IIBMS GENERAL MANAGEMENT EXAM ANSWER | IIBMS HUMAN RESOURCE MANAGEMENT EXAM ANSWER

 IIBMS GENERAL MANAGEMENT EXAM ANSWER | IIBMS HUMAN RESOURCE MANAGEMENT EXAM ANSWER

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

Attempt Any Four Case Study

CASE – 1 Your Job and Your Passion—You Can Pursue Both!

The 21st century offers many challenges to every one of us. As more firms go global, as more

economies interconnect, and as the Web blasts away boundaries to communication, we become

more informed citizens. This interconnectedness means that the organizations you work for will

require you to develop both general and specialized knowledge—such as speaking multiple

languages, using various software applications, or understanding details of financial transactions.

You will have to develop general management skills to foster your ability to be self-reliant and

thrive in a changing market-place. And here’s the exciting part: As you build both types of

knowledge, you may be able to integrate your growing expertise with the causes or activities you

care most about. Or, your career adventure may lead you to a new passion.

Former presidents George H. W. Bush and Bill Clinton are well known for combining their

management skills—running a country—with their passion for helping people around the world.

Together they have raised funds to assist disaster victims, those with HIV/AIDS, and others in

need. Jake Burton turned his love of snow sports into an entire industry when he founded Burton

Snowboards. Annie Withey poured her business and marketing knowledge into her two famous

business ventures: Smartfood and Annie’s Homegrown. Both products were the result of her

passion for healthful foods made from organic ingredients.

As you enter the workforce, you may have no idea where your career path will lead. You may be

asking yourself, “How will I fit in?” “Where will I live?” “How much will I earn?” “Where will my

business and personal careers evolve as the world continuous to change at such a fast pace?” If

you are feeling nervous because you don’t know the answers to these questions yet, relax. A

career is a journey, not a single destination. You may have one type of career or several. It is likely

you will work for several organisations, or you may run one or more businesses of your own.

As you ask yourself what you want to do and where you want to be, take a few minutes to review

the chapter and its main topics. Think about your personality, what you like and dislike, what you

know and what you want to learn, what you fear and what you dream. Then try the following

exercise.

Questions

1. Create a three-column chart in which the first column lists nonmanagement skills you have.

Are you good at travel? Do you know how to build furniture? Are you a whiz at sports statistics?

Are you an innovative cook? Do you play video games for hours? In the second column, list the

causes or activities about which you are passionate. These may dovetail with the first list, but they

might not.

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

2. Once you have you two columns complete, draw lines between entries that seem

compatible. If you are good at building furniture, you might have also listed a concern about

families who are homeless. Remember that not all entries will find a match—the idea is to begin

finding some connections.

3. In the third column, generate a list of firms or organizations you know about that reflect

your interests. If you are good at building furniture, you might be interested working for the

Habitat for Humanity organization, or you might find yourself gravitating towards a furniture

retailer like Ikea or Ethan Allen. You can do further research on organizations via Internet or

business publications.

CASE – 2 Biyani – Pioneering a Retailing Revolution in India

“I use people as hands and legs. I prefer to do thinking around here.”

─ Kishore Biyani, CEO & MD, Pantaloon Retail (India) Ltd.

Kishore Biyani (Biyani), CEO& MD of Pantaloon Retail (India) Ltd., planned to have 30 Food

Bazaar outlets, 22 outlets in Big Bazaar, 21 Pantaloons outlets, and four seamless malls under the

Central logo, by the end of 2005. He also planned to launch at least three businesses every year

and had already selected music, footwear and car accessories as his next areas of investments. He

was already the top retailer in India followed by Raghu Pillai of RPG. As of 2004, Biyani headed a

company that had a turnover of Rs 6,500 million and operated 13 Pantaloon apparel stores, 9 Big

Bazaars, 13 Food Bazaars, and 3 seamless malls (Central), one each located in Bangalore,

Hyderabad, and Pune.

Biyani’s journey from a person who looked after his family business to India’s top retailer in

1987, when he launched Manz Wear Pvt. Ltd. The company launched one of the first readymade

trousers brands – ‘Pantaloon’ – in the country. The company also launched its first jeans brand

called ‘Bare’ in 1989. On September 20, 1991, Manz Wear Pvt. Ltd. went public and on September

25, 1992, it changed its name to Pantaloon Fashions (India) Limited (PFIL). ‘John Miller’ was the

first formal shirt brand from PFIL.

The company opened its first apparel stores, called ‘Pantaloons’ at Kolkata in August 1997. The

stores generated Rs 70 million. Biyani then realized the potential of the Indian market and started

to aggressively tap it. Accordingly, Biyani decided to expand into other segments of retailing

besides apparel. To reflect this change in focus, the company changed its name to Pantaloon Retail

(India) Limited (PRIL) in July 1999 and set itself a target of achieving Rs 10 billion in sales by June

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

2005. In course of time he launched three other retail formats -- Big Bazaar, Food Bazaar, and

Central.

Biyani didn’t believe in copying ideas from western retailers. He was critical of his peers who felt

just copied ideas form the west without making any effort to mold them to Indian conditions. He

ensured that his store formats such as Big Bazaar, Food Bazaar, and Pantaloons were all suited to

the purchasing style of Indian consumers.

Biyani was a huge risk taker and his planning was always different from the conventional way of

doing business. This was also one of the factors that had prompted Biyani to move away from his

father’s conventional way of doing business. During the initial stages of his success, his risk-taking

attitude sometimes had the effect of turning away financiers. The biggest risk that Biyani took was

in opening Big Bazaar in Mumbai in 2001. The company needed money to expand Big Bazaar’s

operations. However, it had profits of only Rs 40 million with a low share price at eighteen rupees.

Therefore, Biyani could not raise money through equity. In light of this situation, Biyani took a

loan of Rs 1,200 million from ICICI for launching the operations of Big Bazaar, which increased his

debt exposure. However, Big Bazaar proved to be a resounding success with 100,000 customer

visits in its first week of operations. According to analysts, if Big Bazaar had failed, Biyani would

have landed in a severe debt crisis. The success of Big Bazaar not only increased the company

profits, it also changed the perception of investors.

Many people criticized Biyani for not delegating authority and Biyani himself accepted the

criticism. He said, “I use people as hands and legs. I prefer to do the thinking around here.” He

preferred taking individual decision on activities like strategic planning, ideas for other ventures,

and other important issues. It was because of this that managers like Kush Medhora of Westside

were initially apprehensive about joining Biyani’s business. However, Biyani changed his attitude

gradually with the launch of Big Bazaar, Food Bazaar, and Central and appointed different people

for managing different business units.

Biyani believed in leading a simple life and in being simply dressed. His vision came from his

diverse reading connected to retailing and other areas. He made it a point to visit each of his

stores across the country. He aimed to spend at least seven hours a week at the stores. In the

stores, he would stand at a corner and observe people. He also walked on streets, met common

people, and talked to local leaders to plan and put up new products in his stores. Each of his stores

was set with a weekly target, which was reviewed every Monday. Whenever a new store was

opened, the details of its operations during the first 45 days were to be sent to him. Sometimes, he

suggested remedies to some problems. Biyani believed in extensive advertising to make more

people know about the product. His decision making was quick and devoid of unnecessary delays.

Biyani was also a good learner and learned quickly from his mistakes. He planned to improve

inventory management through responding effectively to the demands of the customers rather

than forecasting them, as he felt that forecasting would pile up the inventory in this dynamic

market.

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

Questions

1. The tremendous success of the ‘Pantaloons’, ‘Big Bazaar’ and ‘Food Bazaar’ retailing

formats, easily made PRIL the number one retailer in India by early 2004, in terms of turnover and

retail area occupied by its outlets. Explain how Biyani is further planning to consolidate his

businesses.

2. “Our striving toward looking at the Indian market differently and strategizing with the

evolving customer helped us perform better.” What other qualities of Kishore Biyani do you think

were instrumental in making him top retailer of India?

CASE – 3 The New Frontier for Fresh Foods Supermarkets

Fresh Foods Supermarket is a grocery store chain that was established in the Southeast 20

years ago. The company is now beginning to expand to other regions of the United States. First,

the firm opened new stores along the eastern seaboard, gradually working its way up through

Maryland and Washington, DC, then through New York and New jersey, and on into Connecticut

and Massachusetts. It has yet to reach the northern New England states, but executives have

decided to turn their attention to the Southwest, particularly because of the growth of population

there.

Vivian Noble, the manager of one of the chain’s most successful stores in the Atlanta area, has

been asked to relocate to Phoenix, Arizona, to open and run a new Fresh Foods Supermarket. She

has decided to accept the job, but she knows it will be a challenge. As an African American woman,

she has faced some prejudice during her career, but she refuses to be stopped by a glass ceiling or

any other barrier. She understands that she will be living and working in an area where several

cultures combine and collide, and she will be hiring and managing a diverse workforce. Noble has

the support of top management at Fresh Foods, which wants the store to reflect the surrounding

community—in both staff makeup and product selection. So she will be looking to hire employees

with Hispanic and Native American roots, as well as older workers who can relate to the many

retired residents in the area. And she will be seeking their inputs on the selection of certain food

products, including ethnic brands, so that customers know they can buy what they need and want

a Fresh Foods.

In addition, Noble wants to make sure that Fresh Foods provides services above and beyond those

of a standard supermarket to attract local consumers. For instance, she wants the store to offer

free delivery of groceries to home-bound customers who are either senior citizens or physically

disabled. She wants to be sure that the store has enough bilingual employees to translate for and

otherwise assist customers who speak little or no English. Noble believes that she is a pioneer of

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

sorts, guiding Fresh Foods Supermarkets into a new frontier. “The sky is almost blue here,” she

says of her new home state. “And there’s no glass ceiling between me and the sky.”

Questions

1. What steps can Vivian Noble take to recruit and develop her new workforce?

2. What other ways can Noble help her company reach out to the community?

3. How will Fresh Foods Supermarkets as whole benefit from successfully moving into this

new region of the country?

CASE – 4 The Law Offices of Jeter, Jackson, Guidry, and Boyer

THE EVOLUTION OF THE FIRM

David Jeter and Nate Jackson started a small general law practice in 1992 near Sacramento,

California. Prior to that, the two had spent five years in the district attorney’s office after

completing their formal schooling. What began as a small partnership—just the two attorneys and

a paralegal/assistant—had now grown into a practice that employed more than 27 people in three

separated towns. The current staff included 18 attorneys (three of whom have become partners),

three paralegals, and six secretaries.

For the first time in the firm’s existence, the partners felt that they were losing control of their

overall operation. The firm’s current caseload, number of employees, number of clients, travel

requirements, and facilities management needs had grown far beyond anything that the original

partners had ever imagined.

Attorney Jeter called a meeting of the partners to discuss the matter. Before the meeting, opinions

about the pressing problems of the day and proposed solutions were sought from the entire staff.

The meeting resulted in a formal decision to create a new position, general manager of operations.

The partners proceeded to compose a job description and job announcement for recruiting

purposes.

Highlights and responsibilities of the job description include:

 Supervising day-to-day office personnel and operations (phones, meetings, word

processing, mail, billings, payroll, general overhead, and maintenance).

 Improving customer relations (more expeditious processing of cases and clients).

 Expanding the customer base.

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

 Enhancing relations with the local communities.

 Managing the annual budget and related incentive programs.

 Maintaining annual growth in sales of 10 percent while maintaining or exceeding the

current profit margin.

The general manager will provide an annual executive summary to the partners, along with

specific action plans for improvement and change. A search committee was formed, and two

months later the new position was offered to Brad Howser, a longtime administrator from the

insurance industry seeking a final career change and a return to his California roots. Howser made

it clear that he was willing to make a five-year commitment to the position and would then likely

retire.Things got off to a quiet and uneventful start as Howser spent few months just getting to

know the staff, observing day-today operations; and reviewing and analyzing assorted client and

attorney data and history, financial spreadsheets, and so on.

About six months into the position, Howser became more outspoken and assertive with the staff

and established several new operational rules and procedures. He began by changing the regular

working hours. The firm previously had a flex schedule in place that allowed employees to begin

and end the workday at their choosing within given parameters. Howser did not care for such a

“loose schedule” and now required that all office personnel work from 9:00 to 5:00 each day. A

few staff member were unhappy about this and complained to Howser, who matter-of-factly

informed them that “this is the new rule that everyone is expected to follow, and anyone who

could or would not comply should probably look for another job.” Sylvia Bronson, an

administrative assistant who had been with the firm for several years, was particularly unhappy

about this change. She arranged for a private meeting with Howser to discuss her child care

circumstances and the difficulty that the new schedule presented. Howser seemed to listen halfheartedly

and at one point told Bronson that “assistance are essentially a-dime-a-dozen and are

readily available.” Bronson was seen leaving the office in tears that day.

Howser was not happy with the average length of time that it took to receive payments for

services rendered to the firm’s clients (accounts receivable). A closer look showed that 30 percent

of the clients paid their bills in 30 days or less, 60 percent paid in 30 to 60 days, and the remaining

10 percent stretched it out to as many as 120 days. Howser composed a letter that was sent to all

clients whose outstanding invoices exceeded 30 days. The strongly worded letter demanded

immediate payment in full and went on to indicate that legal action might be taken against anyone

who did not respond in timely fashion. While a small number of “late” payments were received

soon after the mailing, the firm received an even larger number of letters and phone calls from

angry clients, some of whom had been with the firm since its inception.

Howser was given an advertising and promotion budget for purposes of expanding the client base.

One of the paralegals suggested that those expenditures should be carefully planned and that the

firm had several attorneys who knew the local markets quite well and could probably offer some

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

insights and ideas on the subject. Howser thought about this briefly and then decided to go it

alone, reasoning that most attorneys know little or nothing about marketing.

In an attempt to “bring all of the people together to form a team,” Howser established weekly staff

meetings. These mandatory, hour-long sessions were run by Howser, who presented a series of

overhead slides, handouts, and lectures about “some of the proven management techniques that

were successful in the insurance industry.” The meetings typically ran past the allotted time frame

and rarely if ever covered all of the agenda items.

Howser spent some of his time “enhancing community relations.” He was very generous with

many local groups such as the historical society, the garden clubs, the recreational sports

programs, the middle-and high-school band programs, and others. In less than six months he had

written checks and authorized donations totaling more than $25,000. He was delighted about all

this and was certain that such gestures of goodwill would pay off handsomely in the future.

As for the budget, Howser carefully reviewed each line item in search of ways to increase

revenues and cut expenses. He then proceeded to increase the expected base or quota for

attorney’s monthly billable hours, thus directly affecting their profit sharing and bonus program.

On the other side, he significantly reduced the attorneys’ annual budget for travel, meals, and

entertainment. He considered these to be frivolous and unnecessary. Howser decided that one of

the two full-time administrative assistant positions in each office should be reduced to part-time

with no benefits. He saw no reason why the current workload could not be completed within this

model. Howser wrapped up his initial financial review and action plan by posting notices

throughout each office with new rules regarding the use of copy machines, phones, and supplies.

Howser completed the first year of his tenure with the required executive summary report to the

partners that included his analysis of the current status of each department and his action plan.

The partners were initially impressed with both Howser’s approach to the new job and with the

changes that he made. They all seemed to make sense and were directly in line with the key

components of his job description. At the same time, “the office rumor mill and grape vine” had

“heated up” considerably. Company morale, which had been quite high, was now clearly waning.

The water coolers and hallways became the frequent meeting places of disgruntled employees.

As for the marketplace, while the partner did not expect to see an immediate influx of new clients,

they certainly did not expect to see shrinkage in their existing client base. A number of individual

and corporate clients took their business elsewhere, still fuming over the letter they had received.

The partners met with Howser to discuss the situation. Howser urged them to “sit tight and ride

out the storm.” He had seen this happen before and had no doubt that in the long run the firm

would achieve all of its goals. Howser pointed out that people in general are resistant to change.

The partners met for drinks later that day and looked at each other with a great sense of

uncertainty. Should they ride out the storm as Howser suggested? Had they done the right thing in

creating the position and hiring Howser? What had started as a seemingly, wise, logical, and

smooth sequence of events had now become a crisis.

Questions

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

1. Do you agree with Howser’s suggestion to “sit tight and ride out the storm,” or should the

partners take some action immediately? If so, what actions specifically?

2. Assume that the creation of the GM—Operation position was a good decision. What

leadership style and type of individual would you try to place in this position?

3. Consider your own leadership style. What types of positions and situations should you

seek? What types of positions and situation should you seek to avoid? Why?

CASE – 5 The Grizzly Bear Lodge

Diane and Rudy Conrad own a small lodge outside Yellowstone National Park. Their lodge has

15 rooms that can accommodate up to 40 guests, with some rooms set up for families. Diane and

Rudy serve a continental breakfast on weekdays and a full breakfast on weekends, included in the

room they charge. Their busy season runs from May through September, but they remain open

until Thanksgiving and reopen in April for a short spring season. They currently employ one cook

and two waitpersons for the breakfasts on weekends, handling the other breakfasts themselves.

They also have several housekeeping staff members, a groundkeeper, and a front-desk employee.

The Conrads take pride in the efficiency of their operation, including the loyalty of their

employees, which they attribute to their own form of clan control. If a guest needs something—

whether it’s a breakfast catered to a special diet or an extra set of towels—Grizzly Bear workers

are empowered to supply it.

The Conrads are considering expanding their business. They have been offered the opportunity to

buy the property next door, which would give them the space to build an annex containing an

additional 20 rooms. Currently, their annual sales total $300,000. With expenses running

$230,000—including mortgage, payroll, maintenance, and so forth—the Conrads’ annual income

is $70,000. They want to expand and make improvements without cutting back on the personal

service they offer to their guests. In fact, in addition to hiring more staff to handle the larger

facility, they are considering collaborating with more local business to offer guided rafting, fishing,

hiking, and horseback riding trips. They also want to expand their food service to include dinner

during the high season, which means renovating the restaurant area of the lodge and hiring more

kitchen and wait staff. Ultimately, the Conrads would like the lodge to open year-round, offering

guests opportunities to cross-country ski, ride snow-mobiles, or hike in winter. They hope to offer

holiday packages for Thanksgiving, Christmas, and New Year’s celebrations in the great outdoors.

The Conrads report that their employees are enthusiastic about their plans and want to stay with

them through the expansion process. “This is our dream business,” says Rudy. “We’re only at the

beginning.”

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

Questions

1. Discuss how Rudy and Diane can use feedforward, concurrent, and feedback controls both

now and in future at the Grizzly Bear Lodge to ensure their guests’ satisfaction.

2. What might be some of the fundamental budgetary considerations the Conrads would

have as they plan the expansion of their logic?

3. Describe how the Conrads could use market controls plans and implement their

expansion.

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 1

Note: Solve any 4 Cases Study’s

CASE: I - Enterprise Builds On People

When most people think of car-rental firms, the names of Hertz and Avis usually come to mind. But in the last few years,

Enterprise Rent-A-Car has overtaken both of these industry giants, and today it stands as both the largest and the most

profitable business in the car-rental industry. In 2001, for instance, the firm had sales in excess of $6.3 billion and

employed over 50,000 people.

Jack Taylor started Enterprise in St. Louis in 1957. Taylor had a unique strategy in mind for Enterprise, and that strategy

played a key role in the firm’s initial success. Most car-rental firms like Hertz and Avis base most of their locations in or

near airports, train stations, and other transportation hubs. These firms see their customers as business travellers and

people who fly for vacation and then need transportation at the end of their flight. But Enterprise went after a different

customer. It sought to rent cars to individuals whose own cars are being repaired or who are taking a driving vacation.

The firm got its start by working with insurance companies. A standard feature in many automobile insurance policies is

the provision of a rental car when one’s personal car has been in an accident or has been stolen. Firms like Hertz and Avis

charge relatively high daily rates because their customers need the convenience of being near an airport and/or they are

having their expenses paid by their employer. These rates are often higher than insurance companies are willing to pay, so

customers who these firms end up paying part of the rental bills themselves. In addition, their locations are also often

inconvenient for people seeking a replacement car while theirs is in the shop.

But Enterprise located stores in downtown and suburban areas, where local residents actually live. The firm also provides

local pickup and delivery service in most areas. It also negotiates exclusive contract arrangements with local insurance

agents. They get the agent’s referral business while guaranteeing lower rates that are more in line with what insurance

covers.

In recent years, Enterprise has started to expand its market base by pursuing a two-pronged growth strategy. First, the

firm has started opening airport locations to compete with Hertz and Avis more directly. But their target is still the

occasional renter than the frequent business traveller. Second, the firm also began to expand into international markets

and today has rental offices in the United Kingdom, Ireland and Germany.

Another key to Enterprise’s success has been its human resource strategy. The firm targets a certain kind of individual to

hire; its preferred new employee is a college graduate from bottom half of graduating class, and preferably one who was

an athlete or who was otherwise actively involved in campus social activities. The rationale for this unusual academic

standard is actually quite simple. Enterprise managers do not believe that especially high levels of achievements are

necessary to perform well in the car-rental industry, but having a college degree nevertheless demonstrates intelligence

and motivation. In addition, since interpersonal relations are important to its business, Enterprise wants people who were

social directors or high-ranking officers of social organisations such as fraternities or sororities. Athletes are also desirable

because of their competitiveness.

Once hired, new employees at Enterprise are often shocked at the performance expectations placed on them by the firm.

They generally work long, grueling hours for relatively low pay.

And all Enterprise managers are expected to jump in and help wash or vacuum cars when a rental agency gets backed up.

All Enterprise managers must wear coordinated dress shirts and ties and can have facial hair only when “medically

necessary”. And women must wear skirts no shorter than two inches above their knees or creased pants.

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 2

So what are the incentives for working at Enterprise? For one thing, it’s an unfortunate fact of life that college graduates

with low grades often struggle to find work. Thus, a job at Enterprise is still better than no job at all. The firm does not hire

outsiders—every position is filled by promoting someone already inside the company. Thus, Enterprise employees know

that if they work hard and do their best, they may very well succeed in moving higher up the corporate ladder at a growing

and successful firm.

Question:

1. Would Enterprise’s approach human resource management work in other industries?

2. Does Enterprise face any risks from its human resource strategy?

3. Would you want to work for Enterprise? Why or why not?

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 3

CASE: II - Doing The Dirty Work

Business magazines and newspapers regularly publish articles about the changing nature of work in the United States

and about how many jobs are being changed. Indeed, because so much has been made of the shift toward service-sector

and professional jobs, many people assumed that the number of unpleasant an undesirable jobs has declined.

In fact, nothing could be further from the truth. Millions of Americans work in gleaming air-conditioned facilities, but many

others work in dirty, grimy, and unsafe settings. For example, many jobs in the recycling industry require workers to sort

through moving conveyors of trash, pulling out those items that can be recycled. Other relatively unattractive jobs include

cleaning hospital restrooms, washing dishes in a restaurant, and handling toxic waste.

Consider the jobs in a chicken-processing facility. Much like a manufacturing assembly line, a chicken-processing facility is

organised around a moving conveyor system. Workers call it the chain. In reality, it’s a steel cable with large clips that

carries dead chickens down what might be called a “disassembly line.” Standing along this line are dozens of workers who

do, in fact, take the birds apart as they pass.

Even the titles of the jobs are unsavory. Among the first set of jobs along the chain is the skinner. Skinners use sharp

instruments to cut and pull the skin off the dead chicken. Towards the middle of the line are the gut pullers. These workers

reach inside the chicken carcasses and remove the intestines and other organs. At the end of the line are the gizzard

cutters, who tackle the more difficult organs attached to the inside of the chicken’s carcass. These organs have to be

individually cut and removed for disposal.

The work is obviously distasteful, and the pace of the work is unrelenting. On a good day the chain moves an average of

ninety chickens a minute for nine hours. And the workers are essentially held captive by the moving chain. For example, no

one can vacate a post to use the bathroom or for other reasons without the permission of the supervisor. In some plants,

taking an unauthorised bathroom break can result in suspension without pay. But the noise in a typical chicken-processing

plant is so loud that the supervisor can’t hear someone calling for relief unless the person happens to be standing close by.

Jobs such as these on the chicken-processing line are actually becoming increasingly common. Fuelled by Americans’

growing appetites for lean, easy-to-cook meat, the number of poultry workers has almost doubled since 1980, and today

they constitute a work force of around a quarter of a million people. Indeed, the chicken-processing industry has become a

major component of the state economies of Georgia, North Carolina, Mississippi, Arkansas, and Alabama.

Besides being unpleasant and dirty, many jobs in a chicken-processing plant are dangerous and unhealthy. Some workers,

for example, have to fight the live birds when they are first hung on the chains. These workers are routinely scratched and

pecked by the chickens. And the air inside a typical chicken-processing plant is difficult to breathe. Workers are usually

supplied with paper masks, but most don’t use them because they are hot and confining.

And the work space itself is so tight that the workers often cut themselves—and sometimes their coworkers—with the

knives, scissors, and other instruments they use to perform their jobs. Indeed, poultry processing ranks third among

industries in the United States for cumulative trauma injuries such as carpet tunnel syndrome. The inevitable chicken

feathers, faeces, and blood also contribute to the hazardous and unpleasant work environment.

Question:

1. How relevant are the concepts of competencies to the jobs in a chicken-processing plant?

2. How might you try to improve the jobs in a chicken-processing plant?

3. Are dirty, dangerous, and unpleasant jobs an inevitable part of any economy?

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 4

CASE : III - On Pegging Pay to Performance

“As you are aware, the Government of India has removed the capping on salaries of directors and has left the matter of

their compensation to be decided by shareholders. This is indeed a welcome step,” said Samuel Menezes, president

Abhayankar, Ltd., opening the meeting of the managing committee convened to discuss the elements of the company’s new

plan for middle managers.

Abhayankar was am engineering firm with a turnover of Rs 600 crore last year and an employee strength of 18,00. Two

years ago, as a sequel to liberalisation at the macroeconomic level, the company had restructured its operations from

functional teams to product teams. The change had helped speed up transactional times and reduce systemic inefficiencies,

leading to a healthy drive towards performance.

“I think it is only logical that performance should hereafter be linked to pay,” continued Menezes. “A scheme in which over

40 per cent of salary will be related to annual profits has been evolved for executives above the vice-president’s level and

it will be implemented after getting shareholders approval. As far as the shopfloor staff is concerned, a system of incentivelinked

monthly productivity bonus has been in place for years and it serves the purpose of rewarding good work at the

assembly line. In any case, a bulk of its salary will have to continue to be governed by good old values like hierarchy, rank,

seniority and attendance. But it is the middle management which poses a real dilemma. How does one evaluate its

performance? More importantly, how can one ensure that managers are not shortchanged but get what they truly

deserve?”

“Our vice-president (HRD), Ravi Narayanan, has now a plan ready in this regard. He has had personal discussions with all

the 125 middle managers individually over the last few weeks and the plan is based on their feedback. If there are no

major disagreements on the plan, we can put it into effect from next month. Ravi, may I now ask you to take the floor and

make your presentation?”

The lights in the conference room dimmed and the screen on the podium lit up. “The plan I am going to unfold,” said

Narayanan, pointing to the data that surfaced on the screen, “is designed to enhance team-work and provide incentives for

constant improvement and excellence among middle-level managers. Briefly, the pay will be split into two components.

The first consists of 75 per cent of the original salary and will be determined, as before, by factors of internal equity

comprising what Sam referred to as good old values. It will be a fixed component.”

“The second component of 25 per cent,” he went on, “will be flexible. It will depend on the ability of each product team as a

whole to show a minimum of 5 per cent improvement in five areas every month—product quality, cost control, speed of

delivery, financial performance of the division to which the product belongs and, finally, compliance with safety and

environmental norms. The five areas will have rating of 30, 25, 20, 15, and 10 per cent respectively.

“This, gentlemen, is the broad premise. The rest is a matter of detail which will be worked out after some finetuning. Any

questions?”

As the lights reappeared, Gautam Ghosh, vice-president (R&D), said, “I don’t like it. And I will tell you why. Teamwork as a

criterion is okay but it also has its pitfalls. The people I take on and develop are good at what they do. Their research skills

are individualistic. Why should their pay depend on the performance of other members of the product team? The new pay

plan makes them team players first and scientists next. It does not seem right.”

“That is a good one, Gautam,” said Narayanan. “Any other questions? I think I will take them all together.”

“I have no problems with the scheme and I think it is fine. But just for the sake of argument, let me take Gautam’s point

further without meaning to pick holes in the plan,” said Avinash Sarin, vice-president (sales). “Look at my dispatch

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 5

division. My people there have reduced the shipping time from four hours to one over the last six months. But what have

they got? Nothing. Why? Because the other members of the team are not measuring up.”

“I think that is a situation which is bound to prevail until everyone falls in line,” intervened Vipul Desai, vice president

(finance). “There would always be temporary problems in implementing anything new. The question is whether our long

term objectives is right. To the extend that we are trying to promote teamwork, I think we are on the right track. However,

I wish to raise a point. There are many external factors which impinge on both individual and collective performance. For

instance, the cost of a raw material may suddenly go up in the market affecting product profitability. Why should the

concerned product team be penalised for something beyond its control?”

“I have an observation to make too, Ravi,” said Menezes, “You would recall the survey conducted by a business fortnightly

on ‘The ten companies Indian managers fancy most as a working place’. Abhayankar got top billings there. We have been

the trendsetters in executive compensation in Indian industry. We have been paying the best. Will your plan ensure that it

remains that way?”

As he took the floor again, the dominant thought in Narayanan’s mind was that if his plan were to be put into place,

Abhayankar would set another new trend in executive compensation.

Question:

But how should he see it through?

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 6

CASE : IV - Crisis Blown Over

November 30, 1997 goes down in the history of a Bangalore-based electric company as the day nobody wanting it to recur

but everyone recollecting it with sense of pride.

It was a festive day for all the 700-plus employees. Festoons were strung all over, banners were put up; banana trunks and

leaves adorned the factory gate, instead of the usual red flags; and loud speakers were blaring Kannada songs. It was day

the employees chose to celebrate Kannada Rajyothsava, annual feature of all Karnataka-based organisations. The function

was to start at 4 p.m. and everybody was eagerly waiting for the big event to take place.

But the event, budgeted at Rs 1,00,000 did not take place. At around 2 p.m., there was a ghastly accident in the machine

shop. Murthy was caught in the vertical turret lathe and was wounded fatally. His end came in the ambulance on the way

to hospital.

The management sought union help, and the union leaders did respond with a positive attitude. They did not want to fish

in troubled waters.

Series of meetings were held between the union leaders and the management. The discussions centred around two major

issues—(i) restoring normalcy, and (ii) determining the amount of compensation to be paid to the dependants of Murthy.

Luckily for the management, the accident took place on a Saturday. The next day was a weekly holiday and this helped the

tension to diffuse to a large extent. The funeral of the deceased took place on Sunday without any hitch. The management

hoped that things would be normal on Monday morning.

But the hope was belied. The workers refused to resume work. Again the management approached the union for help.

Union leaders advised the workers to resume work in al departments except in the machine shop, and the suggestions was

accepted by all.

Two weeks went by, nobody entered the machine shop, though work in other places resumed. Union leaders came with a

new idea to the management—to perform a pooja to ward off any evil that had befallen on the lathe. The management

accepted the idea and homa was performed in the machine shop for about five hours commencing early in the morning.

This helped to some extent. The workers started operations on all other machines in the machine shop except on the

fateful lathe. It took two full months and a lot of persuasion from the union leaders for the workers to switch on the lathe.

The crisis was blown over, thanks to the responsible role played by the union leaders and their fellow workers. Neither the

management nor the workers wish that such an incident should recur.

As the wages of the deceased grossed Rs 6,500 per month, Murthy was not covered under the ESI Act. Management had to

pay compensation. Age and experience of the victim were taken into account to arrive at Rs 1,87,000 which was the

amount to be payable to the wife of the deceased. To this was added Rs 2,50,000 at the intervention of the union leaders. In

addition, the widow was paid a gratuity and a monthly pension of Rs 4,300. And nobody’s wages were cut for the days not

worked.

Murthy’s death witnessed an unusual behavior on the part of the workers and their leaders, and magnanimous gesture

from the management. It is a pride moment in the life of the factory.

Question:

1. Do you think that the Bangalore-based company had practised participative management?

2. If your answer is yes, with what method of participation (you have read in this chapter) do you relate the above

case?

3. If you were the union leader, would your behaviour have been different? If yes, what would it be?

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 7

CASE : V - A Case of Burnout

When Mahesh joined XYZ Bank (private sector) in 1985, he had one clear goal—to prove his mettle. He did prove himself

and has been promoted five times since his entry into the bank. Compared to others, his progress has been fastest.

Currently, his job demands that Mahesh should work 10 hours a day with practically no holidays. At least two day in a

week, Mahesh is required to travel.

Peers and subordinates at the bank have appreciation for Mahesh. They don’t grudge the ascension achieved by Mahesh,

though there are some who wish they too had been promoted as well.

The post of General Manager fell vacant. One should work as GM for a couple of years if he were to climb up to the top of

the ladder, Mahesh applied for the post along with others in the bank. The Chairman assured Mahesh that the post would

be his.

A sudden development took place which almost wrecked Mahesh’s chances. The bank has the practice of subjecting all its

executives to medical check-up once in a year. The medical reports go straight to the Chairman who would initiate

remedials where necessary. Though Mahesh was only 35, he too, was required to undergo the test.

The Chairman of the bank received a copy of Mahesh’s physical examination results, along with a note from the doctor. The

note explained that Mahesh was seriously overworked, and recommended that he be given an immediate four-week

vacation. The doctor also recommended that Mahesh’s workload must be reduced and he must take physical exercise

every day. The note warned that if Mahesh did not care for advice, he would be in for heart trouble in another six months.

After reading the doctor’s note, the Chairman sat back in his chair, and started brooding over. Three issues were

uppermost in his mind—(i) How would Mahesh take this news? (ii) How many others do have similar fitness problems?

(iii) Since the environment in the bank helps create the problem, what could he do to alleviate it? The idea of holding a

stress-management programme flashed in his mind and suddenly he instructed his secretary to set up a meeting with the

doctor and some key staff members, at the earliest.

Question:

1. If the news is broken to Mahesh, how would he react?

2. If you were giving advice to the Chairman on this matter, what would you recommend?

The Indian Institute Of Business Management & Studies

Subject: Human Resource Management Marks: 100

pg. 8

CASE : VI - “Whose Side are you on, Anyway?”

It was past 4 pm and Purushottam Mahesh was still at his shopfloor office. The small but elegant office was a perk he was

entitled to after he had been nominated to the board of Horizon Industries (P) Ltd., as workman-director six months ago.

His shift generally ended at 3 pm and he would be home by late evening. But that day, he still had long hours ahead of him.

Kshirsagar had been with Horizon for over twenty years. Starting off as a substitute mill-hand in the paint shop at one of

the company’s manufacturing facilities, he had been made permanent on the job five years later. He had no formal

education. He felt this was a handicap, but he made up for it with a willingness to learn and a certain enthusiasm on the

job. He was soon marked by the works manager as someone to watch out for. Simultaneously, Kshirsagar also came to the

attention of the president of the Horizon Employees’ Union who drafted him into union activities.

Even while he got promoted twice during the period to become the head colour mixer last year, Kshirsagar had gradually

moved up the union hierarchy and had been thrice elected secretary of the union. Labour-management relations at

Horizon were not always cordial. This was largely because the company had not been recording a consistently good

performance. There were frequent cuts in production every year because of go-slows and strikes by workmen—most of

them related to wage hikes and bonus payments. With a view to ensuring a better understanding on the part of labour, the

problems of company management, the Horizon board, led by chairman and managing director Aninash Chaturvedi, began

to toy with idea of taking on a workman on the board. What started off as a hesitant move snowballed, after a series of

brainstorming sessions with executives and meetings with the union leaders, into a situation in which Kshirsagar found

himself catapulted to the Horizon board as work-man-director.

It was an untested ground for the company. But the novelty of it all excited both the management and the labour force. The

board members—all functional heads went out of their way to make Kshirsagar comfortable and the latter also responded

quite well. He got used to the ambience of the boardroom and the sense of power it conveyed. Significantly, he was soon at

home with the perspectives of top management and began to see each issue from both sides.

It was smooth going until the union presented a week before the monthly board meeting, its charter of demands, one of

which was a 30 per cent across-the board hike in wages. The matter was taken up at the board meeting as part of a special

agenda.

“Look at what your people are asking for,” said Chaturvedi, addressing Kshirsagar with a sarcasm that no one in the board

missed. “You know the precarious finances of the company. How could you be a party to a demand that can’t be met? You

better explain to them how ridiculous the demands are,” he said.

“I don’t think they can all be dismissed as ridiculous,” said Kshirsagar. “And the board can surely consider the alternatives.

We owe at least that much to the union.” But Chaturvedi adjourned the meeting in a huff, mentioning, once to Kshirsagar

that he should “advise the union properly”.

When Kshirsagar told the executive committee members of the union that the board was simply not prepared to even

consider the demands, he immediately sensed the hostility in the room. “You are a sell out,” one of them said. “Who do you

really represent—us or them?” asked another.

“Here comes the crunch,” thought Kshirsagar. And however hard he tried to explain, he felt he was talking to a wall. A

victim of divided loyalities, he himself was unable to understand whose side he was on. Perhaps the best course would be

to resign from the board. Perhaps he should resign both from the board and the union. Or may be resign from Horizon

itself and seek a job elsewhere. But, he felt, sitting in his office a little later, “none of it could solve the problem.”

Question:

1. What should he do?