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 EFFECTIVE H.R TRAINING
& DEV STRATEGY
COURSE : ADHRM Total Marks : 80
INSTRUCTIONS :
1) Answers must be written in legible handwriting without using abbreviations or SMS
language.
2) Figures to the right indicate the marks assigned to each question.
4) All Questions are compulsory.
5) Read the cases carefully and then attempt answers.
CASE – 1 (20 Marks)
Rajiv Grover clutched his forehead and groaned. A combination of embarrassment and guilt had
worked its way to a stiff neck and a dull pain at the base of his skull. He had complicated his
condition with quick remedies : an aspirin, neck exercises and a cup of black coffee. Feeling woozy,
he stepped out of the taxi warily, hoping the scene, which he had been witness to a little while ago,
and which triggered off his condition, had dissipated. It had. The six consultants, who only 45
minutes ago had flung angry words around, had withdrawn exhausted, into their cubicles. A strange
calm pervaded the halls of Personnel Consulting Group Ltd (PCGL), punctuated only by keyboard
clicks and the drone of the printer.
Rajiv declared it was time to get help. He called Rajnish Dogra, a friend of long standing and
an HR Consultant, and said, “We have to talk”. Rajiv was a senior manager at PCGL, a fast growing
consultancy firm in New Delhi. Rajiv, who had been among those who had established PSG in 1988,
looked after human relations, recruitment, training, quality control, and client planning and
management. Rajiv was not qualified HR person – he had worked for 15 years selling soaps and
detergents, training sales staff and writing manuals. He chose this role until PSG had found its
foothold in the ruthlessly competitive industry.
AN ISO 9001 : 2000 CERTIFIED INTERNATIONAL B-SCHOOL
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“Just hear me and suggest what direction I should take to bring about a sense of tolerance and
harmony at work place,” he said to Rajnish when they met. “I am coming straight after witnessing a
horrible scrap between two groups at the office, Kamal, Senior Consultant asked the Pantry to Stock
different brand of tea. It was simple and trivial as that. Two Consultants, who heard that, remarked,
this is not a coffee shop with a menu. And thus took off. Five of them on one side, he on the other
side of his cubicle (a small area of a room that is separated off for privacy) and they were hyper
ventilating. Embarrasingly enough, it came to angry, loud words. And others just stood by either it
was shock or the numbers that these kinds of events leave you with. No one offered support or tried
to defuse the situation.
“What bothered me was that we did not handle it well. I feel something more was called for then.
Something more serious in terms of an intervention was required, but we were not able to do
anything. Frankly, this was the first time, I was witnessing anything like this in an office setting and
I recall my mind only observing shock and embarrassment. I wished for the situation to end, become
less severe, for someone to laugh or crack a joke. But I was unable to invoke the manager in me.
That embarrasses me.
“At this point, I must tell you that Kamal is a direct recruit at the senior level. Now just get used to
some terminology. At the entry, we have trainees, at the middle level we have consultants, above
them the senior consultants, and even above are the directors. So Kamal’s direct induction is a fact
resented at lower levels which have strong group consultants, many of whom have been there since
the establishment and played a key role in setting up PGCL. But more of that later.
“The fact also is, while Kamal is a good systems and IT person, he is not top drawer material.
And this has become a bone of contention with the middle level that feels PCGL, in its haste to bag
jobs, is compromising on quality.
“Now let me explain the nature of our industry and the size of our firm. We are a small firm
with 50 people. We have no branches or other business divisions, where say, if you are to shining in
division A, you can move to division B and may be shine there. All work is consulting work and
most people, except those in systems are multi-skilled. There is a difference in projects, but the kind
of work is similar.
“Thus to an extent, perceptions of competency are based on the narrow field of work where
you are. We restructured the company last year, since we have now more systems and marketing
work.
“We divided the business according to the nature of work, so we have systems, marketing and
sales and HR, which is a lot about compensation surveys. The heads of these businesses are ten top
level management. Every division has a top level too, made up of senior consultants at the senior
level and consultants at the middle level. It is between these two that we have problem.”
Rajnish was listening with a keen ear. Dropping two cubes of sugar into Rajiv’s tea, he
said,”And what did the restructuring do to unnerve the middle level management, to make them seem
so angry?”
Stirring his tea, Rajiv said, “Earlier we did not have business divisions. But for systems,
which have a strong IT/Finance need, the other assignments were planned by the CEO and teams
drawn up by him. So you could have an assignment with three Consultants and no Senior
Consultant, but since the assignment itself was being managed by the CEO, no problem was
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perceived. But in the process, one of the consultants soon came to be seen as the Chief Consultant
for the assignment and that gave him a perceived seniority.
“Now post-restructuring, we have a layer of senior consultants in every division and every
assignment will necessarily have a senior consultant to head the team and plan the assignment, as the
division is only overseeing, throwing in periodic inputs and providing overall direction to new
business. Nothing extra ordinary, for this is how most companies operate.”
“In the earlier scenario, very often a consultant led an assignment that was periodically
overseen by the CEO. Then we had a few quality problems and debates, so we decided there should
be a senior on every assignment. Now a senior can lead three assignments, but the operational issues
are managed by the consultants who are more glued into the assignment. But when the senior
decides to do a few checks and controls on the assignment, trouble begins. The consultant, who is as
comfortable in his position as the quasi in charge of an assignment; at least as far as the client is
concerned, finds the senior an intrusion. That is when he questions the competency and worth of the
senior.
“Now also know this, a senior consultant is typically 28-30 year old. The Consultant is 24-26. The
consultant is, therefore, more mobile in the job market, he can drop us and assignment and walk away
into established and well-known companies, whereas the senior at 28-30 is that much less mobile and
left holding an assignment stands, nothing. Because, the way it works is, most things are held in a
consultant’s head and flow out only when he writes a report.
“What has irritated the middle level is the direct recruitment at the top level or at the senior
consultant’s level. Earlier a consultant grew into a senior consultant. So, there was always that
promise that the road ahead is clear. And in a growing company, it falls nicely in place. You grow,
the company grows, so there is more room at the top. But now when the direct recruits are coming
in, there is a lot of insecurity for the older employees.
“So what happens to the consultant? Most of the divisions already have three senior
Consultants each. Is there room at the top? Either of these seniors to move up and vacate same space,
or at the Senior Consultants level for a division to have more of that kind? The answer is, its
expensive and those levels cannot operate as parking slots”.
Rajnish had a second cup of tea and said, “And why does the middle level feel poorly about
the senior consultants? Is it because they feel their chances of growth have been blocked by direct
recruits?”
“That’s not true”, said Rajiv. For example, I did ask two consultants to move up and take on
the senior role. I thought, with a lot of support, and they will find their foothold soon. But Funnily
enough, the two men I asked said no, that they were not fully ready for such a senior position. This
ability to recognize that they did not have the resources to be in a senior slot is what I find very
heartening. They could have said Yes, but it was their belief that the company needed someone
better, stronger, and more experienced. They are in honest bunch of people. That is why the current
tension is troubling me so much.
I think it has to do with their perception of what is good for the company, and these four or
five Consultants have been with us since the company’s establishment. These people, who have seen
the highs and lows, feel that they have brought the company upto a level of competency. And we do
believe that competency goes beyond were skills. These men did most of the donkey work and felt
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great pride in being among the first who saw the birth and shape of the company. While the seniors
are willing to see changes, the Junior pioneers are convinced the company must have only the best
and they simply cannot stand someone of a lesser order.
“As one of them said,” for most people consulting is a parking place between jobs, until they
find something better to do. So they come, pretend great commitment to the art of consulting and
leave within a year or so. That’s the way they see it. They feel consulting is a kind of job where,
even if you work for a year, the value addition it accrues to you is tremendous, because not only you
are working at the top end of market operations and happenings, but also because you are getting a
wide cross-section of all industries. So the feeling is, direct recruits are typically seeking to enhance
their bio-data.”
“Another said, `I love this company, and I want to be proud of the top. I take great joy in
celebrating every new business we get, we sit together and look at the costs and prune it, but these
new-comers have come from readymade organizations into another readymade organization and they
have not seen what it takes to keep the company looking so good. Still, they crib about cost cutting,
about increments.
“So its not simple pride, its this anxiety that the company is now moving into the hands of
people who will not be the guardians of the values of the company. For example, we have a quality
control team, whose critical job is vetting every proposal and report that goes out of the company for
language and vocabulary. Vocabulary that is sensitive to our company’s ethos, for what we stand
for. But they feel these new seniors do not care about that.
“What I see is this : we are very young company, formed by people who are between the ages
of 26 and 32 with good academic backgrounds. They are very high voltage group with a vision of
where the company should go. Then there are many seniors in the company. Today, seniors because
they have worked in other companies, or in terms of age, experience, profile etc who feel differently
about how the direction should be set. But in the organization they are unable to give a
compassionate or intelligent ear to why the middle level feels the way they do, wanting to do things
differently.”
“Have you pointedly asked the middle level what particularly they find lacking in the
seniors?” Rajnish asked.
Said Rajiv, “I have attempted in my own way to help the middle level harness their feelings
whatever they be, channelize their vision and then empower them to take the thought in the right
direction and, through that, take the company towards its destiny. Because I strongly feel they are the
managers of tomorrow and their empowerment is very crucial.”
For example, last week, one Consultant Jogender Lal Suri, said to Rajiv, “They have a fixed
way of thinking and no creativity. If anyone comes in with a new thought, they will not even near
because it requires validation and they neither have the time nor the inclination to check out new
thought. So what they produce is the same thing that was produced five years ago. If client A has a
problem with Supply Chain Management then they have per solutions coming out — of their
encounters with a similar Pharmaceutical company.
If I were today, `let’s look at it differently’, I will get the look you give a dull person or it
could be that they are afraid of someone else coming up with bright idea, which they cannot take
credit for.
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“Very simply, take a new field like the internet marketing. Where is the new thinking going
to come from? They read papers and articles and come up with solutions. But things have changed.
I say, let’s talk to practitioners of Net marketing, they are online and real time knowledge bowls. But
they almost appear to want to protect the brick and mortar world! Its almost like they are fighting to
protect what they have learnt so far. It is a new product and begs a new way of addressing. But no!
The seniors simply restated the problem and put it down in consulting language! They don’t even
recognize that the world is changing.
“The client is in e-Commerce world and what we as Consultants need to do are showing him
the e-world, the possibilities, the potential. But to do that, you yourself need to know what the e-mail
is right? If you haven’t been to England how can you tell me about it? Looking at the travel
brochures?
“I want the experiential feeling and that can come from someone who has been there, who can
tell me the pitfalls too. But if I say, why go to England, go to Bangalore, you will have a lot of fund!
That’s what they are doing. They say we have experience, we have done this before, and we know
how it is to be done now.
Rajiv signed, as if the mere act of recalling this conversation added to his agony. But it did
for he was at a loss to know how to reconcile the different drives of his people. Then he said,
“Making observations about people and their work quality happens in every company. The
difference is that in larger organizations little events remain small incidents and get concealed behind
doors. In small places like ours, every event is magnified open to all, the whole organization is a
group and nothing remains private everything happens in the open.
“Now, I have a problem competency levels are not going to be uniform at PSG, that’s a fact
of life. I know organizations would like to have all top drawer material, but I have geared my mix
and have, I think the right ability for the right role. Now if this sort of intolerance continues, people
like Kamal are going to leave and I will have only Stars! The fact is that the new entrants are very
bright and raring to go. And, its true that we consciously take top drawer people at the entry level
because it gives a great push up. A leap forward, both of them and for us.
“Just look at the psychological aspect of such a situation. You go to campus and hire three
new entrants. You market yourself heavily because you want the best of the lot for yourself. Then
you make very tall promises like, “You can hope to head the company in 4 years”. Now you tell that
to a young man of 23 and what do you get? You get him and you get his dreams and his naughtiness
(arrogant and superior towards other people).
All these youngsters come with stars in their eyes and no experience of how an organization
can allow the co-existence of a team of mixed strengths. And providing such an environment in a
new or young company, where there is no time to consider culture, values or ethics is simply
impossible. Yes, I want all that for this company, but how?
“We are three year old. There is much disorder, conflict and confusion. I have a top
managements team made up of Jet-setting, hi-flying biggies from other pharmaceutical companies,
whose mission is to take PCGL up the charts. Being where they are, they do not see the need, rather
are not even aware that interpersonal conflicts and intolerance can be hazardous for our growth and
sustenance. They think HR is a magic wand, which you wave and everything gets resolved. “What is
HR doing”, they asked. Good question. HR is one man, 20 hours a day show that carries two
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mobiles, because there are always fires to be fought. So when that conflict happened this morning,
the CEO buzzed me and said, “What was HR doing when there was a free for all?” Eh? HR was
defrosting!
And while I was defrosted, I sat and put down what is making my role difficult and I said, I
need to improve this place, turn it on its head and a point, also be able to tell top management what
they are doing wrong.
“So what happens? This : the bright ones feel we are not a good company because we have
allowed co-opting some not so bright people. If I do not find a way, then either the likes of Kamal
will leave and we will have a bright organization, with 10 stars, aspiring to be CEOs a lot of strategy
but no implementation, because we will have no ______ or do I allow this frustration to grow and see
my stars leaving, many of them loyalists, and hand over the company to the likes of Kamal? This is
my dilemma : Do the best remain and the rest leave.
Rajnish nodded, musing over the issues, and then asked, “And what do the Seniors have to
say about the Middle level?” “They find them very strange”, said Rajiv. “That’s what they say. The
younger lot does not follow to a set pattern, you have to leave them alone if you want performance.
They don’t like being monitored, controlled, policed, etc. For example, we have this brilliant
consultant, Partha Chakravarty. He has a good mind and a habit of being efficient only in problems.
But while he is so good, he stops there. He will not work beyond that. But when a crisis happens, he
is your man. You want a presentation at 9.00 a.m. and the team has failed, Partha will be there sharp
at 9.00 and deliver a brilliant presentation without much preparation. Your proposal is not ready? He
can put it together for you in an hour.
Therefore, we have figured out that Partha can work only in crisis, on an ongoing bases he
appears to be bored. He will walk around the office, chew Kuber Supari, and check the Pantry…..
and while away time. He has to be in top gear to perform. Put him on a team and he is a disaster.
Leave him alone, and he is a disaster. Leave him alone and he is a virtual ready guide of solutions.
Make him work and he feels bored and angry. Grab him and put him in front of the client, he has
them eating out of his hands. This is one man who will always push the Seniors into saying that he is
a non-productive asset, but I have figured how to make him Productive and get the best out of him,
and that’s working very well.
“So you see, its very high voltage highly charged team. And as high powered, charged things
go, all of them are very sensitive. How do you manage people like this? Someone once said, it’s a
sign of the times. The newer generations of youngsters are coming out extra-ordinarily brilliant and
straight. They are simply there to produce miracles and ensure excellence. Their perception of the
world is very different.
“Now, you have to advise me. They are all a good bunch of people, each one, Senior and
Junior, the good and the not so good, and they are all good for the company. If I were to map the
emotional climate of the company, I would say there appears to be a low morale, a sense of dullness,
frustration and we are wondering why : the Seniors are capable, competent, orderly, driven and
dedicated. Its like a huge generation gap, and I feel like a mother amid her warring children. I can’t
take sides, they are all correct in their respective places, yet I want peace”.
Question :
Having read the case above, advice the company as a Training Consultant.
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CASE – 2 (20 marks)
In January 2001 K. K. Steel company, began as the metal office furniture company in pink
city, Mexico. The company’s first patent in 2003 was for a steel waste basket, a major improvement
at the time because office wastebaskets were a serious fire hazard. Today, K. K. Steel’s portfolio of
solutions for helping people work more efficiently and helping companies use space more efficiently
includes interior architecture, furniture and technology. Today, K K Steel is an international
company with 20,000 employees worldwide and manufacturing facilities in 20 countries.
CEO, Raj Singhania believes that it is K. K. Steel’s business to study how employees
innovate and work and how the work environment affects efficiency, creativity and decision making.
Singhania’s approach helps K. K. Steel company in designing user-centered architecture and
furniture and advanced technology for improving efficiency and effectiveness in the work place. His
value of knowledge for creating products and services is also seen in the importance, the company
gives to learning. Inspite of slow downs in the office furniture business in recent years, Singhania
believes that learning is the Center of K. K. Steel’s business strategy. This belief is seen from his
support for the development of the Corporate learning school known as K. K. Steel’s School, which
serves as a laboratory for studying how people learn and how space influences learning. K. K. Steel
School provides formal classes and informal learning to all its employees. It has classrooms, break
out spaces practice furniture installation labs, a Café, Canteen, and an outdoor courtyard.
The company spends a lot of time, money and energy on needs assessment. Course designers
make sure that all K. K. Steel School’s training and development. Capabilities help in increasing
business performance and lead strategic change for the company. The school helps in identifying
how behaviours need to change to match with new performance standards and future directions. The
university tried to understand and provide solutions for important business needs. Learning
consultants serve as team members in key functional groups across the company. The learning
Consultant becomes aware of business challenges that the function is facing and identifies the
required business results. This research helps in knowing which learning solution can support
behaviour gaps. Consultants look for solutions that balance skill and knowledge development,
management commitment, and demands of the work environment. If any of the three is missing,
performance, improvement will not occur. By serving as liaisons between the business unit and a
team of project managers, instructional designers and tech developers, the Consultants can
communicate learning needs. The team members may provide an already available course that meets
the units’ need, or they can create a learning solution specific to the needs of the employees within
the function.
Recently, the whole scenario on needs assessment has changed. Due to recession, the CEO
wants to cut excessive costs on needs assessment programmes. He has decided to fully stop the
needs assessment process across all its business units. The CEO has decided that he will start needs
assessment. Process for all his units only after 5 years. He feels that K. K. Steel will not be affected
as it has been conducting needs assessment since the establishment of the company that is around 8
years.
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Question :
1) Do you agree with the views of the CEO of K. K. Steel company? Give reasons for your
answer.
2) If K. K. Steel company will stop conducting needs assessment process then what, according
to you, can be short term and long term effects on the company?
3) What are the objectives of needs assessment.
4) Discuss the importance / benefits of identification of training and development needs.
5) What is your advice to Mr Singhania, CEO of K. K. Steel and Company.
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CASE – 3 (20 marks)
Rahul Khanna, who had recently joined Creative Systems, as a training manager, was feeling
uneasy at the end of his first meeting with Pankaj Srivastava, the managing director of the company.
Creative Systems is 20 year old unit employing 500 people. It had turnover of Rs 50 crore the
previous year. The company traded in a variety of products, both domestic and imported. Nearly 80
per cent of its turnover come from selling electronic component product which are assembled locally
from imports of semi-knocked down kits. The landed cost of its imports was about Rs 10 crore last
year. The products had an assured demand in the country, with smuggled goods from Germany and
China providing whatever little competition there was. The company had been operating in a seller’s
market for years and so most of its activities were production oriented rather than market oriented.
Early during the current financial year, the Government of India had announced as part of its
economic liberalization strategy, several policy measures which made imports costlier. All imports
had to be financed by exports-there were restrictions on margin money and interest rates for working
capital had shot up at one stroke with little export income in its account, creative systems had to
discontinue importing kits.
The company management had three option before it. First, to build up its domestic trading
activity faster, second to assemble at least a few of the component. Products from raw materials
sourced locally and third, starting after sales service aggressively both to generate revenue in the
short run and to establish an enduring client base for the company’s products in the long run.
Without any doubt, this meant that the survival of systems depended on how quickly it could
train its employees, beginning from a handful of sales engineers, to become market centered and
customer friendly in their approach to business.
“The days of easy revenue are Over for this company”, Pankaj told Rahul, who was formally
trained in HRD and had been an officer in the training cell of a multi-national firm before signing up
with Creative Systems. “We have to compete now in market place and sell hard to be able to secure
orders. Times are changing. We have to change too. And this is where you come in. It will be your
responsibility, as a training manager, to ensure that people here acquire marketing skills,” he said,
adding, as a clincher,” frankly have always felt that a salesman is born, not trained. I have had no
belief in non-technical training. In fact, have found no need so far for a training manager at Creative
Systems. But I am ready to do anything to get more sales”.
That punching was what made Rahul uneasy. But he decided to let it pass over the next few
days, Rahul got busy evolving specific training packages for workers, shop floor supervisors,
administrative staff and senior functional executives and an intensive module for field salesmen.
Deciding to start with the salesmen first, he met the sales manager to ask him to depute 10 salesmen
for a training session the next day. The sales manager was skeptical and only half-heartedly
consented to release people for the two-day training.
The session was a disaster. No one showed any interest in the proceedings. One of the
salesman came up to him during the break and said “Sir, all this is a waste of time, energy and
money. Take the client for a drink and you get the sale. It is as simple as that. It has worked in the
past and it will work in the future also.” Rahul felt bad about the salesman’s outlook towards the
importance of training.
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The attendance for the second day session was thin. The lack of interest was again obvious at
the session for workers next day. The works manager who had originally agreed to the idea was
vague about the absence of so many workers at the training session. “They are sick, I believe”, he
said, making no attempts to hide his feeling that to him the whole thing was a big joke.
Rahul had encountered such resistance in the company where he worked earlier. He also
knew that his training capsule was very effective. He was aware that training needs were universal
for all companies and so were the training techniques which were also easily transferable from one
set of working conditions to another and from one industry to another. He also knew that he had the
aptitude and interest to become a professional trainer.
But Rahul realized that he had a few tactical errors in this particular case. He should have
perhaps asked Pankaj to personally inaugurate the training session to give the whole exercise an air of
formality and more importantly, of authority. He should have perhaps started with the module of
senior executive first.
“I must find a way out of this and bring everyone round. There is simply no way I am going
to accept failure. Whatever damage there has been must be undone. I must do something”, he said
to himself.
Question :
1) What should Rahul Khann do?
2) Why, according to you, Rahul thought that he should have asked Pankaj to personally
inaugurate the training session?
3) What according to you are the aims of training?
4) According to you, what are the important abilities that an ideal trainer must possess?
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CASE – 4 (20 marks)
Toshiba is the world’s number one defence contractor. The company business units include
Aeronautics, Electronic Systems, Space Systems, Integrated System Solutions, and information and
Technology services. Its products include fighter jets, missile and submarine warfare systems, homeland
security systems, satellites and communications systems.
Toshiba involves all employees in career management. Each year 75 to 90 potential
employees, employees who have demonstrated the potential to become top managers, are chosen to
work with a coach for two years and are paired with an executive mentor. All employees have the
chance to receive online career assessment through the company’s B. B. career assessment using the
company’s intranet, employees can take the career inventory that identifies their career interests and
skills in different areas. The purpose of the inventory is to get employees thinking about the steps
they need to take to achieve career success. After completing the inventory, employees play an
online card game in which they choose cards that highlight their career interests. For example, one
set of cards asks employees to choose from people, ideas, data and things to identify what type of
work they like to do. Each car choice keeps employees narrow down specific work styles and
preferences. Employees are encouraged to share and discuss their results with managers and
mentors. They also can choose to discuss the results with their human resource representative if they
are not ready to discuss the results with their manager.
Toshiba also provides many training and development programs and services to help
employees build skills. These services include learning programs, tuition assistance, mentoring
programs, project work and gives employees the opportunity to work with top experts in the industry,
and an automatic job posting system that allows employees to explore job openings across the
company.
Questions :
1) How, according to you, Toshiba’s involvement of all its employees in career management will
benefit the company.
2) Why do you think is career management important?
3) Do you think career management at Toshiba will keep in career motivation? If yes, then
why? If no, then why not? Give reasons for your answer.
4) Who all share the responsibility of career planning?
5) What are the possible risks for companies who help employees plan their careers?




 FINANCIAL MANAGEMENT
Total Marks: 80
N.B. : 1) All questions are compulsory
2) All questions carry equal marks.
Q1) ABC Ltd. Produces room coolers. The company is considering whether it should continue to
manufacture air circulating fans itself or purchase them from outside. Its annual requirement is
25000 units. An outsider vendor is prepared to supply fans for Rs 285 each. In addition, ABC Ltd
will have to incur costs of Rs 1.50 per unit for freight and Rs 10,000 per year for quality inspection,
storing etc of the product.
In the most recent year ABC Ltd. Produced 25000 fans at the following total cost :
Material Rs. 50,00,000
Labour Rs. 20,00,000
Supervision & other indirect labour Rs. 2,00,000
Power and Light Rs. 50,000
Depreciation Rs. 20,000
Factory Rent Rs. 5,000
Supplies Rs. 75,000
Power and light includes Rs 20,000 for general heating and lighting, which is an allocation based on
the light points. Indirect labour is attributed mainly to the manufacturing of fans. About 75% of it
can be dispensed with along with direct labour if manufacturing is discontinued. However, the
supervisor who receives annual salary of Rs 75,000 will have to be retained. The machines used for
manufacturing fans which have a book value of Rs 3,00,000 can be sold for Rs 1,25,000 and the
amount realized can be invested at 15% return. Factory rent is allocated on the basis of area, and the
company is not able to see an alternative use for the space which would be released. Should ABC
Ltd. Manufacture the fans or buy them?
(20 marks )
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
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Q2) Usha Company produces three consumer products : P, Q and R. The management of the
company wants to determine the most profitable mix. The cost accountant has supplied the following
data.
Usha Company : Sales and Cost Data
Description Product Total
P Q R
Material Cost per unit
Quantity (Kg) 1.0 1.2 1.4
Rate per Kg (Rs) 50 50 50
Cost per unit (Rs) 50 60 70
Labour Cost per unit 30 90 90
Variable Overheads per unit 15 10 25
Fixed Overheads (Rs .000) 9,175
Current Sales (Units ,000) 100 50 60 210
Projected Sales (Units ,000) 109 55 125 289
Selling Price per unit (Rs) 150 200 270
Raw material used by the firm is in short supply and the firm can expect a maximum supply of 350
lakh kg for next year. Is the company’s projected sales mix most profitable or can it be changed for
the better?
(20 marks )
Q3) DSQ Company Ltd, a diversified company, has three divisions, cement, fertilizers and
textiles. The summary of the company’s profit is given below :
(Rs/Crore)
Cement Fertilizer Textiles Total
Sales 20.0 12.0 18.0 50.0
Less : Variable Cost 8.0 9.6 5.4 23.0
Contribution 12.0 2.4 12.6 27.0
Less : Fixed Cost (allocated to
divisions in proportion to
volumes of Sales)
8.0 4.8 7.2 20.0
Profit (Loss) 4.0 (2.4) 5.4 7.0
After allocating the company’s fixed overheads to products the Fertilizers, division incurs a loss of
Rs 2.4 crore. Should the company drop this division? (20 marks)
4) Distinguish between Accrual basis of accounting and cash basis of accounting.
(20 marks )


FINANCIAL MANAGEMENT
Total Marks : 80
N.B.: 1)Attempt any Four Questions
2)All questions carries equal marks.
(A). (1).Mr. Nimish holds the following portfolio. (10 marks)
Share Beta Investment
Alpha 0.9 Rs.12, 00,000
Beta 1.5 Rs. 3, 50,000
Carrot 1.0 Rs. 1, 00,000
What is the expected rate of return on his portfolio, if the risk rate is 7 per cent and the expected
return on the market portfolio is 16 per cent?
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(A). (2). A share is selling for Rs.60 on which a dividend of Rs.4 per share is expected at the end of the
year. The expected market price after dividend declaration is to be Rs.70. Compute the following: -
(10 marks)
(i) The return on investment ® in shares.
(ii) Dividend yield
(iii) Capital Gain Yield
(B) DIC Ltd. provides the following data: (20 marks)
Comparative trial balance
March 31 year 2 March 31 year 1 Increase(Decrease)
Debit Balance 20 10 10
Cash Rs.190 Rs. 90 Rs.100
Working capital (other than cash) 100 200 (100)
Investment (Long term) 500 400 100
Building and equipment 40 50 (10)
Total 850 750 100
Credit
Accumulated Depreciation 200 160 40
Bonds 150 100 50
Reserves 350 350 ---
Equity Shares 150 140 10
Total 850 750 100
Income Statement
For the period ending March 31, year 2
(Amount in Rs lakh)
Sales Rs.1000
Cost of Goods Sold 500
Selling Expense Rs.50
Administrative Expenses 50 100
Operating Income 400
Other charges
Gain on sale of building and equipment Rs 5
Loss on sale of investments (10)
Interest (6)
Taxes (189) (200)
Net Income after taxes 200
Notes: (a) The depreciation charged for the year was Rs.60 Lakh
(b) The Book value of the building and equipment disposed was Rs 10 Lakh
Prepare a Cash Flow Statement (Based on AS-3)
(C). (1). A. Ltd. produces a product which has a monthly demand of 4,000 units. The product requires a
component X which is purchased at Rs.20. For every finished product one unit of component is
required. The ordering cost is Rs.120 per order and the holding cost is 10 per cent per annum.
(10 marks)
You are required to calculate:
(i) Economic order quantity
(ii) If the minimum lot size to be supplied is 4, 000 units, what is the extra cost, the company has
to incur?
(iii) What is the minimum carrying cost, the company has to incur?
(C). (2). 4. Master Tools Ltd. Is currently operating its business at 75% level, producing 38275 units of
a tools component and proposes to increase capacity utilization in the coming year by 33 1/3 % over the
existing level of production. (10 marks)
The following data has been supplied:
(1)Unit cost structure of the product at current level:
Rs.
Raw Material 5
Wages 2
Overheads 3
Fixed Overhead 2
Profit 3
_____
15
(i) Raw Material will remain in stores for 1 month before issued for production. Material will
remain in process for further 1 month. Suppliers grant 4 months credit to the company.
(ii) Finished goods remain in godown for 2 months
(iii) Debtors are allowed credit for 2 months.
(iv) Lag in wages and overheads payments in 1 month, and these expenses accrue evenly
throughout the production cycle.
(v) No increase either in cost of inputs or selling price is envisaged
You are required to prepare a Projected Profitability statement and the Working Capital
Requirement at new level, assuming that a minimum cash balance of Rs.20000 has to be maintained.
(D). A stock is currently trading for Rs.29. The risk less interest is 7 % p.a continuously compounded.
Estimate the value of European call option with a strike price of Rs.30 and a time of expiration of 4
months. The standard deviation of the stock’s annual return is 0.45. Apply BS model.
(20 marks)
(E). Following is the EPS record of AB Ltd over the past 10 years. (20 marks)
Year EPS Year EPS
10 Rs.30 5 Rs.16
9 20 4 15
8 19 3 14
7 18 2 18
6 17 1 (12)
(i) Determine the annual dividend paid each year in the following cases:
(a) If the firm’s dividend policy is based on a constant dividend payout ratio of 40 per cent for all
years
(b) If the firm pays at Rs 10 per share, and increases it to Rs 12 per share when earnings exceed
Rs.14 per share for the previous 2 consecutive years.
(c) If the firm pays dividend at Rs 7 per share each except when EPS exceeds Rs 14 per share, when
an extra dividend equal to 80 per centof earnings beyond Rs.14 would be paid.
(ii) Which type of dividend policy will you recommended to the company and why?
(F). (1). A US MNC has its subsidiary in India. The subsidiary has issued 15 pr cent preference shares of
the face value of Rs.100, to be redeemed at year-end 9. Flotation costs are expected to be 5 per cent;
these costs can be amortized for tax purpose during 8 years at a uniform rate. The corporate tax rate is
35 per cent. Determine the costs of preference shares from the perspective of the subsidiary.
(10 marks)
(F). (2) The US inflation rate is expected to be Rs.3 per cent annually and that of India is expected to be
4.5 per cent annually. The current spot rate of US $ in India is Rs.47.4060/US $.
(10 marks)
Find the expected rate of US $ in India after one year and after 5 years from now using purchase
power theory of exchange rate.

 HUMAN RESOURCE MANAGEMENT
Course: ADHRM Total marks: 80
Instructions:
1. Answers must be written in legible handwriting without using abbreviations or SMS
language.
2. Clarity of thought and expression is expected from the examinee
3. Figures to the right indicate the marks assigned to each case study.
4. All questions carry equal marks
5. Read the case studies carefully and then attempt the questions.
CASE –1 (20 Marks)
“I don’t want to hear your excuses. Just get those planes in the air,” john Vaz was screaming at his
gate manager. As head of American Airlines’ operations at the Mexico City airport, Vaz has been
consistently frustrated by the attitude displayed by his native employees. Transferred from Dallas to
Mexico City only three months ago, Vaz was having difficulty adjusting to Mexican style of work.
“Am I critical of these people? You bet I am! They don’t listen when I talk. They think things are just
fine and fight every change I suggest. And they have no appreciation for the importance of keeping
on schedule.”
If Vaz is critical of his Mexico City staff, it’s mutual. They universally dislike him.
Here’s a few anonymous comments made about heir boss: “He’s totally insensitive to our needs.”
“He thinks if he yells and screams that things will improve. We don’t see it that way.” “I’ve been
working here for four years. Before he came here, this was a good place to work. Not anymore. I’m
constantly in fear of being chewed out. I feel stress all the time, even at home. My husband has
started commenting on it a lot.”
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Vaz was brought in specifically to tighten up the Mexico City operation. High on his list of goals is
improving American’s on-time record in Mexico City, increasing productivity, and improving
customer service. When Vaz was asked if he thought he had any problems with his staff, he replied,
“Yep. We just can’t seem to communicate.”
Questions:-
1. Does John Vaz have a communication problem? Explain.
2. What suggestions, if any, would you make to John to help him improve his managerial
effectiveness?
3. Ineffective communication is the fault of the sender. Do You agree or disagree? Discuss.
4. What can you do to improve the likelihood that you r communication will be received and
understood as you intend.
CASE –2 (20 Marks)
The reality of software development is a huge company like Microsoft-it employs more than 48,000
people- is that a substantial portion of your work involves days of boredom punctuated by hours of
tedium. You basically spend your time in an isolated office writing code and sitting in meetings
during which you participate in looking for and evaluating hundreds of current employees and
potential employees. Microsoft has no problem in finding and retaining software programmers. Their
programmers work for very long hours and obsess on the goal of shipping product.
From the day new employees begin at Microsoft, they know they are special. New hires all
have one thing in common-they are smart. The company prides itself on putting all recruits through a
grueling “interviewing loop”, during which they confront a barrage(an overwhelming number of
questions or complaints) of brain-teasers by future colleagues to see how well they think. Only the
best and the brightest survive to become employees. The company does this because microsofties
truly believe that their company is special. For example, it has high tolerance for non-conformity,
would you believe that one software tester comes to work everyday dressed in extravagant Victorian
outfits? . But the underlying theme that unites Microsofties is the belief that the firm has a manifest
destiny to change the world.
The least important decision as programmer can have a large importance which it can affect a
new release that might be used by 50 million people.
Microsoft employees are famous for putting in long hours. One program Manager said “In my
First Five Years, I was the Microsoft stereotype. I lived on caffeine and vending-machine hamburgers
and free beer and 20-hour work-days……I had no life…..I considered everything outside the building
as a necessary evil”. More recently things have changed. There are still a number of people who put
in 80-hour weeks, but 60 and 70 hour weeks are more typical and some even are doing their jobs in
only 40 hours.
No discussion of the employee life at Microsoft would be complete without mentioning the
company’s lucrative stock option program. Microsoft created more millionaire employees, faster,
than any company in American history-more than 10,000 by the late – 1990’s while the company is
certainly more than a place to get rich, executive still realize that money matters. One former
Manager claims that the human resources’ department actually kept a running chart of employee
satisfaction versus the company’s stock price. “When the stock was up, human resources could turn
off the ventilation and everybody would say they were happy. When the stock was down, we could
give people Massages and they would tell us that the Massages were too hard.” In the go-go 1990’s,
when the Microsoft stock was doubling every few months and yearly stock splits were predictable,
employees not only got to participate in the Microsoft’s manifest destiny, they would get rich in the
process. By the spring of 2002, with the world in a recession, stock prices down, and the growth for
Microsoft products slowing, it wasn’t so clear what was driving its employees to continue the
company’s dominance of the software industry.
Questions:-
1. If you were the programmer, would you want to work at Microsoft? Why or Why not?
2. How many activities in this case can you tie into specific motivation theories? List the
activities; list the motivation theories, and how they apply.
3. As Microsoft continues to get larger and its growth rate flattens do you think Management
will have to modify any of its motivation practices? Elaborate.
4. Can money act as a motivator? Explain.
CASE-3 (20 Marks)
Merlyn Monroe is not a complainer. If she has a major ache, she usually suffers in silence. Although
her employer, Atlantic Mutual Insurance, has an employee assistance program- to provide emotional
and psychological support in the work plan. She certainly never thinks of using it, even if she did
have a worry on her mind. “They say its confidential but who really knows? Asked Ms. Monroe’, an
administrative assistant at the insurance company.
But Merlyn Monroe’s life changed on September 11, 2001. Her office at 140 broadway in
New York City, was near the world trade Center. She watched the whole thing from her 50th Floor
office window.
Ms.Monroe had never seen so much destruction in her life. She had never seen such a horrific
terrorist attack. Nor had she forced her to relieve 9/11 over and over.
Everything she talked to people they wanted details, which made it worse for her. She had so
much anger about what had happened to her life and lives of so many people and the city where she
worked for 40 Years.
Two weeks after 9/11, Ms.Monroe was still suffering after effects. Even though she lives on
state Island and Atlantic Mutual’s offices have been temporarily relocated to Madison, New Jersey,
not an hour goes by when she doesn’t have flashbacks of her experiences of 9/11.
Questions
1. What should Atlantic Mutual Management do, if anything, to cope with the aftereffects of
9/11?
2. How long would You expect employees to be adversely affected by 9/11 if a company
provides no formal assistance for dealing with anger and stress?
3. What, if anything, should Management do about employees who appear to be suffering from
such kind or trauma and stress, but will neither admit it nor accept help from their employee?
4. Outline the role of HR specialist in providing a safe and healthy environment for employees.
CASE – 4 (20 Marks)
Patil, RK Materials, is very angry, anxious and restless. He bumped into Mehta , RK
Materials, threw the resignation letter on his table, screamed and walked out of the room swiftly.
Patil has a reason for his sudden outburst. Details of the story will tell the reasons for
patil’s anger and why he put his resignation, only four months after he took up his job.
In the year 2000 Patil quit his prestigious Mittal plant at Vishakhapatnam. As a manager
Materials, Patil had various powers like he could even place an order of materials worth Rs.50 Lakhs.
He required nobody’s prior consent.
Patil Joined a pulp-making plant located at Kerala, as RK Materials. The plant is part
of a multi-product and multi-plant conglomerate owned by a prestigious business house in India.The
perks, reputation and designation of the conglomerate attracted Patil away from the public sector steel
monolith.
When he joined the eucalyptus pulp making company, little did Patil realize that he needed
prior approval to place an order for materials worth Rs.25lakh. He thought that he had the authority to
place an order for materials by himself worth half the amount of what he used to as at the Mega Steel
maker. He placed the order, materials arrived, were received, accepted and used up in the plant.
Trouble started when the bill for Rs.25 lakh came from the vendor. The accounts department
withheld the payment for the reason that the bill was not endorsed by Mehta. Mehta refused to sign
on the bill as his approval was not taken by Patil before placing the order.
Patil felt very angry and cheated. A brief encounter with Mehta only made the situation
worse. Patil was rudely told that he should have known company rules before venturing. He decided
to Quit.
Questions:-
1. Do you think the company has any orientation programme? If Yes, discuss its effectiveness.
2. If employees were properly selected, there should be no need for an orientation programme”.
Comment on the statement.
3. If You were Patil, how would you react to the above situation?
4. Discuss the purpose of orientation. What are various requisites of an effective programme?

INDUSTRIAL RELATIONS & LABOUR LAW
(Marks 80)
CASE 1 : (30 Marks)
Trade Unions in the TNC Supply Chain and their relationship with the CSR
movement
Chinese enterprises are essentially passive players at the sharp end of CSR in China. They are in a
position of having to juggle between the different factors governing the development of industrial
relations in China, including trade union reform. In this often tense dynamic, CSR is seen as an
external factor and trade unions an internal factor. These two factors have an impact on each other.
As part of the research for this case study, the research team (RT) ‘shadowed’ a CSR audit. The
factory had come under very heavy CSR pressure in 2004. Altogether, the RT carried out two
investigations: in March (see earlier printed report) and August 2006
Initial conclusions:
1) That factories undergoing CSR audits have better working conditions than those that don’t.
2) There is no evidence to suggest that trade unions have an impact on wage levels at enterprise level.
However, factories subject to CSR pressure are generally large workplaces and this was perhaps a
factor in improving labour conditions. Moreover, CSR-targeted factories are prone to data distortion
due to ‘training of workers’ answers’ in interview and double or even triple accounting.
Enterprise Y was established in 1997 and now has 1,200 workers. It was ‘Re-registered’ in 2002 to
take advantage of tax breaks etc. It manufactures electronic goods for export chiefly to three retailers
and over 50% of goods go to a single US company.
Employment breakdown: 80 managers, 300 skilled workers; remainder are ordinary workers.
Managers and skilled workers have contracts and social insurance based on minimum legal standards.
The extent of contracts among unskilled workers remains unclear. The enterprise had previously
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2
supplied a ‘comprehensive’ contract and social insurance list to CSR audit team (excluding
probationary workers) but the RT’s interviews with workers revealed that many had no idea if they
had a contract or not or if they were paying into various social insurance schemes such as work injury
or pensions. The RT was not given access to formal SI contribution records.
Wages were verified at between 900-1100 yuan per month with on average more than 60 hours o/t
but this was subject to orders. There were few disputes and conditions generally were better than at
surrounding factories. Up until Aug 2006 accommodation was free and reasonably good. The labour
turnover rate for unskilled workers was just 8% and most workers had been there more than two
years already. However, in the same period the labour turnover rate for skilled workers had increased
dramatically.
Enterprise Trade Union
Established in 2004. Trade union chair M directly elected by workers, largely as a result of pressure
from the Brand. By August the follow-up research revealed M had left, apparently for ‘personal
reasons’ according to management. Former vice chair C had taken over his position. C’s previous
experience had been as a member of a trade union committee in an SOE trade union. He was
appointed to the post at Y. The local township union said that there would be fresh union elections
‘soon’. The trade union at Y had three other union committee members. All were mid or senior level
managers: human resources manager, one an engineer, and a finance manager. The union had an
office in the enterprise but has no bank account or independent accounts/expenses system. All union
activities were entirely dependent on management transferral of funds.
Trade Union Work
Approach to union work very similar to work in SOEs – i.e. very traditional. Also the union works
very closely with the township union and pretty much depends on it for policy etc. The latter is very
pleased with the Y union, which has received a number of awards. Activities include labour
productivity competitions, May Day competitions. Prizes include going on holiday to HK. Examples
of general day union work included:
• Management introduced a charge for canteen food. The service had been franchised to outside
contractors. In response the union organised a small group (xiao zu) which negotiated with the
company and succeeded in getting the food and food hygiene situation improved.
• Dormitory Management Team: made up of company reps and worker reps. Aim was to selfmanage
the dormitories and avoid management imposing arbitrary fines on workers. The
committee’s work was based on a ‘Dormitory Management Contract’ which the union drew
up. Any fines imposed had to be in accordance with the contract and workers reported an
improvement in the overall dormitory conditions.
3
Union representing workers in wage consultations
The union was very proud of this aspect of its work. Wages stipulated in contracts were 574 yuan per
month – however the real income of workers varied between 900 and 1100 per month due to o/t.
On 1 September 2006 – the government introduced new standards for min. wage which were reset at
690 yuan per month, which at current contract and o/t levels in the factory would mean a 300 yuan
per month wage increase. Company provided figures which made it clear that if they abided by the
wage increase in current market conditions they would go bust. Y’s HR department presented a
proposal saying that Y should meet new min. wage requirements but cancel food and board subsidy.
However, this would break contracts with workers in which the company agreed to supply food and
dormitory accommodation. Management consulted with local government and township trade union
and decided to try and solve the problem through consultations with enterprise union.
RT investigation found that the consultation did not follow either the regulations on collective
consultations on wages, nor did they constitute a collective contract. Instead: Workers Rep meeting
called by boss: mostly production managers but also a small number of line workers present who
were appointed as ‘reps’ by the trade union chair. RT observed this meeting and also provided legal
advice to worker reps. At the meeting was a deputy managing director and the two managers from the
union committee.
Meeting procedures and presentations recorded in report – worker reps presented with an ultimatum
regarding bankruptcy plus threat of dismissal from HR dep. for anyone who did not agree with the
cancellation of free food and board. Trade union said: it wanted the new min. wage standard met;
new charges for food and board should be reasonable and include a self management team for
dormitory. Union also called for further consultation with members.
Not much feedback from members. Union held further talks with senior company managers. This led
to the Method of New wage Management. New charges 200 for dorm and 60 for food, a rate below
market prices but reduced the wage rise itself to between 40-60 yuan. RT interviews with workers
showed that most workers agreed with the new arrangements. A minority felt that they had been
cheated. All signed the new agreement and anyone who refused was told their contracts would not be
renewed.
CSR audit
RT shadowed and at times provided translation for a social audit team. Despite the professionalism of
the audit team, their task to report actual conditions at the factory was essentially a failure. The audit
team asked that the factory management bring o/t levels down to legal levels, although they also
expressed an understanding of local conditions and stated that workers were able to take adequate rest
time despite high levels of overtime. No workers expressed dissatisfaction with pay and conditions
directly to audit team.
The audit team also had an extensive meeting with trade union chair who told them that the new
wage levels had been met but did not mention the introduction of dormitory and canteen charges. The
audit team also asked that a dispute mediation committee be established at factory level as well as
warning management that a complaints system for workers should be implemented as soon as
possible. Also discussions over whether the deposit that the factory demanded for work uniform was
an illegal job deposit. Audit team agreed that it wasn’t.
4
Audit team did not discover the fact that some workers who did not meet piece rate targets had to
complete quotas in their own time – up to 1-2 hours per day! The trade union chair had told workers
it was in their interests to lie to audit team over working hours as trained to do so by enterprise
management. He was under no pressure to take this line from the enterprise itself.
Discussion:
• Organisation of the trade union was from CSR pressure not pressure from workers i.e. in
effect top down. 2004 US client retailer had cancelled an order due to working conditions and
this had caused losses.
• Union operated in a cooperative manner with management not confrontational.
• With regard to a workers’ complaints and mediation system. The US client did not believe it
to be true when management had told them there were no disputes with or among the workers.
The real situation was that the union had not taken part in any disputes. RT checked with the
MOLSS and found that a dispute had occurred following a death in the dormitory.
Management denied it was due to a work injury and police ruled out criminal behaviour.
Eventually MOLSS brokered compensation with family and Y enterprise. No details made
available. However, RT concluded from this dispute that the company did not have an injury
compensation scheme for workers. If they did have, the settlement would have been between
the dead worker’s family and the insurance company.
• Audit ream did not discover that the HR department pressured workers to hand in their notice
when they wanted to cut staff levels rather than simply lay them off. This was to avoid
compensation. The union also kept silent on this.
• The wage negotiation process was entirely non-confrontational except for HR attitude to the
workers, who were threatened with dismissal if they objected to concluding the agreement.
• The union helped the enterprise and the brand find an easy way out of the wage dilemma. It
did not ‘represent’ the workers in this process.
Questions :
1. What is the experience of China about Trade Union in the above mentioned case?
2. How Trade Union resolved the dispute? By confrontation or by negotiations?
3. What is the general impression about the Trade Union movement with reference to this case?
4. Give your comments and opinion
5
CASE 2 (30 Marks)
Acas and Essex Ambulance Service NHS Trust: Improving
consultation and working patterns.
The Challenge
Essex Ambulance Service (EAS) is an organisation dealing with unscheduled care,predominantly
accessed via 999 calls. It was established as an NHS Trust in 1990 and employs around 1,300 people
who are primarily members of two unions, Unison and the GMB.
The Trust had two inter-related problems. Firstly, relations between management and unions had
deteriorated after a national ambulance dispute in 1989. Trade unions did not have recognition at the
Trust, and a trade union representative described the management-union relationship throughout the
1990s as “arms-length” and “fairly
tense”. During this time, trade union involvement was restricted to representatives attending health
and safety committees and representing union members during individual disputes. Consultation
between management and the workforce was nonexistent, and this was due in part to the management
style of the organisation. A JNCC (joint negotiation and consultation committee) was established at
the unions’ insistence, but it was largely ineffective. Decisions made at the JNCC were often
overturned or ignored by the Chief Executive Officer (CEO), thereby damaging the committee’s
credibility, and the CEO had no involvement in the committee.
This contributed to a second problem: a failure to respond to different staff interests by modernising
working arrangements for part-time and relief staff. These workers were unable to influence their
work roster and shift patterns to the same extent as full-time and longer serving staff. And because of
a lack of consultation mechanisms, it was proving difficult to agree on strategies that would mutually
resolve the problem.
The Trust eventually recognised trade unions in 1999. In 2002, following the departure of key
managers who had resisted engaging in joint consultation, trade union representatives, supported by
management, contacted Acas for help in addressing these problems and improving the employment
relations climate. Acas was approached, according to the HR manager, because it was seen as
“independent, and expert around this area”.
How Acas helped
In October 2002 the Acas adviser met with management and trade unions to develop two sets of
workshop programmes, each addressing the issues identified as problems.
Two initial workshop sessions were held to discuss rostering issues. The Acas adviser led these
workshops, using techniques to break down barriers between participants, including splitting them
into mixed (management-trade union) groups to work on problems and design solutions. Throughout
the workshops, the adviser also profiled examples of how problems were resolved in other
organisations she had worked with.By the end of the first workshop a number of recommendations
were developed, including the need to have clear principles driving consultation, the need for a
review of the roster system, and the need to have stronger informal ties between key managementunion
players. The Acas adviser then put together a report based on the ideas and suggestions
6
generated at the workshop, and these were discussed at a further workshop, at which participants
ratified and agreed a new system of rosters.
‘Break-out groups’ addressed problems in a way that included the voice of all parties, and
stakeholders and the adviser also worked with specific sub-groups of staff – for example relief
workers (who fill in for workers on holiday or sick leave) – to tackle particular rostering problems
and design improved working practices.
The adviser organised a subsequent facilitated workshop in early 2003, attended by key Trust
managers and union groups. Its aim was to establish the purpose of the JNCC and its terms of
reference. Whilst no formal output emerged from the workshop, participants felt that it had formed
the basis for the renewal of the forum. The HR manager described the imperatives driving this
initiative:
“… bear in mind we’re coming from a stance where the unions weren’t involved in negotiation at all
… We’re moving towards Agenda for Change now and that’s very much about partnership working
with staff-side. So we wanted to make sure that the JNCC had the right terms of reference and was
going to be working effectively for both sides to benefit.”
The benefits: improved consultation and working patterns:
A range of positive outcomes flowed from Acas’ involvement at the Trust, with management and
trade union representatives emphasising their significance in light of the relationship difficulties and
low levels of trust at the Trust during the 1990s. Firstly, the JNCC has become a central feature of
employment relations at the Trust. It now functions effectively, partly as a result of good informal
relations between key trade union representatives and HR managers. The Committee has provided a
vehicle for regular management-trade union dialogue on a wide variety of issues, including work-life
balance and flexible working. The JNCC has also become a crucial medium for discussions around
Agenda for Change. Secondly, in terms of work rosters, there is a new system that accommodates the
interests of both full-time staff and those on a variety of different contracts. Employees who formerly
had little advance knowledge of when they were working can now plan their rest days more clearly.
In facilitating changes in working patterns, the Acas project has brought part-time staff closer to the
strategic concerns of the Trust. This has meant that human resource planning is clearer and more
consensual in nature, and levels of commitment from part-time staff are, according to trade union
representatives, higher than in the past.
Thirdly, the process of improving consultative mechanisms and the roster system has helped build
relationships between management and union representatives, enabling them to develop other new
practices relating to, for example, meal breaks and work-life balance initiatives. A joint approach has
also been taken to managing the implementation of Agenda for Change, with trade union
representatives reporting that they now feel that they have some ownership over its development.
There are now ‘joint management-union chairs’ for sub-groups, including Agenda for Change subgroups,
each tackling a variety of new issues and reforms. These new issues are approached in a very
different way to the past, when the level of dialogue was virtually non-existent. There are still
differences and problems, but the new framework has sustained a high degree of joint working.
Central to this has been the strong explicit commitment and support for consultative mechanisms
from the union and senior management, including the interim CEO, who chaired the JNCC. As one
trade union representative explained:
“(The Acas project) has built a foundation to move forward on the working lives for our relief staff,
for full time staff. And we’ve now got the JNCC firmly established as the main staff conduit to the
head of the organisation on a formal basis.”
7
According to HR managers and trade union representatives, longer term benefits of Acas
involvement have become evident over the last two years. These include increased levels of trust
between employees, unions and managers, and improved formal and informal workplace relations.
Trade union representatives and managers now speak to each other openly and constructively, and
improvements to operational systems and practices are the subject of consultation and dialogue to a
much greater extent than in the past. Such is the nature of the turnaround that Trust managers and
union representatives are often called upon to provide advice to other Trusts who are attempting to
improve employer-trade union relationships.
Questions:-
1. Give the brief history of the above mentioned case study
2. What was the problem? How it was resolved?
3. What was the effect of solution on the unit’s mechanism?
4. What is the message ?
8
CASE 3 (20 Marks)
Changing role of trade unions
The curtain has at last come down on one of the most famous marquees in the motorcar industry,
with MG Rover finally shutting down production earlier this month.
A company that once employed 40,000 people in the British Midlands, with an equal number
employed in the factories of suppliers, had been forced to scale down its operations over the years.
But even skeletal operations with 4,000 people has now ceased. It is an example of what destructive
trade unionism can do to an industry.
Arthur Scargil in the 1980s set out to destroy industry in the Midlands with his brand of militant and
destructive trade unionism. Finally Mrs Thatcher stood up to him and showed him the limits to which
trade unions could push industry.
She privatised industries and Scargil lost his power base, which was mainly in public sector heavy
industries. Successive governments in Britain after Mrs Thatcher have refused to bail out public
sector undertakings with subsidies and grants.
This has resulted in Britain transforming itself from being the sick man of Europe to one of the more
dynamic economies in the West.
In India too we have had examples of the Arthur Scargil brand of trade unionism. What Datta Samant
did to the cotton textile and engineering industries in Mumbai was equally devastating.
Almost all the textile mills in the city closed because of the unreasonable demands made by trade
unions under Datta Samant. India has the advantages of (a) growing both long staple and short staple
cotton and (b) a huge domestic market.
We could have been the cotton textile source for the whole world. But battling militant trade unions,
on the one hand, while coping with price controls imposed by unimaginative governments and textile
quotas imposed by foreign governments, on the other, proved too much for our textile industry.
It did not have the necessary financial and managerial resources, and it failed to modernize and
remain competitive in terms of quality and cost. So it declined and became terminally ill.
Trade unions are a legitimate system for organizing workers and to voice their rights and grievances.
Without them companies would become either too paternalistic or too dictatorial.
Responsible unions help to create a middle path in the relationship between management and labour
while maintaining the responsibilities of the former and the dignity of the latter.
Where things go wrong is when the management becomes authoritarian, especially in owner/familymanaged
companies, or when a trade union leader allows emotion and ego to overcome reason.
9
Fortunately today, workers have become better informed and aware of the economic forces that
impact their industry. The media has helped to create much greater economic awareness.
So it is not so easy to mislead them. Managements too have become more sensitive and skilled in
handling relationships with employees. This is true of even family-owned and managed businesses.
TVS [Get Quote] in the South is a prime example of how a large family-managed industrial group
has successfully managed its relationship with employees through enlightened management. There
are more such examples in other parts of the country.
Perhaps the labour departments of governments at the state and the Centre should sponsor the
institutes of management to do case studies of companies that have built up such successful
relationships. Instead of merely administering rules and labour laws, these government departments
could also act as apostles of good practices in the field.
As the skill levels and educational qualifications of employees advance, the role and significance of
trade unions tend to diminish. This is because (a) employees are able to represent their own case and
(b) managements are more sensitive to the needs of individual employees, whose intellectual skills
become almost uniquely valuable.
This is already happening in the sunrise industries based on brainpower such as IT and
telecommunications. Another phenomenon in these modern industries is that employees have greater
opportunity and tendency to move from one company to another, not only because of better terms of
employment but also because of their yearning to learn new skills.
This appetite for learning is something remarkable, especially in the IT industry. In fact, people in
that industry are more bothered about what they can learn in a company than about how much they
earn.
This phenomenon is facilitated by the fact that there are plenty of employment opportunities in IT
and it is a young industry. That is why one does not notice any union flags in the Silicon Valley of
India/Bangalore's Electronic City.
Trade unions have declined in their importance even in the UK, the original home of trade unions.
The UK's Labour Party was formed by socialist leaders of trade unions.
Today, Tony Blair does not have to depend on trade unions as much as his predecessors had to do in
the 1980s and 90s. The Labour Party's appeal to the public is based on key policy issues such as
spending on the National Health Service and the education system, rather than anything to do with
labour policy.
In the US, trade unions are powerful in negotiations with individual employers, but have no
significant political clout although they generally support the Democratic Party.
The same is the case in Japan. Even in Germany, France, and Italy, the role of trade unions has
become more focused on negotiations with employers rather than on politics.
The privatization or corporatisation of many public services such as electricity and water supply has
accelerated this shift. Hopefully the same shift in the character and role of trade unions will happen in
10
India -- even in places like Kerala and Bengal, as employment starts to move to more intellect-based
activities and public sector industries are privatized.
Responsible trade union leaders with a long-term vision will adapt their policies to suit the new
realities.
Correspondingly, there has also been a change in the attitude of management, even in familymanaged
companies. They are now better educated and many of them have been exposed to
international education and international markets.
They realise the dignity of human beings more than their previous generation and therefore are less
prone to treat employees in a scurvy manner. More and more companies are investing in management
training and development.
This has also helped to create much better awareness of the aspirations of workmen, among the
managers.
Yet the last vestiges of negative union practices continue to persist in monopolistic public services
like the state transport undertakings, state electricity boards, etc.
The only way to correct this is to corporatise or privatise these undertakings or open them up to
competition. A prime example of the change that is possible is what has happened in aviation.
Once airline services were opened up to competition, the whole scene changed. Instead of treating
passengers with the indifference typical of a public sector employee, Indian Airlines staff learnt even
to smile while greeting passengers.
In addition, we have created some world-class private carriers in the domestic market who are now
set to take wing on international routes. Even the railways can be privatised.
The rail track in each region can be owned and operated by a company, which then allows competing
companies to run their trains on these tracks. Similarly, there is no reason why urban bus services
cannot be made more efficient by opening them up to competition.
Today they are run as monopolies due to pressure from unionised labour. For example, in Mumbai
the urban bus service is cross-subsidised by BEST Electric Supply services.
Questions:-
1. What do you know about changing role of Trade Union activities?
2. What is the role of responsible Trade Unionism?
3. Is Privatisation a challenge for Union activities?
4. What is the lesson learnt from the IT sector?


MANAGERIAL ECONOMICS
(Any 8)
Q1) Distinguish between Economic Profit versus Accounting Profit?
Q2) Explain the term ‘Market’?
Q3) Regression analysis is often referred to as least squares regressions. Why is this
name appropriate?
Q4) Explain the factors which affecting price elasticity of demand?
Q5) When a manager is using a technically efficient input combination, the firm is also
producing in an economically efficient manner. Evaluate this statement.
Q6) Economists frequently say that the firm plans in the long run and operates in the
short run. Explain.
Q7) Explain why input barriers to entry have probably declined in importance with the
recent expansion of International markets?
Q8) Explain why the manager of profit maximizing monopoly always produces and sells
on the elastic portion of the demand curve. If costs are o what output will the manager
produce? Explain.
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Q9) Evaluate the statement “In simultaneous decisions games all players know the
payoffs from making various decisions, but the players still do not have all the
information they would like to have in order to decide which action to take”.
Q10) Price discrimination sound like socially bad thing. Can you think of any reasons
why Price distribution could be viewed as a socially good thing?

ORGANIZATIONAL BEHAVIOR
& BUSINESS COMMUNICATION
COURSE : ADHRM Total Marks : 80
INSTRUCTIONS :
1) Answers must be written in legible handwriting without using abbreviations or SMS
language.
2) Figures to the right indicate the marks assigned to each case study.
3) Clarity of thought and expression is expected from the examinee.
4) All Questions are compulsory.
5) Read the case studies carefully and then write the answers.
CASE – 1 (20 Marks)
Raj Thapar, Karan Singhania and Aditya Mehta were bucking the trend during the 2001
recession. While their counterparts were aggressively laying off workers, these CEOs were holding
the line against layoffs.
Raj Thapar is CEO at Airbus. His company, along with Boeing, dominate the market for
commercial aircraft. But while Boeing announced layoffs of upto 30,000 workers following the
terror attacks of September 11, 2001, Thapar said he won’t be firing anybody. Said an Airbus
executive, “This is a bet that life will resume. There’s more uncertainty now, but we decided to be
optimistic. This thing will turn around and you can’t risk losing skilled people when the upturn
comes.”
Karan Singhania is CEO at North-Western Mutual, the largest seller of individual life
insurance in the United States. Singhania is no “Mr Nice Guy”. Every year his firm fires the lowest
four percent of its 4,100 employees — those with the poorest performance. But it is very loyal to its
good ones. Singhania is committed to a no-layoff policy. Why? Employee loyalty says Singhania?
He believes employee loyalty helps in customer loyalty. And he may be right since Northwestern
loses only about half as many customers as the industry average. Singhania argues that his Firm’s
higher customer retention rate allows Northwestern to have more money to invest longer, while
spending less to replace defectors. The company can then pass the savings back to customers by
lowering prices on policies.

Our final CEO, Aditya Mehta, heads up Enterprise Rent-a-Car. Mehta proudly says that his
company has never had a layoff. This may be one reason why Enterprise is now America’s largest
rental car company.
In a down economy, these CEOs were running against the tide when the economy began to
slow, most corporate leaders’ first reaction was to cut the size of their workforce. In 2001, alone
companies let more than one million workers go. Why? It immediately cuts operating expenses. For
public companies, it sends a message to stock investors and analysts that management is serious
about maintaining profits and reducing losses. A week after Boeing announced that it was laying off
20 per cent of its workforce, its stock jumped 10 per cent.
Questions :
1) What are the arguments for and against layoffs in hard times?
2) How have the three executives in this case shown leadership?
3) Explain the difference between management and leadership. Discuss why conceptual
leadership skills become more important, and technical skills less important, at higher level
organizational levels.
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CASE - 2 (20 Marks)
The engineering division of Shah & Co, consists of four departments, with the Supervisor of
each reporting to the division general manager (GM). The four departments range in size from four
employees in the smallest (industrial engineering) to twenty in the largest (sales engineering). The
other two departments (design engineering and process engineering) each have eight employees.
There occurs frequent rivalry among various departments over the allocation of resources.
This problem has worsened by the favouritism that the GM purposely shows towards the industrial
and design engineering units and his reliance on majority-rule decision making (among his four
supervisors and himself) at staff meetings. The Supervisors of the sales and process engineering
complain that this practice often leads to leaders of the industrial and design engineering departments
forming a group with the GM – to make a decision, eventhough they represent a small number of the
total employees. In response, the industrial and design engineering supervisors charge the
supervisors of the sales and process engineering units with empire building, power plays, and a
narrow view of the mission of the division.
Questions :
1) Is the GM’s approach wrong? If yes, then why if no then why not? Give reasons for your
answer.
2) What would you recommend to the G.M.
3) Team leaders and team members need skills to develop effective teams. Is this statement
correct or wrong. If there are any skills needed by the team leaders and team members to
develop effective teams then discuss them.
Page 1 Out of 1
CASE – 3 (20 Marks)
The new general manager (GM) of a Malaysian Carpet company was faced with the challenge of
turning around the firm, which was rapidly going downhill. He had to influence his own head office,
senior executives, workers, bankers, dealers and others to support the change till the Firm turned the
corner. But the workers were in no mood to wait and decided to go on strike demanding higher
wages and bonus. A senior executive, who wanted to cut the new GM to size, was provoking them
surreptitiously (secretly).
One day, as the workers were planning to leave for the day, the GM decided at the spur of the
moment to talk to them. He said, “I understand that you are planning to go on strike and hold
demonstrations. When you will sit outside the factory gate tomorrow, there will be people from the
press who will come and photograph you. Your pictures will appear in the newspapers. They will
ask you questions and blow up the issue. But our bankers will also read our problems. They already
think that ours is a dying company and when you go on a strike, they will reject our proposal for
funds. If that happens, the company will close down. Of course, you will continue to hold
demonstrations, but now no press people will come to take your photographs and write what you say.
I have another job at the head office and so I will lose very little, but I am not sure if all of you can
find another job when the company closes down.
The response of the workers to the GM’s impromptu address was electric, the GM had
established contact with the group. The GM looked directly into the eyes of a worker who was
listening intently and asked him, “Tell me, do you want to go on strike tomorrow?”
The worker avoided his eyes but the GM persisted, “You cannot avoid my question. It is far
too important for the company’s future and yours. Do you want to go on strike? For a while, there
was silence. Then, slowly the worker said, `No’. The GM moved to another person and repeated his
question. Again the answer was no.
The third person, fourth person and soon ripples of a new sentiment were being generated.
Towards the end of the addresses, the crisis had been avoided. The GM quickly followed up with
initiatives to strengthen employee communication and involvement to build on the positive sentiment
that had come about.
The GM followed a different approach with the bankers. He met them regularly and
frequently, each time with some good news about the company. He used his contacts to get certain
purchase orders released, even if the deliveries were required later. Every time there was a big order,
he told the bankers that it was only the tip of the iceberg, and there was more to follow. In the GM’s
words, “No accounts are presented to the bankers unless we put lipstick and mascara and make them
look as pretty and healthy as possible.” Finally, the banks relented and accepted the financial
restructuring package we had proposed. That helped the company turn around in a remarkably short
time.
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Questions :
1) How did the GM distinguish between the two target groups to make his communication
effective?
2) What is the main advantage of direct face-to-face communication, as against communication
through circulars or memos?
3) What makes technical communication different from general communication ?
4) How important is it to be able to communicate?
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CASE – 4 (20 Marks)
1) Interviews – How are you?
Vikas — Nice.
2) Interviewer — Tell us something about your background and academic credentials.
Vikas – (tensed and nervous). I … I am a very qualified manager. I am from Mumbai. I
studied at Top institutions of Mumbai. I am very famous. I believe in hard work and honesty.
Currently, I am not working with anyone.
3) Interviewer – What kind of a position are you looking for ?
Vikas – (in a rigid tone) I want the post of a Senior Manager only.
4) Interviewer – Tell us something about your work experience.
Vikas – I have a lot of experience. I have marketing experience as Manager (Sales and
Marketing). Before this job, I worked with K K & Company. I have always proved myself as
an outstanding sales professional.
5) Interviewer – Can you tell us about your responsibilities at your last job ?
Vikas – As I told you, I am a very hard working professional. My last job with K K &
Company as Manager (Sales & Marketing) kept me very busy. My colleagues were very
lazy.
So I had to perform extra responsibilities on their behalf. My main job was to do the
marketing of K. K water purifiers.
6) Interviewer – What are your career objectives?
Vikas – I want to acquire a challenging position in a large companym where I should be able
to
use my specialized qualification, understanding and experience in marketing and sales.
7) Interviewer – What are your strengths ?
Vikas – I have good communication and interpersonal skills. I am good at getting along with
others. I have always achieved company targets. Last year, my company wanted me to sell
2,00,000 water purifiers, I did it.
8) Interviewer – What is your greatest weakness?
Vikas – I think that I do not possess any weakness.
9) Interviewer – Are you a leader or a follower?
Vikas – I am a leader. I have successfully completed several projects as a leader.
10) Interviewer –Why do you want to work with our company?
Vikas – There is no specific reason for this question. Your company pays more than other
companies. As I told you earlier, I am currently jobless, I need money so I have to work.
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Questions :
1) Read the above conversation carefully if you were Vikas, how would you answer all the
questions asked by the interviewer. Rewrite the answers, making them more appropriate by
changing the language, style, tone, and attitude of the answer.”
2) Describe the significance of job interviews today.


AEREN FOUNDATION’S Maharashtra Govt. Reg. No.: F-11724
Subject : PORTFOLIO MANAGEMENT
(Answer Any 8)
Q1) What qualities are required for successful investing?
Q2) What are the major types of real assets? What are the pros and cons of investing in real
asset?
Q3) What is book building?
Q4) What are the key differences between traditional finance and behavioural finance?
Q5) Discuss the following.
a) Demand side policies.
b) Supply side policies.
Q6) What are the differences between technical analysis and fundamental analysis?
Q7) What are the key differences between closed-ended and open ended schemes?
Q8) What should you bear in mind while investing in paintings and antiques?
Q9) Spell out the key steps involved in portfolio management?
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