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Business Ethics
N.B: 1) Attempt all the questions
2 )All Questions Carries equal Marks

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1.} Define business ethics. Why do we need to study business ethics?
2.} Define morality. Discuss some characteristics of morality?
3.} Briefly discuss utilitarianism. Discuss the problems of measurement.
4.} Make a presentation about two male and two female corporate executives that you admire?
5.} Define ecological ethics. Distinguish between private and social costs?
6.} Discuss the types of job discrimination. How can we determine job discrimination?
7.} What is affirmative action? Discuss some of the major arguments for and against affirmative action.
8.} Discuss why values are important for an organization. Discuss the importance of trans-cultural values.
Find out some cultural/business values of different countries.
9.} Discuss the characteristics of high-performing teams.
10.} Write a few paragraphs about an Indian organization that you admire. What are its values?


 Business Strategy
N.B: 1} Attempt all questions

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Case – 1 Marks-16
Leisure and entertainment usually gain prominence in an economy that is growing; fast and provides leeway
to the consumer to spend on things other than necessities India’s entertainment and media industry is one
of the sunrise industries, growing at a Compound annual growth rate of 18 per cent, much faster than the 9
per cent national economic growth rate. According to a study conducted by the Federation of Indian
Chambers of Commerce and Industry and PricewaterhouseCoopers the industry size is Rs. 437 billion
presently and is projected to grow to Rs. 1 trillion by 2010. Positive measures taken by the government,
technological advancement and entry of large corporate houses in all the segments of the industry are
fuelling the impressive growth.
Among the various segments of the industry, there, are radio, television, films, out-of-home advertising arid
live entertainment While radio and television make up the fastest growing segments, film entertainment
growing at 16 per cent annually, is another potential segment. The film entertainment segment of the
entertainment and media industry has several strategic groups that could be roughly categorized along the
value chain of film making and distribution These strategic groups could be production, distribution, retail,
music and home video. While many of the companies operate in more than one activity area on the value
chain, such as Yash Raj Films operating in all activity areas except retail, there are a few that concentrate
on just one or two activity areas, such as RGV Film Factory that operates only in production of films. Size
based on revenue could be another basis for categorization of the film entertainment companies in India.
Among the large size companies are Adlabs, Sahara, Percept, Yash Raj Films and UTV, that could touch or
exceed Rs. 1000 revenues by 2010. The middle-rung is of companies of revenue size of Rs. 300 — 500
crore, such as pure retail distribution companies such as lnox Leisure, P’SR Cinemas, Pyramid Saimira and
Valuable Group pure content companies such as Pritish Nan Communications Vishesh Films or RGV F
Factory. The third category is of emerging companies in the revenue size range of Rs. 1OC — 300 crore,
such as Real Image, Red Ice and Seven Entertainment Major investments in the media and entertainment
industry in recent years have been ploughed into infrastructure, largely into multiplex chains and digital
theatre chains. These investments are made by companies that are pure retail and distribution companies.
Among the major ones in this strategic group is the Chennai-based Pyramid Saimira Theatre Limited (PSTL)
- India’s largest theatre chain company with over 29 multiplexes operation, with over 371 screens in 2007,
project to increase to 2000 screens by 2010. It was incorporated in 1997 as Pyramid Films international
Private Limited and has gone through severe changes of name to emerge as Pyramid Saimira Theatre
Limited, reflecting its concentration on the theatre business, though it operated in film production and TV
content production in the past Film making and distribution in India has been traditionally an unorganized
and fragmented industry, managed through experience rather than systems. In recent years, one trend in
the film industry is corporatization Under corporatization the traditional organizations dealing with the
various aspects of film making’ and distribution. Become formal organizations registered under the legal
process, such as the Companies Act, 1956. Along with corporatization comes increasing professionalization
in the management of organizations. Technology, especially information and communication technology, has
played its part in heightening the chances of making corporatization and professionalization successful A
new breed of organization has emerged on the horizon that deals with the various activities in an organized
and Systematic manner. Pyramid Saimira intends to be of such organizations. The people behind Pyramid
Saimira include Mr. V. Natarajan, a Gemini-studio’s veteran of the Tamil film industry, Mr. P. S.
Saminathan, the finance and technology brain behind the flagship project and Mr. N.Narayanan, the
management man. The financials for the year 2006-2007, show net sales of Rs 1661.52 crore and net profit
of Rs. 158.82 crore on equity capital of Rs. 282.76 crore.
The flagship project of the Pyramid Saimira is the mega digital. Theatre chain project being implemented in
two phases, with a total cost of Rs. 414.5 crore. This is an information technology driven venture that is a
first-mover in the film industry in India. The basic idea is to have a chain of theatres for exhibition of films
that have been encrypted in the digital medium. The theatres are linked through a satellite-based
communication network. The films are released in the digital format and simultaneously exhibited in the
digitally- enabled theatres through the satellite network. The one-stroke release and exhibition of films is
claimed to reduce the chances of films being pirated, which is the Achilles’ heel of the film
industry in the world. It also avoids the use of costly film rolls and reels now used to photograph and
distribute films. The digitized theatres also offer the potential of developing them as value-added service
providers, enlarging their role from that of entertainment providers to commercial infrastructure providers
such as shopping malls, exhibition spaces and education and training venues.
The business model of the digital theatre concept is based on a vertically-integrated theatre chain on longterm
lease, where the revenue streams emanate mainly from the ticket sales at the individual theatres at
the demand end, much like it does now. The critical difference is on the supply side where the distribution,
retailing and exhibition of films are done in an integrated manner through digital means connected through
a communication network. This effectively eliminates the film distributor and tries to achieve economies of
scale through volume sales. The centralized network operating centre is the nodal supply point.
A standardized delivery process makes the process operationally low-cost, albeit at a high initial investment.
Additional revenue streams, generated through exploitation of the theatre infrastructure to provide other
services than entertainment, help to recoup the high initial investment. Creating a franchise system for a
long-term lease enables sharing of the initial high costs7 of realty by engaging partners who own the
theatre space but use Pyramid Saimira’s digital distribution and exhibition facilities at a price. There are
additional possibilities of creating content library of films, extending networks abroad and building
integrated family entertainment centers.
The digital theatre is a compact model, having various elements such as digital projectors, servers,
connectivity equipments, high-definition recorder and telecine, system integration and software solution
providers. For each of these, there are in-house and external agencies in partnership. For instance,
connectivity equipments are being provided by Tata Net while servers are arranged by a partnership of
Saimira Access Technologies with Real Image Media.
Pyramid Saimira’s SWOT analysis indicates the following factors:
• Strengths Established organization, experienced promoters and networking with financially strong and
capable partners.
• Weaknesses Lack of in-depth technological experience, risks of being the first-mover and limited financial
capability.
• Opportunities Favorable demographics, increasing spending on entertainment, potential expatriate
demand, availability of technological infrastructure such as broadband and digitized films a regenerative
asset that has multiple uses.
• Threats Unorganized film industry, fickle nature of demand for films, powerful industry bodies with political
lobbying capabilities, high entertainment taxes, piracy, high cost of infrastructure and faulty governmental
policy implementation.
Pyramid Saimira’s global ambitions are reflected in its vision statement, which is ‘to be the largest vertically
integrated theatre chain in the world carving a unique space in mass access using theatre infrastructure to
deliver education, entertainment and information at affordable cost to all sections of society’. The digital
theatre project is being implemented in Tamil Nadu and is planned to be expanded throughout India and
abroad in areas where there are a large number of Indian expatriates such as South East Asia, Europe and
the U.S. The acquisition of the Texas-based Fun Asia made through the subsidiary Pyramid Saimira
Entertainment America, targeting the Asian film market, marked the entry of Pyramid Sairnira in the U.S.
and Canada. There are subsidiaries operating in Singapore and Malaysia, where there is a substantial
number of people of Indian origin.
Questions:- (Any Two)
1. Attempt a Porter’s five- forces analysis for the Indian film industry, highlighting the factors relevant for
Pyramid Saimira’s strategic planning.
2. Attempt a strategic groups analysis highlighting the factors relevant for Pyramid Saimira’s strategic
planning.
3. Identify the subjective factors that may have an impact on the strategic choice made Pyramid Saimira.
Case –2 Marks-16
The origins of Deepak Nitrite—the flagship comp any of the Deepak group of industries-go back to 1970
when Chimanlal K. Mehta, an entrepreneur, sensing an opportunity in India’s drive towards self- sufficiency
and import substitution and relying on his trading and manufacturing experience, ventured into the
chemicals industry. The Company was originally incorporated as Deepak Nitrite Private Limited in 1970,
under the Companies Act, 1956 and was subsequently converted into a public limited company in the name
of Deepak Nitrite Limited in 1971. The company’s registered office is at Vadodara and its corporate office is
at Pune with manufacturing plants in Gujarat and Maharashtra. Net sales for the year ending March 2007
are about Rs. 4172 million and net profit is Rs. 357 million. Exports constitute nearly half of the sales.
Overt he years, Deepak Nitrite has grown impressively through a judicious use of integration, related
diversification and internationalization strategies, using the means of acquisition and restructuring. In 1983,
adopting a horizontal integration strategy, the company used foreign collaboration to start commercial
production of ammonia. In 1989, the group employed ammonia-based forward integration and also
diversified into the chemicals related area of methanol. In 1992 came the commercial production of lowdensity
ammonium nitrate, nitro phosphate and nitric acid, resulting in a multi-product portfolio consisting
of organic, inorganic, fine and specialty chemicals. Deepak Nitrite has made tremendous progress over the
years and has posted impressive financial results as well as excellent export performance. It (the growth of
the company), was born out of a process of deep thinking, strategy and planning,’ said the managing
director Deepak Mehta, who claims that planned strategy has led to growth. Environmental scanning led to
foreseeing the threats coming from a dismantled duty regime. Anticipating this, the company went about
implementing strategies that would convert these threats into opportunities. The strategic approach was to
build on its strengths in niche areas of the chemicals market, leverage strong R & D and a robust lab to
product ion skills, bring the strengths up to global levels and work towards a leadership position.
The success of Deepak Nitrite could be attributed to its focused strategy. Implementation capabilities. A
series of plans, programmes and project have been initiated and implemented over the years, in alignment
with its corporate and business strategies. For instance, it has worked on a number of R&D projects over
the years to develop its skills to swiftly transfer products from the labs through production to the markets.
It has effectively developed differentiating capabilities by planning and implementing projects for handling
bulk products to handling batch products, transforming from a commodity supplier to a value-added,
branded product supplier with customization skills. Projects in supply chain management have helped the
company in extending its ability to source its own raw material to tracking customers’ delivery and
inventory scheduling. Cost control has been attempted through wider sourcing; including international vend
ors, and investing in energy-saving equipments.
In the course of strategy implementation, Deepak Nitrite has to deal with a host of government agencies for
procedural implementation. For example, raising finance has taken it to SEBI. A continual interaction takes
place with the export and import regulatory authorities. For instance, anti-dumping duties have been levied
on the comp any for sourcing cheap materials from China. Being in the chemical processing industry, the
company is under the scrutiny of environmental protection agencies. It has been a signatory to the
‘Responsible Care’ initiative of the global chemical industry. It has also achieved the ISO 14001 certification.
Dealing with explosives, the company has to seek licenses from the Department of Explosives, Industrial
Safety and Health Departments and State Pollution Boards of Gujarat and Maharashtra. Apart from these
are the regulatory requirements dealing with taxation purposes. Resource generation has been through
raising money in the capital markets on the basis of its good reputation, internal accruals, loans from
commercial banks and financial institutions and sale of factory land at Pune.28
Questions:-
1. Identify and discuss briefly, the three themes of strategy implementation of activating strategies,
managing change and achieving effectiveness in the case of Deepak Nitrite.
2. picking up data from the case, demonstrate how formulation and implementation of strategy are
interdependent.
Case –3 Marks-16
Synergos# is a young management and strategy consulting firm based at Mumbai. It was established in
1992 at a time when there were a lot of expectations among the industry people from the liberalization
policies that were started the previous year by the Government of India.
The consulting firm is an entrepreneurial venture started by Urmish Patel, a dynamic person who worked
with a multinational consulting-firm at the He left his comfortable position there to venture into the
management consultancy industry the motivation was to be ‘the master of his own destiny’ rather than
being an employee working for others. Urmish comes from an upper middle-class Gujarati family, settled in
a small town in Rajasthan. His father was a government servant who retired with a meagre pension. His
mother is a housewife. His other siblings are all educated and well-settled in their respective careers and
professions. Urmish is a creative individual, uncomfortable with the status-quo. During his student days at a
college at Jaipur, he was continually coming up with bright ideas that some of his friends found to be
preposterous. To him, however, these were perfectly achievable ideas. He studied biotechnology and then
went to the US on a scholarship to do his Masters. After a semester at a well-known university there, he lost
interest and switched to pursue an MBA. He liked it and soon settled down to work with n American
consultancy firm and toured several countries on varied assignments during the seven years he worked
there. In 1992 came the urge to Urmish to chuck his job and be on his own. It was a risky, yet an exciting
step to take. His accumulated capital was limited— just enough to rent office space, buy a few computers
and hire an assistant. There were no consultancy assignments for the first three months. But an
acquaintance soon came to his aid, introducing him to the CFO of a major family business group who
needed advice on a performance improvement project they wanted to launch. The opportunity came in
handy though the returns were nothing to write home about. That project was the first step to many more
that came gradually. Synergos started gaining presence in the competitive management consultancy
industry and attracting attention from the people whom they worked for. Word-of-mouth publicity led them
from one project lo another for the first three years till 1995. Synergos took up whatever came its way,
delivering a cost-effective solution to its clients. A team of four had formed by now, each member of the
team specializing in services rendered to the clients. For instance, one of the members is a specialist in
engineering projects, while another has expertise in finance. The third one is a service sector specialist, also
having experience in dealing with government matters.
The phase of rapid growth started some time in 1995 when the Synergos team decided to focus on the
small and medium enterprises (SMEs). These were firms that realized they had problems needing specialist
advice; but were apprehensive to app roach the big firms on account of their limited outlay and
inexperience of dealing with such firms. Synergos came to their aid by tailoring their services as near as
possible to their needs. Another differentiation platform Synergos offered to its client was a fully-integrated
consultancy service where it got involved right from the stage of planning down to its implementation and
monitoring.
Presently, Synergos has grown to be a medium- sized consultancy firm, serving clients in India and abroad,
working for industries ranging from auto components to financial services and for manufacturing
organizations to service providers. Somehow, nearly half of the assignments it has worked on have been for
mid-sized, upcoming family- owned businesses, a niche it has served well. These organizations typically
need a boutique sort of consultancy that can offer customized services dealing with a broad range of
practices related to strategy, organization design, mergers and acquisitions and operational matters such as
logistics and supply-chain management. Synergos fits in with their requirements owing to its personalised
service and reasonable-commission structure. The organizational structure at Synergos has a board at the
top, consisting of seven people, including the four founding members and three independent directors. One
of the independent directors is the chairman of the board. Urmish, as the founder CEO, also heads an
executive management committee with each of the founding. Members, leading three other top-level
committees dealing with business portfolio, service management and executive recruitment.
The management team is called the professional group. The rest of the employees are ref erred to as the -
staff. -The professional group has young women and men who are graduates from some of the best
institutions in India and abroad. They are assigned to taskforces based on their qualifications, experience
and interests. The departmentation at Synergos is flexible, based on -an interplay of the three categories:
skill, service and specialty. For instance, a professional may have IT skills, may have worked to provide
supply- chain management services and developed expertise in handling operational assignments for
medium-sized food and beverage firms. There is a lot of multi-tasking however, to utilise the wide - range
of skills and special expertise that the professionals have For administrative matters the professionals are
assigned to client-service departments of industry solutions, enterprise solutions and technology solutions.
The flexibility that such an organisational arrangement affords seems to have been the major reason for the
evolution of the organization structure at Synergos over the years.
The staff group of employees consists of the support people who provide a variety of services to the
professionals. Among these are research assistants, industry analysts, documentation experts and
secretarial staff. There is no set pattern for assignment of staff to the administrative departments and
generally, a need-based approach is followed, depending on the workload at a particular time.
Recruitment for professionals is stringent. Synergos typically looks for a good combination of education and
experience and lays much emphasis on the compatibility of the prospective employee with the shared
values. Creativity, broad range of professional interests, intellectual acumen, team- working and physical
fitness to undertake demanding tasks and work for long hours are the criteria for hiring. There are not many
training opportunities except the on-the-job learning. New professionals are assigned to a mentor for some
time till they a ready to handle assignments autonomously. The staff members are usually recruited from
fresh graduates, with good degrees from reputed institutions, in arts, sciences and commerce. The staff
positions are also open for persons wanting to work on part-time or project-bases. Emphasis is given to the
ability of the prospective staff to undertake multi-tasking and work with documentation and word processing
and presentation software packages.
The compensation system consists of a base salary with commission and bonus depending on performance.
There are other usual elements such as medical reimbursement, loan facility and gratuity and retirement
benefits. The performance appraisal is informal, with at least one of the four founding members being part
of the evaluation committee for a professional. Usually, the found-c member closest to the work area of the
employee is involved in determining the rewards to be give’. The time-cycle for appraisal is one year.
Management control is discreet and performance-based rather than behavior-based. The means for control
are informal, such as direct supervision. Urmish is a strong proponent of the emergent strategy and is not in
favor of tying Synergos to a fixed strategic posture. So are the other founder members, though at times
they do talk about deciding on a niche such as the SME organizations as clients and enterprise solutions as
the core competence. In the highly fragmented consultancy industry where it is possible for even one
person to s up an office in a commercial area and leverage corrections to secure projects, Synergos is open
opportunities as they emerge, while trying to maintain the flexibility that has made it successful till no
Questions :- (Any Two)
1. Identify the type of organization structure being used at Synergos and explain how t works. What are the
benefits of using this type of structure? What are the pitfalls?
2. Express your opinion about whether the structure is in line with the requirements of the strategy that
Synergos is implementing.
3. Based on the information related to the information, control and reward systems available in the case,
examine whether these systems are appropriate for the type of strategy being implemented.
Case – 4 Marks-16
‘In a free enterprise, the community is not just another stakeholder in business, but is in fact, the very
purpose of its existence.’ This is a statement of the founder of the Tata group of companies, Jamsetji N
Tata. The thinking behind the statement probably drives the corporate social responsibility initiatives at the
Tata group of companies.
The Tata group describes itself as ‘India’s oldest, largest and most respected business conglomerates’, a
depiction that seems to be quite justified. The group’s businesses operate globally through 98 companies—
27 of them publicly-listed—in seven business sectors. There are nearly 2,90,000
employees working in these companies that have about 3 million shareholders. The group’s turnover in
2006-2007 was about Rs. 130,000 crore .There are five core values that guide the Tata group’s business
decisions: integrity, understanding, excellence, unity and responsibility. The value of integrity means
conducting business fairly, honestly and with transparency. Understanding involves caring, showing respect,
compassion and humanity for colleagues, customers and community. Excellence denotes striving constantly
to achieve high standards in work and quality. Unity implies building strong relationships with colleagues,
customers and business partners. Responsibility signifies giving back to the community and society.
The tradition of CSR is embedded in the history of the Tata group. The J. N. Tata Endowment Scheme was
established in 1892. Over the years, individual family members have created a constellation of trusts and
endowments that contribute to a wide range of CSR activities. In the words of J. J. Irani, ex-managing
director of Tata Steel: ‘Some people consider social responsibility as an additional cost; we don’t. We see it
as part of an essential cost of business, as much as land, power, raw materials and employees.’ This is seen
in the quantum of funding that is channeled into CSR. The Tata group contributes nearly 30 per cent of its
profit after tax, which is an unusually high figure, when other companies or business groups may take pride
in putting in just one per cent of profits into CSR. The high social investment come from the Tata trusts that
have a controlling interest in the holding company, Tata Sons. This ensures that the dividends paid out are
directed to CSR, making the Tata group companies unique in ensuring that personal wealth is converted into
social capital.
The Tata group has created a formal structure to direct CSR activities. The Tata Council for Community
Initiatives is a centralized agency consisting of the Tata companies’ CEOs, charged with the responsibility of
directing and coordinating the CSR activities across the group. It is headed by a member w of the group
corporate centre, one of the two 9overnance bodies, the other being the group executive office. This is an
indication of the high priority accorded by the Tata group to CSR. In order to create accountability, the Tata
group has a 1ctive evaluation system called the Tata Index Sustainable Human Development. The Index is a
set of guidelines for Tata companies looking to their social responsibilities. In the words of G. Nadkarni, vice
president, group corporate sustainability, ‘We have adopted a business model to drive social responsibility
efforts within the group because that way, you ensure a huge network. The index helps structure our
efforts and quantify their effect on the communities and people they are aimed at.’ Of significance is the fact
that the Tata Index for Sustainable Human Development is built around the Tata Business Excellence Model
that drives business decisions of the group companies. One of the several areas of business performance in
the model is of governance and social responsibility, indicating the strategic priority given to this issue by
the Tata group. Typically, business organizations have considered social responsibility as far removed from
their mainline business activities. Not so at the Tata group where CSR is a key element in the business
model. It is the responsibility of every company in the group to make CSR a component of its strategic plan.
Despite having a centralized network and structural arrangements, the individual Tata companies are
autonomous to choose whatever CSR initiatives suit the requirements of the communities they work with.
The strategy that each company evolves is required to be focused on the needs of the communities in which
the company works in. There is a conscious effort to match the strengths and cornpetencies of the company
to the developmental needs of the communities being served. Thus, the company is left free to determine
the scope of its CSR initiatives, be it in the area of arts and culture, civic amenities, education, environment,
health or infrastructure. For instance, the Tata Steel Rural Development Society works at Tata Steel for the
rural communities around the operational units, while the Tata Chemicals Society for Rural Development
does similar work for Tata Chemicals. Voltas for Women is an exclusively female society consisting of female
employees and wives of employees, who work on health and education issues for women. The Tata family
trusts consist of the Sir Dorabji Trust and Sir Ratan Tata Trust besides the J. N. Tata Endowment. Some of
the prominent Tata-funded institutions are the Indian Institute of Science, Tata Institute for Fundamental
Research and Tata Institute of Social Sciences.
Questions: -
1. Collect evidence from the case to support the argument that social responsiveness at the Tata group is
closely aligned with its strategic management,
2. How would you respond to a critic who says that the Tata group engages in CSR activities to enhance the
reputation of the Tata brand and thereby, benefit economically from its social responsibility initiatives?
Case – 5 Marks-16
Krishak Bharati Cooperative Limited (KRIBHCO) is a cooperative society set up for fertilizer manufacturing,
registered under the Multi-State Cooperative Societies Act, 1985. It was promoted by the Government of
India, Indian Farmers Fertilizers Cooperative Ltd. and National Cooperative Development Corporation and
other agricultural cooperative societies spread all over the country. It has more than 6000 members who
have contributed nearly Rs.400 crore as capital. KRIBHCO basically operates in the three business areas of
bio-fertilizers, urea and seeds. Its fertilizer complex is located at Hazira near Surat in Gujarat, seed plants
at various locat ions in eight states of India and service centers called Krishak Bharti Seva Kendra at various
places in the country. KRIBHCO has equity participation in fertilizer companies within India and in one
company in Oman. The cooperative is managed by a board of directors, senior management headed by a
managing director and functional heads in the areas of operations, finance, marketing and vigilance.
The vision of KRIBHCO is stated as: ‘We want to be a world class organization that represents the farmer
community and maximizes returns to them through specialization in agricultural inputs and products and
other diversified businesses that maximize stakeholder value.’ The mission is ‘to act as a catalyst to
agricultural and rural development by Selecting, financing and managing projects that are both socially
desirable and commercially profitable. The objectives are: to increase the urea installed capacity while
maintaining its market share to ensure optimum utilization of existing plant machinery and to diversify into
other core sectors like power, LNG terminal/port, chemicals etc.
The equity capital has been subscribed by ‘Government of India (67.6%) and other cooperative societies
(32.4%). Its, net worth is Rs. 22Sf crore, constituting equity of Rs. 396 crore and re serves of Rs. 1892
crore. It earned a post-tax pr* of Rs. 193 crore in 2006-2007 and has declared a dividend of 20% for the
last three years. The Cooperative has the distinction of paying the highest dividend and maximum taxes in
the cooperative sector in India. KRIBHCO markets its fertilizers through an extensive marketing network
spread over 16 states of India, through cooperative and institutional agencies and through its own outlets.
The cooperatives agencies in its marketing network are located at ferent levels such as apex, district and
taluka lea. and village-level societies. The institutional agencies typically involved are the agro-industries
corporations and land reclamation agencies.
KRIBHCO is an lSO-9001: 2000 and ISO-140C” certified company. It produced and dispatched
more than 34 lakh tonnes of urea in 2006-2007. Various functions of bagging, handling and loading in the
product handling plant are performed through manual product handling processes as well as through
mechanized bagging machines. Mechanical improvements have also been affected for smooth transfer and
conveying of bags in the bagging plant. These efforts have resulted in minimizing product loss, avoiding
shortfall or excess in loading quantities, minimizing the loading time and reducing the specific bag
consumption.
KRIBHCO has formal policies in the areas of energy, environment, quality and safety. It has declared its
energy policy and has volunteered its commitment towards energy conservation. The energy policy is aimed
at an optimum utilization of the various forms of energy in a cost-effective manner to conserve energy
resources. The Cooperative has set up a quality policy and an environment policy, which have been framed
after integrating the energy saving objectives and goals as well. The safety policy of the Cooperative
emphasizes on the importance of safety and to an adherence to safe practices. A safety department
performs the functions of ensuring compliance with safety standards.
KRIBHCO has a modest human resource development set-up where it arranges in-house training and
sponsors employees to external training programmers.
The management information system at KRIBHCO covers its internal operations and the marketing network
using the relational database management system, using client/server technology. An integrated system at
plant-level comprises of financial accounting, payroll, fixed assets, purchases, stores, production,
maintenance, transport ion, personnel & administration and MIS. Administrative and marketing offices have
financial accounting, inventory management, payroll and provident fund management systems. E-mail,
intranet and Internet facilities are provided at all offices. Computer training is provided to staff on a regular
basis. Information security is done through installation and upgrading of anti-virus programmers. With the
IT infrastructure being accessed from various locations, network and data security are important concerns.
The society has an official website at http://kribhco.net/english.
Vigilance is considered important at KRIBHCO, on par with other functional areas. It is aimed at preventive
as well as punitive vigilance and at en- swing transparency and accountability. The vigilance department
works for systems improvement and simplification and codification of rules and procedures for the smooth
functioning of the Society. There is a chief vigilance officer at the head office and vigilance officers at plant
and zone levels. There is a three-pronged vigilance policy in place, aimed at creating awareness, preventing
unethical activities and punishing misdemeanors. The board of directors oversees vigilance through sixmonthly
reviews. An internal enquiry was recently instituted to investigate allegations against the serving
marketing director, indicating the efficacy of the vigilance function.
KRIBHCO is exploring the possibility of setting up a joint venture fertilizer project in Algeria. KRIBHCO is in
the process of signing a memorandum of understanding with the Chhattisgarh State Electricity Board
(CSEB) to set up a 2000 MW power project. It is planning to enter the DAP mark et in India. KRIBHCO had
put in Rs. 50 crore for an all-India rail operations license for railway container operations. International
consultant KPMG is reported to have submitted a business plan to KRIBHCO for running container trains in
the area of Gujarat, Northern Maharashtra and Western Madhya Pradesh. KRIBHCO had signed a deal with
the Railways in 2007 for the operation of container trains for 20 years. It would tie up with other operators
to run the depot. KRIBHCO is keen on a roll out for the procurement of wagons. There have been problems
in the past between KRIBHCO and IFFCO as rivals in the fertilizer industry. Equity investment of Rs. 97
crore was retired by KRIBHCO to IFFCO which had equity participation. There have also been issues related
to the alleged interference of the Department of Fertilizer, Government of India, in the internal affairs of
KRIBHCO.
Questions:-
1. Keeping in view the status of KRIBHCO as an organization in the governmental cooperative sector,
comment on the adequacy of the functional policies in the light of what you have studied in this chapter.
2. Suggest directions for KRIBHCO’s top management regarding functional policies, in view of its ambitious
future Plans.


COURSE: EMBA Sem-I
SUBJECT: Consumer Behavior

Note:- 1) Kindly write question number properly
2) Attached question papers with answer sheets
_____________________________________________________________________________
Case – 1 -Fashion Statement through Khadi
As India’s traditional hand-spun cotton fabric, khadi feels coarse and unrefined. But the feelings it evokes
in anyone with any empathy in India’s heroic struggle for emancipation from colonial rule, is anything but
that.
Till date the fabric bears the invisible-but-indelible imprint of the charkha (spinning wheel), the late
M.K. Gandhi’s revolutionary symbol for self-reliance and emancipation (through unity, expressed in the
refusal to kneel before insolent might). Instead of exporting raw cotton and importing fine Manchestermade
cloth, freedom fighters wanted all Indians to spin their own clothing and boycott imports to weaken
the British Raj.
With the end of Colonial Rule in 1947, the congress government headed by Jawaharlal Nehru opted
for state-led large-scale industrialization, instead of Gandhi’s idea of rule hut-industry development. But it
also decided to provide employment to thousands of spinners by selling their output through a vast
network of retails stores.
Thus was formed the Khadi and Village Industries Commission (KVIC), a nodal agency to promote
the fabric, with its Khadi Bhandar outlets in urban India.
Over the years, KIVC set up thousand of outlets across India. Sales were good. But with the
evolution of technology, perhaps it was inevitable that the sentimental dreams of village self-reliance
would be disrupted. And so it was. Modern machines of Europe’s industrial revolution were soon to arrive.
Indian industrialists set up capital-intensive textile mills and began the mass-production of fine cloth. As
the mills gained volume, they achieved economies of scale and started lowering prices. And so, the
labour-intensive homespun fabric losing out to mill fabric.
Driven by its sentimental attachment to Khadi, and concern for mass-scale-sector employment, the
government started subsidizing India’s traditional spinners. This was an extension of its ‘tax-the-rich’ and
‘feed-the-poor’ outlook, and was projected via the media as a good thing. In any case, KVIC was intended
to be a noble organization, motivated by lofty ideals instead of profit. For decades, all was fine behind the
‘khadi’ curtain of socialism’. The reason behind the support mechanism even acquired a holiness of its
own. Institutionalized, it became immune to doubt. But alas, the system was artificial and its main flaw lay
in the very ‘certain’. Public information was lacking, and so it escaped proper scrutiny. In the real would,
even the best-international projects can fail, or worse, degenerate into instruments for patronage.
But the 1990s, the vision of clothing the masses with khadi was beginning to look absurd. Despite
all policy incentives to the sector, people were buying efficiently machine-made textiles. The forces of
mass production were making polyester, which had gained economies of scale at the raw materials stage
(made from petrochemicals), cheaper still. Yet KVIC continued to produce huge quantities and sell khadi
clothes through its extensive retail chain. By now, khadi was more expensive than other fabrics and had
acquired the image of an outdated clothing material worm chiefly by politicians and social workers.
Ordinary people preferred cheaper alternatives.
Was khadi a lost cause-stuck in the time wrap? Clearly, if KVIC continued the way it was; it was
headed for trouble. Given India’s poor fiscal health, subsidies had become untenable. Yet, the fabric
couldn’t be torn out from consciousness of caring Indian. Something needed to be done. And fast.
By the start of the new century, KVIC discovered a pragmatic solution based on using modern
marketing to revive the fabric. After all, the Free Market can also accommodate common sentiments.
Instead of directing taxpayers’ money towards the cause, it was thought that private citizen should
contribute on their own volition (by buying khadi at premium prices).
The strategy? Refurbish the range, acquire an upscale image, aim the cloths at the well off and
reposition khadi as a fashion statements. Given KVIC’s lineage, the idea was radical. But it was worth a
try. KVIC started with a single-outlet experiment in Delhi’s Khan Market. The first air-conditioned shop
opened here in May 2001, selling khadi muslin garments designed by high-profile designers (Rohit Bal and
Malini Ramani), in addition to a well-packaged range of Ayurvedic products. It was a runaway success,
with Delhi’s elite thronging the shop.
KVIC started marketing two brands, Khadi and Sarvodaya, to which it owns the rights. The former
caters to the premium and export segments, and include essential oils, herbal oil soaps, face scrubs, and
dry fruits honey. Sarvodaya, the mass-market brand, sells mass items such as toilet soap, honey, pickles,
spices and incense sticks.
The move has also sparked off a controversy. Some Gandhians, troubled by the glamour, are
aghast at this ‘betrayal of ideals’. Realists, however, criticize them for failing to free themselves of their
dearly held ‘khadi mindset’. Don’t get them wrong. The latter love the old idealism too. But they also
realize that a product with great symbolic value deserve to be marketed as such, if it is to reach out, and
with mind-space for the poor weaver’s child who might have something to offer if given a chance. Holding
Gandhi’s method (or tools) as sacred amounts to confusing the means with the end.
The capital’s response to Khan Market shop has been so good that KVIC wants to upgrade a
significant fraction of its network. The transformation is to be entrusted to a new marketing company that
will function as any other professional firm. Plans to extend the concept include display units at airports
and modern outlets at Delhi’s Ashoka Hotel, Nehru Place, Hauz Khas, and Kamla Nagar. Next on the
agenda: Jaipur, Chandigarh and Lucknow. What’s more, the sales personnel are to be retrained for
customer orientation at the shop-floor level. The sale boost is expected to be substantial. The Khadi Gram
Udyog store at Connaught Place, New Delhi does an annual turnover o Rs. 10 crore. After renovation, this
is expected to touch close to Rs. 25 crore.
The product range will be widened too. Ahmedabad’s National Institute of Design (NID) has
proposed a special cell for design support, while Delhi’s National Institute of Fashion Technology (NIFT)
may also pitch in.
KVIC has hired three and agencies to promote its brands: Appeal for Khadi; Market Missionaries for
Sarvodaya and Pressman for the corporate and promotional schemes. The budget is about 25 crore. Khadi
campaign is likely to start by highlighting the brand’s eco-friendly credentials, before turning attitudes
towards it and portraying it as a lifestyle insignia.
Vivek Sahni has been roped in to do the packing graphics and retail outlets. E-commerce options
are also being weighed, with KVIC having already booked khadi.com and khadi.org as its domain names.
The export thrust will also be sharpened. Right the around 200 production units, which cater
exclusively to the export to the market. KVIC wants to identify new markets and tap them with its
products. Test marketing efforts are already underway in South Africa, Dubai, and a few other overseas
markets.
QUESTIONS:-
1. Would marketing in foreign countries require study of a popular country’s culture aspects and
buyer behaviour before marketing Khadi there? What aspects would need to be studied?
2. Suggest an approach to make Khadi garments popular among Indian youth.
Case-2- Purchase of a Microwave Oven
Ramesh Sikand and his family lived a comfortable two-bedroom flat in a respectable locality in a large
city. He was employed with a general insurance company in a supervisory capacity. His wife, Sumita was
a teacher in an English medium public school. Both their children, Rachit aged 10 and Sarita aged 8
years, were studying in the same school where Sumita was employed.
Just before Diwali in 2002, one Friday evening the family went shopping. Besides clothes for
children and few other things, they bought a 27 liter. Excel microwave from an outlet with good
reputation. Sumita was very happy and the children were excited with this new purchase. Both the
children were anticipating quick cooking of a variety of dishes they liked. They were expecting that
everyday their mom would give them school Tiffin-boxes packed with noodles other Chinese food.
To celebrate, Sumita invited two of her school colleagues for dinner and prepared a few dishes in
her brand new microwave. Both her friends observed her cooking with great interest. On the dinner table
most talk was around difficulties of both spouses being employed and the shortage of time to attend to so
many household chores. The friends, Ramesh and the kids profusely praised the dishes and how quickly
everything for the dinner was ready. What really took most time was cooking the Chapatis. Sumita said,
“ How nice and convenient it can be if some portable chappati-preparing gadget was available.”
Ramesh said, “It was my idea to buy a microwave. “Sumita said, “Why? You have forgotten. It
was I who two years ago during exam time suggested that it would be good if we buy a microwave.” Both
of them were trying to take credit for the purchase. Finally, both of them agreed that the idea to buy a
microwave was discussed after they attended the dinner at a friend’s place where for the first time they
saw a microwave in operation.
One of Sumita’s friends asked, “why did you buy this particular brand? I have read in the
newspaper just a few days back that there are attractive schemes on some brands.” Sumita and Ramesh
spoke simultaneously,” In fact, both of us have read advertisements and articles in magazines within the
last six months about what features and benefits every brand offers. “Sumita said, “As and when I got
the opportunity, I consulted some of my knowledgeable friends who have owned microwaves for quite
some time, what to look for and what brands to consider.” “You know, I came across some scaring
information about the safety of microwaves. Now the technology is so advanced that all those scaring tit
bits of information are quite baseless. ”Ramesh said, “Whatever we learned from magazine articles and
experienced friends has helped us quite a lot in buying this brand.” Sumita said, “About schemes, you are
right. We too got a set of three bowls to be used for microwave cooking. Besides, we have paid just a
thousand rupees and the rest would be paid in fifteen interest free installments. There is an extended
warranty of three years, and if we are not satisfied with the machine, we can return it within the first 30
days of purchase, and no questions asked. Our Rs.1,000 would be refunded in cash.”
One of Sumita’s friend said, “Recently, one of my relations in Delhi told me her bad experience with
this brand. She went to the extent of suggesting me never to buy this brand of microwave.” Ramesh said,
“I don’t know what to say about your relation’s experience. What information we could collect goes quite
in favor of this brand. Those who recommended it have had few years use experience without any
complaints.” Sumita’s friend said, “You may be right Bhaisaheb. But one thing we all know is that these
are machines and they are not perfect. Excellent cars with unmatched reputations like BMW, Rolls Royce,
and Mercedes too, need repairs.” She smiled, and said, “Haven’t you heard of Murphy’s Law “If a thing
can go wrong, it will”.
At about 10.30 pm, the friends thanked Sumita and Ramesh, and congratulated them for owning a
microwave and left. Sumita and Ramesh were a bit pensive after their departure. They felt somewhat
uneasy about the correctness of their decision in choosing this particular brand of microwave. They knew
their money was safe, but it would be embarrassing if they had made a mistake. They agreed to discuss
the matter with some of their eexperience3d friends.
QUESTIONS:-
1. Discuss whose decision it was to buy a microwave and when was the purchase decision made.
2. What factors influenced the purchase of the microwave?
3. What is likely to be the post-purchase behavior in this case and what is the significance of such
behavior?
4. What is the significance of post-purchase behavior for the marketer?
Case-3- Fancy Dreams
The boardroom was filled with the voice of marketing manager, Ashutosh Kant. He was addressing the
meeting of senior managers of Fancy Dreams. “The last three months were spent by our market research
team in finding out the reasons and patterns of sales at stores. Let me emphasize that retail sales is
showing growth all over the country and in the process, competitions is intensifying. We can no longer
afford to sit and relax, instead we need to put ourselves fully to retain our market leadership.” There facts
revealed by the survey were particularly disturbing.
1. People found Fancy Dreams service staff bordering on aggressiveness and not really helpful, as
customers were never left to browse.
2. Children got bored and hence parents often left the store within minutes after finishing essential
shopping. They never browsed or spent leisure time at Fancy Dreams store, which could otherwise
help promote sales.
3. With many choices available in the market, consumers stopped treating Fancy Dreams store as
unique and exclusive anymore.
Rehman, an entrepreneur, had set up a garment shop in one of Delhi’s busy up market area about 10
years ago. He realized that to attract customers, he must do something new. With this in mind, he
chalked out a detailed plan to open a chain of stores called Fancy Dreams. Some major features of this
store were:
1. Complete dress range for kids, parents and teenagers.
2. Full accessories for women and in footwear, purses, jewelry and cosmetics.
3. A play center where kids could spend time when the parents shopped.
The stores were opened in two locations in Delhi on an area of 10,000 sq.feet each. Within six
months, the stores became popular and the business grew rapidly and in three years the turnover crossed
Rs.6 crore. The promotion plans included advertising in print media and through cable operators. The
store also conducted festivals such as children’s carnival, and Valentine special etc., to attract crowds of
customers.
Stress on store ambience was high as Rehman wanted to create an image of a complete shopping
experience for the entire family. The sales personnel were carefully selected and trained to promote, not
push, any product and to encourage customers to browse through.
The women’s section was given a feminine touch and the men’s section had polished wood and leather
all over. The garments, the accessories, and the gifts were displayed in large racks and
Full-length mirrors were placed in multiple places. Sales personnel present on all the three floors often
advised the customers but never showed around everything. The kid’s section included garments, toys,
books, and was manned by more staff. The play center for the kids was a major attraction. The parents
could safely leave their children in the place, situated on the ground floor itself. The place had separate
section of toys and books for children and was supervised by trained staff. They felt comfortable that
their children would be taken care off properly and the parents, therefore, could leave the children and
shop in a relaxed manner. This concept was unique and highly appreciated by customers and became the
major attraction for them.
The stores were one of a kind in the early 1990s and grew rapidly. The new sections on books, gifts,
and handicrafts were launched gradually and at any time the store had more than 200 categories of
products. During this time, the competition started intensifying as three similar ventures were launched in
the city. This didn’t bother Rehman much, because he felt he had built and image of Fancy Dreams being
the ultimate store. By 1996, multi-storey, one-stop stores became the trend in Delhi and many such
stores came up.
Rehman had expanded his stores in three other cities as well and the turnover had crossed Rs.40
crore. The total manpower rose to 500 and several new management and non-management cadres were
introduced in the company.
Last year during Diwali festival season, the store attracted nearly 40,000 customers in the entire
month. This worried Rehman as it was almost 20 percent less than their estimates. His marketing
manager, after ling discussions, hired a market research firm to study the buying pattern and preferences
of people walking in the store.
QUESTIONS:-
1. Identify the relevant major problems and issues in this case.
2. Suggest a strategy to rectify the problems.
Case -4- Impact of Retail Promotions on Consumers
Shoppers Delight, a large retail store, had above average quality and competitive prices. It advertised its
retail promotions in local newspapers. Its TV advertising was mainly aimed at building store image and
did not address retail promotions. The management knew it well that they had to advertise their retail
promotions more, but they did not feel comfortable with the effectiveness of present efforts and wanted to
better understand the impact of their present promotions.
To better understand the effectiveness of present efforts, a study of advertising exposure,
interpretation, and purchases was undertaken. Researchers conducted 50 in-depth interviews with
customers of the store’s target market to determine the appropriate product mix, price, ad copy and
media for the test. In addition, the store’s image and that of its two competitors were measured.
Based on the research findings, different product lines that would appeal to the target customers
were selected. The retail promotion was run for a full week. Full-page advertisements were released each
day in the two local Hindi newspapers, and also in one English newspaper that devotes six pages to the
coverage of the state.
Each evening, a sample of 100 target market customers were interviewed by telephone as follows:
1. Target customers were asked if they had read the newspaper that day. This was done to
determine their exposure to advertisement.
2. After general description of the product lines, the respondents were asked to recall any related
retail advertisements they had seen or read.
3. If the respondents were able to recall, they were asked to describe the ad, the promoted products,
sale prices, and the name of the sponsoring store.
4. If the respondents were accurate in their ad interpretation, they were asked to express their
intentions to purchase.
5. Respondents were also asked for suggestions to be incorporated in future promotions targeted at
this consumer segment.
Immediately after the close of promotion, 500 target market customers were surveyed to
determine what percentage of the target marker actually purchased the promoted products. It also
determined which source of information included them in their decision to purchase and the amount of
their purchase.
The results of the study showed that as exposure was 75 percent and ad awareness level was 68
percent and was considered as high. Only 43 percent respondents exposed to and aware of the ad
copy could accurately recall important details, such as the name of the store promoting the retail sale.
Just 43 percent correct interpretation was considered as low. Of those who could accurately interpret
the ad copy, 32 percent said they intended to respond by purchasing the advertised products and 68
percent said they had no intention to buy. This yields an overall intention to buy of 7 percent. The
largest area of lost opportunity was due to those who did not accurately interpret the ad copy.
The post-promotion survey indicated that only 4.2 percent of the target market customers made
purchases of the promoted products during the promotion period. In terms of how these buyers learnt
of the promotion, 46 percent mentioned newspaper A (Hindi), 27perecent newspaper B (Hindi), 8
percent newspaper (English), and 15 percent learnt about sale through word-of –mouth
communication.
The retail promotion was judged as successful in many ways, besides yielding the sales worth
Rs.900,000. However, management was concerned about not achieving a higher level of ad
comprehension, missing a significant sales opportunity. It was believed that a better ad would have at
least 75 percent correct comprehension among those aware of the ad. This in turn would almost
double sales without any additional cost.
QUESTIONS(Any Two):-
1. Why would some consumers have high-involvement levels in learning about this sales promotion?
2. Is a level of 75 percent comprehension realistic among those who become aware of an ad? Why or
why not?
3. Do you think such promotions are likely to influence the quality image of the retail store? Explain.
Case- 5- Tattoos and Extended Self
Most product and services associated with extended self and physically separated from the
physically self. Until recently, exceptions were limited primarily to hairstyles and coloring and cosmetics.
One could also alter the physical self through excersise,diet,weight training and plastic surgery. In recent
years, body piercling and tattooing have become additional ways to alter both the extended self and the
physical self. Tattooing is unique (expect for plastic surgery) in that it is a relatively unalterable change to
physical self. It can be done primarily for adornment or beauty enhancement reasons. Or, it conserve
primarily as public or private symbol.
For most of this century, tattooing was not socially acceptable among most social groups in the
United States. The most noticeable exception was enlisted men in the Navy, and even then alcohol
consumption was frequently involved in the decision to secure a tattoo. This has changed sharply in the
recent years. Why has this become socially acceptable and what does it mean it man to the self concept of
those who secure tattoos? Research on tattoo focuses on four themes – the renaissance of tattooing, the
impact of the tattoo on the extended self, the risks associated with acquiring a tattoo, and the satisfaction
/ dissatisfaction that can result.
A tattoo renaissance began in the 1960s with the hippie movement and the evolution of skilled
tattoo artists in the San Francisco area. Interest also began to grow in the historical and ethnographic
aspects of the tattoo medium. The commercial art world and academic art historians began to pay
attention to tattooing as an art from. This, in turn, attracted better tattoo artist. By the early 1990s public
figures, particularly athletes began to wear visible tattoos, which increased their acceptability among the
more venturesome member of “mainstream” society. Tattoos have meaning on at least three levels. First,
there is the meaning associated with having a tattoo .While increasingly common, having a tattoo is still
far from the norm. Thus, having a tattoo in and of itself makes a statement about the person. A person
.with a tattoo is still viewed as somewhat of a risk taker or non –conformist .The location of the tattoo also
contains meaning. The more visible the tattoo, the more rebellious or non – conforming the individual
appears to be. The tattoo itself is a major source of meaning, both private and symbolic. Tattoos may
symbolize group membership, interests, activities, relationship, life transition, or values. Tattoos may be
unique and failed primarily with personal meaning or their meaning may be rooted in the cultural practice
and myths.
Acquiring a tattoo is risky. It is very expensive to remove or alter a tattoo .Thus , if you don’t like
your tattoo or your tastes change over time , you are at financial risk ., There is also the social risk that
one’s current or future friends , colleagues , or employers will have a negative reaction to the tattoo.
Finally, there is still physiological risk associated with acquiring a tattoo.
Ultimately, there is evaluation and satisfaction or dissatisfaction. As mentioned earlier,
dissatisfaction is difficult and expensive to correct. Satisfaction, often at a high level, is a frequent
outcome. Some research indicates that this may even produce addiction.
(Source advances in consumer Research, ed J. W. Alba and J. W. Hutchinson, 1998)
(Authors’ note: Tattooing has been in India for the last several decades. Rural people visiting meals
were to get their names tattooed on their forearms. Womenfolk were more interested in getting some
design or flowers tattooed. Probably, they did not have such complex psychological reasons as the
research in United States shows. In acquiring a tattoo, the new generation youth may be having complex
psychological reasons as reported in the study).
Question:- (Any Two)
1. What is the significance of acquiring a tattoo in India? Are tattoos considered a way of making a
personality statement/
2. Contact two educated persons who wear a tattoo (just not the name).Interview them to find out
what does it mean to them?
3. Interview three of your friends. Find out about their self- concepts and what kind of tattoo would
they like have.