Cases in Organisational Behaviour and Human Resource Management 9780070091108, 0070091102

Table of contents :
Cover
Contents
Part 1 BACKGROUND
Case Method of Teaching/Training in Management
Part 2 ORGANISATIONAL BEHAVIOUR
Introduction
Case 1: ABC Undertaking
Case 2: Alpha Chennai Plant
Case 3: BEC Limited
Case 4: Bharat Rayons
Case 5: Farmers Empowerment—An ITC Way
Case 6: Government’s Dilemma
Case 7: International Market Research Company
Case 8: Mahila Mandal
Case 9: Manufacturers Limited
Case 10: Modernisation of Mind at Tata Steel 5
Case 11: National Electric Equipment Company
Case 12: Ramson Company
Case 13: Rash Pharmaceuticals
Case 14: Rewa—The Research Associate
Case 15: Techtel Company
Case 16: Transtel Electronics
Case 17: Universal Limited
Part 3 HUMAN RESOURCE MANAGEMENT
Introduction
Cases Case 18: Arogya Baginis in Vejalpur Municipality
Case 19: Bharat Arms Company (BACO)
Case 20: Bharat Automobile Company
Case 21: Employee Participation at Bank of Baroda
Case 22: Fitter Murari
Case 23: Germalim Limited
Case 24: Harnam Singh—Crane Driver
Case 25: Indian Company
Case 26: Management’s Dilemmas
Case 27: Marine Electric Company
Case 28: National Oil Company
Case 29: Quality Engineering Works
Case 30: Tiger Toys
Case 31: Vadatra International Solutions
Case 32: Driver Veer Singh

Citation preview

Cases in ORGANISATIONAL BEHAVIOUR and HUMAN RESOURCE MANAGEMENT

Cases in ORGANISATIONAL BEHAVIOUR and HUMAN RESOURCE MANAGEMENT

Editors MIRZA S. SAIYADAIN J. S. SODHI RAMA J. JOSHI Published in association with Shri Ram Centre for Industrial Relations and Human Resources New Delhi

Tata McGraw Hill Education Private Limited NEW DELHI McGraw-Hill Offices New Delhi New York St Louis San Francisco Auckland Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto

Tata McGraw Hill Published by the Tata McGraw Hill Education Private Limited, 7 West Patel Nagar, New Delhi 110 008. Cases in Organisational Behaviour and Human Resource Management Copyright © 2009, Tata McGraw Hill Education Private Limited First reprint 2010 RLLLCDLFRXYZL No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers. The program listings (if any) may be entered, stored and executed in a computer system, but they may not be reproduced for publication. This edition can be exported from India only by the publishers, Tata McGraw Hill Education Private Limited ISBN-13: 978-0-07-015257-1 ISBN-10: 0-07-015257-8 Managing Director: Ajay Shukla Head—Higher Education Publishing: Vibha Mahajan Publishing Manager—B&E/HSSL: Tapas K Maji Assistant Sponsoring Editor—B&E/HSSL: Hemant K Jha Assistant Manager (Editorial Services): Anubha Srivastava Senior Production Manager: Manohar Lal General Manager—Marketing (Higher Ed): Michael J Cruz Product Manager: Vijay S Jagannathan Senior Product Specialist: Daisy Sachdeva General Manager—Production: Rajender P Ghansela Assistant General Manager—Production: B L Dogra Information contained in this work has been obtained by Tata McGraw Hill, from sources believed to be reliable. However, neither Tata McGraw Hill nor its authors guarantee the accuracy or completeness of any information published herein, and neither Tata McGraw Hill nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that Tata McGraw Hill and its authors are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought. Typeset at Vijay Nicole Imprints Pvt. Ltd., 16/17, 2nd Street, Anna Nagar Extension, Valachery, Chennai 600 042 and printed at Avon Printers, 30-A, Delhi - 110 094 Cover Design: K Anoop Cover Printer: SDR Printers

Preface

F

or a long time, a need has been felt to develop cases in the area of Organisational Behaviour and Human Resource Management. While some attempts have been made in the past.

These cases however, for some reasons, do not lead to decision making situations in specific areas. They are good for general discussions in the general area of management. A case has to have a “pain point”, which would require the managers to take decisions to manage the pain point, which is basically the focus of management education. In this book, cases have been put together in the areas of organisational behaviour and human resource management. All these cases require processing of information, analysis of the existing information and drawing conclusions leading to a decision. There are 17 cases in Organisational Behaviour dealing with issues such as women employment, sexual harassment, work culture, organisational behaviour, job satisfaction, mentoring, communication, employee commitment, interpersonal conflict, team management, leadership style and employment. There are 15 cases in Human Resources Management. Their focus varies from discipline management, promotion, workers participation, union management, recruitment and selection, training and development, career planning and compensation management. In addition, there is a detailed note on case method of teaching, training and notes on the general introduction of Organisational Behaviour and Human Resource Management. We believe the use of these cases in courses on Organisational Behaviour and Human Resource Management would improve the quality of learning in the class and provide students a grip on the real life situations facing the managers. They would help them in thinking about policy formulation and policy implementation in these areas. Mirza S. Saiyadain J. S. Sodhi Rama J. Joshi

Acknowledgements This book is the result of the initiative taken by the Shri Ram Centre for Industrial Relations and Human Resources. This work would not have been completed without the contributions made by a number of scholars whose cases have been included in this volume. We acknowledge their contribution and are thankful to them. The manuscript was typed by Ms. J. Pawa, Ms. Jaimala and Ms. Reeta Tangri of Shri Ram Centre for Industrial Relations and Human Resources. They deserve our special thanks.

Mirza S. Saiyadain J. S. Sodhi Rama J. Joshi

Contributors 1.

A. C. Nanda, Ex. Faculty, Shri Ram Centre for Industrial Relations and Human

2.

Resources, New Delhi. Anima Sharma, Assistant Professor, Shri Ram Centre for Industrial Relations and Human Resources.

3. 4. 5.

Archana Tyagi, Ex. Professor, Institute of Management Technology, Ghaziabad. B. D. Singh, Professor, Institute of Management Technology, Ghaziabad. Bijai N. Zaveri, Research Scholar, Gujarat University, Baroda.

6. 7.

Daisy Chauhan, Assistant Professor, Management Development Institute, Gurgaon. Govinda Tamang, Senior Faculty, Central University, Nepal.

8.

J. S. Sodhi, Professor and Director, Sri Ram Centre for Industrial Relations and Human Resources, New Delhi.

9.

K. B. Akhilesh, Professor, Department of Management Studies, Indian Institute of Science, Bangalore.

10. 11. 12.

K. D. Kohli, Ex-Deputy Director General, Ordinance Factories. K. K. Verma, Director, Ac ademy of HR Development, Ahmedabad. Kakoli Sen, Assistant Professor, IILM Institute of Higher Education, New Delhi.

13.

M. S. Ramanujam, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi.

14. 15.

Mirza S. Saiyadain, Ex. Professor, Indian Institute of Management, Ahmedabad. Prashant Amin, Faculty, Gujarat University, Baroda.

16.

Poornima Kishinchand, Faculty, Saint Gits Institute of Management, Pathamuttan,

17.

Kerala. Rama J. Joshi, Professor, Shri Ram Centre for Industrial Relations and Human

18.

Resources, New Delhi. S. K. Roy, Ex. Professor, Shri Ram Centre for Industrial Relations and Human

19.

Resources, New Delhi. S. P. Chauhan, Professor, Shri Ram Centre for Industrial Relations and Human

20. 21. 22.

Resources, New Delhi. Sangeetha Rajadurai, Faculty, Tata Dhan Academy. Smitha Pillai, Ex. Student, Institute of Management Technology, Ghaziabad. Vandana Parashar, Assistant Professor, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi.

Contents Preface Acknowledgements Contributors Part 1

v vii ix

BACKGROUND

1

Case Method of Teaching/Training in Management 3 Part 2

ORGANISATIONAL BEHAVIOUR

15

Introduction 17 Cases Case 1:

ABC Undertaking

Case 2: Case 3:

Alpha Chennai Plant 27 BEC Limited 32

Case 4: Case 5: Case 6:

Bharat Rayons 35 Farmers Empowerment—An ITC Way 38 Government’s Dilemma 42

Case 7: Case 8: Case 9:

International Market Research Company 46 Mahila Mandal 49 Manufacturers Limited 53

23

Case 10: Modernisation of Mind at Tata Steel 56 Case 11: National Electric Equipment Company 62 Case 12: Case 13: Case 14: Case 15: Case 16: Case 17: Part 3

Ramson Company 66 Rash Pharmaceuticals 68 Rewa—The Research Associate 73 Techtel Company 78 Transtel Electronics 82 Universal Limited 85

HUMAN RESOURCE MANAGEMENT

87

Introduction 89 Cases Case 18: Arogya Baginis in Vejalpur Municipality 97 Case 19: Bharat Arms Company (BACO)

104

Contents

xii

Case 20: Bharat Automobile Company

107

Case 21: Employee Participation at Bank of Baroda 110 Case 22: Fitter Murari 113 Case 23: Germalim Limited 115 Case 24: Harnam Singh—Crane Driver 121 Case 25: Indian Company 125 Case 26: Management’s Dilemmas 130 Case 27: Marine Electric Company

132

Case 28: National Oil Company 136 Case 29: Quality Engineering Works

139

Case 30: Tiger Toys 142 Case 31: Vadatra International Solutions 145 Case 32: Driver Veer Singh 149

Part 1 INTRODUCTION

Case Method of Teaching/ Training in Management1

M

ore than seven decades ago, Dewing (1931) catalogued three theories of education—General Education (accumulation of facts by people through

ages), Special Education (more intensive and exhaustive cataloguing of the results of experience along a certain direction) and Specialised Education (mastery of the facts in a field of study). Business education is a specialised field of education consisting of recapitulations of the results of business experiences “arranged, catalogued, systemised and then presented without the lumber of discarded precedents.” Perhaps, one of the most appropriate pedagogy to disseminate specialised education in business is the case method.

What is a Case? The case method of teaching/training in management has gained considerable popularity in schools of business management all over the world. The teaching as developed by Harvard University is designed to simulate real life problems faced by managers in various functional areas. Unlike other methods of This write-up has been prepared by Mirza S. Saiyadain.

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teaching/training, the case method stimulates thinking, analysis and problem solving approach to learning and is extremely useful in professional course. It presents a real life event in natural settings and enables the participants to address the how and why questions about real life events (Mitchell, 1983). A case is a factual account of an event or events that have taken place in an organisation. It is a unit of activity embedded in the real world which can only be studied or understood in a context (Graham, 20000). While the case events and data are factual, many dates and places are disguised to prevent recognition of the original organisation and/or its employees. Some cases not only present the actual situation but the decisions taken by the managers. On the other hand, other cases simply describe the situation. In the first case, the focus is not to pass the judgement on the decision taken by manager but to see if participants agree or disagree with the decision and why. In the second case, the focus is more on analysis, diagnosis and decision making. A case is a bounded system and can be defined as a coherent entity specific to an individual, an event, a process, an organisation or a period of time (Yin, 2004). According to Stake (1995) such a bounded system has to be seen in a context. Cases can also vary in terms of whether there is one single way of handling the situation or whether each situation can generate different decisions depending upon the assumptions and analysis of available information. In the first category, one would generally find cases in finance and accounts, computers, quantitative area and to some extent, production and production/operation related situations. The cases in the second category would generally fall in the broad areas of organisational behaviour, marketing and strategic management. A case has a time structure and presents a sequence of events overtime. The structure may be narrative, quantitative or expository. A case may relate to a specific area of working, may be prepared from field study or from published material. Case is “learning by doing.” It is an exercise in identifying, diagnosing and recommending a course of action by analysing the problem situation. Hence, it involves independent and constructive thinking and responsible judgement. This teaching technology is designed to develop amongst participants the ability to reason and arrive at a conclusion for action.

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Whether cases are used to make presentation as an illustration, role play or just discussion in the class, they help participants to learn and develop certain skills characteristic of effective managers. These skills develop by taking case studies seriously, listening and appreciating different point of views and learning from each other. Case studies require prior preparation, active participation and quick assimilation of various point of views. Hence, they contribute in developing diagnostic and conceptual skills. They help in presentation and communication skills and enhance data processing and conclusion drawing. They force the participants to learn to identify justifications to back up their opinions and point of view. These skills cannot be inculcated through lectures where participants are passive receivers of information. In an interesting note, two research assistants involved in writing cases and sitting through case discussion at Harvard Business School, identified four stages of learning through cases when students are exposed to this kind of teaching (Schoen and Sprague, 1954). The first stage consists of an initial reaction of frustration because the approach of teaching technology is new and cases do not lead to a comfort feeling of finding a “correct” answer. Additionally, they are not allowed to fall back on their experiences or the experiences of others. Short cut solutions or “theoretical shadow boxing” will not clarify issues or unravel real problems. This stage is followed by a natural curiosity to find how the others have solved the problem. The participants seek exposition of techniques, approaches, data and information from others as well as from the case. In the third stage, the participants develop an insight into their personal make up, learn from the acceptance or rejection of their views from other thinking participants and tends to re-evaluate their own thinking, analysis and conclusions. They realise that there cannot be a single way but multiple ways of solving a business problem. Finally, as they get more practice in analysing managerial problems, they learn a vocabulary, systems of relating variables, different perspectives and confidence in handling managerial problem and take decisions.

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Learning DeCision-Making One of the major objectives of management education is to assist participants to take decisions given the managerial problems in case studies. Decision making is not an easy job. Some time ago, a Fortune magazine survey showed that most executives had many misgivings about decision-making (Cooper, 1961). The feelings of most of them were best summarised by one executive who said, “You don’t know how you do it; you just do it” These misgivings could partially be the result of one or more of the following reasons: 1.

A relative inability of the decision maker to identify discrete stages in the decision making process.

2.

Since, the right to take decisions symbolises relative value, authority, prestige and pay level, many executives are eager to have such right not because they can take meaningful decision but because it gives them the authority.

3.

The misgiving could also be caused by the inability of the executives to be really convinced of the decisions they make. Most decisions are usually accompanied by doubts and anxieties. Modern management theory has now been able to provide several basic

frameworks that can, to a large extent, control some of the misgivings or reasons for such misgivings. Effective decision making requires an understanding of the meaning of decision and the process involved in decision making. A decision is generally defined as a choice from amongst a variety of available alternatives. Choice itself is a function of the objectives that one has set about leading to an action plan. Choice also involves an element of uncertainty. Although one would expect that at the time of making a choice, one would have taken uncertainty into account, we also know that foreseeing all uncertainties is humanly impossible. Hence some element of doubt always continues to exist in all decisions. Others have seen decision more in a dictionary sense of the meaning where decision is a conclusion or termination of a process. It has a sense of

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finality, a settlement, and an outcome. However, an interesting aspect of this meaning is that the end point of one process is not seen as a final termination but also as a starting point of another process. Hence, decision-making is characterised by a continuous process. Over the years, a model of decision- making has been developed by the author, which consists of nine stages of problem solving. The basic assumption is that each managerial situation presents a problem, which needs to be solved by taking a decision. These stages are given below. 1.

Defining a Problem In order to find a solution of the problem that a manager is facing, the problem needs to be identified. This is a very crucial stage because a correct identification of the problem can lead to an effective decision. In most cases, managers tend to look at the surface of a problem because of the ease in defining it.

2.

At this stage it is necessary to justify why a

Establishing a Problem

particular problem has been identified. The decision maker must find data, facts, figures or any other information from the case situation to justify his/her belief in the problem. It is interesting to note that one is not looking for the reasons of the problem because it is too late but information to establish the problem. 3.

Defining Objectives

Given the nature of the problem and its

establishment, it is what a manager hopes to achieve. The objective function has to be consistent with the nature of the problem. 4.

Generating Alternatives

Since a decision is defined as a choice

between the alternatives, a number of alternatives need to identified or generated having a bearing on the problem. 5.

Developing Criteria

In order to make choices between the

alternatives, some criteria need to be developed, which should be used to evaluate the various alternatives. Criteria are touchstones, they verify the worth of alternatives. 6.

Evaluating of Alternative It is imperative that all alternatives are evaluated against all criteria. Absence of this condition will not

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generate the basis for comparison which is an essential condition for the choice. 7.

Prioritizatising of Alternatives Once the alternatives are evaluated against all the criteria, it becomes necessary to ranking them order depending upon the number of criteria they satisfy. The alternative that satisfies most of the criteria gets the top priority followed by those in descending order.

8.

Deciding on the Action Plan This is nothing but accepting the top most alternative as a decision leading to an action plan to manage the problem identified above.

9.

Preparing for Contingencies Plan

It is possible that once the action

plan is identified for some unforeseen reasons, it may not work at the time of implementation. Hence, it is necessary to have contingency plan(s). These are nothing but the remaining alternatives starting from the next best. The above stages are sequentially arranged, suggesting there by that in taking a decision the process has to begin with the problem definition followed by the other eight stages in the order. Very often, managers in the heat of moment take decisions first and then try to post facto justify them. Such an attempt may be time saving but does not guarantee the effective viability of the decision or the action that follows the decision. The second important element of the stages of problem solving is that different situations may require focusing on different stages of the problem solving. For example, for selecting an employee the important step may be to define the criteria. Yet the beginning has to be made from problem definition because unless we know why there is a need to select employee, the rest would not make much sense.

teaChing through Cases A case is essentially an account of a crisis. It presents a conflict, a tension between alternative courses of action that bring different view points and contentions and that it must be resolved by a decision. It presents a complexity, having no single correct answer but still demanding a response from the

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participants. So if it is strictly participant centric technology, what is the role of a teacher? Teaching cases (also know as case studies) involves engaging participants in discussion, helping them by providing direction, questioning their solutions — in short, helping them to think. This could be effectively achieved by the following: 1.

The first task in teaching a case is to place the case in a context or the framework of a course. Basically, it means asking what the teacher expects the participants to learn. Whether it is an application of a concept or a theory or the participants learn concept or theory through discussion on a case situation.

2.

In the context of the above, it becomes necessary to provide reading material dealing with the context or a framework in the course. This could be either an existing reading or a text specially prepared for the session. This is also necessary because the same case can be used for several courses.

3.

Preparation is the foundation of case discussion. Participants should be asked to read the case (distributed in advance) carefully, process the information in the case and come up with some tentative points and conclusions. Understanding of case data is a precursor for meaningful case discussion. Participants should also be encouraged to have preliminary discussion with other participants either individually or in groups. Experience has shown that if a group consists of participants with different academic backgrounds, understanding of case data can be facilitated for those not familiar with the concepts of a different field of study. For example, a case in production/operation for those with non-engineering background could be made more easy by those with engineering background in the group.

4.

Some cases are followed by discussion questions or questions provided by the teacher to help the students to prepare the case. A meaningful discussion often gets restricted because the participants try to answer the questions and in the process miss out some of the

C a s e s in O B a n d H R M a n a g e m e n t

10

important information that may be extremely useful but does not fall within the purview of the questions. 5.

One of the major roles of the teacher is to seek involvement of all the participants. Not all participants are vocal or bold enough to present their points. They may have good ideas but are too shy to present them. Not only this, but a large number of ideas make the class discussion vibrant and interesting. A passive listener in the class may make a short remark, which may change the direction of discussion, or a reanalysis of the ideas already presented.

6.

Teaching cases requires managing process. A teacher needs to ask questions that help participants in diagnosing the problem and drawing conclusions. An attempt should be made to question the participants on the viability of their conclusions or decisions suggested by them. This is based on the assumption that there is not a single problem, which is not capable of atleast two intelligent solutions. Such an attempt helps participants to realise that there could be another way of examining the same problem. This is often referred to as consequence management.

7.

It is a useful exercise to record comments made by participants on the chalk board/white board. Such an exercise helps in tracking the discussion, identifying similarities and differences amongst the points made by the participants and sharply focus on the major issues and concerns in the case. It also helps in summarising the discussion before the session gets over.

8.

Teachers may also be tempted to provide their own solutions to a problem situation. Given the nature of teacher-taught relationship, teachers solutions might become the gospel truth for the participants. Cases should be used with a clear understanding that the purpose of business education is not to teach ones understanding of the truth but to teach them to think in the presence of new situations in an ever changing environment. Teaching by case method consists of

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class discussion of possibilities, probabilities and expedients. Such discussion rests on the wise balancing of probable results, and in this balancing the teacher has little to contribute except to provide direction, question the viability and show relationship between various point of views and assist them in generating effective action plans. Engaging participants in discussion, and leading them through their own explanations is what a teacher is supposed to do in the class.

Writing Cases A case requires the participants to analyse a situation, exercise judgement, and make suggestions as to what to do in the circumstances described in the case. Essentially a decision has to be made in the light of uncertainity. This also requires formulation of an action plan. While there is no standard format for writing a case, Reynold (1980) has suggested a number of steps that should be followed. According to him, the case should have an opening section dealing with the brief history of the organisation. This should be followed by main case body consisting of an expanded description of the problem situation with relevant data. Finally, a closing section consisting of the scenario for the need to solve the problem. Before writing the case, the case writer must ask the question, What is this case about or what does the writer or user wants the participants to learn from this case? Depending on the need, the case can be developed from the published material and secondary sources of information or by interviewing company executives. In the later case, Culliton (1954) has suggested a three stage process consisting of before, during and after the interview. Before the interview, the case writer should find a “lead”. One can spot a lead from a variety of sources such as, a casual chat with the company executive, an article in the journal/magazine, a newspaper advertisement, etc. This should be followed by getting to know the organisation. It is generally helpful if top executives are taken in confidence before the appointments are made and information is sought. During the interview, there is a need to explain the

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1

policy of writing a case, ensuring confidentiality and taking notes with the prior permission. After the interview is over, an attempt should be made to immediately write the interview data and then develop a full length case. However, before the case is used for discussion, it is absolutely necessary to submit a draft to the executive and seek their permission to use the case for academic purpose. If asked, names and other details must be disguised. Following are important considerations in writing cases: 1.

The first thing to remember about writing a case is that it should have a problem requiring a solution. Hence, it should have enough information in it for the participants to identify and understand the problem and after analysing it they should be able to arrive at a proposed action plan.

2.

The case writer has to keep the audience (participants) in mind. Participants may not be familiar with the background details and the terminology used in the case. Hence, it is necessary to keep jargons to the minimum., However, if this is not possible, explanations of the terms used must be provided in the case.

3.

A case should be written in a narrative format and the situation should be presented as it happened. Relevant details of the organisation, its structure and strategies should also be included as they provide the context to examine the situation.

4.

A case may take many forms from a traditional paper based document to a video, a film or an audio recording.

5.

Questions are often raised about the length of a case. There is no standard format. A case can be as short as a single paragraph or a complex many page document with graphs, charts and annexures.

6.

A good case should begin with the “pain points” or with the end in view. This is followed by reverse engineering the case to produce an experience to find a solution to the problem causing the pain.

7.

Ending the case is important. Since the case presents a conflict situation, a manager should take a decision to manage the pain point.

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One can also end by saying if you are a manager in this situation what would you do and why. 8.

Some cases present a series of questions at the end of the case. There is some debate whether this is the most relevant way to learn from the case. If the larger purpose of the case learning is to process information, analyse it and draw conclusions, any attempt to provide questions would narrow the focus of learning. Participants would try to find answers to the questions given at the end of the case, rather than learn from the analysis of the situation.

9.

A case does not illustrate the right or wrong way of handling the managerial situation. Hence all cases should have a footnote to say that, “This case is prepared for class discussion and does not illustrate effective or ineffective handling of managerial situation.”

teaChing note Teaching note is a communication between the author of the case and the instructor using the case. The basic purpose of the teaching note is to help the instructor to understand the reason the case was written, the questions that may arise from it and the theoretical points that might be raised during the discussion. Generally, a teaching note begins with a short description of the case. This is followed by the learning objectives. Some teaching notes also provide a description of the discussion outline to help the instructor to teach the case. The author might also provide some details about the concept or theories that ought to be understood through the case. While, it is useful to understand the author’s objective in preparing the case, there is some concern about its utility in achieving the objective of education through cases. If the teaching note is too prescriptive, it might discourage the instructor and the participants from working independently with the case material. They would tend to depend on the interpretations provided in the teaching note.

referenCes Cooper, J. D. (1961), The Art of Decision Making, New York: Double Day. Culliton, J. W. (1954), Writing business case. In M. P. Mcnair and A.C.Hersum (Eds) Case Method at Harvard Business School, NewYork: McGraw Hill. Dewing, A. S. (1931), An Introduction to the use of Cases. In Cecil E. Fraser (Ed.) The Case Method of Instructions, New York: McGraw Hill. Graham, B. (2000), Case Study Research Method, London: Continuum. Mitchell, J. C. (1983), Case and Situation Analysis, Sociological Review, 31(2), pp.187-211. Reynold, J. I. (1980), Case Method in Management Development: Guide for Effective Use, Geneva: International Labour Organisation. Schoen, D. R. and Sprague, P. A. (1954), What is the case method? In M.P. Mcnair and A.C. Hersum (Eds.) Case Method at Harvard Business School, New York: McGraw Hill. Stake, R. (1995), The Art of Case Study Research, London: Sage. Yin, R. (2004), The Case Study Anthology, London: Sage.

Part 2 ORGANISATIONAL bEHAVIOUR

Introduction2

T

he last two decades have witnessed substantive transformation of the Indian society from a basically agrarian society to a dynamic, industrial

society with comparatively higher levels of education and standard of living. This progress nevertheless has its flip side. Along with progress we find ourselves in the midst of conflict — conflict between nations, castes/classes, management and workers, among peers and even among neighbours. Issues such as these cannot be solved by scientific and technical skills alone; these require social skills. Many of our most critical problems are not in the world of things but in the world of people. Our greatest problem as human beings has been the inability to secure cooperation and understanding with others. Organisational Behaviour (OB) helps us to develop this understanding and cooperation. It is the study and application of knowledge about how people, individuals, and groups act in organisations. It does this by taking a system approach. That is, it interprets people-organisation relationships in terms of the whole person, whole group, whole organisation, and whole social system. Its purpose is to build better relationships by achieving human objectives, organisational objectives, and social objectives. This write-up has been prepared by Rama J. Joshi.

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1

A study and review of the functions, roles, skills, activities and approaches to management reveals the paramount importance of managing people in organisations. Regardless of whether it is called “the leading function”, “interpersonal roles”, “human skills”, or “human resource management, communication and networking activities”, it is well recognised today that managers need to develop their people skills if they are going to be effective and successful. The discipline on which people skills are based is called “organisational behaviour”. Organisational Behaviour (OB) is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organisations. In other words, it is a distinct area of expertise with a common body of knowledge. This body of knowledge is built on contributions from a number of behavioural disciplines, namely psychology, social psychology, sociology and anthropology. Psychology’s contributions have been mainly at the individual or micro level of analysis, while the other disciplines have contributed to our understanding of macro concepts such as group processes and organisation. Thus, there are three levels at which behaviour is studied: individual, group and structure. The knowledge gained about individuals and groups and the effect of structure on behaviour is applied in order to make organisations work more effectively. Thus, simply stated, OB is concerned with the study of what people do in an organisation and how their behaviour affects the organisation’s performance. Performance, productivity, job satisfaction, absenteeism, turnover, organisational citizenship behaviour are some of the outcome variables that we wish to explain or predict through a study of organisational behaviour. What are the determinants of these outcome variables? At the individual level the biographical characteristics, perception, individual decision making and motivation affect human behaviour. The group level variables include group decision making, team work, leadership and trust, conflict, power and politics, etc. At the structural level, the design of formal organisation, organisational culture and the human resource policies all have an impact on organisational behaviour.

Or ganis a t io n al B e ha vi ou r

signifiCanCe of oB The significance of OB stems from (i) its contribution to ‘people skills’ and (ii) ‘building organisational performance.’ There are two aspects of people skills: understanding people and getting them to work effectively. Understanding people: The field of OB provides an understanding of why people behave as they do in organisations. There is an emphasis on projecting the employee as a whole person, exposed to varied stresses, having fears, expectations, frustrations, etc. impacting on his performance. He is the sum of inherent abilities, acquired knowledge and skills. His efficiency depends upon recognition of human dignity, education, training and personal development which can all be enhanced through motivation. Getting people to work effectively: A business executive must spend a sizable amount of his time to people’s problems in order to motivate his subordinates to do work/improve his performance. In this context an executive’s managerial and leadership skills assume great importance. Contribution to organisational performance: The significance of OB is illustrated by the following equation: Ability X Motivation = Human performance. In this equation ability is the product of knowledge and skill while motivation stems from an individual’s attitudes in a given situation. Thus, Knowledge X Skill = Ability and Attitude X Situation = Motivation. There are a number of situational factors embracing the physical and social climate of work. But human performance is also coupled with other resources such as tools, power and material for achieving overall performance. This is illustrated in the equation: Human performance X Resource = Organisational performance. Understanding organisational behaviour has never been more important for managers than it is today. A quick look at a few of the dramatic changes now taking place in organisations supports this claim. For instance, the typical employee is getting older; more and more women and people of backward classes are in the workplace; corporate downsizing and the heavy use of temporary and/or contract workers are severing the bonds of loyalty that

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historically tied many employees to their employers; and global competition is requiring employees to become more flexible and to learn to cope with rapid change. The war on terror has brought to the forefront the challenges of working with and managing people during uncertain times. In short, there are a lot of challenges and opportunities today for managers to use OB concepts. Some other critical issues confronting manager’s for which OB offers solutions and/or atleast some meaningful insights toward solutions are: increased foreign assignments, emergence of networked organisations, working with people from different cultures and managing workforce diversity, etc. The present collection of cases in the field of OB covers some of these areas. There are cases on gender issues, work culture, communication, team management, interpersonal conflict, commitment, job satisfaction, empowerment, mentoring, leadership and management, etc.

CASES

CASE 1

ABC Undertaking

T

he managements in the past have been fond of thinking and practicing in an attitude of ‘I know all’. The more senior the manager the more

intense the feeling and the instruction to the subordinates...‘let us not argue and go and do as told’. The subordinates would in turn pass on the same style down the line. Over a period of time, this style also came to be accepted. A clear distinction emerged within the organisation between the thinkers and the doers. The yardstick of success of such a style was an environment of peace in Industrial Relations (IR) and profits. The movement of quality circles in Japan broke the myth that it is only the management which can think. It is another matter that other countries including India failed to capitalize on quality circles due to resistance from immediate supervisors and managers. The pressures of competition and the imminent likelihood of the pubic sector losing its monopoly and support base from the government has been a trigger for the senior management to think differently. One of the shifts which have yielded positive results in some organisations is the paradigm shift where the management seeks perceptions of employees on various policies to assess their performance. Prepared by J.S.Sodhi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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It is with this background that a research organisation was asked to undertake a study in a public sector undertaking. It is a premier consulting organisation rendering consultancy services in railway related fields working in more than 40 countries with a competent technical team and sound financial health. It has employee strength of about five thousand. A large number of senior employees are on deputation for the railways. The main objectives of the study were to obtain feedback from employees at all levels in the organisation on various dimensions of organisational climate and Human Resources (HR) policies; examine the preparedness of the employees to take up future challenges in Rail India Technical and Economic Services (RITES); and, highlight the strengths and weaknesses of the studied dimensions and make recommendations. The specially designed questionnaire was administered to about 10 percent of the employees at all levels, locations and functions. Some of the key findings are as follows: Table 1

Total Sample—Dimensions, Mean and Ranks Dimensions

Mean

Job Satisfaction

1.88

Organisational commitment

1.81

Safety and Security

1.77

Job Content

1.65

Preparedness of Employees to take up Future Challenges

1.33

Social Integration

1.58

Delegation of Authority

1.56

Mutual Trust

1.55

Approaches to Discipline

1.51

Quality Systems

1.51

Interpersonal Relations

1.48

Likely Future Challenge in View of Changing Economic Environment

1.46

Performance Appraisal

1.36

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Objectivity and Rationality

1.32

Training and Development

1.24

Welfare Facilities

1.23

Recognition and Appreciation

1.22

Participative Management

1.20

Scope for Career Advancement

1.12

Grievance Handling

1.09

Monetary Benefits

1.03

The perceptions of executives and non-executives on various dimensions of climate on the similar lines are presented in Table 2. Table 2 Means of Organisational Climate Dimension as Perceived by Executives and Non-executives Micro Dimensions

Non-Executives

Mean

Mean

Mean

Job Satisfaction

1.78

2.08

Safety and Security

1.72

1.87

Organisational Commitment

1.68

2.04

Job Content

1.65

1.64

Social Integration

1.58

-

Delegation of Authority

1.57

-

Mutual Trust

1.56

1.53

Interpersonal Relations

1.51

1.33

Approaches to Discipline

1.51

1.47

Quality Systems

1.51

-

Likely Future Challenge in View of Changing Economic Environment

1.47

-

Performance Appraisal

1.36

-

Objectivity and Rationality

1.34

1.29

Preparedness of Employees to take up Future Challenges

1.34

-

Training and Development

1.28

1.17

Recognition and Appreciation

1.24

1.19

Participative Management

1.21

1.17

Scope for Career

1.16

1.04

Grievance Handling

1.12

1.02

Welfare Facilities

1.10

1.44

Monetary Benefits

0.88

1.30

Advancement

It is important to note that job satisfaction, organisation commitment and teamwork of both the permanent and those on deputations was higher than the other dimensions. There was, however, resentment against the management for keeping a large number of officers on deputation as, according to a large number of employees, they were enjoying better perks, using the organisation as a parking space, and it was blocking the promotion avenues of other permanent employees of the organisation. The findings of the study were presented to a select group of senior employees, the HR representatives and the Chairman and Managing Director (CMD). The CMD expressed his disbelief at the findings and alternated between scolding his employees and casting doubts over the study results. According to him, he has himself kept an open door policy and this should have been perceived by the employees and the study team as an indication of a spirit of working together. Others present took a cue from the CMD’s remarks and defended their management policies. The HR department had come prepared with data on the number of meetings the joint forums have had during the last one year, numbers promoted, grievance rates, etc. According to them if the perception of the employees on grievance handling is not up to mark, why have there been very few written grievances or almost nil complaints in the Right to Information Act.

CASE 2

Alpha Chennai Plant

K

. Mohan, the HR Manager at the Gwalior plant of Alpha group was transferred to its Chennai plant popularly called ACP or Alpha

Chennai Plant, in 2002. He has been with this company for the past ten years. Alpha group is a renowned company in India with manufacturing plants at Gwalior, Ahmedabad, Chennai, Surat and Dubai. Alpha had acquired the Chennai plant from Buchan Ltd., an American company in the year 2000. The plant manufactured nylon 6, used in tyre and fabric industries. The demand for nylon 6 in the Indian market was very low so Buchan was incurring huge losses at that time. Alpha was able to revive the business with the introduction of nylon 66, which is a cheaper version of nylon, much in demand with the Indian customers. From a production level of 2000 tonnes, Alpha increased the production to a massive 12800 tonnes. Buchan was a world renowned company. It was known for its quality products. Their plant in Chennai was of world standards. They had implemented Total Quality Management (TQM), Kaizen and various other Quality Circle initiatives. Apart from all this they had a wonderful work culture popularly known as High Performance Work System (HPWS). It Prepared by B. D. Singh, Archana Tyagi and Smitha Pillai “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

C a s e s in O B a n d H R M a n a g e m e n t

was a participatory culture where the employees played a very important role in decision-making process. In this work culture, employees were empowered in taking strategic decisions. They were required to work as high performance teams where knowledge and skills were shared among all. Every day shift assembly meeting was held, quarterly open houses and monthly panchayat meetings were a norm. These meetings were the forums for employees to interact and share their views and ideas with the management. Mostly all the employees used to attend these meetings with enthusiasm, which were held religiously without fail. There was a lot of interaction between the management and the employees. The employees were extremely happy with this culture and Buchan never faced any serious people issues during its four year long possession of the plant. Buchan was very particular about this work culture and educated each employee about the essence and importance of HPWS. Buchan had believed in intensive and ongoing training for its workforce. They used to select young men between the age group of 16-18 years from nearby rural schools or colleges with a minimum matriculation qualification and send them on a custom made training programme for imparting technical skills at Bangalore. The takeover by Alpha was neither hostile nor smooth. The employees at Buchan had lot of apprehensions whether Alpha would be able to carry forward their culture. Alpha was a traditional Indian manufacturing firm. It concentrated more on production than employee welfare. It was facing union problems in almost all its other plants. After the takeover, the Chennai plant soon became a training ground for the employees of the rest of the plants of Alpha. People selected from Chennai and nearby places were trained for technical skills and then sent to the other manufacturing plants of Alpha across the country. This whole work set up at Chennai was something new to Alpha. HPWS was soon implemented in almost all other manufacturing plants

Or ganis a t io n al B e ha vi ou r

of Alpha group. Management at Alpha tried to revolutionise its work culture with the new found tool. They thought this was the perfect work system for any manufacturing firm. They believed it can reduce the number of strikes and agitations because people would now get a forum to voice their concern. They tried to copy the model and hardly brought any changes to it. Mohan was aware that the Chennai plant followed this unique work culture. He had his own apprehensions about the working of this system. He had recently witnessed a strike in the Gwalior plant. The strike went out of management’s hands and they suffered huge losses in terms of production and goodwill. After the settlement the management felt that Mohan should be shifted to the Chennai plant. Mohan was amazed with people’s capability to do various tasks at the Chennai plant and their ability to work as teams with little supervision. But he had to face various challenges too. Increasingly the employees at the Chennai plant were feeling a sense of stagnation in their career. The plant followed a flat organisational structure with only six managers and eight supervisors, which gave a very meagre chance for promotion. There was hardly any effort for job enrichment or job rotation. The work was mostly monotonous in nature and involved little creativity. There were also constant comparisons with the services and salaries provided in other companies. The employees wanted Alpha to revive their salary structure, improve their transport facilities, reduce canteen charges, etc. With the increased production the workload on employees were also increased, so they demanded more allowances and increased pay. Mohan, 40, was new to South India. He was a man with a fixed mind set. According to him the employees were very well taken care by Alpha and there was very little that could be done for their benefit. He was also not keen at communicating with the employees, although all the employees were proficient in English.

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His working style was quoted as rude and mean. Employees did not believe in sharing their views with him because according to them, he ultimately did whatever he wanted. There had been instances where employees had gone with their grievances to him and he took that as an opportunity to settle his grudges against them. He never went to the shop floor. He always said, “My door is always open, anybody can come to me. I need not go anywhere.” Mohan himself was working under a lot of pressure and constraints. Alpha though claimed of an open culture did not allow its managers to take independent decisions. All the decisions were taken by the top management and the middle management was just expected to implement the decisions. The lower management had better freedom vis-a-vis their position as compared to the middle management. One of the most unique features about Alpha’s Chennai plant was that most employees were unmarried, graduates or postgraduates residing in the nearby places with little family obligations. All of them had their training in Bangalore. So they knew each other even before joining the company as employees. They were competent and proficient enough to look for better options outside, which worried the Alpha group. The salary structure of the employees at the Chennai plant was already higher than the employees at the other plants of Alpha. So the chances of salary revision was very minute, which further agitated the employees since the per person production was highest at the Chennai plant. The employees believed that since they were more capable and productive then their counterparts, they should get a higher pay. But, if Alpha followed this principle then it could lead to agitation at other plants. It did not want to take that risk either. As time went by, the monthly meetings and open houses became just a formality. The absenteeism in these meetings were largely evident. The employees believed that the management was doing these activities just for the sake of it and were not taking any serious action. This belief stemmed from their experiences with the management where their ideas and suggestions were not taken into account. People soon lost their trust

Or ganis a t io n al B e ha vi ou r

in them and stopped participating and sharing their views, which spoiled the whole purpose of these initiatives. Moreover, employees faced problems with their supervisors too. They complained that their bosses did not appreciate their work and always looked for opportunities to criticise them. The supervisors were considered to be close to the management especially the HR manager, Mr. Mohan. The employees claimed that the supervisors were biased during performance appraisals. The deserving people were not rewarded and favourites of the managers were given preferential treatment, which caused a lot of distress and low morale among the employees. In April 2005, employees at the Alpha’s Chennai plant formed a union. This was a major set back for Alpha. Out of a workforce of 200 employees, more than 80 percent of them had become official members of the union. The management had no clue about it till they received a letter from the labour commissioner. The union got support from political parties and various other influential people of the society like the Panchayat President, etc. There was also a sudden spurge in the employees who were leaving their jobs at the Chennai plant of Alpha. Many of the star performers were leaving the organisation and that further accentuated Alpha’s troubles. The management was in a dilemma. They could not understand why the employees resorted to such an extreme step.

CASE 3

BEC Limited

B

EC Ltd. a large public sector undertaking was set up in 1970 in a rather economically underdeveloped and socially backward region.

It was, in fact, the first large industrial establishment set up in the district having a huge employment potential. Prior to the setting up of this organisation the employment opportunities in the region were extremely limited. Agriculture was the chief source of employment and income to the people. The local produce was used primarily for self-consumption. The economic position of the whole district was quite unsatisfactory. The literacy level was very low. In fact, within the State, this region was about the lowest on most of the economic and social criteria. The establishment of BEC Ltd., a huge industrial organisation in this region, which was hitherto unexposed to industrial activity, dislocated the prevailing social norms and ways of behaviour and work of people. In view of this fact, it became imperative for the management of this large public sector undertaking to develop and maintain effective relations not only with its workers but also with the surrounding community. During the initial years of the organisation little attention was paid to developing Prepared by Rama J. Joshi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

Or ganis a t io n al B e ha vi ou r

good relations with the community since the management had to face different kinds of problems at the construction stage. Not too soon, the management came to realise that this neglect led towards a negative pattern of thinking and expectations on the part of the community. Another important reason for the formation of such attitudes had been the lack of communications or inadequate communication between the organisation and the community, Hence, it was felt essential by the management to develop direct contact with the local residents. One of the recent methods adopted to mould the community perceptions has been through the medium of in house journal. This journal was published monthly both in English and in Hindi. The journal was aimed to be an efficient forum for exchange of views amongst all sections of the enterprise as well as an aid to informing all members of the developments within or connected with the organisation. The publication was used both for the purpose of in-plant communication as well as a medium for public relations. It was edited by the professional staff of the Public Relations Department. As an instrument for internal communication its main purpose was to provide itself as a channel for free expression of views to enable understanding between management and the workers. All employees were encouraged, with the help of the trade union representations, to take a direct interest in the journal and contribute to it. Suggestions for improvement for the journal as well as relating to the company were also invited. This policy of inviting and publishing critical comments and articles from the employees was being very positively perceived by its readers. In fact, over the years, the readership of this journal had increased to a considerable extent. In order to find out if the journal had been meeting the aims for which it was set up, the management decided to review the contents of this journal. For this purpose all the twelve issues of the house journal for the year 1990 were selected and analysed. A content analysis of the information presented is given in Table I. This table is prepared in terms of the frequency with which each of the listed information was reported in the journal.

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Table 1

Percentage Distribution of Items Published based on Content

Analysis of Twelve Issues of the Journal S.Nos

Items

Frequency of Publication (%)

1.

Social, Recreational and Literary Activities (Sports, cultural programmes, mahila samaj, community centre, literacy features, etc.)

41.30

2.

Work Related Information (a) Company’s progress and achievement (b) Financial news (c) Incentive schemes (d) Employee recognition

13.77

3.

Personal News (Achievements of personnel within 11.59 and outside company in educational, literary and cultural fields and appoinments, transfers, retirement, marriages, obituary, etc.)

4.

Image Building Themes (Participation of managers 10.87 in outside professional meetings, visits of VIPs to the plant, representation of the plant at exhibitions, etc.)

5.

Information about the Enterprise (a) Company policies and problems and (b) Company’s programmes—developmental, training, workers education, etc.)

7.97

6.

Employee Feedback (Worker’s viewpoints and suggestions and critical notes about management/ policies)

7.25

7.

Ideological Themes (Emotional appeal to employees 4.35 to solicit cooperation in contributing to the company, etc.)

8.

Miscellaneous (a) Official announcement (b) About the journal

2.90

Given the nature of the contents of the journal, the management of the company was debating whether this house journal has the potential of generating positive community relations and at the same time helpful in promoting better human understanding and cooperation with the employees.

CASE 4

Bharat Rayons

B

harat Rayons is an ISO 9002 private company manufacturing viscose filament yarn as its main product. It has over the years,

reaped handsome dividends and the company’s products are today accepted as premium products in the domestic and international markets. The company also prides itself on the importance it has placed on the development of human resources. The HRD systems include, among others, well planned training programmes for employees at all levels, career and succession planning, job rotation, performance appraisal, participative management, QCs, 5S, a Knowledge Integration Programme (KIP) and Skills Development Programme (SDP). However, with the opening up of the economy new players have entered the scene, making it imperative for the company to bring about continuous improvement in results, productivity, cost control and quality. This essentially suggests that the HR Department needs to review what it is doing today and identify what it needs to do in the future. A review of HRD systems conducted recently indicates training to be one of the strengths of the company for all levels of executives/employees except the Prepared by Rama J. Joshi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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Graduate Engineer Trainees (GETs). Training activities in the company consist of induction training or training new recruits and functional training for managers/workers (regular employees). Mentor system is also part of the training function, especially of induction training. The training modules are need based, developed in consultation with the department concerned and under the broad overall company guidelines. GETs who are the direct recipients of induction training feel this training to be generally inadequate. They feel that the new entrants are left on their own to learn. They are, of course, provided with the opportunity to identify problems at the shop floor but there is no guidance on how to solve day-to-day problems. Some trainees feel that sufficient time is not provided to know about the company’s work procedures, equipment, etc. This is due to a very brief orientation in each department as well as on the job training. Further discussions with the trainees revealed that because of the brief assignment in each department, the departmental head also did not take sufficient interest in the trainees. No important work was assigned to them, since their presence in the department was very temporary. The concept of “mentor” was institutionalised in the company in April 1992 after it was discussed with Head of Departments (HODs) and other officers in a meeting conducted during the same month. The objective was “to guide, help and assist trainees to adapt themselves to industrial environment” (to be a ‘friend, philosopher and guide’). Initially the term “godfather” was used which was later changed to “mentor”. Mentor, in the company, is an experienced employee of the organisation who takes care of one or more than one trainee (protégé). These trainees are the engineers, CAs and MBAs. Normally a person at the level of HOD/manager/senior officer is nominated as a mentor. The mentor has the responsibility to guide, help and assist his protégé(s) to lead a happy and satisfied work life. Mentoring is basically considered a process of socialisation and of induction into the organisational culture. All levels of employees (including GETs) agree that the concept of “mentor” is good but the results are not always according to expectations.

Or ganis a t io n al B e ha vi ou r

Mentors can guide and improve the system of training new entrants as well as in imparting effective and purposeful training. They try to instill confidence in new entrants and guide them in case of difficulties. On the personal front they have helped a lot and provided valuable advice. At the same time it is felt that the concept is not being practiced seriously. Very few mentors are serious; they are just wasting time. It is felt that trainees are not guided properly by some mentors. They do not take due interest in their protégés because they are too busy with their own work. They are also neither interested nor powerful to influence training due to cost considerations. It is also felt that the system is not monitored well by the HRD department. Further discussions with some mentors reveal that they are not very clear about the role they are to play. The mentors and the protégés meet very infrequently. The designated mentors feel that protégés should come to them rather than them going to the protégés. There exists a system of convening regular meetings of GETs and the mentors to take stock of the progress and to chalk out further course of action. But these meetings are also held very infrequently. The HRD executive is aware of the issues and concerns and is pondering what could be done to improve mentoring in Bharat Rayons.

CASE 5

Farmers Empowerment —An ITC Way

“Internet will extend electronics marketplace and make it ultimate go between the universal middleman” — Bill Gates

itC’s Brief history

I

TC was incorporated on August 24, 1910 under the name of ‘Imperial Tobacco Company of India Limited’. The Company’s ownership

progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company’s multi-business portfolio encompassing a wide range of business—cigarettes and tobacco, hotels, information technology, packaging, paperboards and specialty papers, agri-exports, foods, lifestyle retailing and greeting, gifting and stationery. The full stops in the Company’s name were removed effective September 18, 2001. The Company now stands rechristened as ‘ITC Limited’. Prepared By Prashant Amin and Bijal Zaveri “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

Or ganis a t io n al B e ha vi ou r

ITC is one of India’s leading private companies, with annual revenues of US$2 billion. It is one of India’s foremost private sector companies with a market capitalisation of nearly US$18 billion and a turnover of over US$4.75 billion. ITC is rated among the World’s Best Big Companies, Asia’s ‘Fab 50’ and the World’s Most Reputable Companies by Forbes Magazine, among India’s Most Respected Companies by Business World and among India’s Most Valuable Companies by Business Today. ITC also ranks among India’s top ten `Most Valuable (Company) Brands’, in a study conducted by Brand Finance and published by the Economic Times. ITC’s Agri-Business is one of India’s largest exporters of agricultural products. ITC is one of the country’s biggest foreign exchange earners (US$2.8 billion in the last decade). The Company’s ‘e-Choupal’ initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. Its International Business Division was created in 1990 as an agricultural trading company; it now generates US$150 million in revenues annually. The company has initiated an e-Choupal effort that places computers with Internet access in rural farming villages; the e-Choupals serve as both a social gathering place for exchange of information (choupal means gathering place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also created a highly profitable distribution and product design channel for the company—an e-commerce platform that is also a low-cost fulfillment system focused on the needs of rural India. The e-Choupal system has also catalysed rural transformation that is helping to alleviate rural isolation. ITC’s e-Choupal creatively leverages information technology to set up a meta-market in favour of India’s small and poor farmers, who would otherwise continue to operate and transact in ‘un-evolved’ markets. As of July 2007, ITC’s e-Choupal services, through 6400 e-Choupal across eight states, reach more than 4 million farmers in about 40,000 villages. ITC intends scaling up the initiative with 20,000 choupals and

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700 saagars to reach 10 million farmers in 100,000 villages by 2010. Free access to Internet is also opening windows of rural India to the world at large. ITC’s e-Choupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organisations. Access to information through e-Choupal has reduced the dependence of the farmers on the traditional agricultural intermediaries. It has also enabled them to align their agricultural output with market demand. e-Choupals enable transparent listing of various mandi prices, giving the farmers a fair chance to choose where to sell their produce to gain a better price, thereby increasing their bargaining power. Historical data and figures on supply, expert opinion on future price movements, information on farming practices and techniques, soil testing, virus testing, and weather information also contribute to the empowerment of the farmer. The e-choupal model involved farmers in the design phase of the project. In some cases, farmers have also contributed to the content on the Web to ensure user-friendliness. The sanchalak who operates the computer is also a farmer selected from the village itself. Farmers actively access information for crop prices in mandis, and get inputs on soil testing, best farming practices, and expert advice from the system. The e-choupal system considerably reduced transaction costs for the farmers. The weighing techniques under the system are accurate and transparent, and farmers are paid in proportion to the quantity of their produce, unlike the mandi system. In addition, quality measurement is more open as results are immediately available to farmers. This initiative has created an organisation at the local level that is transparent and accountable in its operations. Through the e-Choupal system, ITC has empowered farmers by giving them more control over their choices, that is, what they grow, how much they sell their crops for, a higher profit margin on their crops,

Or ganis a t io n al B e ha vi ou r

access to information that improves productivity, and improved crop quality, which contributes to making Indian agriculture more competitive. Villages benefit in other ways as well. For example, children often use the computers for schoolwork and games, and to receive information on school test results. Large profit-seeking companies can invest in rural development in ways that are affordable, sustainable, and replicable. e-Choupal benefits farmers, rural communities and the company’s shareholders. e-Choupal is also expanding the range of its activities to support rural communities, using its network to deliver a broader range of services. Working in partnership with government agencies and civil society organisations in watershed development, animal husbandry, human-capacity development, education, health care and gender empowerment. As such, e-Choupal is an excellent example of scaling up in terms of both the geographic reach of its activities, and the scope and potential impact of its activities in rural India. The e-Choupal system faces multiple continuing challenges: 1.

The possibility that radical shifts in computing access could fundamentally alter community-based business models. That is one of the reasons ITC seeks to build and control its own ITC infrastructure.

2.

As the number and power of the sanchalaks increase, there is a threat that they will unionise and extract rents — unwarranted additional payments based on their increasing influence on the system.

3.

ITC’s relationship with the samyojaks seems to be uneasy, and competitors with the financial muscle to invest for scale could conceivably use discontented samyojaks as the base to obtain market share.

4.

The scope of the e-Choupal operation, the diversity of activities required of every operative, and the speed of expansion create real threats to execution management. ITC has awakened the aspirations of farmers. If ITC fails to fulfill

these aspirations, the farmers will look elsewhere for satisfaction.

4

CASE 6

Government’s Dilemma

T

he present case highlights the functioning of the rural branch of a nationalised bank in a remote rural area. The area under study is a

remote village on the border of Narsinghpur and Hoshangabad districts in Madhya Pradesh. This village is around 80 Kms away from the nearest town. The only ‘Pucca’ road touches the outskirts of the village, the lanes and by-lanes within the village are mostly ‘Kutchcha’. There are few patches of tiled lanes near the houses of the Sarpanch and few influential people of the villages. Among the villagers only few people have ‘Pucca’ houses otherwise 70–80 percent of them live in the thatched houses with tiled roofs. Every house is given a single bulb connection on minimum charges; the influential people manage to have more connections while most of the villagers are not even able to pay the minimum charges. There are three hand pumps, two municipal taps and two wells. In the entire village only the Sarpanch has a borewell and a doctor who is living in this area since past thirty-five years has a tube well. The land belongs to the state on the papers but traditionally it belongs to the Sarpanch, who happens to be the traditional head of the village since past several generations. The quality of land is average and the annual yield in most of the fields does Prepared by: Anima Sharma “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

Or ganis a t io n al B e ha vi ou r

not even suffice the owner. But, of course, due to the lack of the flow of cash economy they exchange their produce to buy essential household goods for their personal consumption. The reasons for the low yield goes to multiple factors notable among these are poor quality of land, land being un-irrigated on cobbled and rocky hill terrains, untimely or no supply of seeds and fertilizers to the farmers, their dependency on the rain, which may not come when it is really needed and most important by lack of knowledge of modern agricultural machines and techniques. More than 80 percent of the population is either landless or possesses poor quality barren or un-irrigated land hence, they have to depend on an alternate source of income for their livelihood. Due to lack of education or training they cannot work as skilled labour hence, most of them work on daily wages as labourers. During the monsoons most of the lanes within the village are inundated with rain water and overflowing drains and the entire village is cut-off from the outside world because of the overflowing seasonal rivers. Maintaining the drainage system, waste disposal system, wells, water supply, roads and lanes within the village is the responsibility of the Panchayat but, due to the lack of the funds and any controlling mechanism, which can check their activities they work at their ease and for their ease. In the list of the most influential people of the village few people enjoy extra and exclusive status and power they include Sarpanch, doctors, social workers, veterinary assistants, school teachers and local MLA, who comes to the areas for the votes and to hire the villagers when she has to organise a rally. Except appearing during the formal functions and making casual talks to increase her vote bank, MLA remains persistently unapproachable for the common villagers. The Forest Policy has restricted the rights of the villagers to the land, forest produce and game. This has got the villagers annoyed profusely to an extent that there are daily incidents of quarrels between the poachers and the Forest Guard, which sometimes takes an ugly turn leading to killings. It is more of an emotional matter. The land and the environment they live in have been accommodating them since ages. Now, they feel cheated and deprived of the things which according to them belong to them.

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There are few government officials who are posted in the area and have an important role in the implementation of the programmes and the policies. They directly interact with the people. The more important among them are Block Development Officer (BDO), bank manager, district collector, forest guard/officer, tehsildar, police constables, doctors and sometimes school headmasters. Unfortunately, these people have formed a nexus among them, which is very hard to pierce through. Many of them do not want to move out because of their vested interest and if they have to, then they prefer to go to an area where they could get a similar environment. These people merge the issue of social welfare and development with their personal development and gradually their focus changes from people centric development to self-centered development. As a result the programme evaluation in the area hardly shows any difference in the life and lifestyle of the people. Now, over a period of time people have partially become aware of few of these things. This partial awareness spiced up with the full confidence sometimes creates very embarrassing situations and at other times where confidence is replaced with shyness and ignorance, the people continue to live the way they are. The bank manager was maintaining false records of the loans and subsidies allotted in the names of the villagers. A sudden inspection by the auditor on receiving complaints followed by his investigations in the nearby villages resulted in the suspension and transfer of the bank manager. He was transferred to the urban centre and was trying his level best to come back to the area. The police constable is looked upon with awe more because of his muscular power than because of his authority. The BDO is the most powerful government employee, who directly deals with the development and welfare activities in the entire block. He is one of the persons who organises and is invariably present in all the public meetings of the MLA and other senior politicians, bureaucrats and VIPs visiting the area and since he does not deal with the disbursement and procurement of the funds, etc. directly villagers regard him in the high esteem. During the time of the inspection it was found that in the political arena his status

Or ganis a t io n al B e ha vi ou r

was most vulnerable. He was physically roughed up by the people of the victorious party because he was appointed by the people of the defeated party. In the above mentioned scenario the villagers do not get the benefit of even 25 percent of what they should be getting. Most of the programmes meant for the development of the villages and welfare of the villages run-out before reaching the stage of implementation and those which get implemented have partial impact on the village and the villagers. Out of all the programmes meant for the beneficiaries only 4–5 percent are utilised and the rest of the programmes are left unutilised. To combat with this situation and to make the micro level planning more effective, government is in a dilemma regarding what should be done.

4

CASE 7

International Market Research Company

I

nternational Market Research Company has its Head Quarters (HQ) in Canada and its South Asian regional office is in New Delhi, India.

In India they have five branches at Delhi, Kolkatta, Mumbai, Chennai and Bangalore. The regional office has a President, a Vice President, two consultants, three team leaders, one field research team and office staff. The offices in other cities have one coordinator and/or one team leader and the field research team. The President and Vice President are usually traveling either within or outside India and hence the real power within the office remains in the hands of the coordinator and/or team leaders. The main activity of this office includes market surveys and research of medical and engineering goods for the promotion, performance evaluation and launching of a product for their national as well as international clients. One of the three team leaders in Delhi resigned and a new person, Siddhant replaced him. Till Siddhant joined everything seemed to be running smoothly at least at the surface level. The other two team Prepared by: Anima Sharma “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

Or ganis a t io n al B e ha vi ou r

leaders Vishal and Lokesh showed the first sign of disagreement with the appointment of Siddhant, when they came to know that he has received his higher degrees from the U.S., which had put him several points ahead of both of them. The first jolt was felt by Vishal and Lokesh when in the first meeting with the President and Vice President (VP) they realised that Siddhant is given special treatment and the President and VP were paying serious attention to whatever he is saying. At the end of the meeting Siddhant was given an extra task of organisational restructuring. For this, he had to evaluate the performance of every worker including the team leaders and to check the balance sheet of the organisation. The objective of this was to decide the qualification/skill based allocation of duties for all staff members, hiring/firing, promotions given to each of them, compensation and packages as per the performance and cost cutting on the unutilised items, thus bringing transparency in the system and to increase its sustainability. Siddhant never knew that he was going to put his hand in the beehive. In his draft plan he mentioned several discrepancies in the audit records and the ways to cut down upon few extra expenditures. In his human resource plan the responsibilities were decentralised and he also presented a 360 degree evaluation system in which team leaders had little role while deciding the fate of the research team. The copies of this plan were distributed amongst the President, VP and the team leaders for the feedback. It brought the turmoil in the entire office. Vishal and Lokesh, who were already discomforted by the entry of Siddhant in the office, now felt that not only they will have to make compromise with several of their personal expenditures, which they were charged to the office account but they were also losing their power on the field staff by showing their favour time to time. Immediately, both the team leaders mobilised the office staff and the entire staff split into groups. Some were favouring the old team leaders, few were favouring Siddhant but due to old association with the other team leaders they did not want to oppose them either. Few were under the obligations of the old team leaders hence, did not oppose them and others played the role of mere spectators. This scenario led the President and the VP to seek opinions of office staff and the result of this was more confusing because only about

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30 percent of them expressed any opinion. In the meantime, the office had become a battlefield in which not only Siddhant with his insignificant supporters was at a logger heads with the other two team leaders but their supporters had also started giving a cold treatment to Siddhant. It was perpetual cold war like conditions in the office. The older team leaders mobilised the office staff and soon the complaints against Siddhant started to pour in the HR department and HRD was inundated with the resignation threats of several members unless Siddhant was dismissed. The President and the VP are thinking of how they should come out of this situation.

CASE 8

Mahila Mandal10

A

women’s Self Help Group (SHG) or ‘Mahila Mandal’ is a purposeful group with a certain aim. The specific aims may vary from one SHG

to another but usually their primary motive is the socio-economic and socio-cultural welfare of the society. Sometimes these groups attain so much informal power that they become a vital tool in promoting any kind of development activity. They also play a significant role in further propagating the ideas of the local leadership. Thus, they have a prominent place in the regional planning and local development cycle. ‘Mahila Mandal’ is a very important step in the direction of empowerment of women. It is a democratically hierarchical group comprising of all females. They take up all the responsibilities of running the organisation and its activities. They may have a patron to guide them. They generate funds for themselves. Thus, it is self-sustained and selfgoverned group working on the issues of social development/welfare as well as for themselves. Tribal group of an indigenous population living in Central India (Madhya Pradesh), known as ‘Thakurgonds’ belong to numerically highest and geographically most widely distributed tribe, ‘Gonds’. They 0

Prepared by Anima Sharma “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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are patrilineal, patriarchal and endogamous people. As is common for all tribal societies, the Thakurgond women also occupy a very significant role in the economy of their society. Unlike in urban and rural societies the status of tribal women is very high and they have a say in their household matters. But at the level of the society they do not hold much political power in their traditional system. Traditionally, they were living in kingdoms, where the king is the supreme power. The introduction of the Panchayati system have brought about changes, but still in the remote areas where the kingship still prevails, for namesake though all the major decisions of the village are taken in consultation with the king. With time their traditional system has undergone tremendous change and the brunt of modernisation has brought all round change in their erstwhile simple lifestyle. Thakurgonds have accepted few changes readily, left few others after flirting with them briefly and are confused about the rest. This area is significant for development studies because of the several changes witnessed by it within the last two and a half decades. The recently started development activities have brought new job opportunities as well, which have affected their traditional system in many ways and one of the most important is the role and status of women in their society. In their traditional economic system women were the equal partners in all the household affairs. They contributed to the family equally by gathering food, fruits and forest produce for their consumption while their male counterparts went to the deep jungles to hunt down the bigger games. With the advent of the new job opportunities their traditional roles have also undergone a great deal of change. The modern system has taken away their independence and has pushed them into earning daily wages. Forest Policy has put restrictions on their traditional economic activity, ‘Hunting and Gathering’ and they are neither educated nor trained for the skilled jobs hence, working on daily wages as labourers is the only way of earning left with them.

Or ganis a t io n al B e ha vi ou r

Most of them (almost 80–85%), males as well as females work as labourers on daily wages. Both of them work under the same conditions, do similar work yet there is difference in the state defined daily wages given to the males and the females. Thus, the disparity between the genders may not be there but discrimination against both of them together is certainly there. Interestingly, unlike other such communities undergoing change due to development, the status of women has changed and new responsibilities have been added in their role sets to take care of the needs of the village. It would be worth mentioning here that one of their traditional healers Thakur Das Thakurgond and a local teacher Phool Singh Uike have got inspired by the concept of ‘Mahila Mandal’. They travelled to all the nearby villages within the periphery of two–three Kilometers, talked to the women and other villagers about the SHG. Initially, five women came forward and gradually the number rose to 18 members from eight different villages. The President, General Secretary and Treasurer are selected from among them by mutual consent for a tenure of three years. This group actively participates in different activities like promotion of the development activities launched by the block office, election campaigns, village cleanliness, kitchen garden, health programmes, etc. The economic resources of the ‘Mahila Mandal’ are limited as they do not have any independent source of income. The people living in this area are not so affluent that they could make investments to promote the activities of the group. Moreover, since most of them work on daily wages, they do not want to spend time to walk down to the venue of the meeting of the ‘Mahila Mandal’. Hence, gradually the number of participants in each subsequent meeting is gradually decreasing. The President of the ‘Mahila Mandal’ is the wife of the ‘Mukhiya’ of the ‘Zila Parishad’. She is being unanimously nominated every year, unopposed. In fact, because of her status no one wants to contest with her. Also, no one opposes to whatever she says. But, one fact commonly applied on all the women folks of the ‘Mahila Mandal’ is, that their decisions are mostly governed by the males of their family or their spouses. They

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5

invite the comments and suggestions of the locally powerful groups like, village head, BDO, social worker, school principal, or doctors, etc. also. Sometimes the local MLAs and political leaders use these groups to fulfill their political interests, which may or may not be appreciated by the group members. Because of these reasons the enthusiasm of the members of the group is fading out and this situation may result in splitting of the group.

CASE 9

Manufacturers Limited11

T

he company was set up in the early fifties. It is in the automobile sector and a leading house in manufacturing automobile parts.

The management style was benevolent. In the earlier days turnover was unplanned. The entrepreneur was essentially interested in percentage point increase in profits from the previous year. This was being achieved by yielding to all kinds of demands of employees and as a result the management lacked the urge to develop or promote quality of products or processes or their employees. The need for quality was not felt as it was a sellers’ market. The management preferred managers who could get work done through persuasion or autocratic style or by giving personal benefits to trade union leaders and the influential workers. The union leaders became strong and would in turn deal with workers through strong arm tactics at the behest of the management. Some of the policies and practices prevalent in the organisation were as follows: •

Attendance system was adhoc and not followed properly. The shop managers/supervisors reports on such matters were final.

11

Prepared by J.S. Sodhi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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•

The company introduced clock punching in 1990, but it never worked.

•

Welfare-oriented policy was followed but without any linkage to returns.

•

Long sickness benefits existed coupled with group insurance scheme of Life Insurance Company (LIC), which were being grossly misused.

•

Any sick employee not attending office would get basic salary and Dearness Allowance (D.A) for one year during illness. Besides, employees’ medical claims were rising and in most cases due to simple manipulations.

•

Attractive incentive schemes were being offered to employees.

•

The practice of overtime was predominant.

•

Religious sentiments of the owners were misused.

•

Employees were given leave on New Year’s Day.

•

Jagran (religious gathering during night) was performed on every Saturday. As a result, there was no shift on Sunday despite the fact that very few would participate in Jagran. Janam Ashtami, Baisakhi, etc. were observed by workers as holidays.

•

Provision of canteen facilities at highly subsidised rates complicated the situation. A cup of tea would cost 10 paise, vegetarian lunch 60 paise and non-vegetarian lunch Re 1. This made the canteen very attractive for outsiders. About 25 percent of those eating in the canteen were outsiders, i.e those who were not employees of the organisation. The system and not the workers was at fault. The company changed the system in April 1994. A contractor looked after the canteen. The subsidy element existed in terms of building, furniture, crockery, etc. Some rates were revised but the subsidy element was still high.

•

On death, retirement or long sickness, there was a provision for employment of descendents. It brought in workers who were not committed. Their presence would create other problems as well. This system has been discarded, although some consideration is still given.

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•

The management estimated that out of the day’s schedule of eight hours work, the actual work was done for five hours.

•

The union leaders had become very strong and peaceful industrial relations was being bought by appeasing the union leaders. About this time, there was a change in the leadership at the top. The

new leader was very clear that this unprofessional style of management will have to change. He called a meeting of his senior management to discuss strategies to resolve problems and formulate new policies, which would integrate the interests of the organisation with that of the employees.

CASE 10

Modernisation of Mind at Tata Steel12

T

ata Steel, India’s largest fully integrated private steel plant is comparable with any integrated steel plant in the world. Today the

House of Tatas owns close to 25 percent of its equity and the company has an asset base of over 9000 crores. Export volume is about 0.426 million tonnes equivalent to US$170 million. It grew from an initial capacity of 0.1 million tonnes in 1912 to 3.89 million tonnes by year 1990–2000. Besides going through the usual teething problems, Tata Steel experienced a number of more serious problems. It went through a 13 month strike after which making steel became less cost effective, competition with foreign and local steel manufacturers became severe and consumers started shifting their loyalty to local manufacturers of recycled products. For Tata Steel it became necessary to reorient itself to new thinking and approach. Modernisation became the guiding principle. Tata Steel started the process of closing down old units and setting up new ones in four phases of technical modernisation. The process of modernisation 12

Prepared by Mirza S. Saiyadain “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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started in 1980 and went on till 1997. The four phases varied in terms of time period as seen below: Phase one

1980-1983

Phase two

1984-1989

Phase three 1990-1995 Phase four 1995-1998 During the modernisation period stretching over 18 years some units were closed and new facilities were added at a cost of about 7000 crores of rupees. Given the enormous investment in technological modernisation, it became necessary to reorient the workforce meeting the new challenges and opportunities. Systematic changes were initiated in human resource strategy through programmes to create new performance ethics at Tata Steel. Many senior managers when interviewed pointed out to these strategic shifts in the minds of employees to accept change as a fact of reality. While reflecting on these initiatives one senior HR manager said, “We have always been good in running, we needed a direction”. These directions were crystallised by initiating a variety of schemes to generate responsiveness, a climate of creative thinking, a feeling of involvement, courage to utilise resources, accept challenge, a positive attitude, and change the way employees think. All this was done to bring about customer sensitivity, cost consciousness, improve productivity and create better working and living conditions. The new HR policy aims at “ensuring transparency, fairness, and equity in all its dealings with its employees— Tata Steel will strive continuously to foster a climate of openness, mutual trust and team work—Tata Steel recognises that its people are the primary source of its competitiveness”. The process of acceptance of change was initiated through a variety of programmes, significant among them are briefly described below. “If we do not take care of our customers—someone else will”. This declaration aptly summarises the feeling that a shift must take place in making customer delight as the major focus of all is endeavours.

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Tata Steel has a customer base of over 5000 customers out of which 158 have been identified as key customers accounting for 51 percent of the total business. One percent increase in sale to key customers contributes Rs 1.8 crores. Tata Steel ensures preferential treatment to these key customers in the area of redressal of complaints and quick handling of accounts. An Enterprise Resource Planning System has been implemented to improve availability and analysis of customer needs and other market demands, stock management, quality assurance and accounts management. Performance Ethics Programme for executive category came into being as a follow up on Mckinsey Report on transformational exercise and restructuring of the organisation to convert Tata Steel into a high performing organisation. The process requires identifying high impact positions and staff the positions with best suited persons. All these positions would have greater accountability, autonomy and higher profit and loss responsibility. In terms of the actual mechanics, each department head signs an internal Memorandum of Understanding (MoU) with the CEO as a promise to deliver. In addition, internal MoUs within the department, across departments and with customers for compliance on efficiency and quality and with provision of constant review and continuous monitoring are to be signed. The focus is to give what was not given last year. All executives are given Key Result Areas (KRAs) and balance code cards for people upto divisional headquarters are to be maintained. No value or low value items would be reduced in future and eventually eliminated. Since all this is done to help employees to make best use of operating units, which are young both in terms of age and facilities, incentives are to be given on the basis of performance. As on January 1,1994 Tata Steel had 78,276 employees on its pay roll. In order to best fit the number of employees with the requirements of jobs, Tata Steel started the process of right sizing eventually bringing down the workforce to 50,910 as on October 1, 2000. The attempt is to further reduce it to 48,000 level in the near future.

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The process of “Early Separation Scheme (ESS)” was proposed by Tata Management. According to this scheme employees who became surplus as a result of restructuring exercise were given the option to perform any duty not necessarily that for which they were hired, or take a pension. The pension amount varied with the age of the employee and the years of service. But all of them were assured the pension upto the age of sixty. Thus those with less than 40 years of age and less than 10 years of service were offered a monthly pension equivalent to the basic and Dearness Allowance (DA) of last drawn salary, those upto the age of 45 years got 1.25 times and those crossing the age of 45 years received 1.50 times the last drawn basic and DA. In addition, they were provided medical facilities at company’s hospital/dispensary, loan of Rs 2 lakhs to start a business, and preference in assigning a kiosk in Jamshedpur. One of the most influential attempts to modernise was fostered through an exposure to Tata Heritage Technology and Community Centre housed in Russi Mody Centre for excellence. It provides consolidated information on the House of Tata. In addition it has the first business archive in India and 16 professional associations housed under a single roof in an ambience of ancient civilisations of Egypt, Greece and Babylon. The second agency is the Information Department. It runs 96 libraries in Jamshedpur and 51 libraries outside Jamshedpur. It collects, processes and disseminates information in the field of iron and steel and allied subjects. It has over 2.5 lakh books, subscribes to a large number of technical journals, has inter and intranet facility, online catalogue for books, video cassettes, CD Roms ad music CDs. It also has a book bank scheme for employees’ children of 2nd standard and above, and a kid’s corner for showing them educational films. Since knowledge is the greatest driver for change it has a budget of Rs 1.6 crores. Tata Workers’ union is one of the earliest trade unions in India. Its history dates back to 1920. Over the years it has seen the involvement of political stalwarts like C. F. Andrews, C. R. Das and Motilal Nehru and office bearers of such caliber as Subhash Chandra Bose, Prof. Abdul Bari and Michael John.

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When the modernisation plan started in 1980 both the union and the management agreed on no retrenchment, redundant labour to be retrained and redeployed in suitable jobs. Talking about modernisation, Mr. D. K. Singh, General Secretary said that Union agreed to bring new technology because it was consulted. They cooperated because they wanted to serve the company and they got a good deal. There was continuous dialogue, openness and transparency and schemes suggested by management were not very painful to workers. They found a common path by joint consultation, which has been a culture in Tata Steel. The relationship between the union and the management was best vocalised by Mr. Singh when he said, that they have different paths but their destiny was the same. Consistent with the policy of openness, trust and transparency as a vehicle of change, Tata Steel introduced several programmes of sharing information with the employees and the community. In May 1995 the first formal Employee Awareness Programme (EAP) was launched in Medium and Light Structure Mill. The topics dealt with themes such as personnel policies, safe habits, training and career development, health and healthy life, occupational health, welfare amenities, work discipline, suggestion system and working towards higher productivity. The wife of the MD initiated Domestic Management Programme where wives of the employees go through a three and half-days programme with inputs provided on such themes as budget, safety, hygiene and child welfare. In addition, wives of the employees are invited to visit their husband’s workplace and have lunch with them at the company cafeteria. Tata Steel’s endeavour is to create awareness at the lowest level in the company and community at large because “Modernisation of Mind” as a concept must reach a substantial segment of the community. In addition to the above-mentioned programmes, the MD has regular meetings with the female employees and dialogue with senior citizens in the city of Jamshedpur. It has also started the practice of naming ‘Person of the Month’.

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success indicators Phase 5, Modernisation of Mind, formally began on April 1, 1999. During the year and a half the picture has drastically changed. Customer awareness is high, decision-making has been pushed to the lowest level, bureaucracy has been demolished, levels are reduced from 13 to 4 among officers, O level reports to E level despite the fact that there are five levels with O category. Employment of children has been stopped and thanks to ESS work force is reduced to 50,910 without any ripple. Seven to ten percent of the profit goes to township and community development; 38 percent of all employees are covered in improvement projects and all departments are getting ISO ratings. There has been no major disruption by way of strike or gherao during the last 70 years. There is a general acceptance of change among the employees and they demand and desire to learn beyond their regular jobs. There is greater transparency in the system. Emphasis has shifted to productivity, profit and customer instead of products and opportunity for experimentation and openness to accept ideas (learning humility). In addition, savings through suggestions improved from Rs 523 lakh in 1997 to Rs 720 lakh in 1998 and Rs 865 lakh in 1999. Cluster manning has been introduced in 13 departments covering 5,147 employees. Total operation performance programme covered all major production and services department in the norms during 1999–2000. The spirit and direction of Modernisation of Mind is best summarised in the Tata Steel Information Bulletin, January–March 2000 which claims that, “Perfection in any endeavor is an aiming point, not a starting point. Let the desire for it push you but don’t let the absence of it stop you. If you are going to get anything done you must start somewhere. More specifically, you must start where you are.” For Tata Steel the journey has begun but the road is long and winding and the destination is far away.

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CASE 11

National Electric Equipment Company1

A

unit of the Uttar Pradesh State Industrial Development Cooperation, the National Electric Equipment Company (NECC) was engaged in

the production of electric motors, power and distribution transformers, and also doing repair work. The factory, which commenced production in the year 1975, had on its rolls 609 employees in 1985. The General Manager of NEEC was the Chief Executive who had under him a marketing manager, a production manager, a personnel manager, a controller of accounts and a chief of design. All the managers were Graduates in Arts. They were untrained in management and in their day to day work relied mostly on their knowledge of the products and the processes. The General Manager had been concerned about the losses the company had been incurring since the last seven years. A preliminary discussion amongst the managerial group indicated that the following factors were responsible for these losses, i.e. excessive overtime payment, idle working time, power failure, shortage of materials, communication gap between the top management and the workers at the shop floor, lack of motivational incentive and plan and lack of training of personnel at 13

Prepared by Rama J. Joshi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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all levels. During this meeting there was a consensus that there was a need to go into the problem more systematically. Rather than exploring and identifying areas for corrective action by the internal managerial manpower, it was decided to hire the services of an external consultant. A reputed organisation engaged in research, training and consultancy was approached. As a first step, the consultants decided to conduct an attitude survey. The survey was conducted with the help of (i) a structured questionnaire, and (ii) interviews with key managerial personnel of the unit. The questionnaire was administered to a sample of 15 managers and assistant managers and 38 supervisors drawn from different shops/departments. The consultants, in their report, relied more on the responses of managers/ assistant managers than those of supervisors, since most of the supervisors were not able to give their opinions independently.

Main Points The following main points emerged from the responses to the questionnaire: a.

Human Resource Management

The responses indicated that the

human resources were not well utilised. Absenteeism was reported to be a major impediment in human resources utilisation. A few manages felt that the skills of people were not matched with the requirements of the job. This was attributed to lack of suitable recruitment policy and training scheme. b.

Productivity A majority of the managers felt that the productivity in the unit was low. Some of the managers pointed out that the rewards and punishment procedures were not well organised. A good percentage of managers also complained about malingering and lack of clear objectives at managerial levels.

c.

Organisation structure felt that

A fairly large percentage of respondents

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(1) The roles of line and staff were not clearly delineated (2) There were serious overlaps of job functions (3) There were imbalances of power vested at different levels. A few also pointed out that employees did not understand how the “organisation operated”. d.

Conflict

According to the majority of the managers there was

unhealthy rivalry between managers at certain levels which at times seemed to become an impediment to organisational effectiveness. e.

Leadership A high percentage of respondents felt that managers were not able to do a good job of motivating their subordinates mainly because the managers were perceived to be ineffective. There was an indication of “unwilling acceptance of managerial decisions” because of lack of respect for leadership.

general Some of the other important points emerging from the survey were: 1.

There was lack of team spirit,

2.

Subordinates were not consulted by their superiors.

3.

There was inadequate information exchange with regard to oganisational and/or their changes.

4.

Workers were not encouraged to come up with creative ideas and suggestions.

interviews with key Personnel The content analysis of interviews conducted with the key personnel of the company brought forth a few very important issues: 1.

Building up of a positive work culture, which at present seemed to be lacking.

2.

Overcoming employees’ resistance to change.

3.

Exposing employees to new management concepts designed to improve organisational behaviour.

Or ganis a t io n al B e ha vi ou r

4.

Creating conditions for quick absorption of modern technology.

5.

Micro level planning was missing and it needed to be introduced and strengthened.

6.

Exposing of both supervisors and managers to human relations concepts and man management skills so as to improve their effectiveness.

7.

Training in supervisory skills to handle educated and uneducated workers. The General Manager has been analysing the consultants reports for

the last two days. He has decided to invite the consultant a week later to discuss further action.

6

CASE 12

Ramson Company1

T

he company’s founder began, as a small businessman about 50 years back and diversified into the present business. Over the years

it has achieved excellent progress. The company has been the largest manufacturer and seller of the product in the world in terms of volume for the last many years. The financial results of the company have been equally impressive. The company also has as much as 48 percent market share of the product market in India. The company has a workforce of 1485 out of which 1184 are workers and the rest executives. Despite its success, the competition is getting tougher from the national and international players. The salary levels are very high almost the highest in the region and the industry Lalji. The Patriarch of the family (the Indian partner) had a soft paternalistic approach to managing the company. It was more personalised in the formative years with Lalaji taking care of the needs of the workers in the manner in which he thought it to be. Relationship building was extremely dear to him and was something that came naturally. Some years back, the reigns of the company were handed over to his son who began adopting a professional approach in managing the enterprise. Whereas the earlier approach was informal, his approach is very formal and professional with 14

Prepared by J.S. Sodhi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

Or ganis a t io n al B e ha vi ou r

well-laid out structures and the boss-subordinate relationships. Training and developing workers is a regular process. During festival times the management gave gifts like CD Changer, T.V., Fridge, Washing Machines, Cameras, etc. to some workers. Training programmes are organised for workers to improve their communication skills and on how to get along with each other. There are a number of social dialogue forums like morning meetings, monthly communication meetings, suggestion scheme, Kaizen and cultural, sports and religious programmes. Tough managerial practices, however, is the norm of the day. For example, half day leave is deducted if the worker comes late by one minute. There is no transport facility given by the management. Targets are highly stretched and the workers have to achieve them come what may. If they have to participate in any formal meeting within the working time, they are not expected to compromise on production targets. Also, if the rate of rejection in any department is high for whatsoever the reason, they have to produce more to maintain the expected daily production levels. Workers are expected to also complete their targets along with all the social dialogue meetings. Despite getting very high salaries, workers are not happy and disapprove of the management’s heightened emphasis of highly stretched targets. The management has made it clear that the workers will never attempt to form a union. Infact, learning from their past experience, the management had, as a matter of policy, recruited workers of their new plants from different parts of the country. According to the management, this was done to facilitate the creation of a company culture. Workers, however, perceive that this was done to ensure that workers do not unite together to form a union. In the social dialogue forums, workers feel that their problems are never taken up and the members of the management often impose their agenda. One day the management received a note signed by a large number of workers indicating that they are keen to register a union. This has come as a surprise and management is wondering how to handle the situation.

6

CASE 13

Rash Pharmaceuticals1

S

et up as a private limited company in 1951, Rash Pharmaceuticals grew to occupy the second position amongst drug producing

companies after Glaxo Laboratories. The company was started by two friends to manufacture ethical formulations. Over the years, it diversified into manufacturing of bulk drugs, hospital products, beauty care, pharmaceutical machinery, electronics and automobile components, diagnostic kits and high-tech genetic engineering products. Rash Pharmaceuticals developed the world’s first immune-diagnostic kit for the detection of filariasis. The products of Rash Pharmaceuticals are exported to many countries in Africa, the Middle East, Europe, South East USSR and South America. It has been awarded Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council’s award twice for being “first” in export and the “top” exporter for three consecutive years. Three years after inception, Rash Pharmaceutical recorded a turnover of US $ 0.1 million, which grew to be 1 million by the year 2000. The company employs 149 senior executives, 93 junior executives, 211 supervisors, 272 staff and 830 workers. In addition, it has another 15

Prepared by Mirza S. Saiyadain “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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2000 field staff working in about a dozen field offices all over the country. The company personnel are highly qualified with many years of formal and technical education and the employees keep themselves abreast with the latest innovations in products and technology through books and journals subscribed by the library of Rash Pharmaceuticals. The average age of the employees is 33 years. Most of them are married and of those 30 percent have their spouses working. On an average the employees have about eight and a half years of working experience in Rash Pharmaceuticals. They have been in their present position for six years and have been promoted on an average 1.5 times during their association with the organisation. The company’s salary scales are competitive with very liberal perquisites and benefits to employees. The employees are generally very proud to be working with Rash Pharmaceuticals. Many of them have indicated both on formal and informal occasions that if they had the choice, they would choose Rash Pharmaceuticals rather than any other drug manufacturing organisation. The top management has also been by and large satisfied with the commitment and attitude of its employees. The company’s philosophy has always been paternalistic though some signs of changes towards professionalism are visible. These are mostly because of the sons of the promoters who after getting higher technical education have joined the company as Directors. Since its inception till today, the top management of the company has taken pride in its own efficiency, taking quick and effective decisions under pressure and generally being close to its employees. Of late there have been some disturbing developments, which have caused a great deal of concern to the top management. The company has lost its second position in the industry and has slided to the third position after Glaxo Laboratories and Ranbaxy. Absenteeism is on the increase and is found to be hovering around 10–11 percent. Employee turnover has reached 22 percent. 527 employees joined Rash Pharmaceuticals by the end of December 1990, 116 out of them had left, some of them within one week after joining. Category-wise percentage of turnover is given in the table below:

6

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Table I

Category-wise Percentage of Turnover

Joined

Left

Turnover (%)

Executives

46

11

23.9

Supervisors

250

50

20.0

Workers

231

55

23.8

The management realised that their problems have nothing to do with the products and their quality as they are strictly monitored but they seem to weave around the management of human resources. There were indications of rumblings among employees who had started showing symptoms of dissatisfaction and an attitude of “let’s see what happens”. Management retained the services of an outside consultant to essentially diagnose the problem areas in the management of human resources so that “corrective” actions could be initiated. The consultant had extensive discussions with the top management, senior managers and a section of employees. In addition, a questionnaire seeking the responses of employees on various aspects of job and related factors was also administered to 21 percent of the employees representing all levels from senior executives to workers. The consultant’s report identified the following areas of strengths and concerns:

strengths •

Rash Pharmaceuticals has a large percentage of employees who are highly educated. They have several years of formal education as well as professional training. These employees are also keen to keep themselves updated by reading professional journals and magazines.

•

The employees, irrespectives of categories, age and years of experience with Rash Pharmaceuticals, have a strong positive attitude towards the company. They are proud to be working with it (average = 5.4 on a six point scale) and if they start their life over again they would prefer to work with Rash Pharmaceuticals (Average = 4.8 on a six point scale).

Or ganis a t io n al B e ha vi ou r

•

The employees are particularly pleased with the realisation that Rash Pharmaceuticals provides sufficient opportunities to its employees to use their skills and abilities (average = 5.09).

•

The top management collects information before taking decisions, which it can take quickly and often under pressure and it also has the will to implement its decisions.

•

Immediate supervisors have been perceived to be open to suggestions from their subordinates and have shown inclination to change if change suggested is feasible.

Concerns The overall favourable predisposition towards the company does not seem to be reflected in specific areas and activities. •

While there is an overall satisfaction with salary and other tangible benefits, disparities in salary structure for same level across departments have been reported to be a cause of concern for many employees.

•

Most of the activities in Rash Pharmaceuticals are done on “war footing”. Though the jobs are challenging, the practice of crisis management leaves little time for social life.

•

Changes are “unplanned” and the employees are neither able to cope with changes nor have any idea of current thinking and action of management.

•

The management is perceived to exploit its employees and is seen as tending to impose its decision on the employees.

•

Supervisors feel while they somehow should get the work done, they are helpless in either rewarding or punishing their subordinates.

•

The channels of communication between the top management and lower levels are not open. Neither the lower levels get to know the thinking of top management nor the top management seems to be aware of the problems at shop floor.

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•

The interactions have become very bureaucratic. For trivial information from ones counterpart in another department, one has to go through the proper channel delaying access to information.

•

If there are any Human Resource Management (HRM) policies the employees do not seem to be aware of them, particularly those on promotion and appraisal. In the absence of such awareness the employees have developed their own concepts of such policies and are sore because the so called policies do not seem to benefit them. The Directors have gone over the report of the consultants and have

asked the General Manager (Personnel and Administration) to prepare a blue print of specific activities that should be initiated to manage the concerns expressed in the report.

CASE 14

Rewa— The Research Associate1

T

he NGOs have undergone a lot of structural and functional changes in the past one and a half decade. They are no more the welfare societies

or charitable trusts run by the untrained people under the patronage of an influential powerhouse. Rather, most of those have become highly organised structures where several important programmes are run and services are delivered by the trained professionals. These NGOs follow set criteria of recruitment, evaluation, promotion and elimination, which have become stricter than before. Though, they still do not run with the profit motive they run long term projects which involve a huge amount of money. The financial details of such organisations are as elaborate as those of any middle range corporate office. The reputation and status of an NGO is assessed on their annual turnover on one hand and the networking with the stakeholders and partners on the other. The office in this case is a reputed middle range medical research based NGO situated in South Delhi. The organisational structure of the NGO is multilayered comprising of the patron/founder, members (Governing Body, Advisory Board) and the salaried staff. Among the 16

Prepared By: Anima Sharma “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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salaried staff the Managing Director is the supreme, on behalf of the salaried staff he is answerable to the patron and the members. Under him in order of hierarchy a Deputy Director, an Assistant Director, Project Teams (comprising of Senior and Junior Programme Managers, Programme Officers and field staff) a Receptionist and other office staff. The highest mobility is seen in the Project Teams, who are structured but the responsibilities are shared jointly by all the members as per the demands of the work. The Non-Government Organisation (NGO) staff including the MD is salaried. Their salaries are drawn from the projects and programmes, which are usually funded by the international donors, the United Nations (U.N.) and European Funding Agencies. They run projects on health, healthcare and have specialisation in advocacy, counselling and training. They are well networked in different states with other NGOs with whom they are associated either as mother NGO or as partners. The MD is a medical practitioner with specialisation in paediatrics who also runs a private clinic along with his wife in another part of South Delhi. Despite the fact that his wife is a competitive partner in his clinic, she never participates in any of the activities of the NGO. The MD is a man of several credits and few but serious vices overshadow his gains. He has an internationally acclaimed research work and a vision to grow more. Because of this he is traveling most of the time within and outside Delhi and is hardly available to his staff. During his absence he communicates electronically with a few of his selected staff, chief among whom is the Deputy Director (DD) for whom he has an exceptional high degree of softness. The DD is a woman of lesser skills and qualifications but with higher degree of temper and attitude, who prefers to depend on her whimsies for all official decisions rather than using rationality and the MD depends on her blindfolded. This makes her the crownless head of the office with anarchic and strange criteria of assessing the ability and performance of the staff based on her fantasies. Whatever she said would be endorsed

Or ganis a t io n al B e ha vi ou r

by the MD without even raising an eyebrow. This issue is the point of discussion on the lunch table everyday rather than the issues related to the projects and the office. The DD is not much liked by the staff members but they do everything to please her because they know that this is the only way to ensure their long term stay in the office. They know that the DD can easily be flattered and this is the best way to remain in her good books to remain in the office. She is a person who seldom realises that people are indeed befooling her, they are in fact gossiping about her, the MD and MD’s other friends. These gossips were damaging because these not only disrepute the images of the MD and DD but, also any newcomer who tries to professionally be nice is also humiliated and insulted. Also, on an average in the absence of the MD these gossips consume 80–90 percent effective office hours of the majority of senior staff members and they stay late in the evening or work in the office on Saturdays and Sundays to impress the MD that they are hard-working, sincere and dedicated. Since, the DD is aware of her limitations she prefers either male staff or female staff members who are married or junior to her. If the older staff notices that a new entrant to the office would become a part of their gossip then he/she would be weaned with such gossip information. When Rewa, who was a fresher in this sector with a prestigious University Degree in hand and having qualified all the basics sufficient to put her at par with any successful colleague at the workplace entered the office, little did she know the sequence of events that awaited her, which would change her entire course of life. She was a lively and enthusiastic person who wanted to perform her duties with perfect dedication and honesty. When Rewa entered the office she immediately attracted the attention of the entire staff including the MD which made the DD insecure. The DD hated everything about Rewa and that hate became more intense when she started feeling that the MD is taking interest in Rewa. Though, it was purely professional interest it invoked unfounded sense of insecurity in the DD. Being well aware of their relationship, Rewa maintained her distance and even if he tried to be over friendly, she

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remained unresponsive. This infuriated the MD. He pretended to be normal and showed that he was driven by other office staff telling him about her and as if judging her purely on the basis of her performance. But his actions spoke louder than what he wanted others to understand. In the beginning, Rewa completely trusted the MD, never doubting any of his decisions and did whatever tasks she was asked to do but gradually she realised that she was wrong. The MD became rude with her on all the fronts. He would find faults with whatever she did and would condemn and criticise her irrespective of whosoever was present around. Gradually, he stopped calling her for the staff meetings and started to assign her tasks suitable for the most junior staff. He was doing all this because he wanted her to bow down before him and seeing her non- flexible attitude in this regard he became angry. This had a two-fold impact, on one hand he was able to strengthen the DD’s confidence in him but at the same time he put Rewa in the most vulnerable position in the office. If she would speak anything in self-defense then she would be portrayed as being argumentative and a chatterbox and would be advised by the MD to keep shut. If she would not speak then she would be blamed as non-communicative and lacking team spirit. Even her very personal behaviours and traits would be publicly scrutinised and criticised. In the meantime, the MD got an ambitious long term project in the far south and he had to shift his base for few years to South India. He called one of his trusted fellows to organise his office, who was aware of the disharmony between the MD and Rewa. Gradually, due to the office grapevines and gossips and lack of vision of the MD every interaction between her and the MD came to a standstill. He thought Rewa will surrender before him one day and always gave her false hopes that she would be involved in the bigger projects at the senior level, which would never happen as long as the things were this way. He was exercising his full authority in ridiculing every effort done by Rewa and still did not want her to leave.

Or ganis a t io n al B e ha vi ou r

Seeing that grapevines and gossips ruled the office and there was no hope of any improvement and in the meantime due to some demanding situation appearing at her home Rewa finally thought that she cannot take it from both the fronts. Now she is in a fix as she is not sure whether she should stay in the organisation and wait for things to improve or leave the organisation and simply walk away.

CASE 15

Techtel Company1

I

n the 1970s when telecom industry was still in its infancy in India, a young U.S. returned Mr. Gupta started TechTel. When TechTel started

its picture tube manufacturing plant in a small town near Delhi, they faced agitation from locals demanding employment. It was a tough time for TechTel, facing hostility from media, politicians and all other quarters which looked at them with suspicion. At this stage, TechTel carried out a survey in the local community about their perceptions, apprehensions and expectations from TechTel. The survey revealed that most of the fears were due to a lack of clarity. TechTel felt the need for clear and complete communication. A structured plan for regular communication with the media, government, local community and the surrounding villages was then put in motion and responsibilities allocated. This worked effectively and in less than six months, all agitation died down and the locality was all praises for the plant’s contribution to the local community. Realising the power of clear and timely communication, Mr.Gupta took a lesson from the incident and decided that at TechTel everybody will be well informed, which will have an influence on his efficiency too. He also felt that this would bring in a sense of involvement and commitment 1

Prepared by Kakoli Sen “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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in the long run. The vision and culture of the group were designed to make it a strong and stable organisation powered from within by a committed workforce. The group firmly believes in total employee involvement through their empowerment and participation in decision-making. Over the years the company grew to become the largest Indian manufacturer of a wide range of display devices like colour and monochrome T.V. Headquartered at New Delhi, it has a number of manufacturing locations all over India. The group employs over 6000 people in its world-class factories and has a combined turnover of more than Rs 3000 crores per annum. To meet future challenges, TechTel has taken many initiatives to build their knowledge infrastructure. The tube development group, with its dedicated pilot line, continuously develops new products and processes. The projects group excels in creating state of the art equipment and production facilities. Various national awards for indigenisation have recognised these efforts. TechTel has also registered many patents for developments in display technology. The group is also highly focused on the preservation of the environment and has set up extensive environment protection systems. TechTel’s vision is to be globally the best value provider of video display and other chosen products, through leveraging technology and competencies by creating a culture of self-striving with focus on total employee involvement towards customer satisfaction. TechTel believes that people with initiative and the capacity to excel, are prime movers in an organisation have an independent mind and want to be involved. It believes that each individual has unlimited potential and he wants to contribute to the organisation’s goals and its effectiveness and is able to make genuine contributions. It is the leadership’s responsibility to create a work environment wherein individuals feel encouraged realising his/her potential. TechTel started its Quality movement in the 1980s and is based on the strong belief that self-motivated employees work towards continuously improving customer satisfaction, business results and societal impact. With a workforce of about 6000, communication remains a focus

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0

area. There is a communication forum which has members from the corporate and the units. The secretary of the forum is General Manager (Corporate Communications). The Vice President (HR) implements the communication policies and strategies of the organisation and also reviews the implementation in the units. The objective of the communication forum is to create an understanding of the vision, mission, values and norms along with challenges, strategies and action plans to all team members. Because of its multilocation and addressing different markets, there is a need for integration and creation of a common platform for group synergy. At present in TechTel, the CMD has direct access and impact on the internal culture. However, with many more plants and locations coming up and more people being added, reaching out to them was a practical problem. How could he reach so many people? He saw the solution in technology. His video message was recorded and circulated to all units biannually, in Hindi for workers and operators for about 8–9 minutes duration and in English for supervisors for about 12–14 minutes duration. Thus, he would share the environment and challenges and also provide guidelines and targets for achievements. The messages would be shown to groups of 10–15 people all through the day. The supervisor would also be present. After the show, discussions would be held on proper understanding and their comments along with a moderator. The feedback would be recorded and relayed back to the CMD. In this manner, he would reach out to each and every member of his work family. In addition, another video message of about 25–30 minutes was also shown for levels above supervisors where he would share his views about the future plans. The purpose of this exercise according to Mr. Gupta was that he should be able to deliver the aims and objectives of the organisation to all its employees himself so that there is no ambiguity and everyone is well versed with their role and responsibilities and growth in the organisation. He had deliberately kept it an open two way communication, so that his employees could reach him directly and share their concerns with him.

Or ganis a t io n al B e ha vi ou r

Over the years with advancement in technology and with more players entering the market, TechTel is facing competition. Sales have gone down and there have been deadlocks in factories over wage increase. Though Mr. Gupta feels that these are part of any organisation, yet he has been strongly feeling the need to invest on organisation building. At an annual meet of TechTel when Mr. Gupta tried to interact with his employees over an informal luncheon meeting, he found that many of his middle and junior level employees were unable to visualise the values TechTel stood for. Most of them were also not clear about their contribution to the organisation. This set him thinking whether the communication model followed by him is working.

8

CASE 16

Transtel Electronics1

A

recent addition to the Transtel Group, Transtel Electronics, went into production in 1987. The company, set up in technical

collaboration with Mitusubishi of Japan at a cost of Rs 85 crores, manufactures electronic guns for picture tubes (for both colour and black and white televisions). Most of the parts of the electronic gun are imported and merely assembled in this plant. Out of a total worker strength of 408, approximately 80 percent are women. A majority of them are very young (average age being 20 years), unmarried and new to the industrial culture (average length of service is two years). The nature of industry (electronics) requires high precision work from workers and a high degree of discipline with regard to cleanliness, dress code, etc. Since rejection is very costly a high degree of commitment and quality consciousness is a must in this industry. Currently, such awareness is being promoted through meetings, quality circles, etc. but, reportedly, the efforts have fallen far short of the desired results. The management of Transtel Electronics asked Shri Consultants in New Delhi to make a preliminary visit to its unit at Noida in 1

Prepared by Rama J. Joshi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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8

Uttar Pradesh (U.P.) in order to diagnose the problem and design subsequent steps to develop a productive work culture in the organisation. Dr. Hemlata of Shri Consultants visited the unit on

two different

occasions. She went about the works and talked to some girls working there. She had individual discussion with the General Manager and other senior managers of the unit and also met groups of male and female supervisors and had detailed discussions with them. Based on discussions held, mainly with managers and supervisors during the two visits, the consultant came to the following conclusions concerning women employees: a.

Strengths of Women Employees

Both the managers and supervisors felt that in the kind of operations involved, the special abilities/skills of women make them more suitable for jobs in an electronics industry. Most of them felt that women possessed the qualities of patience, sincerity, loyalty, cooperativeness, etc. Administrative control could be easily exercised on women employees; they also created lesser labour problems. In addition, women required less time to pick up new assignments, and they performed routine jobs better. All these were distinct advantages as far as work in the present organisation was concerned. b.

Disadvantages of Women Employees

In so far as disadvantages of women employees were concerned, factors like personal and family problems, the physical limitations, inability to work odd hours or stay back late were mentioned. A majority of them reported that women were less career conscious, spent lesser effort in self-development, were reluctant to accept new challenges or changes, worked casually, and did not take their work as a challenge. In short, it was felt that there was lack of commitment to work, amongst women employees. c.

Supervising Women Employees

There were conflicting viewpoints as to whether women were easier or difficult to supervise or manage. Some supervisors found women easier to supervise because, as compared to men, they were perceived to be more

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open and vocal in their preferences. Other managers found it difficult to supervise women because of factors like higher emotionality, their being more talkative, their tendency to cry when criticised, lack of openness, interpersonal conflicts amongst themselves, etc. The consultant, also felt that it was important to find out from the employees themselves as to how they experience work i.e., how do they relate and react to their work situation? What are the factors that promote or inhibit their effective performance in the organisation? Do the factors lie within the organisation, in the women themselves or outside the organisation? Answers to such questions would help in not only improving the quality of their performance, but also increasing their commitment to work. The management is faced with the problem of how to bring about a high degree of commitment and quality consciousness amongst women workers.

CASE 17

Universal Limited1

U

niversal Limited was a private insurance company with an employee strength of 250. It had a hierarchical structure with a

Chairman and Managing Director heading it. The second level in the hierarchy had three GMs under whom were six senior managers. The senior mangers were heading six divisions and had managers reporting to them. The CMD, Mr. V. K. Rao, had a personality which drew people towards him as he genuinely cared for his people. As soon as he took over as the CMD he called a meeting of the General Managers and Senior Managers. Mr. Rao started the meeting on a very informal note by asking the managers to introduce themselves. He then shared his vision for the company and his expectations from his team. He also emphasised that a company is as good as the people working in it and people are the real assets of a company, it is people who make all other resources productive. He vehemently articulated that three approaches that need to be avoided today to make any organisation successful at different levels are bureaucratisation, hierarchirisation, and centralisation. He clearly stated that he would like to create a culture where people took pride in working for Universal Limited. 1

Prepared by S.P. Chauhan and Daisy Chauhan “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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One of the senior managers, Mr. Gupta had a different opinion about the CMD. He felt that his soft approach would make the employees take a laid back approach to work, which would not allow the company to retain its position in a highly competitive, demanding and changing business environment. Mr. Gupta adopted a different style in getting work from his subordinates. One of his deputies, Mr. Sharma had newly joined the company as an assistant manager. He had come from a work culture where targets were decided in consultation with the subordinates, which according to him led to more involvement and commitment from the subordinates. Mr. Sharma found the style of his boss, Mr. Gupta very imposing, and restrictive. He was a person who believed in functioning independently with least supervision and direction. He considered Mr. Gupta’s approach to be very interfering and autocratic. On a few occasions Mr. Sharma did try to give suggestions to Mr. Gupta but the standard response he got was “this is not the way things are done at Universal.” After a few attempts, feeling frustrated, Mr. Sharma gave up. One day Mr. Sharma was attending to a number of cases, which had to be dealt with before the closing of the year. Mr. Gupta walked into his cabin and addressed him in a very harsh tone saying that one of the cases Mr. Sharma had recommended last week were not scrutinised properly and he could not settle claims right, left and centre. In a way he was hinting that Mr. Sharma had not verified the cases well enough. What annoyed Mr. Sharma was that these comments were made in the presence of some of his clients and he had to cut a sorry figure. Though he did try to explain to Mr. Gupta that the cases were thoroughly verified, Mr. Gupta was not ready to listen to his explanation. Mr. Sharma felt humiliated. He was overheard sharing with one of his friends that he was looking for a job elsewhere. Other managers were also somewhat unhappy with the management style of some of the senior managers in the company.

Part HUmAN RESOURCE mANAGEmENT

Introduction20

L

abour standards and employment relationships were evolved largely in an environment of favourable economic conditions. Basic contours

of employment revolve around permanent, full-time jobs, regular working hours, a collectively arranged working week, paid holidays and a general right to collective representation. Today the best of enterprises have to survive in the dynamic competitive environment. In such an environment business competitiveness will depend upon the enterprise’s ability to compete through sustainability (providing a return to stakeholders, providing high quality products, services and work experience to employees and increased value placed on knowledge), competing through globalisation (expansion into world markets, preparing employees to work in such markets), and competing through technology (changing employees and managers work roles, integrating technology and social systems and development of e-commerce and e-HRM). New technologies have led the companies to experiment with new management practices like reconfiguration of subcontracting relations and rationalisation of internal managerial hierarchies as well as features and identities of the actors (Sodhi, 1999). There has been a recasting of the basic contours of industrial relations (IR) and the personnel function within the organisations. Industrial relations 0

This write-up has been prepared by J. S. Sodhi.

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have a long lineage and in the past tended to focus on the institutions involved in codifying, negotiating and affecting employment conditions. The preoccupation of industrial relations has been dominated by collective action by way of unions and state regulation (Sodhi, 2001). The development in the practice and theory of industrial relations indicate that it will no longer mean labour relations narrowly defined as collective bargaining and contract administration. Nor will it mean industrial relations covering only aspects of labour relations. Instead it would involve the reciprocal expectations and behaviours of employers and employees. In fact the erstwhile industrial relations are being given the new nomenclature of Employee Relations where the subject would encompass the coverage of non-unionised workers along with the unionised, the non-manufacturing worker along with the manufacturing, and the white-collar along with the blue-collar (Blyton and Turnbull, 1993). The personal management likewise has evolved into Human Resource Management (HRM). The former believed that their key managerial task visà-vis labour was monitoring of the carefully delineated written contracts, importance of devising rules, labour relations being the key to human relations, selection taken as a separate managerial task, pay based on job evaluation (fixed grades), etc. HRM on the other hand views their managerial task as mentoring, key relations as customer integrated, selection as an integrate key task and pay based on performance (Storey, 1992). In addition HRM must exhibit a form, a conscious rationale according to which specific techniques from within each functional area are selected and then integrated with other organisational policies (Goss, 1994). HRM’s main function has been referred by scholars (Raymond et. al, 2007) as policies, practices, and systems that influence employees’ behaviour, attitudes, and maximise performance. Many practitioners refer to HRM as involving “people practices”. HRM must have any and every practice, which helps in achieving the goal of performance of the company while integrating the interests of the employees. Over the time, HRM has acquired a key role in building a competitive organisation. In progressive companies it is expected to play the roles of a strategic partner in terms of aligning HRM strategies to the business strategies of the organisation; being an administrative expert in terms of designing

H um an R eso u rce M an ag e me nt

and delivering efficient and effective HRM systems, processes and practices; employee advocate in terms of managing the commitment and contribution of employees and that of a change agent in terms of helping transform organisations to meet the new competitive conditions. Practitioners of HRM therefore face enormous challenges in meeting the expectations. Their road map includes undertaking some fundamentals that have a deep belief in the potential of human beings, creating a culture within the organisation where every employee is uniformly aligned to the objectives and goals of the organisation, developing a learning environment, creating an environment where everyone is made to be a thinker and doer. India has been a late entrant to the globalised world but is now witnessing the kind of pressures on the enterprises as seen in the eighties and nineties in the developed world. The requirements are more intense in view of the higher rigidities of the labour market in India. Historically, employee related functions were being carried on under the aegis of administration supplemented by a welfare officer in some of the companies. The sixties gave way to a new nomenclature of personnel and administration (P&A) though without much of a substantive difference in the spirit and contours of the function. The sixties and the seventies witnessed a spurt in industrial action in terms of strikes. This was a reflection of the outer political environment, which supported the trade unions and workers. As a result, many companies engaged the services of industrial relation experts and created an exclusive function to deal with trade unions and other related issues. In a way, this strengthened the traditional framework of industrial relations in which, the perpetual struggle for power between the management and the trade unions/workers dominated worker management relations. The power struggle continued in the eighties, though with a shift, which witnessed the ascendancy of the employers/management. While all this was happening, the country in the early 1990s embarked on a newer economic policy framework, which had wider implications for industrial organisations. They were faced with the reality of national and international competition, a need to deal with IR in a proactive manner, maintaining industrial peace, providing excellence, upgrading technology and quality, improving productivity, etc. These required a different orientation to

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their assumptions and people management practices. As a result a separate function of Human Resource Management (HRM) was created in many more companies. Some of the activities which may help practitioners to achieve their HRM goals are presented below (Ivancevich, 2008): •

Nature of Employment and Employee Commitment The challenge is to provide long-term commitment by the organisation to the workforce while not being able to provide a guarantee of employment.

•

Selection and Recruitments

HRM needs to draw a detailed profile

of the role and the changing expectations of the role. This will help them to select the right employees in the right way. •

Compensation and Rewards

According to the Hewitt survey and

a number of other studies (Sodhi, Joshi and Others, 2007), places compensation and rewards as the most important factor leading to their satisfaction/dissatisfaction in the organisation. An important implication is that compensation needs to be higher than what is being paid by competitors and reward system is just and differentiate between the performers and others. •

Employee Ownership An important factor in reducing attrition is to give employees ownership interests in the organisation by providing them with such things as shares of company stock and profit-sharing programs.

•

Transparency and Information Sharing

Lack of transparence fuels

unjust misgivings and information about operations, productivity, and profitability. Transperancy and information sharing has shown to enhance effectiveness of the employees. •

Giving a Voice to the Employee

Nothing de-motivates an employee

more than the fact that he has no voice in the organisation. Social dialogue forums, which genuinely encourage the decentralisation of decision making and broader worker participation is required. •

Teams and Job Redesign

An environment of teamwork needs to be

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created, which encourages the use of interdisciplinary teams that coordinate and monitor their own work. Teams have been seen to exert a powerful influence on individuals by setting norms regarding appropriate work quantity and quality. •

Learning and Skill Development Learning takes place both in the formal and informal environment. Effective training and its periodic evaluation at all levels ensures that employees and managers perform their jobs competently.

•

Periodic Evaluation

Periodic evaluation at all levels ensures that

employees and managers perform their jobs competently. Train people to perform different tasks and having people do multiple jobs can make work more interesting and provides management with greater flexibility in scheduling work. •

Social Equality

Equal treatment of employees by such actions as

eliminating executive dining rooms, reserved parking spaces as well as other substantive ways like the provision of working conditions, health and safety, etc. •

Measurement of Practices

HRM should measure such things as

employee attitudes, the success of various programmes and initiatives, and employee performance levels.

referenCes Blyton, P. and Turnbull, O. (1993), The Dynamics of Industrial Relations, Macmillan, London. Goss, David, (1994), Principles of Human Resource Management, Rutledge, London. Ivancevich, M. John (2008), Human Resource Management, Tata McGraw Hill Publishing House, New Delhi. Jeffery Pfeffer (1994), Competitive Advantage through People, Harvard Business School Press, Boston. Raymond, Noe A. et al (2007), Human Resource Management: Gaining A Competitive Advantage,” Tata McGraw-Hill, New York. Sodhi, J. S. (1991), Industrial Relations and Human Resource Management in Transition, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi. Sodhi, J. S. and Plowman, D. H. (2001), Economic Change and Industrial Relations: India and Australia, Scholastic Press Australia. Sodhi, J. S. Joshi Rama, et al., (2006), Employee Satisfaction Surveys In Various Public Sector Organisations in India, Monographs, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi. Storey, J., (1992), Developments in the Field of Management of Human Resources, Blackwell, Oxford. Note: Raymond’s analysis has partially been modified by the author.

CASES

CASE 18

Arogya Baginis in Vejalpur Municipality 21

K

ishor Bhai Chauhan, the then President of Vejalpur Nagarpalika recalled,“Vejalpur Nagarpalika was the one which started

e-govenance for the first time in India and used it for successful management of the solid waste management project”. With a lot of enchantment he added, “We brought Nagarpalika services at the doorsteps of our citizens and this happened only because of the collaborative efforts of Nagarpalika and Self Employed Women’s Association (SEWA) with the support of the residents of Vejalpur”. Vejalpur is one of the urban conglomerates outside the limits of Ahmedabad Municipal Corporation (AMC), but falls within the jurisdiction of the Ahmedabad Urban Development Authority (AUDA). Vejalpur Municipality has twelve wards with a total of 41578 households and a population of 1.5 lakhs approximately. There are around 1700 societies in this area. It had a good track record of always pioneering efficient and effective implementation of state and central government projects and programmes. The Nagarpalika is known for the ways it did things. It received 2005–2006 ICON awards for its e-governance initiatives. It is the first e-governed Nagarpalika in India. The solid waste management project of the Nagarpalika is yet another credit for 21

Prepared by Poornima Kishinchand , Govinda Tamang and Sangeetha Rajadurai “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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the pioneer. Vejalpur’s initiative on solid waste management dated back to the year 1999, when the Municipal Solid Waste Management (MSW) Rules2000 came into force by December (See Exhibit -1). According to these rules, it is the duty of every municipality/Urban Local Body (ULB) to adopt a suitable system for solid waste management to comply with these rules. The Supreme Court had given three years time to implement the MSW-2000 owing to the increasing threat to the environment due to increasing rate of urbanisation. Kishore Bhai, the elected representative (Nagarpalika President) at that time, got enthused by the MSW Rules2000 for its scope in bringing environmental and developmental impact on society. In continuation of his successful experimentation on making e-governed Nagarpalika a reality, he decided to venture into building systems and processes for solid waste management within his jurisdiction. Being a diploma in Civil Engineering, he has always given due respect for technological interventions in building systems and procedures. The first thing that Kishore Bhai Chauhan did was to go through the MSW rules in detail. He tried his level best to understand the purpose, procedures and expected outcomes of the rules by himself and by consulting others like Mr. Asnani, member of Asia Pacific Solid Waste Management Committee. He even made a visit to have a feel of similar experiment that was tried by other municipalities in cities like Bangalore and Trichur. He did realise the need for involving various stakeholders like the government, voluntary organisation and the ultimate clients, i.e. the residents of his Nagarpalika. His actions started with critically looking at the existing systems and practices of garbage disposal and the income and expenditure pertaining to waste disposal of the Nagarpalika. This step revealed to him the scope for cutting 50 percent of the cost on transportation by introducing the system of segregating the waste into dry and wet waste. He desired to provide the best quality services to his people and wished to work out a model of garbage collection at the doorstep of each household. It was at that point of time, Kishore Bhai met the Vice President, Ms. Manalisha Ben of SEWA, for exploring the possibility of issuing licenses for shops to their women vegetable vendors.

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SEWA, the Self-Employed Women’s Association, was established in 1972 as a trade union of women workers from the informal sector and is a confluence of three movements—the labour movement, the cooperative movement and the women’s movement. As of 2005, SEWA had 7,96,755 members in seven states of India, working as home based workers, vendors, labour and service providers and producers. SEWA organises women to become self-reliant and to promote full employment. To achieve these goals, SEWA follows the joint strategies of struggle and development to organise women workers. Seeing the plight of rag pickers, SEWA started running a campaign for women waste pickers for the last ten years. SEWA came up with an idea of promoting cooperatives for the betterment of their life by making them seek alternative jobs like producing and selling of stationery papers, helping them to take up contracts like cleaning and sweeping government or private offices for generating extra income. Kishore Bhai inspired by SEWA’s work for the most disadvantaged community in both economic and social terms, decided to join hands with SEWA to include their rag picking members. Eventually, he signed in an annual agreement with the SEWA’s cooperative for assuring employment opportunity for their rag picking members at a reasonable wage rate. (See Exbihit 2) To work out job responsibility, he studied the real capability of the rag pickers in terms of number of houses to be covered in a period of two to three hours. Considering the nature of households i.e. several storied buildings, the calculations from real experience made him fix approximately 125 to 150 units as one beat to be covered by each of the rag pickers everyday. Also, he in consultation with SEWA, fixed the units such that individual rag pickers could earn a total income of Rs 2250–2500 per month. By being an employee of Nagarpalika, she could earn Rs 1250–1500 per month and she could also earn by selling the dry waste, which could fetch her Rs 1000 per month. The contribution from the individual residents for paying the rag pickers came around Rs 10 per month to meet the cost. Kishore Bhai also employed supervisors who belong to rag picking community but with minimum required educational qualification, to

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monitor the attendance of the rag picking employees and to ensure quality services to the public at their doorstep by getting constant feedback from the residents and society. The area is fixed such that she is responsible to ensure the system efficiency for at least 2500–3000 households. The contribution from the individual residents for paying the supervisors worked out to Re 1 so that individual supervisors could earn Rs 2500 to Rs 3000 per month. Kishore Bhai and the SEWA jointly evolved certain norms, which needed to be strictly adopted by the rag picker members. Kishore Bhai strongly emphasised three non-negotiable norms to be adopted by the rag picking employees at their workplace. They are •

Keeping oneself very clean, neat and fresh with tilak on their face thereby giving emphasise to personal hygiene.

•

Greeting “Jai Shree Krishna” with a pleasant smile in case of Hindu residents or with similar words in their respective religion.

•

Maintaining punctuality to each household in door to door garbage collection. Moreover, the importance of overcoming the social barriers was felt

necessary to bring acceptance of rag pickers belonging to the Valmiki community, who occupy the lower status in the social stratification. Consequently, there emerged a need for creating a new social identity for the rag picking members as ‘Arogya bagini’ meaning ‘the sister of health’. To reduce their hardships, it was decided to provide the individuals a hand pulled trolley with containers for wet waste and plastic bags for dry waste. The need for winning the confidence and trust of the resident societies and commercial shopkeepers was strongly felt. Kishore Bhai also realised the necessity for educating them on the importance of solid waste management and to discuss the importance of their role in this collaborative model. With the support of SEWA, he planned and implemented an awareness campaign by holding a series of public meetings with the resident societies. He also developed a brochure on the project details for mass awareness. By convincing the public on the project ideas, specific support decisions and declarations were made.

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•

Support in terms of keeping their dry and wet garbages separately.

•

Public contribution to share the total expenditure.

•

Give periodical feedback on the system efficiency. The resident societies were also entrusted with the monitoring of the

attendance of the Arogya baginis and their quality of work. In order to develop the practice of keeping dry and wet wastes separately, the public were educated on giving logical and scientific reasons of environment pollution and everybody were provided with a plastic bag printed with the slogan, “Keep house clean, Keep society clean and Keep city clean”. Big containers or community bins for common level storage of domestic waste were placed in the selected points such that all the wet waste collected by Arogya baginis could be dumped. The next step was to clear the containers having wet waste. For this, the Nagarpalika made an arrangement to clear the garbage in three shifts using tractors and lorries with lifting system and transport it to the landfill dumping sites. The system of coding the vehicles, container sites, etc, site maps to the tractor drivers, registration of containers that are shifted to landfill sites are entered in the computers and online monitoring system of work done was developed. Because the whole procedure is online, both the citizens of Nagarpalika, administrative system and governance were enabled for efficient administration of the entire project cycle. Also, the Management Information System (MIS) was used to monitor the payment of salaries and wages on time to the employees. The project witnessed remarkable success in a short run, and the public credibility on the Nagarpalika increased tremendously. The residents were ready to increase their contribution from Rs 75 in the initial month of the project to Rs 200 per year towards the service they get through Solid Waste Management (SWM). Nearly 350 rag picking members of SEWA were now serving the Vejalpur Municipality as Arogiya baginis. At one point of time, they had become the best effective channel of communication between the Nagarpalika and the residents as any letter

0

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or message was passed to all the residents within two to three hours time. Residents also passed complaints if any, through Arogiya bagini. One of the executive committee members of mandli recalled, “We realized that this is the end of all our earlier sufferings and hardships. We thought it was a boon to us as we could return home by 11 a.m. and have time for our family and also could engage in sorting the dry waste to earn extra incomes.” Another Arogiya bagini added, “No more long walk in search of waste to earn our bread. No more anxiety of being chased by street dogs. No more pain out of injuries and skin infections.” In July 2006, the Vejalpur Nagarpalika got merged with the Ahmedabad Municipal Corporation. Problems started soon enough. One day SEWA organisers received a group of Arogya Baginis with a complaint. “We wish we got our salary on time so that we could pay our house rent on time, pay kiranawala on time, pay children’s fee on time. Now life has become hell. How long could we work like this with our salary pending for three months and we have nothing to eat? Previously it was good we used to get our salary on time.” Exhibit 1 : Municipal Solid Waste Management (MSW) rules 2000 Municipal Solid Waste Management Rules-2000 came into force by December 1999. According to these rules, it is the duty of every municipality/ULB (Urban Local Body) to adopt suitable system for solid waste management to comply with these rules. Salient features 1.

Promote segregation of waste at

Dry and wet waste

source. 2.

Avoid multiple handling of waste

Health hazards kept away

3.

Conduct awareness programs.

Public-Govt-NGO model

4.

Public/NGO participation

5.

Processing of organic waste

By composting, vermicomposting, bio-methenation

6.

Scientific disposal of inert waste in landfill site

Dumped in pit system

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Exhibit 2 : Legal Agreement between Vejalpur Nagarpalika and SEWA (2003) 1.

Working hours 8 a.m.–10.30 a.m.

2.

Equipments provided by Vejalpur Nagarpalika are hand gloves, masks, aprons, handcarts (6 nos.)

3.

One supervisor for 1500–2000 Arogya bagini

4.

Work allocation according to MSW-2000 rules

5.

41,578 houses are divided in to 12 wards; maximum houses for each Arogya bagini is 150

6.

The right to increase/decrease the wages is reserved with Vejalpur Nagarpalika

7.

Wages decided is Rs 7.30 per house per month

8.

The wages should be paid within 30 days of the following month at the latest

9.

SEWA is responsible for any injury, accident, damages to Arogya baginis

10. For any differences, the decision of Vejalpur Nagarpalika will prevail.

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CASE 19

Bharat Arms Company (BACO)22

M

r. Badal Shah, General Manager (GM) of Bharat Arms Company (BACO) received confidential information from the head office

at Bombay that the load on his factory was likely to abnormally go up during the next six months or so and he should gear up his resources to meet increased requirements of various items produced by BACO. Mr. Badal Shah called in his Production Manager, Mr. S. N. Sarkar, to give him the news and also to ask him about his needs for additional resources to meet the higher rate of output. He was informed by Sarkar that he would require a large number of machine operators to immediately start the second shift, followed by a third shift a little later. The GM then sent for his Personnel Manager, Mr. Rama Reddy, for consultation and a review of manpower requirements. After detailed consultations, it was decided to set up a special training scheme, to give educated young boys a crash course in various machinist trades, followed by on-the-job training in production shops. The scheme started with fanfare. It was inaugurated by the Chairman of the Board located at Bombay. 22

Prepared by K.D. Kohli “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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A Chief Instructor for this scheme was designated by promoting a fifty-two year old, Assistant Foreman, Banerjee of Works Inspection. He had worked earlier as an instructor for a regular artizen trainee scheme for about ten years, before being made Assistant Foreman in Works Inspection. Two senior skilled workers were also brought in as instructors from the tool room. They were also given a short course in instructional techniques for one month in the company’s Apprentice Training Centre at Bombay. A batch of 30 boys was recruited. The chief instructor obtained training schedules and supporting modules for various trades from Apprentice Training Centre, Bombay. However, he found these schedules somewhat lengthy and therefore unsuitable for the crash training programme which BACO had decided upon. He, therefore, modified these schedules and corresponding modules of Apprentice Training Centre and launched the training programme for the first batch. Before adapting the training modules, he had consulted the assistant managers of the shops concerned, as to the skill levels they required of the new trainees. Although, Mr. Banerjee had considerable experience as a training instructor, he did not believe in the ‘newly devised’ ideas about training policy training objectives, etc. He advised the two instructors to use the ‘demonstration method’ for the boys and to let them practice the jobs on which they were to be employed later in the production shops. When the boys were found to have attained the skill levels of an acceptable standard, with a reasonably good speed and accuracy, they were moved on to various production shops to do regular production work. The training technique adopted by Mr. Banerjee did seem to work initially and the first batch moved on to the shops well in time, to help augment production. However, while the second batch was still going through the abridged schedule and modified modules, disquieting reports started coming from the production shops. The foreman complained that the trainees, were not quite upto the mark. The foreman and his staff could not give them the supervision and instructions, which they needed to come up to the level of regular workers on-the-job. The trainees’ rejection rate

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increased, their shift output decreased and the line production dropped much below the expected level. The Production Manager, Mr. Sarkar got worried. He ordered re-deployment of these trainees on simpler jobs. The foreman at the machine shop transferred them to routine work and put them on inconsequential machine operations. The trainees found the work uninteresting and they felt demotivated. Their chances to earn bonus were greatly reduced and within a month some of them resigned and some others just started absenting themselves. This development was reported to the GM. Before the situation could deteriorate further, the GM asked the training manager to investigate the matter and make recommendations as to how the situation could be improved.

CASE 20

Bharat Automobile Company 2

B

harat Automobile Company is a large company with its head office in Bombay. Mr. Sunil Kumar the Personnel Manager has invited

Mr. Tuhin K. Mukherjee, a management consultant, for advice on selection and promotion policies. Mr. Sunil Kumar asked Mr. Mukherjee to come as soon as possible in the morning. When Mr. Mukherjee arrived, Mr. Sunil Kumar said, “Tuhin, I am glad you’re here. I’ve been having some trouble in selection recently. Briefly, let me outline how we handle selection here.” Blue-Collar Employees Conduct an interview to screen out the misfits, then administer a test battery—mostly abilities test—and then interview the best of the lot (based on tests). For crucial jobs, either security-wise, or if the job involves expensive equipment, get two letters of reference from previous employees. White-Collar Employees Clerical, and similar category— the procedure is the same as for blue-collar employees except references are always checked out. 23

Prepared by Rama J. Joshi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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Managerial Employees Conduct multiple interviews, group discussions, administer intelligence test, personality tests, and reference checking. In the case of filling up managerial positions, internal candidates can also apply and they go through the same procedure. Sunil Kumar added, “I’ve also been noting down the happenings in selection for the last six months since I’ve been in this job. a.

We are having a lot of trouble with reference letters. When we ask people on the selection panel to rate the applicants on the basis of all factors, including references, we find they read different things into these letters.

b.

Our turnover at all levels has been high. My boss thinks it is because we are not matching the best people to the right jobs.

c.

We are also having some problems with relation to the use of psychological tests, specially in the context of promotion from within. For example, there arose two vacancies of branch managers in our regional marketing divisions. We decided to fill these vacancies by promoting internal candidates. Out of a total number of 27 assistant managers who wanted to be considered for the posts, 12 were initially short-listed to be considered. This initial screening was done on the basis of their performance ratings, relevant experiences, qualifications, seniority, etc. They were also interviewed to judge their suitability for the next position. In order to further short list the candidates they were administered the following tests: (i)

The adaptability test to measure the intellectual caliber of candidates.

(ii) Self-actualisation test to measure the motivational profile of managers. (iii) The leadership style questionnaire for ascertaining ‘tasks’ or ‘people’ orientation.” The selection programme was held in Bombay. Only nine candidates from different regions could make it. The whole programme was completed in a single day. The test administration took about two hours in

H um an R eso u rce M an ag e me nt

the morning. This was followed by group discussion. Individual interviews were conducted in the afternoon and went up to 8 p.m. By then the test results were also ready. The relative rankings of the nine candidates on each of three tests were presented to the interview board. However, the two sets of ranking did not match. The person who got the first ranking in the interview did very poorly on leadership test. Also another person who did very well on two out of the three tests was found to be quite mediocre in the interview. The personnel manager is wondering as to what should be done to fill vacancies from within.

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CASE 21

Employee Participation at Bank of Baroda 2

B

ank of Baroda is ranked among the first four nationalised banks in branch network, deposits, advances and profits. It distinguishes

itself in banking innovation and advancement. It stresses on employee development, rigorous selection for promotion and overseas postings and involvement of unions and officers association in official celebrations, annual business planning and mid year review. Bank of Baroda’s branches in Madhya Pradesh were part of MP Zone, which was the smallest of the 14 zones of the bank in branch network, business size and profits. It has 84 branches distributed in two regions — Bhopal and Raipur. Not many medium and large scale industrial units existed in the zone. Hence, bank business was predominantly lending to farm sector, small industry and trading and raising deposits from public, government and semi government corporations. The bank had two workmen unions. The first, Bank of Baroda Employees Union, Madhya Pradesh (MP) was a constituent of All India Bank of Baroda Employees Federation and recognised by the bank as 2

Prepared by K. K. Verma “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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the sole collective bargaining agent for the employees (henceforth called Union 1). The second was Bank of Baroda Employees Association, MP. This was a constituent of the All India Bank of Baroda Coordination Committee, affiliated to banking industry major power block, AITUC (henceforth called Union 2). For officers, All India Bank of Baroda Officers Association was recognised by the bank. In August, Reserve Bank of India (RBI) fixed deadlines for all banks for clearing housekeeping arrears and prescribed grave penalties like holding the CMD responsible for non-compliance. Bank of Baroda was in a serious housekeeping situation. It advised the zones to hold meetings with unions/association on regular basis so that the arrears could be cleared early. Consequently a joint meeting was called. This was the first occasion in MP that the two unions and the association sat together with the management to discuss the business related issues. In addition, they argued that if the unions/associations could collaborate in housekeeping, they could as well participate in business development. The Zonal Manager pointed out that as all employees were going to apply for bank’s equity shares in the offing, they would own the bank and therefore, irrespective of the affiliation, they all had the responsibility for improving the bank’s image, reputation for service and performance. All facts and figures relating to zone’s housekeeping and reconciliation of accounts were placed before the members in the meeting. They were also provided business targets and actual performance so far reached. The management representative expressed the desire that a zero level of pendency in Inter Branch Transaction of Accounts (IBTA) could be aimed and the unions/association were asked to extend full cooperation. Leaders of the unions/association felt happy that they are being approached for solving the housekeeping problems and confessed that they were under the wrong impression that the zone was doing well. They suggested that customer service is the most important area and that large branches should hold similar meetings. The management was able to initiate the concept of a new relationship, though in a limited way for the business process. Besides the formal joint forum meetings the regional mangers and the unions/association representatives began interacting informally.

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These meetings had a deep impact on the managers and members of unions/associations. The process encouraged the staff towards greater care for customers and business. They used their contacts, neighbourhood and family relations for new accounts. Even peons and messengers went for loan recovery from small borrowers. Interunion rivalry began to wane and the two unions started agreeing with each other on business issues. This pro-business reaction by the unions was a total change in the attitude and thinking of the union leaders. The result was the growth in deposits of branches which had been declining/stagnating in previous years. Deposit outstanding recorded 17.29 percent growth. Credit restrictions were minimised and the zones advances growth came very close (8.98 percent) to the banks advance growth of 9.46 percent. The non-performing assets came down to 23.51 percent from 38 percent. The business per employee rose from Rs 57.69 lakh to Rs 64.42 lakh. In short, there was remarkable all round business growth in the MP zone and it was maintained during the subsequent years. However, during these joint meetings, the unions/associations also started raising issues about employees’ grievances, a share of profits by way of increments, special attention to be given to the issues raised by Union 1 as it was the recognised union. It also sought special status. If these joint meetings did not focus on the workers/officers related problems, the unions/officers representatives would walk out from the meetings. Mutual criticism and finger pointing became the order of the day at the cost of losing sight of the objective for which participative activities were started. During these meetings, this issue became so prominent that the Zonal Manager started wondering if he has done the right thing.

CASE 22

Fitter Murari 2

M

r. Murari joined Laxmi Instruments as an assistant fitter after completing his training in the local polytechnic. Belonging to a

family of artisans, Mr. Murari had inherited a natural aptitude to pick up skill. At the polytechnic his instructors found in him an unquenched thirst for learning and an unbounded enthusiasm for acquiring and enriching his dexterity. As a result, he secured the top position in his batch. He did not have to wait long to find a job at Laxmi Instruments as a skilled worker. After six months’ probation period, he was confirmed on his post. Having settled down, Mr. Murari got married. The company allotted him a quarter near the factory. He persuaded his parents to come and live with him. The same year Mr. Murari was promoted as fitter grade II and transferred to the tool room. Mr Bhatnagar, in charge of tool room, explained to him his duties saying, “Murari, I have heard a lot about your devotion to work. I am confident that you will continue working hard. You can come to me whenever you need help. You will not find me wanting in any way.” During the next two years, Mr. Murari, though not the senior most 25

Prepared by A.C. Nanda “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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fitter grade II, had officiated twice as grade I fitter. He was grateful to Mr. Bhatnagar for providing him these opportunities. This, however, caused some sort of heart-burning among other senor grade II fitters. When Mr. Babu Lal, grade I fitter, retired. Mr. Murari was almost certain that he would be appointed as grade I fitter in place of Mr. Babul Lal. But, as a bolt from the blue, Mr. Murari came to learn a week later that a notice had been put up on the company’s notice board to invite applications for the post of grade I fitter. He rushed to Mr. Bhatnagar and said, “This is how the company appreciates hard work! Strange are the ways here! I have sweated all these years and when it comes to reward, I am made to feel like a beggar; stand in the queue with a begging bowl in hand and crying for mercy. Mr. Bhatnagar, you must help me in getting my due promotion.” “No, no,” replied Mr. Bhatnagar, “Do not get upset. I shall plead for you when I meet the works manager this evening. Rest assured, things will come out alright.” Next day, Mr. Bhatnagar sent for Mr. Murari and told him, “I am sorry, the works manager insists on selection by interview. In his view, you should also apply for the job and follow the same procedure as the rest of applicants would do. There are other grade II fitters and some are senior to you. Their claims cannot be brushed aside.” Mr. Murari could stand it no longer. He shouted, “ I knew it already. You officers are all made of the same stuff. You and your tribe do not believe in justice and fair play. Merit and hard work mean little to you. What a fool I am that I did not understand the position earlier.” Mr. Murari did not apply for the post. Instead, he started looking for a suitable job elsewhere. After a few months he left Laxmi Instruments and joined the United Engineering Company as a foreman.

CASE 23

Germalim Limited2

G

ermalim is a private limited, family-based pharmaceutical company located in Bombay with an annual sales turnover of nearly

Rs 10 crores. Started about 10 years ago at a small scale, the company grew phenomenally at a compound rate of practically 40 percent per year, thanks, among other things, to the government’s squeeze against multinationals and also equally, to a young professionally trained family member having taken over the affairs of the company and speedily employing aggressive marketing strategies that proved to be highly lucrative. Germalim has one strong product, an analgesic-cumtranquiliser, and two variants of the same product for more specific applications, which together command a market share of practically 50 percent and account for 60 percent of the company turnover and practically as much of its profitability. The company employs about 20 managerial and 200 non-managerial personnel in its newly set up factory in Aurangabad, about 120 medical representatives and 25 managerial staff in the field, headed by 4 divisional managers and about 150 other personnel for materials, stores, head-office functions, etc. A SWOT analysis, which the company had undertaken as part of implementing Management by objectives (Mbo) progamme had indicated, 26

Prepared by S.K. Roy “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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however, that the organisation at this stage, would do well to minimise such a dependency on a single product and should, therefore, formulate as early as possible firm and reasonable short-range objectives, as well as strategic action plans, towards developing at least two other major product lines based on proper market surveys. It was also decided to achieve at the same time a wider and deeper penetration of the existing market segments. Studies had also shown that the field set-up of the company on the sales side called for major improvements, such as streamlining the information and control systems, making the distribution network and facilities more adequate, administration of the stockist network in a more detailed and consistent manner, etc. The company had grown very fast in terms of turnover and profits, primarily due to the strength of the single product which did very well in the market but, at the same time, not much attention could be given earlier to streamline the sales and marketing organisation. During this period the company also undertook in a big way a programme of profesionalisation including the installation of an Mbo programme, performance appraisal systems, and management information and control systems, with a view to minimising its earlier informal and small-company culture. The Managing Director himself was looking after the marketing function. But, as the company grew both in size and complexity, the need was increasingly felt for a full time general management functionary at the top, a responsibility which the Managing Director was unable to take upon himself, if he continued to look after the marketing function. The decision was, therefore, taken to hire the services of a fully qualified and experienced marketing manager who could take charge of the function including coordination with the other functions such as manufacturing and materials. As per the practice prevalent in this industry, initial attempts were made to locate a suitable incumbent through informal contacts. But this did not yield the desired results. An attractive newspaper advertisement was then issued which brought in about 35 applications out of which about 15 could be screened off prima facie, and the remaining 20 applicants were called for an initial interview

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primarily for short list purposes, and on the basis of the latter exercise another 10 could be eliminated. A comprehensive job description had been prepared which stipulated, on the one hand, familiarity with the industry particularly with the product lines on which the company was operating, appreciation of marketing problems in the field as well as good understanding of the product development, aspects of marketing, and on the other, certain personality characteristics such as drive, willingness to travel extensively, sociability, etc. The short-listed candidates were subsequently put through a selection procedure consisting of an unstructured group discussion, a few relevant psychological tests focusing on the relevant traits, and independent interview by the MD and an external consultant. The choice finally narrowed down to two individuals. One of them had long experience as a sales manager in a wide variety of pharmaceutical companies. Through familiarity with field problems, aggressiveness, strong result-orientation, the experience of launching successfully about two to three new and rather difficult products earlier in his career, willingness to work hard and go into details, etc. seemed to be his forte. He was looking for a change because being in a multinational company his growth prospects were limited. His weakness, on the other hand, appeared to be his autocratic style of working, and a certain lack of professional finesse that is increasingly looked for in present day managers. He was also rather poor in conceptualisation of problems and situations. He did not quite appear to be a well-rounded marketing manager with whom the company could form a long-term association. The second candidate had a “touch of class” about himself, which practically everybody on the interview board agreed. Highly intellectual, a thinking person, and well-read not only in management but even liberally, he had a marketing services background including product promotion and market research in multinational companies as well as in a few Indian companies. He was asked in the interview as to whether he considered himself to be ready to head the marketing function in view of the fact that he had not had much first-hand experience on the sales side. He convincingly replied that nobody could effectively function with marketing services unless he possessed good familiarity with the

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field and the problems of selling, and also that in the course of long association with marketing services he naturally had acquired as much of field familiarity as a sales manager did. Probing his familiarity with the field and problems of actual selling seemed to produce encouraging results. He was quite high on self-assurance too. His weakness appeared to be only two, namely a certain amount of slowness in comprehending and responding to stimuli, and no demonstrated competence and history of achieving results in the line function of marketing. The last weakness was important but it was reckoned that the company already had a group of people down the line who had produced excellent results over the last several years, and that what the company therefore needed at the head of the marketing function was someone who could think, conceptualise, diagnose problems, etc. Accordingly, the second applicant Mr. Chatterji got selected. Within about six months of his joining, a definite interaction pattern between him and the MD became evident. He wanted to change many of the policies, procedures and systems followed in the marketing function, and every time he sought the MD’s concurrence for these changes, the latter demurred. The MD’s point of view was that these systems, after all, had worked and produced results all these years and why should anybody seek to change them without having worked with them for a fair length of time. Mr Chatterji’s customary response to this was typically in the form of a question: How could he be held accountable for achieving results when, as the head of the function, he did not have the freedom to organize things as he thought fit? As already stated, this was an Mbo company, which meant that, among other things, accountabilities are quite sharply defined. A conflict relationship had implicitly developed between the Marketing Manager and MD. The external consultant intervened and tried to facilitate communication between the two including appreciation of each other’s point of view, but his efforts did not meet with much success. It seemed that the issue, as it appeared, was only symptomatic and that there was something more than meets the eye in the conflict. In the subsequent months, a number of decision situations and problems emerged, in the course of which it became rather clear that

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Mr. Chatterji was probably trying to play safe, was avoiding quarterly review of results with the MD or even if he participated in such reviews he usually would come up with a whole host of rather lame explanations as to why results had not been achieved. Defensive behaviour was increasingly being observed in his decisions and responses. Increasing evidence was also available that the marketing function at the Head Office (HO) had slowed down and now took much more time to process information and issue decisions than was the case before. In a number of instances, the field managers were getting impatient because such delays at the HO directly affected their performance and results, and they started making complaints to the marketing manager. And since the MD himself had looked after the marketing function earlier, and this being a private limited company, copies of these complaints were usually marked to the MD too. This only made the relationship between the Marketing Manager and the MD further confounded because every time the MD received a complaint from the field, he would try to discuss with Mr. Chatterji, who generally continued to be even more defensive. It was further noticed that in the sales meetings and conferences, the regional and divisional managers started playing games with the Marketing Manager taking advantage of the latter’s inadequate familiarity with field problems, peculiarities of the respective territories, stockist complaints, discount to be given to various stockists on different products, etc. During this time Mr Chatterji did travel out in the field very extensively but apparently such travel had not given him adequate familiarity with the details of the field operation. At the same time, however, Mr Chatterji’s contribution on the product promotion side was found to be satisfactory. His ideas and contributions in respect of new products that could be undertaken, putting out better quality promotion literature, training of sales personnel, etc. were not only adequate but even excellent. The company, however, already had an experienced and competent product manager, which meant that the net value of Mr. Chatterji’s contributions in this area was not substantial. Mbo stipulates quarterly performance review, and the first two reviews of Mr. Chatterji by the MD, on which the external consultant

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was also consulted were rather rough and unfavourable. In a number of instances the MD pointed out what appeared to be rather serious and blatant inadequacies on Mr. Chatterji’s part in terms of failure to take a decision in time, overlooking important details in taking decisions, not moving aggressively enough and seizing market opportunities, and such other aspects of managerial behaviour. Such negative evaluation and review only confounded the relationship further and it was increasingly becoming apparent that Mr. Chatterji was getting nowhere in the organisation. This state of affairs continued for another couple of months and then came what proved to be ‘the last straw on the camel’s back.’ A regional manager was suspected to have sold in the market in connivance with a couple of medical representatives, substantial stocks of samples that were meant to be distributed to physicians free of charge. Sample-selling is widespread in this industry among medical representatives but usually a company would take a stricter view of the matter when the same thing is suspected at a managerial level, for otherwise the long-term implications can be very damaging for the company. A prima facie enquiry conducted into the matter went against the regional manager. Mr. Chatterji thereupon opined that the manager concerned should be asked to resign. The MD, on the other hand, advised that the man concerned was an old-timer with the company and has had a reasonably good record of performance, and therefore, a more lenient view was warranted. Mr. Chatterji made an issue out of it and resigned.

CASE 24

Harnam Singh—Crane Driver2

N

orthern India Oil Corporation (NIOCO) was an oil prospecting company operating in a wide area spread all over northern states

of Punjab, Haryana, Himachal Pradesh and also Western Uttar Pradesh (U.P.) NIOCO’s head office was located in Solan near Shimla. Its activities were mainly confined to Himachal Pradesh and U.P. Each project area where prospecting was in progress was under a Project Manager who reported to the Chairman and Managing Director (CMD) of the company. The labour-management relations in various projects had their own characteristics. Each project had a Personnel Manager to assist and advise the Project Manager on employee welfare, grievances and discipline, besides maintaining personnel records. NIOCO, however, had a Director at the headquarters for general administration of personnel and IR policies of the corporation as a whole. Sardana Project of the company was located about 15 kilometers from Meerut where 2400 employees, including 700 workers, were employed. They worked at a number of drilling sites where work went on around the clock on three shift basis. There was an independent workers’ union at this project, of which all office bearers were employees of the 2

Prepared by K.D. Kohli “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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project. The union was, however, affiliated to the main workers’ union operating at the headquarters, which in turn was superintended by labour leaders of the same union at the national level. The union-management relations at the project level were generally cordial. Harnam Singh was a driver of a mobile crane (5 ton capacity) in this project. He was working in the general shift at the Salal drilling site along with 24 other workers from transport and other disciplines. The main job of Harnam Singh was to lift and load heavy materials and equipment during erection and dismantling of drilling rings. He had been working in Sardana project for the past ten years. His service record had been generally satisfactory and he was rated an average worker. He was 36 years old. About three years back he was warned for ‘careless work’ on Palwal drilling site where he had operated the crane just before the slings were fully adjusted on a bunch of long pipes. A serious accident was then averted through sheer by chance. A few months back, a new foreman, Ramamurthi joined the Sardana Project on transfer from Chamba Project and was placed incharge of transport group, which included Harnam Singh. Ramamurthi was 32 years old and was a crane driver himself before being promoted as Foreman about three years back. Ramamurthi reported to the Executive Engineer, Transport at the project headquarters. A few days back, Harnam Singh was assigned the task of loading a ten-ton trailor with pipes dismantled at Salal site for transporting to the new site of Dongri about five kilometers away from Salal. Ramamurthi noticed that Harnam Singh was moving the crane with three pipes at a time whereas, he thought, the crane could easily take a full load of at least six pipes at a time. He came to the crane cabin where Harnma Singh was sitting and driving the crane. “What is this Harnam Singh? You should do your work properly. Why don’t you load the crane dully,” he told Harnam Singh. Taken by surprise, Harnam Singh protested and told Ramamurthi “ I have been working as a crane driver for the past ten years. This is all that is possible. I have been doing this type of loading for seven years now”. Dismissing

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his protest, Ramamurthi told him to take back the crane and said, “Do not move until I tell you”. So saying he got three more pipes placed on the slings and then asked him to move these to load on the trailer. When Harnam Singh returned after a few minutes for another load, Ramamurthi told him, “You think you are in a marriage party. The way you work the crane it would seem we have no deadline to meet. Don’t think you can get away with all this. I have set many scoundrels right.” Ramamurthi then walked away to another location but kept watch on Harnam Singh throughout. Harnam Singh felt deeply hurt by this incident, but kept quiet then. During lunch interval, he went to Rampal, a worker in his section and a member of the executive committee of the union, and told him about the Foreman’s behaviour. Soon the report of the incident spread to other workers, and a group of them assembled together and decided to lodge a compliant about the incident with the Personnel and Industrial Relations Officer of the project. Daulatram, another union activist, had also by then joined the group. A group of workers, led by Daulatram and Rampal, then left the worksite and reached the Personnel and IR Officer’s room at about 3 p.m. The first act of the Personnel and IR officer, on seeing the group of workers rushing into his office, was to look at the wall clock. “What is the matter?” he asked. Rampal narrated the incident and demanded immediate action against the Foreman. “He has insulted all of us, we shall not tolerate it,” they all protested. The Personnel and IR Officer then got the full details from Harnam Singh and advised the workers to get back to the worksite, promising meanwhile to discuss the matter with the Project Manager. Immediately thereafter, Ramamurthi was sent for by the Project Manager and on arrival at the office, the Project Manager questioned Ramamurthi about the incident. He, however, denied having abused Harnam Singh during questioning but did accept having asked him to take full load of pipes in each trip. Finally, he told the Project Manager that Rampal and Daulatram were inciting the workers against the officers and were obstructing supervision of work at the drill site.

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Next day, in the morning, Rampal and Daulatram received chargesheets asking for their explanations as to why disciplinary action should not be taken against them. The charge-sheets alleged that they had committed major offences of creating disturbance and commotion at the workplace during working hours, had themselves stopped work, incited others to stop work without reasonable cause, and had left their work spot without permission. In the evening, on the same day, the union held a meeting of their workers at the main gate of the project office wherein the Union President and Secretary strongly condemned the behaviour of the Foreman. The Union Secretary demanded the withdrawal, by management, of the charge-sheets issued to Rampal and Daultram and asked for proper punishment for the Foreman. They held out threats of direct action and cessation of all drilling work, if the company pursued the disciplinary proceedings against Rampal and Daulatram. The union sent a telegram to the Chairman and Managing Director at Solan seeking his intervention in the matter. There was a lot of tension throughout the project, and progress of work slowed down considerably in the subsequent shifts. The following day all the workers abstained from work. The Director (P&A) from the head office arrived in Sardana that evening with a mandate to get the work going.

CASE 25

Indian Company 2

T

he company began its operations in the eighties in the automobiles sector and soon achieved success. It was partly because of a huge

demand and also a unique organisation culture and management strategies. The unique management style of developing work culture and its compliance, developing familiar norms where workers help each other with their work and problems, each member respecting the opinions of his fellow workers valuing teamwork, creation of a healthy intrateam atmosphere, a performance orientation and values of economy. Its behavioural, performance and disciplinary norms were very strict. And any deviation would warrant strict action with a decrease in the incentive amount (which was built into the salary) to a warning and even dismissal. Maruti has had a single union since its beginning. In fact as part of the progressive management’s policies, the company’s management led by the then Managing Director, had encouraged unionisation of labour in the company. The MD was from a public sector undertaking, and some of the union leaders of that company were recruited by him in this company. The first union was formed by these leaders with an affiliation to Indian National Trade Union Congress (INTUC). Subsequently, this union could 2

Prepared by J.S. Sodhi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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not win the support of all the workers. About 20 percent workers formed another union with the support of Hind Mazdoor Sangh (HMS). Despite this, the erstwhile union continued for some time with its operation as a recognised union, although splinter groups along with those who were with the Bhartiya Mazdoor Sangh (BMS) fomented trouble in the factory resulting in tensions on the industrial relations front. The INTUC union organised a two day strike. Alongwith this, dharnas (sit in) outside the factory gate were organised disrupting the entry and exit of workers and officers. At this time, the management intervened and persuaded, through education and consultations, all the workers to unite under the banner of a single independent union without seeking affiliation with any political party or union. Majority of the workers agreed to the management demand. The management also agreed to hold free and fair elections within the premises of the factory at their expense. An elaborate machinery was created for the same and elections were held and the majority union was given the recognised status. Elections are usually held during lean periods and generally on a Saturday. The General Secretary and the President of the union are elected on company basis. Other office-bearers are selected on divisional basis and each division sends one representative. The whole exercise has, however, not been smooth, particularly in the initial years. Some members of the INTUC and bulk of the other union representatives attempted to create trouble particularly on the appointment of a returning officer. When this demand was not met gate meetings were held, members of Parliament were approached who extended support to the union members. Workers applied to the Registrar of Trade Unions for registering their union. An appeal was also made to the High Court. As a consequence of all this, workers observed a two day strike which was led by a handful of leaders. The management acted tough, suspending a number of activists, thus giving the message to agitators. The management even refused to talk to them during the time the leaders were agitating. Finally, workers accepted having an internal union, thus yielding reluctantly to the management’s demand of deaffiliation of their trade union. The management also persuaded the

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unions to change their constitution by incorporating fresh clauses which prohibited outsiders as union leaders, no political affiliation, resort to go slow, gherao or other negative practices along with clauses of union’s cooperation with the management to develop a positive work culture and improve productivity. In the 1990s, the then State Government attempted its best to prop up an outside union in the factory with a political affiliation to the Lok Mazdoor Sangh (LMS). About 20 percent of the workers did lend credence to this union. The union was not recognised by the company. However, some of the active members of this union gave their charter of demands which included, among others, 20 percent bonus (during that year no bonus was paid till that time) and production bonus at a higher rate. The management adopted a policy of not entering into any dialogue with them. The LMS leaders resorted to negative tactics of a dharna outside the factory premises, boycott of canteen and even assault on a number of managers. The company moved to court against dharna, which was organised outside the factory gate. The High Court decided in favour of the company. Despite this, dharna at the gate was not lifted, as the state government kept on instigating the agitators. The Labour Commissioner had to intervene. Finally, the state government and the leaders of LMS relented, because the company management went public with the statement that it is ready to shift the factory site from Haryana, which would have resulted in heavy loss of revenue to the government. Union-management relations which were described by all the officials as cordial were not so as per the views of the workers and the trade union leaders. There has always been an uneasy calm. The company has tough productivity standards. Workers have to work hard to achieve them. There are a number of productivity linked schemes which serve as incentives to the workers to work more. Since 1994, there has been a disagreement between unions and management over the distribution of production incentive. The company had introduced technological upgradation in some of the assembly shops which led to increases in output per worker per day. Unions began demanding a share in the

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increased output, which has been resisted by the management. This led to renewed agitations and a call for strike. During this period, the management suspended the President, General Secretary and six others for calling a general body meeting which unanimously agreed for going on strike. A two day strike was subsequently organised. Different versions for the reasons of strike exist. The union claims that it was due to the company’s plan of privatisation. It was during this time. The management claims that it was because of the pressure tactics adopted by the union to press their claim for the provision of a higher incentive, a long standing area of disagreement between the unions and the management. The scheme provided incentives to the workers on the basis of number of units manufactured in the factory in a day. Some of the plants were then been modernised. As a result of this, productivity and output had increased. The management claimed that increases in productivity have been the result of introduction of new technology, which the unions negated. Nonetheless, production in a day has increased tremendously. The unions claimed that the incentive scheme should be reformulated. Management has in fact been claiming, according to the union officials, that the earlier scheme needs to be modified in favour of the management. The management had put forward a proposal that those employees whose quality was not upto the required standards may not get incentive money, but the union felt that it would bring arbitrariness into the distribution of incentives. Coming back to the issue of suspension of union leaders, for which the immediate provocation was the two day strike, it needs to be highlighted that the notice and resolution for the same were approved by all the office-bearers of the union. A proper notice was given to the management for going on strike. The management sacked not only the President and General Secretary of the union but also one worker from each shop to create a fear psychosis among all the workers. Eight days’ salary of each employee participating in the strike was also cut for that month. Subsequently, suspensions of three employees who were not union office-bearers were revoked, although these employees had participated in the meeting, which had called for strike.

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According to the union representatives, the management suspended only those office-bearers who were antagonistic of their policies. Subsequently, some of the office-bearers of the union who were sympathetic to management became active and the management began dealing with them. According to the employees such leaders represented only about 20 percent of the workforce. The level of trust between the management and the union has reached its lowest level and the management is wondering what should be done.

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CASE 26

Management’s Dilemmas 2

T

he company has been a pioneer in the field of electronics being a major manufacturer of a vast range of products substantially meeting the

country’s needs in vital sectors like defence, communications and radar, T.V. broadcasting, semi conductors, electron tubes, opto-electronics, systems engineering or turnkey projects. The unit for which the case pertains is engaged in the manufacture of various radars, communication equipment including multiplexing and channeling design and fabrication, turnkey communication system including telemetry and tele-control for the military needs of the country. This unit employed 2390 non-executives and 583 executives. The performance of the unit was good and had shown an increase every year. The management made comprehensive efforts to contribute meaningfully to the total organisation’s endeavour to excellent performance and for maintaining its “leadership in professional electronics.” The main plank of management’s employee relations policies was participative management. The origin of participation could be traced to the management decision to introduce Quality Circles. It was felt that QCs would achieve the following: 2

Prepared by J. S. Sodhi “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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(a) Ward off monotony—QCs would make people feel that their work was meaningful. (b) Enable workers to utilise their capabilities and do something creative. (c)

Enable them to do something worthwhile on their own.

(d) Contribute to the development of workers and sharing of experiences, knowledge and ideas in the process. (e)

Develop a problem-solving attitude in workers rather than creating problems for the management. In the initial two years of the introduction of the movement, QCs

more than doubled as compared to the previous year and this continued. From a mere 6 QCs in the first year, the number rose to 159. The QC members made presentations inside and outside the company and won a number of regional and national awards. The management by and large was happy as QCs also resulted in huge savings. While the QCs were in operation for about two and half years, the management decided to introduce the Scheme of Employee Participation in Management. Its objectives were as follows: i)

To promote continuous increase in productivity for the economic and industrial development of the nation, which in turn will also benefit the company and its employees.

ii)

To derive benefit from the experience and ideas of employees working in specific areas with the aim of improving the quality of products and the working environment.

iii) To give the employees a better understanding of their role, the importance of their contribution in the process and other operational aspects. iv) To satisfy the urge of self-expression of the employees. The management was enthusiastic and made similar sincere efforts for the success of the workers participation in management through the shop samities, works councils, joint developmental councils, etc. However, worker’s participantion in this form failed despite all the efforts. The management is in a dilemma as to why, on the one hand, QCs are succeeding and workers participation in management is failing.

CASE 27

Marine Electric Company

0

T

he Marine Electric Company was established as a departmental concern of the State Government and was converted into a Public

Limited Company. The Company manufactures a wide range of electrical equipments such as Products A, B, C, D and E. In addition to the product sales, the company undertakes turn-key jobs for complete electrification of many specialised and varied types of industries. Except product D, all the product divisions are making profits and have maintained a growth rate of about eight percent. The objectives of the company, inter-alia, include; evolving a participative style of management to ensure good working conditions and job satisfaction for all employees; ensuring wage commensurate with their performance, career advancement, goodwill amongst all employees and also respect for human individual. The corporate plan of the organisation is formulated by the corporate management committee which consists of the Chairman and the Managing Director, Functional Directors and the General Managers. The Managers’ involvement in corporate management committee is rather limited and 30

Prepared by K. B. Akhilash “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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they are only informed about the “annual targets and monthly targets” to be achieved. The organisational chart, representing managerial positions indicates that the post of manager is an important position in the organisational hierarchy, as he heads one of the divisions of the organisation. Normally three to five departmental heads will be reporting to him. Each departmental head is responsible for one of the major activities of the division. Under each departmental head, there are superintendents responsible for activities of some of the sections of the department. Each section consists of supervisory and other workers. About five years back, the organisation consisted of 19 managers, 60 departmental heads and about 100 superintendents. Most of them had, to their credit, more than 10–12 years of experience in the company and were looking for better opportunities and advancement in the organisation. The company has an individual appraisal system, which is confidential in nature. It is treated as an annual ritual and only adverse remarks are looked into while considering the individual for next promotion. The recruitment and promotion in the supervisory and management cadres were governed by the “Cadre and Recruitment Rules of the Company”. The rules stipulated that managers should be selected through promotions from the cadre of departmental heads, giving preference to the departmental heads of the same division. Direct recruitment at this level was allowed only when there was no departmental head who could be promoted. The company believed in “new blood theory” while recruiting persons at the level of departmental heads, and other levels, and hence allowed 20 percent quota for direct recruitment at the level of departmental heads and 15 percent at other lower levels. The rules also stipulated that while promoting superintendents to posts of departmental heads, preference should be given to the superintendents of the same department. While promoting supervisors to the level of superintendents, first preference was given to supervisors of the same section, second preference to supervisors of the same department and third preference to supervisors of the same division.

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In order to meet the growing requirements of the organisation and the needs of the individuals, the management promoted many employees to the supervisory level, supervisors to superintendents and superintendents to departmental heads. They were promoted against the vacancies and not on the basis of their competence alone. Simultaneously, some members were also directly recruited. After promotions and recruitments, the managerial personnel consisted of 22 managers, 120 departmental heads and about 200 superintendents. Some of the departmental heads and superintendents made several observations some of which are reproduced below: Mr. Hardish, who is a departmental head of a production shop said, “I am working in this organisation for more than 12 years. The other departmental heads were working under me earlier. I helped them to get better opportunities in the organisation. Today, I am doing very little work and it is not interesting also.” Mr. Ramsey, an experienced departmental head of the design department observed: “There is no future in this organisation. There is one more senor colleague in my department. I can never become a manager in this division. I am staying in this organisation because of the reasonable salary I am getting here. At this age it is difficult to get an opportunity in any other department.” Mr. Dharan, who was recently promoted as departmental head, said, “ I am not happy with my promotion. I am the departmental head, just for namesake. I am doing the same old job.” Mr. Gokuldas, a superintendent of production planning, commented, “I am very hard working but in this organisation personal ability or merit is no consideration. If you want to get a promotion in this organisation, you should be at the right place at the right time. Look at the people in the projects department. They all joined with me. But now they are managers and departmental heads.” Some senior managers were recruited from some other organisations and they started talking about a career planning programme. This idea

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got momentum in the organisation as it was a much-talked-about issue in the organisation. The top management group also discussed about the different aspects of career planning. The following are the views about career planning expressed by the Corporate Management Members (reproduced from the minutes of top management committee meetings): The production director said, “The manager should plan his career. If he is capable, then he can come up. He should also seek better opportunities outside the organisation.” Finance Director mentioned that due to many regulations from the Government, it might not be possible to adopt a definite career planning. General Manager Personnel analysing various processes and consequences of career planning concluded: “Illness is better than cure.” The Chairman expressed, “We are making profits only through inflation. We want some returns first and then only we can think of promotions and prospects.” However, the middle management is concerned about their career and have made a representation to the Chairman of the company.

CASE 28

National Oil Company

1

T

wenty four year old Balasubramaniam, popularly known as Bala amongst his colleagues, joined National Oil Company’s (NOC) project

at Tanda in 1980 as a Junior Godown Keeper (JGK). His main duties as JGK included receiving, stocking and issuing a variety of materials and equipments required by different divisions of the project. Three years later in 1983, he was promoted as a Senior Godown Keeper (SGK) to supervise the work of three or four JGK in the Tanda Project. In 1993, however, he was transferred to NOC’s Oil Research Labouratories at Pathankot and posted as SGK to the stores section of the laboratory which was located at about two kilometers from NOC’s head office building in Pathankot. Bala had joined the local union of Tanda project immediately after his initial recruitment and within a year got himself elected as its secretary. Some time later, he became its Vice President. Within a few months of his transfer to NOC Oil Laboratories, he became an office bearer of the company’s central union at Pathankot, but fell out with other union officials some time later. 31

Prepard by K. D. Kohli “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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Bala was reported as an average worker. Except for minor complaints of leaving his workplace without permission and disturbing others at work, there was nothing significant on record against him either in regard to his work or conduct in the NOC. Throughout his service in NOC he continued to be an active union worker. He was known as a good platform speaker and the booming voice he possessed helped him to create a fairly good impression on his audience. Bala had the unsavoury reputation of being somewhat temperamental and was also known for lashing an occasional vituperative tongue. One Tuesday morning in March, 1996, he had come to the NOC’s head office building presumably on some laboratory work. At about 11 o’clock he was talking to some union members, a little loudly though, in the porch of the administration building. The office of the Personnel Manager (PM), O.P.Handa, was located on the right side of the porch. One of the windows of his office opened into the porch. Opposite to Handa’s office was the office of G.N. Acharya, Chief Administration Officer (CAO), head of the department of administration. Handa, a retired army officer, on hearing the noise, asked his peon, “Tell them to move away from the porch as the noise caused by them is disturbing me.” The peon went out and asked Bala and others to move away. “Who the hell are you to ask us to move away? Go, do your work.” Bala rebuked the peon. Handa heard this and came out to the porch and roughly told the group, “It is I who had asked the peon to tell you to move out of the porch, as I cannot concentrate on my work with all the noise you are making.” Just then, before anyone could reply, Acharya, the CAO also came out of his office. Seeing the PM and others in the porch, he brusquely asked the group in the porch, “What is going on here? Why have you left your office?” When no one replied, CAO looked at Bala and asked him, “What are you doing here?” Bala, then, somewhat angrily replied, “Who are you to ask me this question? I am here on duty.” This unexpected and audacious retort visibly upset the CAO. In an agitated voice, he told Bala, “I am the CAO here, if you must know.

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Why have you come to this building? Go away and don’t waste your time here.” “I have come to HO on confidential office business. In any case, it is none of your business and why should I tell you why I am here?” Bala unabashedly replied in his usual coarse voice. “Hmm, so you will not tell me, Where do you work?” CAO then enquired. “I work in Oil Labs, and now you can do what you like,” Bala replied somewhat indifferently but loudly added, “I know how to deal with people the like of you.” Bala’s resounding voice, coupled with an unusual admonitory gesticulation, gave the impression of blatant hostility and defiance. The CAO felt thoroughly insulted and angrily told Bala, “Stop gesticulating like that and go away from here.” Meanwhile, on hearing the commotion, the Deputy CAO and the Watch and Ward Officer (WWO) also came on the scene and tried to reason with Bala, “You should know how to behave with the head of a department.” Bala, however, paid no heed to these remonstrations and continued in his usual way, “Who is he to question me? I am here on duty. I don’t care for the like of him. He must also learn to behave.” Finding the situation getting out of hand and not wanting to worsen it further, the CAO hurriedly left the place. Later, the Deputy CAO and WWO persuaded Bala and others to return to their respective places of work. Next morning Bala was suspended and a charge-sheet for gross misconduct and insubordination was issued to him.

CASE 29

Quality Engineering Works

Q

2

uality Engineering Works (QEW) is a departmental factory run by the Ministry of Industry. It has the unwritten rule to fill all vacancies

in lower category posts by internal promotion. The factory, located at Allahabad, employed about 2600 persons of which about 1800 were industrial workers. Majority of the workers were skilled workers, as the precision work done in QEW demanded high skill at all stages. In September 1982, due to a sudden spurt of workload, QEW had to expand rapidly to honour the heavy commitments made to the Ministry by the higher management. The production planning section was one in which there was a particularly large requirement for planners, estimators and rate fixers. These were the people who prepared process layouts, estimated operation timings and also prepared rate forms for different components as well as for assembly operations. All this work required reading and interpreting drawings, deciding the machines to be used and the tooling to be provided for different operations. All the three categories of jobs were usually filled from amongst skilled workers from tool room, machine shop, assembly or fitting 32

Prepared by K. D. Kohli “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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shops. Most of the skilled workers in QEW had served three years’ trade apprenticeship. Being white-collared jobs with enough opportunities to rise further to supervisory staff jobs, the jobs of planners, estimators and rate fixers, were very much sought after, particularly those of the planners. The usual method of recruitment was for the Planning Manager to seek the assistance of Production Manager to spare some of the senior workers from the production shops. This time, however, the demand for planners, estimators and rate fixers was unprecedented and the Production Manager refused to spare some of the men, until the General Manager used his authority to direct the Production Manager to at least spare some of the selected workers. In spite of this pressure from above, some of the fitters from the assembly shop were not allowed to change over to these jobs, which obviously resulted in a lot of frustration all around. When the Planning Manager found that the planning work had started suffering for want of adequate number of planners and others, he took up the matter with the General Manager and persuaded him to call for applications from amongst the skilled workers, in the hope, that he would be able to get about 20 trainee planners and equivalent, which he required immediately. The General Manager instructed the Personnel Manager to do this. Unfortunately, this decision had been taken without consulting the Production Manager. The latter’s reaction, when he saw the General Manager’s order in the mail box was that he would find it impossible to spare more than half a dozen men all at once, let alone 20. But he took no further action, thinking that they would in any case, on the basis of standards used earlier, find a few suitable men from the production shops. Normally, in such cases the personnel department conducted a written test which was followed by an interview to assess the suitability of those who came forward to take the written test. A merit list was then prepared and the jobs were offered to those listed, as vacancies arose.

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About 150 applications were received in response to the General Manager’s order. A large number of these were from the skilled fitters in the final assembly shop, who were frustrated by the inadequate job instructions from the planning department and the consequent delays which resulted from repeated rectification work and design modifications, which were regularly taking place. The personnel department scrutinised the applications and found 50 suitable for the written test. Of these 30 came up for the final interview, by the selection committee headed by the Planning Manager. He found about 18 suitable from his department, eight from assembly section, three from fitting shop, three from general engineering, shop and two each from tool room and machine shop. The test results were put up to the General Manager who asked the Personnel Manager to have the selected men released from the shops concerned. When order for their release were received by the shop managers concerned, they protested vigorously and appealed to the Production Manager who in turn took up the matter with both the Personnel Manager and the General Manager. Discussions however went on for sometime between the interested parties, but without any satisfactory solution. Meanwhile, the workers concerned who had been finally selected for the posts in the Planning Department started getting impatient. Some of the shop managers tried to pacify the affected workers of their shops by saying, “I would hate to stand in the way of your promotion, but how can I let so many of you go at this stage when my own shop needs you so much. I will certainly try to release you sometime later when the load situation is a bit better.” Three of the selected assembly fitters had applied for promotion on a previous occasion also, but had been turned down. They were now threatening to leave the factory unless they were released immediately. All the men selected by the Planning Manager were the key men of the shops and QEW could ill afford to lose them. The General Manager, finding himself in a fix, decided to refer the matter to the head office.

4

CASE 30

Tiger Toys

I

t was a pleasant day with the weather getting cooled by a heavy rain. But Mr. Vivek Aggarwal was not feeling very comfortable as he had

to urgently deal with some issues. He had been observing that during the last one year the productivity of his department had declined. This was contrary to his expectations. He had recently hired four graduate trainees, fresh MBAs from a premier business school. He called the senior most manager in the department, Mr. Manoj Saxena, to find out the reasons for the declining productivity. Manoj very clearly stated that he was finding it very difficult to get work from the newly appointed managers, Rahul, Amit, Vineet and Sumit. Vivek found it difficult to understand why very competent managers were not effectively performing their roles. He asked for further details about the performance of the newly appointed managers. Manoj said that when some job was assigned to them and detailed instructions given for completing the job, they asked a number of questions, some relating to the purpose of the job and some related to the method. They somehow did not seem to be convinced about the purpose and even when they were convinced they wanted to adopt their own style of executing the job. The 33

Prepared by Daisy Chauhan and S. P. Chauhan “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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impression they created was that they were competent enough to do the job and they knew better how the job was to be accomplished. They kept saying that they needed more of head and elbow room, to deliver results. After all they were equipped with the latest knowledge and skills which, according to them, the senior managers lacked. Vivek said that he would get back to Manoj later. In the meantime, he expected Manoj to deal with his subordinates so that the performance of his department improved. He called all the four newly appointed managers. The following conversation took place: Rahul, Amit, Vineet and Sumit: Good Morning Sir. Vivek: A very good morning. How are you getting along with the work? Hope everything is fine. How do you find the work environment? Rahul: Sir, frankly speaking we expected a different job profile. After all we have the requisite knowledge and skill to carry out more important jobs. But what we are assigned is normal routine work. Even there, we are not allowed to exercise our independence in carrying out the job. There is too much interference from our boss. Vineet: Sir, I would also like to add that there is no consultation with us before assigning the jobs. I have been given the responsibility of compiling data from various sources and preparing a demand forecast for a number of products, which are to be launched shortly. I don’t find any application of my customer relationship management expertise in the jobs assigned to me. It seems that the people here do not have any idea of person-job fit while assigning responsibilities. Sumit: In the initial six months all four of as worked with full commitment but there was no appreciation for our effort. In fact, productivity could be improved if there is a system of remuneration in which part of the salary is fixed and part of it is variable, based on output. Amit: I agree with the views of colleagues. I am concerned about the lack of an orientation programme for the new employees here. They are just left on their own to fend for themselves. There is no initiative from the company to acclimatise the newly appointed people to the culture of the company.

4

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(All four of them expressed their concern that their level of motivation was certainly getting affected and they did not enjoy working in the Company.) Vivek: I appreciate your views and concerns but at the same time I would like to share my own concern regarding the decline in productivity of your department. After they left, Vivek was at a loss.

CASE 31

Vadatra International Solutions

V

adatra International Solutions is a leading provider of cost-effective customer care solutions. Company helps clients to reduce operating

costs and improve quality levels by deploying self-service options and automation to optimise customer care. Incorporated in 1999 and privately held, Vadatra International Solutions is headquartered in India and employs more than 35,000 professionals globally. Vision of the Vadatra International Solutions is to be the leading global solutions provider of process driven, quality-centric Business Process Outsourcing (BPO) and contact centre services to Fortune 1000 and other leading global companies. The mission statement is: Provide a new paradigm for customer support using best-in-class technology, people, service solutions. Vadatra International Solutions sees its staff doubling in the next three years as outsourcing booms, but says the days of single, multi-billiondollar deals are over. Demand for India’s information technology services 3

Prepared by Vandana Parashar “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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is red hot as the industry expands into new areas such as manufacturing and retail from finance, but customers want multiple vendors, said the President of Vadatra International Solutions’s core business. “Large customers want providers to work together.” They say: ‘We won’t do these large, five-year outsourcing deals with one party’.” says the President. Vadatra International Solutions, which competes with larger companies for technology services to U.S. and European companies, expects to keep adding about 1,000 people a month to its 35,000 staff. “There’s no reason why we shouldn’t have an operation of 75,000,” said The President recalling that Vadatra International Solutions had fewer than 400 people when she joined in 1999. That would bring Vadatra International Solutions in the league of foreign rivals. In 2006, as part of its strategy to attract the best talent, Vadatra changed the way of recruitment. Now, instead of listing specific job openings, the company featured its Internet address in its ads and invited prospective candidates to apply. It also advertised its website in cyberspace to reach candidates who surfed the net from around the world. The company was thus able to monitor and measure its recruiting programmes through the number of visits to its site. Since most people visited Vadatra’s website from their jobs, the company could identify their place of work. Vadatra worked towards removing some of the frustration associated with applying for jobs. The company learned to attract happily employed people through focus groups. These focus groups targeted senior professionals in other companies and found out how they spent their free time, the websites they visited and the how they felt about job hunting. These insights helped the recruiters in posting their jobs.

Compensation and Benefits Structure for Vadatra india employees Compensation Structure

In Vadatra the level of hierarchy can be

divided into four levels, which is in the descending level of positions.

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4

They are: Level 1, Level 2, Level 3, and Level 4 and each level has four sublevels namely a, b, c and d. In short, Level 4 will have sublevels namely Level 4a, Level 4b, Level 4c and Level 4d. However, the basic salary of employees differs from country to country depending on the local compensation trends. Level 1: This is the highest level in the hierarchy and this level includes all the people in the top management and senior most management. Managing director, section marketing manager, finance director, business development manager, etc. come under this level. Level 2: People who come under this category are accounting aid, zonal sales manager, technical sales manager, HR manager, Information Technology (IT) & communication manager, national sales manager, marketing manager, etc. Level 3: This level consists of people who are into middle level management and are known as middle level executives. HR executives, accounts executives, officer account payable, IT administrator, product manager, marketing coordinator, service coordinator, event coordinator, area sales managers, etc. come under this level. Level 4: This is the lowest level in the hierarchy and people who fall under the category of level 4 are executives, sales executives, service engineers, customer support coordinator etc. Salary Structure

The salary structure for Vadatra India employees is

same irrespective of their level in the organisational hierarchy or the job designation although, the amount varies for each level and sub level. For e.g., the total salary that a level 4a employee gets will be higher than the amount that a level 4d gets and the salary level 3 employees will be higher than the salary that the level 4 employee gets and so on.

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The salary structure for a person in level 1 and for a person in level 4 are given in the table 1 below: Table 1

Compensation and Benefits Structure for Vadtra India Employees Level 1

Level 4

MD in Rs

Executive in Rs

Basic salary

25,00,000

1,68,000

House rent Allowance (HRA)

6,25,000

42,000

1,00,000

6,720

L.T.A (leave travel llowance)** 2,00,000

13,440

25% of basic salary Medical allowance** (4% of basic salary) ( 8% of basic salary) Bonus (One month basic

2,08,333.33

14,000

salary)** TOTAL (Compensation)

36,33,333

2,44,160

** These are given only once in a year to an employee but if an employee wants he/she can take the medical and L.T allowances in two installments a year.

The President estimates that wages in India rise 10 percent annually in the next two to three years albeit from a low base. Vadatra International Solutions pays its entry level executives a starting wage of Rs 20,000 to Rs 30,000 per month. In fact, Vadatra International Solutions’ 5,000 overseas staff earn twice as much as a group than its 30,000 Indian employees. Vadatra International Solutions also is known for its tight rein on costs in India. Vadatra International Solutions found that despite hiring an average of 1,000 people every month, the company still had hundreds of openings. The recruitment pressure further increased the following year, when Vadatra International Solutions hired more than 1,000 employees per month. The biggest challenge is training and retaining staff, the President said, “Vadatra International Solutions now loses around 20 percent of staff annually, worse than the 17 percent industry average, which used to be practically zero during the dot-com bust three years ago”.

CASE 32

Driver Veer Singh

M

r. Vipul Kumar a senior executive of a public sector undertaking in Delhi requested for a staff car to attend a meeting in the Ministry

of Agriculture on June 19, 2000 at 11.00 a.m. Transport section allotted him a staff car with Veer Singh as the driver. Mr. Vipul Kumar, on reaching the Ministry of Agriculture, asked Veer Singh to stay back, as the meeting was not to last long and that he expected to be back by 12 noon. The officer, with whom Mr. Vipul Kumar had an appointment, was in a meeting with his senior officers and got delayed by about an hour and a half. The meeting with Mr. Vipul Kumar actually started at 12.30 p.m. and went on upto 1.45 p.m. The driver had no information about this. When Mr. Vipul Kumar came out at 1.45 p.m., he found that the car was there, but the driver was not there. He waited for 15 minutes and the driver did not turn up. As he had a meeting with his CMD at 2.15 p.m. he took a taxi and came to office. Later, he submitted a voucher to Head of HR for reimbursement of taxi fare and a complaint against Veer Singh saying that he was absconding and that disciplinary action should be taken against him. 35

Prepared by M.S. Ramanujam “This case was prepared by the author for the sole purpose of aiding classroom discussion. Cases are not intended to serve as endorsements, or sources of data, or illustrations of effective or ineffective management.”

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The voucher was passed on to finance section and the complaint was sent for examination to the administration section. Finance section did not approve the voucher saying that a staff car was allotted to Mr. Vipul Kumar and, therefore, he cannot claim taxi fare in addition. The administration section examined the complaint and observed that Veer Singh is a habitual offender. Instances of such offences during the last one year are described below: On September 24, 1999, Mr. Kundan Singh, Senior Manager of the company was required to go to New Delhi railway station to take delivery of materials, for use by the company (which have arrived by a goods train), by 5 p.m. when the goods head closes shop. Incidentally, September 24, happened to be the last day for receiving materials from the goods head. September 25 and 26 were holidays. The transport section has assigned Veer Singh to drive Mr. Kundan Singh in a staff car to the New Delhi railway station for the purpose. Veer Singh who was to return to office at 3 p.m. on that day, after dropping a senior officer at the airport, returned only at 6 p.m. without any valid explanation. As a result, the company had to incur substantial amount as demurrages for the delay in taking delivery when Mr. Kundan Singh took delivery on September 27. On that occasion, Veer Singh was cautioned in writing against any such lapses in attending to duty. In January 2000, Mr. Subrahmanyam, Deputy General Manager of the company residing in Noida was to catch a flight to Bombay on official duty at 6.30 a.m. from the Delhi airport. Veer Singh was asked to report at Mr. Subrahmanyam’s residence at 4 a.m. for taking him to the airport. He did not turn up. As a result, Mr. Subrahmanyam had to miss the flight and an important meeting at Bombay. On enquiry, Veer Singh mentioned that he reached office at 3 a.m. on that day to take the staff car but he found that one of the tyres was flat and the stepney did not have enough pressure. Veer Singh did not even bother to inform Mr. Subrahmanyam over phone from the office. He had this time committed two offences: One not keeping the staff car, assigned to him in working condition and not informing Mr. Subrahmanyam well in advance.

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In view of the repeated neglect of duty the administration decided to call for disciplinary action against Veer Singh. When Veer Singh came to know of the intent of the management, he approached the union leaders saying that he was being harassed by the administration.