials including
confidential papers related to University examination and sensitive goods like
polio drops and life-saving medicines. In view of the strengths of its competitors
such as DHL, Safexpress and Blue Dart, the company had enhanced services with a
greater focus on cargo management and customer satisfaction with the new operations backed by better strategic planning. To achieve its aim, SCL had strategically tied-up with Jubli Commercials, an lATA
accredited freight forwarder, which started its operations as Air Cargo Agent.
The company was
confident that it was set to become 24 x 7 one-stop solution provider
for all freight forwarding services including customs clearance for
international cargo. SCL having 40 percent share in express distribution business was developing a huge centralized warehouse on 22 acres of land at Nagpur in India India
Questions:
1.
What made SCL a leader in the logistics
industry?
2.
Discuss the strategies adopted by SCL for its
survival in the competitive scenario.
3.
Comment on the contributions of SCL to
society.
4.
What steps the company should take to
globalize its network reach?
Discuss the strategies adopted by SCL for
expansion.
CASE
IV
LOGISTICS OUTSOURCING
Company Profile
Indian Steels Limited
(ISL) is a Rs. 6000 crore company established in the year 1986. The company
envisaged being a continuously growing top class company to deliver superior quality
and cost effective products for infrastructure development. With major
customers being from Public Sector Undertakings, the company has established
itself well and is said to be considering its expansion plan and proposed
merger with another steel making giant in the country.
In 1996, owing to the
cut throat competition in the emerging dynamic global markets, ISL emphasized
on both effectiveness and efficiency. The company strongly believed in focusing
on its core competency (i.e. manufacturing of steel) and outsourcing the rest to
its reliable partners. Outsourcing of its outbound logistics was one such move
in this direction. ISL out sourced its stockyards and other
warehousing services to a third party called Consignment Agent, who was
selected on an annual basis through a process of competitive bidding. The CA
was responsible for the entire distribution of the products within the
geographical limits of the allotted market segment and was paid by the company
according to the loads of transaction (measured in metric tonnes) dealt by him.
The company also believed in maintaining long-term relationships with the
suppliers as well as the buyers. It always prioritized the needs of its regular
and important customers over others and this worked out to be a win-win
strategy. The case brings out the model of outsourcing logistics the company
has adapted for the enhancement of its supply chain competency and thus
leveraging more on its core competency which led to increased productivity.
Indian Steels Limited
(ISL) is a Rs. 6000 crore company established in
the' year 1986. The company envisaged being a continuously growing top class company to
deliver superior quality and cost effective products for
infrastructure development. The company performed with a mission to attain 7
million ton liquid steel capacity through technological up-gradation,
operational efficiency arid expansion; to produce steel with international
standards of cost and quality; and to meet the aspirations of the stakeholders.
The production started in the year 1988 and initially, it manufactured Angles, Pig Irons) Beams and Wire Rods that were mainly used for constructing
roads) dams and bridges. These products were mainly supplied to Public Sector
Undertakings such as Railways, Public Works Department (PWD) Central Public
Works Department (CPWD) Rashtriya Setu Nigam Limited, Audyogik Kendra Vikas Nigam Ltd. and various foundry units. The company had its
headquarters at Raipur
The company has
established itself well and is said to be considering its expansion plan and
proposed merger with another steel making giant in the country. The company was
awarded ISO 9001, ISO 14001 and ISO 18001 certifications. The temperature in
the plant premises is reportedly about 6°C lesser than that
of the township, thanks to the greenery being maintained therein.
Logistics Outsourcing
Outbound logistics which basically connects the source of supply with the sources of
demand with an objective of bridging the gap between the market demand and
capabilities of the supply sources was always a problem for companies
operating in this industry. Consisting of components like warehousing network,
transportation network) inventory control system and supporting information
systems outbound logistics was always playing a key role in making the right product
available at the right place, at the right time at the
least possible cost. In 1996 owing to the cut throat competition in the emerging
dynamic global markets, ISL emphasized on both effectiveness and
efficiency. The company strongly believed in focusing on its core competency (Le.
manufacturing of steel) and outsourcing the rest to its reliable partners.
Outsourcing of its outbound logistics was one such move in this direction.
Recognizing the
growing demand for its products from the big, diversified and geographicallydispersed customers, the company started
expanding the number of warehousing stockyards. From a
humble beginning, the company today has 26 stockyards; most of them are
outsourced. Each of the outsourced stockyards was managed by a third party,
which the company referred to as Consignment
Agent (hereafter referred to as CA) in the area. The CA was selected on an
annual basis through competitive bidding process. The
performance of CA was closely monitored by a company representative (full time employee of ISL working in the site of CA). The CA was responsible
for the entire distribution of the products within the geographical limits of the allotted market segment and Was paid by the company according to
the loads of transaction (measured in metric tonnes) dealt by him. Based on
their sales turnover CAs were trifurcated into A, Band C categories. The CAs
with a monthly turnover of Rs. 150-200 crore fell under A category) whereas
those with Rs. 100 - 150 crore were B and less than Rs. 100 \ crore were C category.
In addition to the
company representative) a team of marketing division operated in the town where, the site of CA was located. This department was responsible or estimating
the future demand, translating it into orders and sending to the manufacturing
plant. Material dispatch was done using either one or a combination of the two
modes: Rail, Road. While using rail as the mode of transportation, the company
had a choice to book a Normal Rake (a
full train with about 35 wagons, each wagon with an approximate capacity of 60
tonnes) or a Jumbo Rake (a full train
of about 52 wagons, each wagon with an approximate capacity of 60 tonnes). At
times, the company was engaging the services of the CONCOR (Container
Corporation of India
As soon as the
material was dispatched from the manufacturing plant, the respective CA used to
get a Stock Transfer Chalaan electronically
through Virtual Private Network, which
was developed by a professional software service provider. In-transit,
monitoring was generally done with the help of Indian Railways, if the mode was
Rail. Otherwise, truck/trailor drivers were contacted through mobile phone.
Transit generally took five to six days, providing time for CA to plan for
receiving materials. The CA used to utilize this time for arranging material
handling devices like heavy cranes and required labour. The material thus
unloaded was reaching the warehousing stockyard where CA was responsible for
arranging the materials as per the warehousing norms of ISL.
The company broadly
classified materials into Long Products and
Rounds. Products falling into each
category were further classified by their size, shape and utility and the
company used a distinct colour code for this purpose. Each subcategory of
material had a specific place for downloading. The company used Bin System for this purpose. While downloading
the material in stockyard, the company norms insisted that CA arrange for
providing Dunnagt Material. This
enabled the CA to store material without 1 direct contact with the land surface and thus
reduced the probability of material deterioration. Material
was stored in the stockyard until an authorized representative of the customer
used to come and collect it. While dispatching material to the customer, a Loading Slip was generated against the Delivery Order. The company" also believed in maintaining long-term relationships with the suppliers as
well as the buyers. It always prioritized the needs of its regular and
important customers over others and this worked out to be a win-win strategy.
Operational problems
were majorly because of uncertainties in transportation, fluctuation in supply
of electricity and the load bearing capacity of the soil in the stockyard.
Some: more problems were encountered whenever there was a change in CA and
these were overcome by training the employees of the new CA and keeping the old
CA responsible for the: material in his stockyard for six months after the
contract as well. Observations reveal that, at times there were situations wherein CAs
had to do those things which they were not legally supposed to do (like
subcontracting) because of the pressures mounted by political leaders with
selfish interests.
Despite these
problems, this model of outsourcing logistics was working out very well for the
company. The practices, which were started in the year 1996 have sustained
major changes in the environment and are being practiced even in 2006. It has
enhanced the supply chain competency of the company by enabling it leverage
more on its core competency, which leads to increased productivity.
Questions:
1. Analyze
the case in view of the logistics outsourcing practices of the ISL.
2.
Discuss the importance of logistics
outsourcing with reference to supply chain management.
3.
Suggest strategies for further strengthening
the supply chain of ISL.
4.
The participants/students are expected to
have a clear understanding of Supply Chain and Logistics Management concepts.
5.
The issues involved in the case are Sales
Forecasting, Strategic Sourcing, Selection of Warehousing Service Provider,
Transportation Mode and other nuances in Logistics Management.
Note: Solve any 4 Cases Study’s
CASE: I Toyota
Of all the slogans kicked around Toyota, the key one is kaizen, which means “continuous
improvement” in Japanese. While many other companies strive for dramatic
breakthrough, Toyota overtook Ford Motor Company to become the second largest
automaker in the world. Ford had been the second largest since 1931.
Toyota simply is tops
in quality, production, and efficiency. From its factories pour a wide range of
cars, built with unequaled precision.
Toyota turns out luxury sedans with Mercedes-Benz-like quality using one-sixth
the labor Mercedes does. The company originated just-in-time production and
remains its leading practitioner. It has close relationships with its suppliers
and rigid engineering specifications for the products it purchases
Toyota’s worldwide
leadership in the automotive industry was built on its competitive advantage
across the supply chain. Between 1990 and 1996, Toyota reduced part defects by
84 percent, compared to 47 percent for the Big 3. It also reduced the ratio of
inventories to sales by 35 percent versus 6 percent. These reduction advantages
occurred despite the fact the Big 3 relied on identical suppliers. A study by
Jeff Dyer of The Wharton School of the University of Pennsylvania and Kentaro
Nobeoka of Kobe University attributed Toyota’s success partly to its
implementation of bilateral and multilateral, knowledge-sharing routines with
suppliers that result in superior Interorganizational or network learning.
Toyota uses six approaches to facilitate knowledge sharing: (1)a supplier
association;(2) teams of consultants;(3)voluntary study
groups;(4)problem-solving teams;(5)interfirm employee transfers; and
(6)performance feedback and monitoring processes. This effort also involves intense
levels of personal contact between Toyota and its suppliers.
Toyota pioneered
quality circles, which involve workers in discussions of ways to improve their
tasks and avoid what it calls the three Ds: the dangerous, dirty, and demanding
aspects of factory work. The company has invested $770 million to improve
worker housing, add dining halls, and build new recreational facilities. On the
assembly line, quality is defined not as zero defects but, as another slogan
puts it, “building the very best and giving the customer what she/he wants.”
Because each worker serves as the customer for the process just before hers,
she becomes a quality control inspector. If a piece isn’t installed properly
when it reaches her, she won’t accept it.
Toyota’s engineering
system allows it to take a new car design from concept to showroom in less than
four years versus more than five years for U.S. companies and seven years for
Mercedes. This cuts costs, allows quicker correction of mistakes and keeps
Toyota better abreast of market trends. Gains from speed feed on themselves.
Toyota can get its advanced engineering and design done sooner because, as one
manager puts it, “We are closer to the customer and thus have shorter concept
time.” New products are assigned to a chief engineer who has complete
responsibility and authority for the product from design and manufacturing
through marketing and has direct contacts with both dealers and consumers.
New-model bosses for U.S. companies seldom have such control and almost never
have direct contact with dealers or consumers.
The 1999 Harbour
Report, a study of automaker competencies in assembly, stamping, and powertrain
operations, stated that the top assembly facility in North America (based on
assembly hours per vehicle) is Toyota’s plant in Cambridge, Ontario. In this
plant, a Corolla is produced in 17.66 hours. Toyota was also rated number one
in engine assembly, taking just 2.97 hours to produce an engine.
In Toyota’s manufacturing system, parts and cars
don’t get build until orders come from dealers requesting them. In placing
orders, dealers essentially reserve a portion of factory capacity. The system
is so effective that rather than waiting several months for a new car, the
customer can get a built-to-order car in a week to 10 days.
Toyota is the best
carmaker in the world because it stays close to its customers. “We have learned
that universal mass production is not enough,” said the head of Toyota’s Tokyo
Design Center. “In the 21st century, you personalize things more to
make them more reflective of individual needs.”
In 1999, Toyota
committed to a $13 billion investment through 2000 to become a genuinely global
corporation without boundaries. In this way, it will be able to create
worldwide manufacturing facilities that produce cars according to local demand.
Its goal is to achieve a 10 to 15 percent global market share by 2010.
Why the drive towards
customization of vehicles? Part of this is due to fierce competition that
provides consumer with a multitude of choices. The Internet enables consumers
to be more demanding and less compromising. They now have access to the lowest
prices available for specific models of vehicles with all of the bells and
whistles they design. From the comfort of their homes, they are able to bypass
dealers and still find the vehicle of their dreams.
Senior management at
Toyota believes that kaizen is no
longer enough. The senior vice president at the Toyota USA division, Douglas
West, states that his division is committed to both creating and executing a
new information system to drive the fastest, most efficient order-to-delivery
system in the North American market. Toyota management has come to realize Kaizen alone can no longer predict
business success. The sweeping changes taking place in the business environment
can no longer rely on the kaizen
philosophy of small, sustained improvements. In fact, one expert in the
industry believes that “pursuing incremental improvements while rivals reinvent
the industry is like fiddling while Rome burns.” Competitive vitality can no
longer be defined by continuous improvement alone.
Question:
1.
In what
ways is Toyota’s new-product development system designed to serve customers?
2.
In what
ways is Toyota’s manufacturing system designed to serve customers?
3. How does Toyota personalize its cars and
trucks to meet individual consumer needs?
CASE: II Exposure, Attention, and Comprehension on the Internet
CASE: II Exposure, Attention, and Comprehension on the Internet
The Internet universe literally grows more cluttered by the minute.
According to Network Solutions, Inc., which registers the vast majority of Web
addresses around the world, about 10,000 new addresses are registered each day.
That means by the time you finish reading this case, about 60 new domain names
will have been gobbled up. With all the clutter on the Web, how have some firms
been able to stand out and attract millions of customers?
First, there are some
basics to which online firms must attend. These cost little more than some time
and a little creativity. The first is
creating a good site name. The name should be memorable (yahoo.com), easy to
spell (ebay.com), and/or descriptive (wine.com—a wine retailer). And, yes,
ideally it will have a .com extension. This is the most popular extension for
e-commerce, and browsers, as a default, will automatically add a .com onto any
address that is typed without extension.
The second priority is
to make sure the site comes up near the top of the list on any Web searches. If
you use Lycos.com to perform a search for “used books,” you get a list of more than
2.6 million websites. Studies have shown that most people will look only at the
top 30 sites on the list, at most. If you are a used-book retailer and you show
up as website #1,865,404 on the search list, there is a very good chance you
will not attract a lot of business. A 1999 Jupiter Research study reveals that
“searching on the Internet” is the most important activity, and Internet users
find the information they are looking for by using search engines and Web
directories. A good Web designer can write code that matches up well with
search engine algorithms and results in a site that ranks high on search lists.
Virtually all popular
websites have those basics down pat. So the third step is to reach out
proactively to potential customers and bring them to your site. Many companies
have turned to traditional advertising to gain exposure. Television advertising
can be an effective option—albeit an expensive one. In late January 1999,
hotjobs.com spent $2 million—half of its 1998 revenues—on one 30-second ad
during the Super Bowl. According to CEO Richard Johnson, so many people tried
to visit the site that the company’s servers jammed. Johnson says the number of
site hits was six times greater than in the month before. A quirky ad campaign
may or may not help. Pets.com, now de-func, built its image around a wise-guy
sock puppet. CNET, a hardware and software retailer, ran a series of television
ads featuring cheesy music, low-budget sets, and unattractive actors. One such
ad featured two men—one in a T-shirt that said ”you,” another in a T-shirt
labeled “the right computer” – coming together and joining hands thanks to the
efforts of another guy in a CNET T-shirt. The production quality was
rudimentary enough that any sophomore film student could have produced it. The
spots were so bad that they stood out from the slick, expensive commercials to
which viewers were accustomed. Critics ripped the campaign to shreds, but CNET
called it a success.
Other Internet firms
have used sports sponsorships to increase visibility. CarsDirect.com, a highly
rated site that allows consumers to purchase automobiles online, once purchased
the naming rights to NASCAR auto race (the CarsDirect.com400). Lycos also has
tried to make the most of NASCAR’s increasing popularity. It spent hundreds of
thousands of dollars to have its name and logo plastered all over the car of
popular driver Johnny Benson. Meanwhile, online computer retailer Insight and
furniture seller galleryfurniture.com each targeted football fans by purchasing
the naming rights to college bowl games.
Of course, if you can
reach consumers while they are in front of their computers rather than their
television sets, you may stand an even better chance of getting them to your
site. However, typical banner ads are inefficient, averaging click-through
rates of only about 0.5 per cent (only one of every 200 people exposed to the
ad actually clicked on the ad). Too often, banner ads are just wallpaper;
consumers may see them but they usually are not sufficiently stimulated to
click-through. However, Michele Slack of the online advertising group Jupiter
Communications believes banner ads can be useful if used correctly. “The
novelty factor is wearing off,” she says. But “when an ad is targeted well and
the creative is good, click-through rates are much higher.”
An alternative way to
reach people who are already online is through partnerships. One of the most
visible examples of such an alliance is the one between Yahoo! And Amazon.com.
Let’s say you’re working on a project on the Great Depression and you want to
see what kind of information is available online. If you go to Yahoo! And type
in “Great Depression,” you will not only be presented with a list of websites,
but you will also see a link that will allow you to click to see a list of
books on the Great Depression that are available through Amazon. Another
example of a successful partnership was forged in 1998 between Rollingstone.com
and the website building and hosting service Tripod. Every one of the 3,000
artist pages on Rollingstone.com contained a link to Tripod. The goal was to
encourage fans to use Tripod’s tools to build webpages dedicated their favorite
singers or bands. According to the research company Media Metrix, during the
course of the alliance Tripod jumped from the Web’s fourteenth most popular
website to number eight. Alliances with nonvirtual companies are another
options. In 2003, the Internet classified firm CareerBuilder kicked off a
cross-promotional campaign with major Internet firms, including AOL and MSN.
A less subtle but
nonetheless effective way to build traffic is to more or less pay people visit
your site. One study showed more than half of Internet consumers would be more
likely to purchase from a site if they could participate in some sort of
loyalty program. Hundreds of online merchants in more than 20 categories have
signed up with a network program called ClickRewards. Customers making
purchases at ClickRewards member sites receive frequent-flier miles or other
types of benefits. Mypoints.com offers a similar incentive program in which
customers are rewarded with air travel, gift certificates and discounts for
shopping at member merchants. The search engine iwon.com was even more direct.
It rewards one lucky visitor each weekday with a $10,000 prize. According to
Forrester Research, companies in 2002 spent about $6 billion annually on online
incentives and promotions.
Finally, some firms
rely on e-mail to thoroughly mine their existing customer databases. The
auction site Onsale (later merged with Egghead.com) proved just how successful
e-mail can be. It sent out targeted e-mails to its customers based on their
past bidding activities and previously stated interests. Click-through rates on
these targeted e-mails averaged a remarkable 30 percent. E-mail marketing also
holds promise for business-to-business firms. The Peppers and Rogers Group is a
marketing firm that gives presentations around the United States. At the end of
the presentations, people are invited to go to the company’s website and sign
up for their e-mail newsletter, Inside 1 to 1. The newsletter invites readers
to visit the Peppers and Rogers website to learn more about various articles,
promote their products and services, and participate in forums. Inside 1 to 1
now boasts a subscriber base of 45,000, but the company estimates that about
200,000 people actually see it because subscribers forward it to their friends
and colleagues. About 14,000 people visit the Peppers and Rogers site each
week, with traffic often peaking immediately after the newsletter is sent.
As you can see, there
is no one effective method for generating interest in a website. The same
methods that have worked for some firms have failed for others. One certainty
is that as the Internet grows and more people do business online, Internet
firms will have to find ever more creative ways to expose customers to their
sites and keep their attention once there.
Questions:
1.
Consider
the e-mail campaigns discussed in the case. Why do you think these campaigns
were successful? Discuss the attention processes that were at work. Do you see
any potential drawbacks to this type of marketing?
2.
During the 2000 Super Bowl, ABC invited viewers to visit its
Enhanced TV website. Fans could play trivia, see replays, participate in polls
and chat rooms, and view player statistics. The site received an estimated 1
million hits. Why? Frame your answer in terms of exposure, attention, and
comprehension.
3.
Think about your own Web surfing patterns. Write down the
reasons you visit sites. Which of the marketing strategies discussed in the
case do you find most (and least) influential?
CASE: III Peapod Online Grocery—2003
CASE: III Peapod Online Grocery—2003
The online grocery turned
out to be a lot tougher than analysts thought a few years ago. Many of the early
online grocers, including Webvan, ShopLink, StreamLine, Kosmom, Homeruns, and
PDQuick, went bankrupt and out of business. At one time, Webvan had 46 percent
of the online grocery business, but it still wasn’t profitable enough to
survive. The new business model for online grocers is to be part of an existing
brick-and-mortar chain. Large grocery chains, like Safeway and Albertson’s, are
experiencing sales growth in their online business but have yet to turn a
profit. Jupiter Research estimates that online grocery sales will be over $5
billion by 2007, about 1 percent of all grocery sales, while it expects more
than 5 percent of all retail sales to be online by then. A few years ago,
optimistic analysts estimated online grocery sales would be 10 to 20 times that
by 2005, but it didn’t work out that way.
One of the few online grocers to survive in 2003 is
Peapod, the first online grocer, started by brothers Andrew and Thomas
Parkinson in 1990. However, even Peapod was failing until 2001 when Dutch
grocery giant Royal Ahold purchased controlling interest in the company for $73
million. Peapod operates in five markets, mainly by closely affiliating itself
with Ahold-owned grocery chains. Peapod by Giant is in the Washington, DC,
area, while Peapod by Stop and Shop runs in Boston, New York, and Connecticut.
The exception is Chicago, where Peapod operates without an affiliation with a
local grocery chain. Peapod executives claim the company is growing by 25
percent annually and has 130,000 customers, and all of its markets except
Connecticut are profitable. Average order size is up to $143 from $106 three
years earlier.
The online grocery business seemed like a sure winner in
the 1990s. Dual-income families strapped for time could simply go online to do
their grocery shopping. They has about the same choices of products that they
would have had if they went to a brick-and-mortar grocery, about 20,000 SKUs
(stockkeeping units). They could browse the “aisles” on their home computers
and place orders via computer, fax or telephone. The orders were filled at
affiliated stores and delivered to their homes in a 90-minute window, saving
them time and effort and simplifying their daily lives. For all this
convenience, consumers were willing to pay a monthly fee and a fee per order
for packaging, shipping, and delivery. Since most of the products purchased
were well-known branded items, consumer faced little risk in buying their
traditional foodstuffs. Even perishables like produce and meat could be counted
on to be high quality, and if consumers were concerned, they could make a quick
trip to a brick-and-mortar grocery for these selections. However, while all of
this sounded good, most consumers didn’t change their grocery shopping habits
to take advantage of the online alternative.
Currently analysts do not expect the online grocery
industry to take off in the near future, if ever. Miles Cook of Bain &
Company estimates that only 8 to 10 percent of U.S. consumers will find
ordering groceries online appealing, but only about 1 percent will ever do so.
He concludes: “This is going to remain a niche offering in a few markets. It’s
not going to be a national mainstream offering.” Jupiter Media Metrix analyst
Ken Cassar concludes that “The moral of the story is that the ability to build
a better mousetrap must be measured against consumers’ willingness to buy it.”
Question:
1.
What behaviors are involved in online grocery shopping? How
does online shopping compare with traditional shopping in terms of behavioral
effort?
2.
What types of consumers are likely to value online grocery
shopping from Peapod?
3.
Overall, what do you think about the idea of online grocery
shopping? How does it compare with simply eating in restaurants and avoiding
grocery shopping and cooking altogether?
CASE: IV Sony
In just over half-century,
Sony Corporation has from a 10-person engineering research group operating out
of a bombed-out department store to one of the largest, most complex, and
best-known companies in the world. Sony co-founders Masaru Ibuka and Akio
Morita met while serving on Japan’s Wartime Research Committee during World War
II. After the war, in 1946, the pair got back together and formed Tokyo
Telecommunications Engineering Corporation to repair radios and build shortwave
radio adapters. The first breakthrough product came in 1950, when the company
produced Japan’s first tape recorder, which proved very popular in music
schools and in courtrooms as a replacement for stenographers.
In 1953, Morita came to the United States and signed an
agreement to gain access to Western Electric’s patent for the transistor.
Although Western Electric (Bell Laboratory’s parent company) suggested Morita
and Ibuka use the transistor to make hearing aids, they decided instead to use
it in radios. In 1955, Tokyo Telecommunications Engineering Corporation
marketed the TR-55, Japan’s first transistor radio, and the rest, as they say,
is history. Soon thereafter, Morita rechristened the company as Sony, a name he
felt conveyed youthful energy and could be easily recognized outside Japan.
Today Sony is almost everywhere. Its businesses include
electronics, computer equipment, music, movies, games, and even life insurance.
It employs 190,000 people worldwide and does business on six continents. In
1999, Sony racked up sales of $63 billion; 31 percent of those came from Japan,
30 percent from the United States, and 22 percent from Europe. (To visit some
of Sony’s country-specific websites, go to www.sony.com and click on “Global
Sites.”)
Perhaps Sony’s most famous product is the Walkman.
Created in 1979, the Walkman capitalized on what some perceived as the start of
a global trend towards individualism. From a technological standpoint, the
Walkman, was fairly unspectacular, even by 1979 standards, but Sony’s marketing
efforts successfully focused on the freedom and independence the Walkman
provided. One ad depicted three pairs of shoes sitting next to a Walkman with
the tag line “Why man learned to walk.” By 2000 more than 250 million Walkmans
had been sold worldwide, but Sony was concerned. Studies had shown that
Generation Y (ages 14 to 24) viewed the Walkman as stodgy and outdated. So Sony
launched a $30 million advertising and marketing campaign to reposition the
product in the United States. The star of the new ads was Plato, a cool,
Walkman-wearing space creature. The choice of a nonhuman character was no
accident according to Ron Boire, head of Sony’s U.S. personal-mobile group. He
wanted a character that would appeal to the broadest possible range of ethnic
groups—thus, the space creature. Boire explains, “An alien is no one, so an
alien is everyone.”
Sony’s current vision, however, extends far beyond the
Walkman: to become a leader in broadband technologies. Sony looks forward to a
day when all of its products—televisions, DVDs, telephones, game machines,
computers, and so on—can communicate with one another and connect with the Web
on a persona network. A Sony executive provides an example of such technology
in action: “Say you are watching TV in the den, and your kids are playing their
music way too loud upstairs,” he says. “You could use your TV remote to call up
an onscreen control panel that would let you turn down your kids’ stereo, all
without having to get up from your recliner.”
Sony sees its new PlayStation2 filling a major role in
the Internet of the future. In March 2000, Sony introduced the PlayStation2 in
Japan and sold 1 million units within a week. Newsweek featured the PlayStation2 on its cover that spring, even
though it wasn’t offered in the United States until later in the year. Most
consumers probably bought PlayStation2 to play video games, but its potential
goes far beyond that. It is actually powerful enough to be adapted to guide a
ballistic missile. Sony envisions consumers turning to the PlayStation2 for not
only games but also movies, music, online shopping, and any other kind of
digital entertainment currently imaginable. Ken Kutaragi, president of Sony
Computer Entertainment, predicts the PlayStation2 will someday become as valuable
as the PC is today: “A lot of people always assumed the PC would be the machine
to control your home network. But the PC is a narrowband device that… has been
retrofitted to play videogames and interactive 3-D graphics. The PlayStation2
is designed from the ground up to be a broadband device.”
The PlayStation2 also reflects a changing attitude within
Sony regarding partnerships with other companies. Toshiba helped Sony design
the Emotion Engine, which powers the PlayStation2. In previous years, these kinds
of alliances were the exception rather than the rule with the Sony. Sony was
perceived as arrogant because it rarely cooperated with other companies,
preferring to develop and popularize new technologies on its own. Recently,
however, that has changed. Sony has worked with U.S. based Palm to develop a
new hand-held organizer with multimedia capabilities, cooperated with Intel to
create a set of standards for home networks, and launched a joint venture with
Cablevision to build a broadband network in the New York metropolitan area.
Nevertheless, some critics believe Sony remains too insular, looking on from
the sidelines while other companies join forces to create entertainment
powerhouses. Sony has no alliances with U.S. cable or television networks, raising
some doubts about its ability to fully develop its home Internet services. Sony
has talked with other music companies about possible joint venture, but nothing
has come to fruition.
Unlike many U.S.-based multinationals, Tokyo-based Sony
traditionally has marketed itself on a regional rather than a global basis. For
example, Sony has almost 50 different country-specific websites from which
consumers can order products. However, there are signs that strategy may be
changing, at least to some degree. Sony launched www.Sonystyle.com, a website
that is the company’s primary online outlet for selling movies, music, and
electronic products. Sony also plans to provide product service and support on
the site, and eventually software upgrades as well. The current main website
(www.sony.com) is mainly a source for corporate and investor information. Also,
in 1997 Sony embarked on a worldwide ad campaign to make itself and its
products more relevant in the eyes of younger consumers. Ironically, much of
Sony’s future growth may come from its own backyard. The primary buyers of
electronic and digital products are ages 15 to 40. It is estimated that by
2010, two-thirds of the people in the world in that age bracket will live in
Asia. Tokyo is already a powerful influence on Asian culture. Asia’s most
popular youth magazines are published in Tokyo, and most of the music Asian
young people listen to comes form Tokyo. So part of Sony’s challenge is to
continue to grow on a global scale while paying close attention to the
burgeoning market at home.
Immediately following World War II and for some years
thereafter, the label “Made in Japan” connoted cheap, shoddy, imitation
products. Today, for many people, that same label stands for excellence and
innovation. Certainly Sony can take much of the credit that transformation. Now
the question is whether Sony’s products and marketing efforts can keep pace (or
set the pace) in the upcoming age of digital convergence.
Question:
1.
Identify and discuss some of the cultural meanings for Sony
possessed by consumers in your country. Discuss how these cultural meaning were
developed and how they influence consumers’ behaviors (and affect and
cognition). What is the role of marketing strategies in creating and
maintaining (or modifying) these cultural meanings?
2.
It is often stated that the world is becoming smaller because
today people communicate relatively easily across time and distance. Discuss
whether that has been beneficial for Sony. What are some marketing challenges
it presents?
3.
What do you think about Sony’s tradition of region-specific
or nation-specific marketing? Would Sony be better served by working to create
a more uniform global image?
CASE: V Pleasant
Company
Samantha Parkington fights for women’s suffrage. Addy Walker
escapes from slavery. Kirsten Larson builds a life in the frontier. Characters
from feminist novel? No, these plucky heroines are part of The American Girls
Collection, a line of historical dolls that are the darlings of 7- to 12
year-olds. Christmas orders piled up so fast at Pleasant Co.—the privately held
doll-maker—that company vice presidents had to pack boxes in the warehouse.
Former president, Pleasant Rowland, who began the company
with royalties she received from writing primary school reading books knew her
vision had to be broad. Simply launching a me-too doll would have meant
failure.
Before Rowland got her idea she went shopping for dolls
for her two nieces. All she found were Barbies that wore spiked heels, drove
pink Corvettes, and looked as if they belonged in strip joints. Though industry
sources told her she couldn’t sell a mass market doll for over $40—some Barbies
cost less than $10—Rowland gambled that boomer parents would pay more for one
that was fun and educational.
Each of Pleasant Co.’s five dolls represents an era of
American history. Addy is from the Civil War, and Samantha is described as a
“bright Victorian beauty.” Parents can also buy historically accurate replicas
of clothes, furniture, and memorabilia, such as the June 6, 1944, Chicago Daily Tribune headlined “Allies Invade
France, made for Molly McIntire, the 1940s doll. The 18-inch dolls cost $84;
add in all the accessories, including $80 dresses for the doll’s owner, and the
price exceeds $1000. Every doll also stars in its own series of novels, with
titles like Kirsten Learns a Lesson Samantha Saves the Day. The
heroines go on adventures and cope with moral dilemmas; for example, Felicity
Merriman, a colonial girl, has to decide whether to continue her tea parties
while her father fights King
George Ill’s tea tax. Says Rowland: “We try to give girls chocolate cake with vitamins.”
George Ill’s tea tax. Says Rowland: “We try to give girls chocolate cake with vitamins.”
Pleasant Co. decided early on not to compete doll to doll
on toy store shelves. Defying industry wisdom, Rowland began selling only
through her own catalog. She counted on her dolls’ being so different that word
of mouth would take care of sales. She also coddled her customers. Pleasant Co.
opened a “hospital” for broken dolls, so when brother sticks a pair of scissors
through Molly’s head, Mom can return her to Pleasant Co. for repairs. For $35
the company does the surgery then mails Molly—now wearing a hospital gown and
carrying a certificate of health form the house doctor—home to recuperate.
Will Pleasant Co.’s dolls have legs? Rowland says movies,
CD-ROMs, and theme parks aren’t out of the question. But she’ll expand only as
long as she can keep the business special. She refuses to license her products
on T-shirts and lunch boxes, fearing that too much exposure would cheapen the
doll’s image. Says Rowland: “It never hurts to play hard to get.”
In 1998, Mattel, Inc., purchased Pleasant Co., which
continues to operate as an independent subsidiary. During the same year,
American Girl Place, the company’s first retail and entertainment site, opened
in downtown Chicago, and a second store opened in New York in 2003. The stores
are a little girl’s delight. Visitors can purchase dolls, books, and clothing;
view a musical revue; and have tea, lunch, or dinner at the Café at American
Girl Place. The Chicago store sold $35 million worth of products in 2003.
Question:
1.
Why do consumers pay $84 for a Pleasant Company doll when
they can buy other dolls much more cheaply at retail stores?
2.
Considering money, time, cognitive activity, and behavioral
effort costs, are Pleasant Company dolls more or less costly than dolls that
can be purchased at retail stores?
3.
What recommendations do you have for Pleasant Company to
increase sales and profits?
BUSINESS MANAGEMENT
Attempt Only 4
case study
CASE – 1: Where Do We
Go from Here?
As one of the many seminars held to discuss the corporate
response of family-owned business to liberalisation and globalisation, the
keynote Mr Gurcharan Das concluded his speech by saying, “In the end, I would
say that the success of Indian economy would depend on how the Indian industry
and business respond to the reform process.”
As the proceedings of the seminar
progressed it became clear that there was a difference of opinion in the
perception of participants. Those who were supporting the case for letting the
family-owned businesses face competition opined that such businesses in India
The participants critical of the
role of family business had this is to say: “There has been a tendency to mix
up family’s intent with that of businesses managed by them. There is a lack of
focus and business strategy. Family businesses have generally adopted a
short-term approach to business causing less purposeful investments in
specially critical areas such as employee development and product development.
Customers and development of marketing skills have been neglected.”
The valedictory session of the
Seminar attempted to bring out the issues clearly. It culminated in an agenda
for reform by the family businesses. The points highlighted in the agenda are:
- Indian family-owned business organisations need to professionalise management,
- they need to curtail the diversified of their business groups and impart a sharper focus to their business activities, and
- they need to pay greater attention to the development of human capital.
Question
Suppose you were an observer at the seminar. During tea and
lunch breaks you had an occasion to meet several people who were skeptical and
felt that the reform process was having only a superficial impact on the
corporates. Express your opinion that you form about the issues at the seminar.
CASE – 2 A Healthy Dose of Success
Muhammad Majeed represents a typical Indian who has created
success out of sheer hard work and commitment through his education and
expertise. At the age of 23 years, Majeed, after graduating in pharmacy from Kerala University ,
went to pursue higher studies in the US
SLL has over three dozen
products, and seven US
SLL thinks of its business as
“manufacturing and selling traditional standardized extracts and nutritional
and pharmaceutical fine chemicals”. Sabinsa, its US-based company, secures
contracts from the US
companies to manufacture certain chemicals in India
SLL looks forward to being a Rs
500-crore company by 2005 when the World Trade Organisation’s patenting regimes
comes into force.
Question
How will you define the business of SLL? Comment on the business
of SLL and your opinion on the likelihood of its success.
CASE – 3 No Chain, No Gain
Textile industry is one of the oldest industries in India India
RSWM is the flagship company of
the LNJ Bhilwara group. It has been the largest producer and trader of yarn in
the country and caters to the large demands for blended yarns and grey cloth
fabric used for children’s school uniform. In 1994, the yarn business faced a
severe crunch owing to overcapacity. From 1995 onward, RSWM became a late
follower of the industry trend as other competitors already moved up the value
chain.
Textile manufacturing is
basically constituted of the processes of spinning, weaving, processing, and
marketing. More than 50 per cent of the value is concentrated in weaving and
processing. Moving up the value chain from spinning involves large investments
in machinery and labour. Graduating to marketing requires getting closer to the
customers. This is the challenge that a traditional spinning mill like RSWM had
to face if it was to sustain itself in a highly competitive market.
At another level, for RSWM, it
was a matter of cultural transformation of the organisation long used to a
conservative, trader mentality. Imagine a company whose main driving force,
Shekhar Agarwal, Vice-Chairman and Managing Director having little interest in
watching Hindi movies signing up Sharukh Khan at a considerable price for
celebrity advertising. From the market side, it has long been troubled with its
commitment to the loyal middle-class customers as it had to simultaneously pay
attention to the upwardly mobile upper middle class customers. Then there was
the dilemma of being too many things to a wide range of audience. RSWM wanted
to have a stake in the export markets as well as keep its share in the rural
markets. It perceived itself as an efficient producer and wished to become a
flamboyant retailer. It excelled in basic textile processing yet dreamt of
attaining sophistication in in-house production of readymade garments. And all
this while it has been a late mover, losing out to early movers such as
Raymonds. No wonder it virtually landed up on the fringes of the industry, far
behind formidable competitors like Reliance, Grasim, and S.
Kumar .
Question
Suggest how should RSWM manage its value chain effectively.
Should it try to imitate the market leaders? If yes, why? If no, why not? What
alternatives routes to success do you propose?
CASE – 4 A
Very Intriguing Package
It is not quite often that a positive product feature
becomes an albatross around the neck of a company. VIP Industries had held sway
for over two decades in the organised Indian luggage market on the basis of the
durability of its moulded suitcases. Obviously, the customer perceives
value-for-money in the long-lasting, reasonably-priced Alfa brand of VIP
suitcases which sells 1.5 lakh pieces a month. But this means that having bought
one suitcase the customer can do with it for several years. Market research by
the company shows that an average Indian family pulls out the suitcase merely
for outstation travel a few times a year. Hence, there is no pressing need for
continual replacement of the old luggage.
The VIP products are made of
virgin polymer as compared to the recycled grade I and II polymers used by the
unorganised sector. They are subjected to stringent stress tests for quality
control.
VIP has a presence in a wide
range of the market segments within a price spectrum of Rs 295 to Rs 6,000
apiece. It is her that the competition from the unorganised sector hurts the
company most. VIP’s economically-priced brand, Alfa is widely imitated and sold
at much lower prices. This enables the unorganised sector to typically sell 20
times more than VIP can. The lower price threshold seems to be Rs 225 which in
nearly impossible for VIP to achieve given its cost structure. In the Rs 1500
plus premium range, VIP has to contend with Samsonite which is a formidable
competitor.
The obvious tactic for VIP has
been to cut costs. Distribution and logistics is one area where valiant efforts
have been made at cost reduction. VIP has four factories located in heart of India
Severe pressure on sales has
resulted in VIP Industries offering discounts and unwittingly entering into a
disastrous price war. Promotion of a high visibility product suffered and
advertising expenditure has been ruthlessly curtailed from the earlier Rs 11
crore to Rs 2 crore now. Its lead advertising agency is HTA. Action on the
promotion front has seen reorganisation of the brand portfolio. Incidentally,
earlier its successful and popular Kal
bhi aaj bhi campaign served to reinforce its durability theme.
There are several roadblocks that
the company has to negotiate. Increase in population, rising propensity of
Indian to travel, and the insatiable thirst of customers for state-of-the-art
technological products with newer designs and innovation, all at an affordable
price are the opportunities and challenges before the company. Introduction of
new brands, Mantra and Skybags, product range of diversification to include
children’s bags and ladies’ bags, strategic alliance with Europe’s leading
luggage-maker—Delsey—are some of the steps taken by the company.
Yet, caught in its self spun web
of past successes, VIP is today faced with an uncertain future.
Question
How should the VIP Industries get out of the bind that it
finds itself in? Outline the contours of the marketing plans and policies that
VIP needs to formulate and implement?
CASE – 5 Let There be Light
Traditionally, power plants, being capital-intensive, have
been set up by the public sector and state electricity boards (SEBs) in India
The Madhya Pradesh State
Electricity Board (MPSEB) is not much different from its counterparts in other
states. It faces similar problems and is opting for identical solutions. The
common elements in the power sector reforms are: corporatisation by breaking
the SEB into generation, transmission, and distribution; financial
restructuring including debt and interest payment rescheduling; reduction of
manpower; and improvements in operational efficiency.
Public utilities, like SEBS, have
to be commercially viable in order to survive. Yet historically, this aspect of
SEB as an organisation has been sacrificed at the altar of political
expediency. The ruling party, irrespective of whether it is the Congress at
present or the Bharatiya Janata Party earlier, have made pre-election promises
of supplying free or heavily-subsidised power. Digvijay Singh, the present
chief minister of Madhya Pradesh, a populist politician earlier, on longer sees
electoral benefit in providing free electricity. “It pays to pay” is his
refrain today, whether it is healthcare or electricity.
Bold steps—bold, as they still
carry the risk of a political fallout with fiery BJP leader Uma Bharti
breathing down Digvijay’s neck or the silent schemers of his own party working
overtime behind the scenes—have been initiated to reform the energy sector in
Madhya Pradesh. MPSEB is to be divided into generation, transmission, and
distribution (T&D), and supply companies. Financial management and cash
flow management is to be improved. The retirement age of MPSEB employees has
been reduced from 60 to 58 years. Effective operational control is sought to be
exercised by metering power supply at division / district level to fix
responsibility for T & D losses and power thefts. A sustained drive is on
to identify non-paying consumers, install meters, and make them pay their bills
regularly.
MPSEB’s annual losses are to the
tune of a massive Rs 1,600 crore; total liabilities are estimated to be Rs
20,000 crore. Undeniably, are parameters indicating the rot that has corroded
the system.
At one level, the reform of the
energy sector is a political action but at another, and perhaps, a more
fundamental level, it is a question of managing an organisation strategically
through strategic actions designed to turn around a vital public utility.
Question
Analyse the problems of the MPSEB from the strategic
management perspective. Do you feel that the actions taken or being
contemplated are strategic in nature? Propose what else needs to be done to
make the MPSEB a viable organisation.
BUSINESS ETHICS
Section I
CASE STUDY:
No Minor Offence
Census data reveals high level of under – age marriages
Census statics are
generally full of surprises. But this one is startling: 6.4 million Indians under the age of 18 are
already married. That’s not all. As many as 1.3 lakh girls under 18 are widowed
and another 56,000 are divorced or separated. The legal marriageable age for
women is 18, for men 21. A century and a half after Ishwarchandra Vidyasagar’s
crusade against child marriage, the practice persists. Obviously, the Child
Marriage Restraint Act, 1929, exists only on paper and has not been able to
deter parents from marrying off under –aged sons and daughters. The incidence
is understandably higher in rural areas, but not low as expected in the cities.
It’s more common in the BIMARU states, with Rajasthan leading the way ironically,
the Act renders all under-age marriages illegal but not void, which means that
an illegally married couple can stay married. It is, therefore, violated with
impunity and hardly anyone is ever hauled up. Despite the fact that child
marriage is a criminal offence, action is rarely taken by the police. Even
civil society remains a passive spectator. There’s not enough penalty-a fine of
Rs.1, 000 and imprisonment up to three shows that the state does not view the
crime seriously.
The practice is
linked to the curse of dowry. “Chhota Chhora dhhej kam mangta” (the younger the
groom, the smaller the dowry demand) justifies many such alliances. The
grimmest part of the scenario is the physical havoc that early marriage wreaks
upon girls who are too young to bear the burden of maternal and child
mortality. There is also the belief that a daughters’ marriage is a scared
obligation that parents must fulfill at the earliest. A new legislation,
Prevention of Child marriages Bill, 2004, to replace the loophole-ridden 1929
Act is awaiting parliament’s approval. But legislation alone is not enough.
Compulsory registration of marriages is one way of tackling the problem.
Creating awareness about the ill-effects of such marriages and mobilizing
committed social workers to intervence are others. However, social workers have
to often function in hostile conditions. The 1992 case of Bhanwari Devi, the
Rajasthan saathin who was raped for preventing a child marriage, is chilling.
In the end only education, economic security and increasing empowerment of
women can eliminate the problem.
Questions
1. Discuss ethically the drawbacks you find in the under-age
marriages?
2. How does the increasing empowerment of women help
eliminate problems if this type?
Section II
Solve any six questions:
Q2.
a)
What are moral hazards and why is it important?
b)
What is emergent strategy?
Q3.
a)
What are the objectives of a business, and which
is the most important?
b)
How many steps are there in the decision making
process and what are they?
Q4.
a)
What CSR issues exist for NFPs?
b)
What measures of performance are typically used
by these organizations?
Q5.
a)
How globalization effect CSR?
b)
Is globalization threat for CSR?
Q6.
a)
Why is the measurement of performance important?
b)
What is ISO14000 and what factors does it cover?
Q7.
a)
What are the responsibilities of business in
their corporate decision?
b)
What is the relationship between CSR and
corporate behavior?
Q8.
a)
What are the 4 factors of sustainability?
b)
What are the factors of distributable
sustainability?
Q9.
a)
What
justification does stakeholder Theory use for considering stakeholder?
b)
What are the steps involved in the incorporation
of environmental accounting into the risk evaluation system of an organization?
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