BENGALURU CITY UNIVERSITY - BCU MBA CASE STUDY ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

 BENGALURU CITY UNIVERSITY - BCU MBA CASE STUDY ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

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DR. PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

CASE STUDY 1:

Case Study - Proper coordination between employees and management, In Search

of Greener pastures

Rohit joined ABC Ltd., a heavy engineering unit, having a turnover of about Rs. 20 crores,

in the junior management cadre as a direct recruit. During his tenure with the company,

Rohit proved to be a dedicated and sincere worked which earned him quick promotions in

the organization. He had made a mark in whichever department he had worked and his

departmental heads were happy with his work. After serving the company for a period of

ten years, Rohit felt that there was no scope for further improvement in his position and

started applying for better jobs commensurate with his experience.

He finally succeeded in getting a job but his new employer wanted him to join within one

month. To this, Rohit pleaded inability, as he was required to give three months ‘notice to

his present employer, as per company rules. However, he said he would discuss the matter

with the personnel manager and try to reduce the period to one month by paying two

month‘s salary in lieu of the required notice. Rohit accordingly, submitted his resignation

to the present employer and requested the departmental head to recommend his case to

the personnel manager, for relieving him after one month. The departmental head, said

that he would discuss the matter with the personnel manager and try his best to help him.

However, the latter turned down Rohit‘s request stating that the rules require him to give

three months ‘notice and that the alternative suggested by Rohit was not acceptable.

When Rohit learnt about the personnel manager‘s response, he approached his

prospective employer to explain his difficulty, which was beyond his control, and requested

them to extend his joining period to three months. This was accepted by them, as a special

case. The departmental head took up Rohit‘s case with the management and suggested

that in future, the officers who resigned may be permitted to give one month‘s notice and

two months‘ notice if required, so as to ensure against any unnecessary delay in the work

of the department. But, the management refused to accept this proposal, stating clearly

that the company‘s policy cannot be changed.

Questions:

1. Did the management take a correct decision in Rohit‘s case under the circumstances?

2. What steps should the departmental head take to ensure that officers who resign do not

adopt an in-different attitude towards their work during the three months ‘notice period?

3. If you were in the position of the management, how would you have handled the

situation?

CASE STUDY 2:

Case Study - Managerial Skills! “Naughty Rule”

Dr. Reddy Instruments is a medium-sized company located in the Industrial Estate on the

outskirts of Hyderabad. The company is basically involved with manufacturing surgical

instruments and supplies for medical professionals and hospitals.

About a year ago, Madhuri aged 23, niece of the firm‘s founder, Dr. Raja Reddy, was hired

to replace Ranga Rao quality control Inspector, who had reached the age of retirement.

Madhuri had recently graduated from the Delhi College of Engineering where she had

majored in Industrial Engineering.

Balraj Gupta, aged 52, is the production manager of the prosthesis department, where

artificial devices designed to replace missing parts of the human body are manufactured.

Gupta has worked for Dr. Reddy Instruments for 20 years having previously been a

production line supervisor and, prior to that, a worker on the production line. Gupta, being

the eldest in his family, has taken up the job quite early in life and completed his education

mostly through correspondence courses. From their first meeting, it looked as though

Gupta and Madhuri could not get along together. There seemed to be an underlying

animosity between them, but it was never too clear what the problem was.

Venkat Kumar, age 44, is the plant manager of Dr. Reddy instruments. He has occasionally

observed disagreements between Madhuri and Gupta on the production line. Absenteeism

has risen in Gupta‘s department since Madhuri was hired as quality control inspector.

Venkat secretly decided to issue a circular calling for a meeting of all supervisory personnel

in the production and twelve quality control departments.

The circular was worked thus- Attention: All supervisors Production Quality Control

Departments

A meeting is scheduled on Monday, Feb 20 at 10.40 a.m. in room 18. The purpose is to

sort out misunderstandings and differences that seem to exist between production and QC

personnel.

Sd. Venkat Kumar; Plant Manager

Venkat started the meeting by explaining why he had called it and then asked Gupta for

his opinion of the problem. The conversation took the following shape:

Gupta: That Delhi girl you recruited is a ‗fault finding machine ‘in our department. Until

she was hired, we hardly even stopped production. And when we did, it was only because

of a mechanical defect. But Madhuri has been stopping everything if one ‘defective part

comes down the line.

Madhuri: That‘s not true. You have fabricated the story well.

Gupta: Venkat, our quality has not undergone any change in recent times. It‘s still the

same, consistently good quality it was before she came but all she wants to do is to trouble

us.

Madhuri: May I clarify my position at this stage? Mr. Gupta, you have never relished my

presence in the company. I still remember some of the derisive remarks you used to make

behind my back. I did take note of them quite clearly!

Suresh (another quality control supervisor): I agree with Madhuri Venkat. I think that

everyone knows that the rules permit quality control to stop production if rejections exceed

three an hour. This is all Madhuri has been doing.

Gupta: Now listen to me. Madhuri starts counting the hour from the moment she gets the

first reject. Ranga Rao never really worried about absolute reject rule when he was here.

She wants to paint my department in black. Is not that true Riaz Ahmed?

Ahmed (another production supervisor): It sure is Gupta. Every time Madhuri stops

production, she is virtually putting the company on fire. The production losses would affect

out bonuses as well. How long can we allow this nuisance ‘to continue?

Thirty minutes later Madhuri and Gupta were still lashing out at each other. Venkat decided

that ending the meeting might be appropriate under the circumstances. He promised to

clarify the issue, after discussion with management, sometime next week.

Questions:

1. Should Venkat have called a meeting to sort out this problem? Why or why not?

2. What do you say about the rule calling for production to halt if there are more than three

rejects in an hour? Should it have been enforced? Explain.

3. What do you feel is the major problem in this case? The solution?

CASE STUDY 3:

Case study on effective Forecasting-Punjab Machine Tools Corporation (PMTC)

PMTC in the business of metal cutting tools and metal forming tools, is engulfed in

competition with national as well as international players. PMTC‘s products are used by

capital goods and other engineering industries. The business is cyclical in nature,

dependent on capacity utilization levels in user industries.

Gyan Chand, the MD of PMTC, had been urged by the distributors in a recent meeting, to

introduce high-tech metal cutting tools and new models using the latest technology. They

felt that this would help them fight the dumping of cheap second hand machinery and

increase the domestic as well as export market share. Gyan Chand realized the

implications of the distributors ‘suggestions. This would increase the R&D budget

tremendously. A fully automated production line would put pressure on finances. A greater

variety of tools, models etc. would require inventory space. Machines need to be trained

again, especially in running the latest, fully automated robots and gadgets.

Reflecting on previous staff meetings, Gyan Chand realized that marketing people always

wanted a greater variety of models but never appreciated the huge financial burden such

a decision would imply. PMTC, after all, carried through its operations all along with just a

few models quite successfully. In such a scenario, Gyan Chand felt that here is no need

to go in for new models. Instead, he thought the focus should be on improving existing

models and reducing the cost and price. The customer now-a-days is more interested in

getting value for money. However, to be on safe side, he sought the opinion of consulting

firm, in this regard.

Questions:

1. What do you think is the mission of the enterprise?

2. What kind of opportunities and threats exist in the firm‘s external environment?

3. How would you go about evaluating the strengths and weaknesses of the firm? What

factors are critical for success or failure?

4. To be successful, an organization must be an open system? What does this mean and

how does it apply in this case?

CASE STUDY 4:

Case Study - Management by Objectives. Super Department Stores‟ MBO

Programme

Prakash Gupta was irritated and confused, after the meeting with Dinesh Sharma. Prakash

was the chief manager of Delhi City Super Department Stores (SDS), and Dinesh was the

regional stores manager, in charge of stores of Noida, Faridabad and Ghaziabad. Three

weeks earlier, Prakash had received a letter from Dinesh explaining that top management

had decided on an MBO programme to help SDS improve its operational efficiency and

profitability. The letter mentioned about linking stores managers ‘salary hikes, promotions

etc. to performance. The accompanying instructions required managers to list the

objectives they achieved which were appropriate for their store and then to await the

regional manager‘s review visit.

Prakash has done just what he was asked to do. In a meeting with his departmental

managers, Prakash had chosen objectives that they all agreed were appropriate. All of the

objectives represented performance levels that were improvements over the past year and

were reasonably attainable, such as:

1. Increasing sales by 10 %

2. Reducing inventory losses by 2 %

3. Improving customer service (i.e., 20 % fewer complaints made to head office)

4. Reducing cash register shortages to 0.05 % of sales

Dinesh came late for the MBO review visit and stressed that there was little time. He quickly

scanned the written statement of objectives which Prakash gave him, then explained that

profit improvement was really what the home office was interested in. Senior management

in Chennai, running the SDS in over 18 major cities in India, decided that a 10 % increase

in profit would be a reasonable objective for Prakash‘s store. This single objective, Dinesh

explained, would objective the monitoring of performance by the head office and would

also reduce the amount of information the store would have to submit. The visit was cut

short because Dinesh had to attend a meeting on the advertising budget back at the head

office.

Questions:

1. Does the MBO system at SDS meet the criteria for an effective programme? Why? Why

not?

2. Evaluate Prakash‘s approach to objective setting.

CASE STUDY 5:

Case Study - Improper Decision Making and its impact in Manufacturing Industry.

The Polyester Manufacturer

Jaswant Sethi was sitting on the verandah of his summer cottage in Kasauli, when the

news arrived. The consortium of financial institutions that provided huge loans to his

company, Hind Synthetics, had directed him to hand over the running of the company to a

professional manager. Sethis wasn‘t totally surprised at this turn of events. He had been

through tens of meetings in the recent months, trying to make his case against such a

move. But, being the hard-headed businessman that he was, Sethi knew that chances of

his winning were slim.

Over the past 30 years, Hind had built a synthetic fibre plant with an annual capacity of

26,000 tonnes. Of the Rs.150 crore invested it, Rs.55 crore had come by way of loans.

But, the downturn of the past six years had pushed Hind into a crisis. With profits drying

up, it had defaulted on interest payments, and today owed Rs.120 crore in principal and

interest to the lenders.

As far as Sethi could see, there was no immediate hope of things changing for the better.

The faxed message, further added that Sethi would continue to be the chairman of the

company, but the new CEO would report to a three-member committee of the board,

including Sethi. ―Let me assure you, Jaswant, this is only an interim measureǁ, the lead

lender wrote in a bid to soften the blow.

Shyam call Nadim. Tell him to get the car ready. We, are leaving for Delhiǁ, Sethid barked

at his house-keeper, on his way to the bath. Within half-hour of receiving the fax, Sethi

was on the road, seated in the ample rear of his Mitsubishi Pajero. Pulling out the fax

message from his bag, he tried to mentally playback Hind‘s past and present. He had

ample time to do that - five hours at least - and it wouldn‘t be until eight in the evening

before he could get to meet head of the lead financial institution for dinner.

Memories came flooding back. Sethi remembered the August morning in 1986, when he

had accompanied his father to Chennai for the inauguration of Hind‘s plant. Seth Sr. had

been proud that this was one of the biggest polyester plants in India at that time.

The facility had been built to manufacture 4,500 tons per annum (TPA) of rayon yarn; 2,500

TPA of nylon yarn and 4,000 PA of nylon type cord, and 15,000 TPA of polyester filament

yarn. As a teenager, the first thing that had struck Sethi about the new plant was its size;

―it‘s hugeǁ, he remembered telling his dad. Three decades on, it was the size that was

bleeding Hind.

But until the late eighties, Hind had not felt the pinch. A majority of its competitors had

similar capacities, and none of them really worried about efficiencies because import tariffs

were high and, therefore, the industry could afford to sell on a cost-plus basis. But,

liberalization of the economy, which began in the early nineties, had changed all that.

Import duties came down progressively to 32 percent from 150 percent. Suddenly, it was

cheaper for customers to import man-made fiber than to buy locally. Manufacturers were

forced to match prices, but without comparable efficiencies in place, the bottom-line began

to hurt.

It hadn‘t taken long for Sethi to realize that Hind‘s small manufacturing capacity had

become a source of competitive disadvantage. ―What else can explain the losses despite

Hind manufacturing to its full capacity, ǁ Sethid said almost aloud.

At half-past three, Sethi‘s Pajero pulled up in front of the office of Rajeev Verma a

consultant Sethi had been referred to. Verma was surprised to see the CEO of Hind

Synthetics land up in his office without a warning. Sethid thrust the fax message into

Verma‘s hand by way of explanation. Quickly, Sethi brought Verma up to speed on the

events of the past few weeks.

―Companies that came in much later than you have set up 5000 plus TPA plantsǁ pointed

out Verma. ―In fact, Vimoline Industries has not only set up a 2-lakh TPA plus plant, but

also gone in for backward integration right up to the primary feedstock stage. Why didn‘t

Hind expand its capacity?

―Threin, hangs a tale, ǁ Sethi winced, ―You know, Hind was doing well, till the early 90‘s

with operating margins of up to 40 percent. We thought the good times would last. It was

only when profits were beginning to decline by mid-1994 that we thought of expanding our

capacity. Paradoxically, it triggered off a spiral from which Hind has not recoveredǁ.

―How? Verma asked.

―Since the primary capital market was not too favorable,ǁ Sethi explained, ―we decided

on an initial rights issue in mid-1994 to fund both, capacity expansion and backward

integration. But, the issue failed. All major shareholders renounced their rights

entitlements.

In anticipation of funds from the rights issue, we had taken a bridge loan from financial

institutions. That was clearly a mistake. As the original promoter, I was forced to contribute

over 80 percent of the rights issue which helped merely to increase my stake from 12 to

34 per centǁ.

―But what happened to the issue proceeds? Verma asked.

―They were frozen under a petition from the institutions,ǁ said Sethi. Sooner than we

realized, we got intro working capital problems. In the process of servicing the debt, our

business priorities went haywire. One example: Although we imported the plant and

machinery, it could not be commissioned for two years for lack of funds.ǁ

―But are there any synergies among your product lines? Verma asked.

―Forget about synergy, what scares me is the thought that in another few years, some of

my product lines may become obsolete, Sethis said with a quiver in his voice.

Questions

1) Does it make sense to Hind to retain all its existing four product lines? Why? Why not?

2) What measures should Hind undertake to ensure that its business continues to run and

on course?

3) In your opinion, should Hind be a volume player or a speciality player? If Hind decides

to be a speciality player, what are the options open to it?

4) Do you think the new CEO can‘t have the luxury of a learning period? If yes, how can

he arrest cash losses of Hind and generate enough liquidity in a very short span of time?