Ms-21 june 2008
MS-21 June, 2008
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Review and describe Herzberg's work motivation theory and discuss its relevance for organizational processes.
2. Describe the importance of counselling process in organisations and discuss the ethical issues involved in counselling. Discuss how an organization can handle them.
3. Identify and deliberate on group processes. Discuss the measures ons could adapt to improve group productivity.
4. Describe different types of organisational culture and their significance in the Indian context.
5. Write short notes on any three of the following :
(a) Interpersonal Perception
(b) Importance of persuasion
(c) Sociometry
(d) Leadership effectiveness
(e) Barriers to communication
6. Read the following case carefully and answer the questions given at the end :
Hari Iyer; the Vice President (Marketing) of Victor Computer Systems Ltd., was immersed in thoughts, about the happenings, taking him few years (1999) down the
memory lane. This was when George (the Marketing Manager) had proudly walked down the aisle to shake hands with the founder and chairman Victor at the latter's residence in England and all the company's employees and special invitees standing and cheering him. There were another 49 employees along with George, to have dinner with the founder chairman at his home in England. This dinner was a part of the 'Quality performance circle programme' in which the chairman rewards quality top performers, who are exceeding their quarterly targets by more than 15 per cent for the entire year. All winners were given a cash award, a certificate and also had their pictures taken with the chairman and printed and published in the company's inhouse magazine.
Victor Computer Systems Ltd. is a 20 year old global company, having set up base in I99I and has a sound product range of computer peripherals. Right from the beginning, the company has been able to build up a goodwill for its quality products. Very soon, it was selling its products at a higher price in the market. George had joined the company in 1997 and his immediate boss Gaurav Patei was thoroughly satisfied with him an,C also liked him. Because of his excellent track record and performance, George was not only liked by his superior but also enjoyed many company benefits.
George had earned the reputation of a go-getter, who enjoyed working on challenging customers (or clients) though he doesn't believe in wasting much time on trying to please very hard to please customers. He was very focussed on the targets set for the month for all his teams. He tries to instill in his teams (executives and managers) the idea of always being ahead in the race of hard core selling and also put it into practice by working hard himself. He was also very smart at closing sales with institutional buyers thereby bring in a lot of sales in terms of volume for the firm. Seeing George's potential, Gaurav always tried to provide enough scope to explore the potential of bis customers on his own. Inspite of all this, Gaurav was a little worried about George's attitude towards those Area and Regional Managers who made efforts to sell to small customers. Even though he had heard rumours about George's belittling attitude towards few of such Regional Managers, he had ignored them because of George's performance.
However, from 2000 onwards, the recession world over was having its impact on the Indian IT industry. This slack also affected Victor Computer Systems in business with a noticeable dip in corporate customers demand for its products. The company also had redesigned its marketing strategies and reallocated its targets to its marketing teams. But keeping in mind George's obsession for big customers and a person of strong likes and dislikes, Gaurav thought it right to bring up this matter with the Vice President, Hari lyer. After hearing Gaurav, Hari was in a dilemma because he knew people like George were always in demand and chased by head hunters.
Questions :
(a) Which aspects of goal setting model have gone wrong in George's case ?
(b) What strategy should be adopted by Gaurav and Hari to motivate George ?
(c) Suggest how you would chann elize the social processes to avoid attitude problems.
Ms-21 june 2009
MS-21 June, 2009
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Describe any two models of group development and discuss how group effectiveness could be improved.
2. What is Perception ? Discuss the implications of Perception in organis ational functioning. Illustrate with examples.
3. Describe the importance of Behaviour Modification in organizations and briefly discuss the importance of ethics in behaviour modification.
4. How are organisations also political entities ? Discuss how political behaviour is inevitable in organisations ? Illustrate with examples.
5. Write short notes on any three of the following :
(a) Emotional intelligence.
(b) Work ethics.
© Importance of counselling.
(d) Corporate culture.
e) Role of Punishment in learning.
Ms-21 june 2010
MS-21 June, 2010
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Describe power dynamics in an organisation and explain how power can be used ethically ? Cite examples.
2. Discuss the process and management of ethical counselling in organisation set ups. Illustrate with a suitable example.
3. Describe any one approach to conflict process and discuss various conflict Management styles and their relevance citing suitable examples.
4. What is perception and discuss the common errors in perception and how it can be overcome with reference to organisational processes ?
5. Write short notes on any three of the following :
a) Porter and Lawler's Model of Motivation
b) Corporate Governance
c) Emotional intelligence
d) Formal communication channels
(e) Groups vs Teams
6. Read the following case carefully and answer the questions given at the end :
Mr. Venkat Raman joined Southern Fertilizers Manufacturing Company in January
1987 as a Junior Operator Trainee. Within the non-executive category, the company had five levels from P1 (the lowest grade) to P5 (the highest grade). Raman joined at P2 level. After training, he was absorbed in the Ammonium Sulphate Shop as a Junior Operator. He rose up to the level of P4 in December 1991 because of his sincere and hard work. All through these years, he kept away from union activities. He never refused or avoided any job. Very often his officers used to ask him to do additional jobs which he did willingly.
Gradually Raman became a handy man for all sundry assignments which others might have refused. Since February 1992, Raman was regularly asked to perform certain duties which were actually to be done by a P5 level operator as the post in the higher grade was vacant. However, as per the company's rules, Raman was not eligible for promotion to the higher grade at that time.
Gradually, Raman started performing all the duties attached to the higher post. About this
time, Raman started taking interest in union activities. On August 8, 1993 Raman was instructed by his superior to stop one agitator pump and start another one. He was also asked to normalise the operation of the sulphate drier. Later his boss alleged that he did not attend to these jobs and neglected his normal inspection duty as a result of which tar got settled in a tank which was to remain free of tar. On August 12, Raman was instructed to attend to the breakdown of discharge feeder chain and conveyor. Later his superior alleged that he did not do this job. On both these days, Raman did not fill the
section's log book which was a part of his normal duty. On August 25, a show-cause notice was served on Raman demanding explanation within 48 hours as to why disciplinary action should not be taken against him. He replied on August 29, denying the allegations and stating that the management had fabricated the charges. As per the company's rules, he was charge-sheeted on October 18, for (a) neglect of duty, and (b) willful insubordination and disobedience of the lawful and reasonable orders of his superiors. Raman replied on October 25, denying all the charges and requesting the management to withdraw the charges immediately. Thereafter, an Enquiry Committee consisting of an officer from the Ammonium Nitrate Department and an officer from the Personnel Department was set up to look into the charges. Raman was given an opportunity to produce evidence on his behalf and defend himself. The committee held 20 sittings and throughout the proceedings, Raman denied the allegations levelled against him and asserted that his boss was prejudiced against him because of his union activities.
In April 1995, the enquiry committee brought out the following points in its findings.
A) There was a provision in the company for paying acting allowance to those operators who acted in the higher grade temporarily for more than three months. It appeared that Raman had been demanding the acting allowance, but due to some procedural problems, he was not paid.
B) It could not be proved beyond doubt that the instructions were given to him and that he did not abide by the instructions given to him on August 8, 1993. On August 8, 1993,
C) Raman deliberately neglected his normal inspection duty resulting in the deposit of tar in the tank. The loss to the company was, however, insignificant.
D) Raman did not attend to the breakdown on August 12, 1993 as instructed by his boss.
E) Raman did not fill the section's log book on August 8 and 12, 1993 as was expected of him.
Questions :
i) Critically explain the change in Raman's behaviour.
ii) What would you have done if you were his immediate boss ?
iii) Do you feel that recurrence of such cases can be avoided by improving the motivational climate of the organisation ?
iv) What steps would you initiate as Chief Executive of the company ?
Ms-21 june 2011
MS-21 June, 2011
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Briefly discuss the role of Manager with reference to paradigm shift in the present day business context.
2. What is perception ? Discuss the role of perception in organisations. How can errors in perception be overcome ? Justify your answer with suitable examples.
3. Describe the importance of Behaviour Modification in organisations. Briefly discuss the role of ethics in Behaviour Modification.
4. What are the various sources of conflict ? Explain any two Conflict Management styles and their relevance in an organizational set up.
5. Write short notes on any three of the following :
(a) Learning Organisations
(b) Barriers to Communication
(c) McClelland's Achievement Motivation Theory.
(d) Work Ethics
(e) Groups vs Teams
6. Read the following case carefully and answer the questions given at the end :
The lyer group of Hotels, Chief Manager Ashish (Bangalore Branch) was facing a unique problem. Inspite of being recognised as 'A Chain of Hotels which can he trusted for its excellent service delivery'. One of the main problems faced by its Bangalore branch was a high turnover of its housekeeping staff, since the past one year, which
led to its existing clientele's dissatisfaction. Two to three of the hotel's esteemed existing customers had made it a point to make a note of this in the customers suggestion book. Ashish realised that it was imperative to reduce if not stop the housing staff turnover as this apart from causing customer dissatisfaction was adversely affecting the hotel's overall performance. Ashish had a meeting with the housekeeping managers and the housekeeping executives and it was decided that a new reinforcement system would be effective from the following month when the housekeeping staff would get an additional bonus of Rs. 500/- every month, provided the employee had 100 percent attendance and a performance rating of above 90 per cent. Over and above, the first ten of best housekeeping as identified by the housekeeping manager, would be allowed to undergo training at the hotel's in- house centre of learning and development. Ashish had thought the above reinforcement system would be more effective since it would take care of the otherwise incurring costs involved in hiring new housing staff - the price to be paid for losing experienced housing personnel.
The housekeeping tasks were separated into vacuum cleaning, dusting, changing sheets,
changing water and flowers in the room etc. The managers (or supervisors) were asked to observe the housekeeping staff's behaviour while they performed their tasks and then forward the names of the best performers for the training programme. At the end of six months Ashish was surprised to see that the housing staff turnover remained the same at 40 per cent. A meeting with the housekeeping managers did not get anywhere because the reasons cited by them (those leaving the firm) were mentioned as 'personal reasons'.
One day when Ashish was on his way to greet a good old customer of the hotel, overheard a (chanced) conversation between two housekeeping staff Sagar and Vinay.
Sagar - "Our HM (House Manager) Maya madam had promised me that if my performance improves she would recommend my name for the training programme, but this time once again she has recommended the name of Trivedi - another sloppy worker".
Vinay - "Biswas Sir, my HM has said that he is happy with my cent per cent attendance and 92% (on an average) performance rating since the last three months, but he says that the bonus although promised monthly, will be paid as a single consolidated amount every six months, due to the accounting problems."
Questions for Discussion
(a) Was the contingency of positive reinforcement suggested by Ashish proper in the above context ?
(b) How do you feel the schedule of reinforcement can be modified to improve employee performance ?
(c) What reinforcement should be provided for changing the behaviour of the housekeeping managers in the above case ?
Ms-21 dec 2007
MS-21 Dec, 2007
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Identify the reasons for growing importance of values in an organisation. Discuss impact of Globalisation on value systems in the organisations.
2. Describe Herzberg's Motivation and their context. and McClelland's theories of relevance in today's organisational
3. Discuss the importance of Behaviour Modification in organisations and describe the format which is required for industrial behaviour modification.
4. What is the contribution of team roles as an approach to work ? Are they better than individual approach ? Justify.
5. Write short not€s on any three of the following :
(a) Communication networks
(b) Dynamics of power
(c) Perceptual errors
(d) Knowledge management
(e) Emotional intelligence
6. Read the following case carefully and answer the questions given at the end :
For over a year now, Sandeep, the CEO of consulting firm Market Movers (MM) had been trying to inculcate a deep involvement with the customer as a way. of life at MM. But no matter what, their involvement seemed to only skim the surface. of course, the teams worked very. diligently, but sandeep always felt that there Are something missing in their approach. He had tried many models and methods; but after a grand start full of enthusiasm and effectiveness, somehow the momentum would be lost.
The incidents kept coming to his mind as if to remind him to find the elusive 'something'. what had triggered his thinking today was an angry exchange between him and Vinay Chabra the previous evening over what Sandeep felt was inability to look beyond the nose. Keya Sircar, his associate director, had been surprised over what she called'loss of decorum'. "A little loss of decorum is good," Sandeep had said later. "lt allows you to go beyond the ordinary. And I don't want the ordinary ! we are working with minds and the mind is such that it can create just
as well as it can destroy as it can go into a state of inactivity. But because the mind controls when you are not in control. I admonish to demand commitment to their innate creativity. it's a reminder of what they truly are passionate people who
must control the mind's meanderings from the focus." Sandeep was aware of the potential creativity of his team. I3ut what nullified his efforts was the gap between
ideas and execution. When they brainstormed, bright ideas emerged. But after this, there was a virtual paralysis : the ideas did not lead to performance. Rather, the passion in the performance did not match the passion in the ideas, so was there a breach opening up between lnspiration and motivation ? At MM, there was no performance bonus. Sandeep's view was : "Perform we will; that's what we are here for. If I give you rewards for performing, you will only perform. But we will reward creative observation." Sandeep did not believe in motivation' It led to performaocg doing an act which had to be done -but not to creativity. This then was the substance of his appeal for passion. Motivation presunred the existence of knowledge that had to be turned into action, execution and application. So he sai'd : "knowledge + motivation : activity or event". But the event itself was a tried and tested one. Therefore, motivation was only a means to deliver the desired results. But the business they were in could not operate from known past outcomes any more. Today's businesses demanded all-new, outstanding outcomes. That originality and uniqueness was possible only if there was passion to go beyond known 'knowledge' and trained abilities. What he called passion for creativity, ngt mere productivity. "Anyone can produce based on another's template and ideas. But to be the template generator, that's originality." Keya said , ''This, radical approach is not conducive for our kind of timeframes !" Sandeep said :
"in consulting, the cutting edge is innovation. The tried and tested consulting model of doing process reviews and model-building will wither away because the faith in
models is dying. Innovation can happen only if the people involved have a passion for it. The key differentiator between businesses that succeed and those that fail is passion. The moment there is a mismatch between personal passion and the product line, it fails to work."
Questions :
(a) Does motivation help in raising performance only. Or it also inspires creativity and innovativeness among employees ?
(b) Why is Sandeep's approach o{ niotivation not suitable ?
(c) Does Organisation need a team of highly motivated employees to succeed ? Give reasons.
Ms-21 dec 2008
MS-21 Dec, 2008
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Describe briefly the salient features of counseling in organizations. Discuss the possible outcomes of counselling.
2. Explain briefly the Behaviourist and Cognitive approaches to learning and their relevance in organizations.
3. How do groups form ? What are the conditions for enhancing group effectiveness.
4. What are the characteristics of a Learning Organization and explain how a learning organization differs from a Traditional Organisation.
5. Write short notes on any three of. the following
(a) Power vs. Authority
(b) Emotional Intelligence
(c) Political Implications
(d) Corporate Governance
(e) Transaction Analysis
6. Read the case gizten belozo and anszoer the questions given at the end.
Mr. Subash works at the headquarters of a multinational Motorbike company. His task was to process warranty claims and advice service engineers working in the field with distributors throughout the world. Then Mr. Subash heard of an opening for a field engineer in this company itself. As a first step, Mr. Subash approached his immediate superior Mr. Manohar and asked to be considered for the post. He was told to mind his present job sincerely with an assurance that his request would be considered.later on. After sometime while Mr. Manohar was on a business trip, Subash approached Ms. Sarala, the Service Manager for international operations, who was of course the boss of Mr. Manohar. During the discussion, Ms. Sarala, who favoured promoting young talents from within the company realized that Mr. Subash was well qualified for the position of a field engineer. Ms. Sarala promised to talk to Mr. Manohar after his return from the trip. One week later, Mr. Manohar called Subash to his room and said, "I learnt you have talked to Ms. Sarala while I was away about the position of field engineer. I would not like you to be shifted at this moment, as very recently we have switched over to a computerised claim-processing system and I need your services because you have the broadest experience among all the seven persons working under me on this project." Subash was shocked to see the logic as to why he should not seek for promotion and why should he not be considered for the same, as he fulfils all the eligibitity criteria for being appointed as a field engineer. He was not able to justify the stand taken by his superior as he should be punished for being the most experienced person in the group. Two weeks later, a field engineer was appointed from outside the organisation with almost identical qualifications but with a little more experience. Subash was wondering what he should do next.
Questions:
l. Identify the problem in the case. What would be your next step, if you were Subash ?
2. How would you react to this development, if you were the CEO of the organisation and it was done wlth/ without your consent/knowledge ?
3. How do you perceive the role of Mr. Manohar and other superiors as Managers ? Do you think it may lead to any organisational problem ? If yes, why ?
4. Do you see this development as a solitary case or a happening which may have its bearing on the overall work culture of the organization
Ms-21 dec 2009
MS-21 Dec, 2009
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1. Describe Maslow's need hierarchy theory and it's relevance in the present day organizational context.
2. Describe Johari window model in enhancing interpersonal relations.
3.Discuss the importance of organisational culture and how it contributes to organisational success.
4. What are the barriers to effective communication and how to overcome them. Give examples.
5. Write short notes on any three of the following :
a) Learning organisations
b) Counselling
c) Groups vs teams
d) Emotional intelligence
(e) Conflict resolution
6. Read the following case carefully and answer the questions given at the end :
Arun joins 'ZAPTO' chain of casual wear stores as a sales representative, immediately after the completion of graduation and a diploma in sales management. The firm was very happy with his extremely good performance. Arun was awarded the 'Star Performer Prize' for his continuous display of the highest sales volume record for 12 consecutive months. The General Manager of 'ZAPTO' chain of stores, Rajkumar, was informed by his Marketing Manager, Madhuraj, that Arun was a very aggressive and dynamic sales representative having a strong target commitment and orientation. Within a span of two years, based on his good performance appraisal, Arun was promoted to the position of Assistant Marketing Manager. Under his new assignment, Arun had 8 sales representatives reporting to him and also to ensure that the sales target of his shop was met. Arun took to his new promoted assignments with the same zeal and enthusiasm. Arun now set the targets to be met by his team members for the first month and communicated the same, clearly indicating that all the team members have to meet the target without fail. The eight team members (sales representatives) felt that the targets set were too ambitious but declined to comment on it directly. After the meeting, during an informal chat all the team members discussed the matter amongst themselves and then dispersed. Arun called for a review meeting at the end of a fortnight to take stock of the situation and was shocked and disappointed to learn that all the representatives were well behind the target set for them. Arun could not control his disappointment and openly and bluntly condemned them for not reaching the target. He once again reiterated that he expected all his team members to achieve their targets by the end of the month. After the meeting, the team members amongst themselves admitted that they found Arun to be a difficult person with an unapproachable mind-set. However, they also decided to give in their best efforts to achieve the targets assigned to them. But even with their sustained efforts they could achieve only 70 per cent of the target set by Arun, by the end of the
month. At the end of the month, when Arun reviewed the sales statements of his team, he was disappointed though slightly happy with the marginal improved efforts of his team. However, in the meeting instead of praising and encouraging his team's efforts, Arun communicated his displeasure and once again was emphatic and told his team that lack of
commitment from them was stopping them from attaining their target, so they had to try hard once again. This outburst was not liked by his team. And in the next month-end briefing, Arun was greeted with well below the target set. Arun now openly rebuked his sales representatives team, for their slow performance and refused to accept that he had set too high targets for his team. Ultimately, the team members met their Marketing Manager, Madhuraj and conveyed everything to him. Madhuraj was shocked but promised to talk to Arun.
Questions for discussion :
a) In the above case, what are the problems affecting the team's effectiveness and performance ?
b) Do you feel Madhuraj should modify team members roles before talking to Arun ?
(c) Can you suggest ways by which Arun can be developed as good team leader ?
Ms-21 dec 2010
MS-21 Dec, 2010
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
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Ms-21 dec 2011
MS-21 Dec, 2011
MS-21 : SOCIAL PROCESSES AND BEHAVIOURAL ISSUES
1.Describe the growing importance of Teams in today's business scenario. Discuss the processes involved in building effective Teams.
2. Discuss any two theories of motivation and their usefulness in organisation cite suitable examples.
3. Define and describe communication channels. Discuss with examples how effectively they can be used in organisations.
4. What is work culture ? Explain various attributes of work culture. Briefly discuss the measures to be undertaken for developing work culture.
5. Write short notes on any three of the following :
(a) Work ethics
(b) Group cohesiveness
(c) Ethical issues in counselling in organisations
(d) Halo effect
(e) Emotional intelligence.
6. Read the following case carefully and answer the questions given at the end.
Case Incident : I can't take it any more! Sonia was the head of the marketing services
division at the Triumph Management Group Head office based in Bangalore. On face it appeared Sonia was very lucky as she had it all - a high profile job with a big company, high pay along with stock options, a likeable enthusiastic team of co-workers. On the personal front Sonia's husband was a senior financial specialist with a multinational firm and they had a daughter who was going to a reputed school with a good housekeeper to look after the daughter and home.
On the job front, Sonia was liked not only by her colleagues but by her subordinates as well as her superiors for her total commitment to the task assigned to her, communication abilities and pleasant personality. The board of the Triumph Management Group were deliberating on the merging of this company with their sister concern Trident Value Group so as to gain strategic competence. After this decision was tentatively communicated there seemed to be visible certain working conditions leading to manager's level of perceived stress. The most stressful organisational change events were the frequent changes in instructions, policies and procedures, facing unexpected crises and deadlines and sudden increase in the activity level or pace of work. Sonia realised that stress was affecting her team's performance because many of her
managers complained about work overload, absence of a proper feedback and only
communication was received when performance was found to be unsatisfactory, along with role conflict and ambiguity. Sonia, at her level tried to address these issues by frankly telling her subordinates that the management had not given clear guidelines on how the organisational changes were going to affect this firm's employees. So till such instructions were received, they (employees) continue to work as per the current requirement. She also advised them to do regular physical exercise and ensure a proper intake of balanced diet so as to reduce stress. Very soon Sonia also started feeling that
stress was affecting her performance. She recalled the turn of events after receiving oral information on the managements decision to elevate her to the post of Vice President (marketing). She had made two presentations of two important issues to the board during the past 11/2 months. And they were reasonably good based on the feedback received from her superior. Sonia remembered that at the time of the presentation though 'keyed up', her presentation had revealed a lot of enthusiasm, energy and confidence. She had been able to answer almost all the questions put forward to
her by the board members. But after the presentations, Sonia started feelling that at the work place, her schedule was dominated by one crisis after another. On most of
the days when she came home it was very late, giving her hardly any time to talk and play with her daughter or talk to her husband. Many of her work days started at 7 a.m. and continued till almost 10 p.m. She longed for quality time specially to be with her family and also pursue her passion of playing the 'Veena', her favourite musical instrument. Finally one fine day Sonia presented her resignation letter to her superior quoting "personal reasons" as the reason for leaving.
Questions for Discussion
1. Identify the causes of stress at the individual level (for Sonia), and the general work stressors in the above case.
2. What methods of stress management would you suggest to the organisation in the above case, to reduce stress at the individual employee level and organisational level ?
Ms-11 june 2007
MS-11 June, 2007
MS-11 : STRATEGIC MANAGEMENT
l. Why do firms need to have specific set of objectives ? Do objectives form an integral part of Strategic Management ? Critically evaluate the importance of objectives taking into consideration any organisation of your choice. .
2. Briefly discuss McKinsey's 7-S framework. Explain as to how PESTEL grid can be used to understand the role of McKinsey's 7-S framework.
3. Explain the concept of l;ocus as a business level strategy. What are the variants of focus strategy ? discuss the advantages and risks involved. Explain using an example from the automobile sector.
4. What are the factors, which conlribute to successful strategic alliances ? Explain each of them briefly. Give some examples of successful strategic alliances.
5. Do you think that functional strategies are important for a business organization ? Bring out these strategies for all the functional areas of a business organization .
6. Read the following case and answer the questions given at the end
A BRIEFCASE CASE
The time is 8.55 in the morning. Mr. Mehta of Vishala Printers, a division of ABC, has called a meeting of his senior managers at 10.00 . a.m. to discuss a situation. tsy 2.00 p.m. the firm has to submit its bid to its major customer CIMC in a sealed envelope. All the quotations received till the deadline will be opened in front of those present at 3.00 p.m. As he sits in his car, Mr. Mehta is not panicky, but is in a reflective mood
THE HISTORY
The Firm
Associated Business Corporation (ABC) is a diversified, ffiulti-divisional company having business presence in capital-industrial products, consumer durables, and services industries. Through use of strategic planning tools, the company has successfully evolved a strategy of high-specialization and differentiation for its products.
Combined with the company's philosophy of high-ethic practices, the firm has established for itself a reputation for high quality products in each of its three businesses.
Customers perceive the firm and its products as extremely reliable and which give full value for money. As such they readily pay higher prices charged by the company. All the three businesses have an equal prominence in the firm's business portfolio in terms of contribution to sales and net profits and each business unit has a healthy rivalry with the other units for superior results each year.
THE BACKGROUND
The Printing Division
Vishala Printers is a division of Associated Business Corporalion, which specializes in publishing of scientific journals, annual reports and business catalogues. the firm
has a most modern laser printing and computer type-setting unit . It takes pride in the amount it invests (approx. 10 percent of ils annual sales) in maintaining its technological leadership through continuous development of employee skills and purchase of latest computer hardware and soflware. the Chief Executive of this division, Vipul Mehta,: 38 years of age, is a cofounder of ABC, He is a professionally qualified engineer and MBA from one of the premier management institutes of the country. He takes personal care that each and every product that comes out from the Printing Division is impeccable in quality. He started the venture in partnership with lwo other people, after having worked for 3 years in a multinational company in India. Over the past few years, lhe firm has shown consistent pattern in rate of growth and profitability. The market-to-book ratio has usually been above 5 for the previous three years.
A DILEMMA
Central India Manufacturing Corporation (CIMC) One of Vishala Printers' major customers is Central India Manufacturing Corporation. CIMC is a high-profile public sector unit manufacturing strategic goods for the country. It is one of the few PSUs making consistent profits. The yearly volume of business that CIMC
provides to Vishala Printers is roughly 20 percent of.the latter's annual turnover. CIMC's top management regularly publishes performance reports, catalogues, brochures, periodicals, field survey reports, etc., some of which are sent at the highest levels of Government of India including the Prime Minister and concerned Cabinet minister. Of late, some competitors of Vishala Printers who were doing day.to-duy printing jobs in which quality requirements are not stringent, have beeq pressing the
Finance and Accounts (F/A) people in CIMC to do something' so that they could also get a share in the seemingly high-margin quality jobs. These are the jobs which presently Vishala Printers undertakes for CIMC. These printers had also developed personal contacts with some influential persons in the organization. Some
officers and staff from the f / A and stores offices had earlier visited Mr. Mehta and tried to negotiate with him an understanding so that the obligation could become 'mutual'. they had also dropped suitable arm-twisting hints that 'although
we could have done so, we have never delayed your payments or made any adverse comments on the bills presented for payment'. Mr. Mehta had clearly instructed his staff not to encourage such
activities or dealings, and hence the F/A people were politecly refused.
The Decision Problem
Recently, the stores department of CIMC has taken a policy decision that all printing jobs will be awarded to one firm on a yearly contract basis. The acceptance of the tender and final award will be based purely on lowest rates offered. the rates, once accepted, will be valid for a period of one year and remain frozen till the end of the period. Mr. Mehta feels lhis is a trick devised by some
vested interests in the F / A and stores sections in connivance with other printers to eliminate his organization from future contracts with CIMC. It is universally known that the rates charged by Vishala Printers are as much as 40 -50 percent higher than the other'local' printers. Mr. Mehta justifies the difference saying, 'despite the apparently high differential in rates, the net margins for us are only about 15 - 18 percent on the quoted price. Our competitors in their ignorance do not realize the additional fixed and variable costs that we incur and also the extent' of expertise involved.' Mr. Mehta feels that his rates are extremely reasonable and fair and any downward price revision will not justify the amount of his personal and organizational expertise and investments made in executing high-quality printing work.
With the consolidation of all printing work on a yearly basis, even the director of CIMC would not be able to use his discretionary powers to award orders to Vishala Printers as the value of one single contract will far exceed his authority. Till the new policy, the director was using his discretionary authority, for ,!u prestigious and time-bound jobs. Another usual practice had been to form purchase-committees for 'important jobs. The purchase-committee chairman could place orders directly on the firm on the basis of recommendations of the job-committee.
The committee took decisions taking into consideration several other factors such as the nature of job, its purpose, timeliness of delivery, quality of workmanship required, which, in turn, depended upon the skills and resources that the printcr had, past experience of the printer in undertaking similar jobs, etc.
The committee members even visited the printer premises to make an on-the-spot assessrnent. Now this would also not be possible as under the new rules all printing orders were to be given only on the lowest quotation basis. According to Mr. Mehta, 'the work involves lot of value-addition particularly in respect of intangibles, and these additions cannot be neatly quantified for the purpose of calculating and evaluating the rates offered by different competitors. the top management and scientists of CIMC know that nobody else can provide the kind of service required, yet they cannot put this down on paper.'
The Case for Vishala Printers
One senior executive of CIMC made this comment on the quality provided by Vishala Printers : "Previously, we had to run around the printers and chase them for
getting the job done. the proofs usually got delayed and once they were received, carried many mistakes. The superscript and subscript notations and mathematical equations used in our scientific papers particularly were never done properly even after we corrected the proofs. the aesthetic appeal of the catalogue or report would
,always give impressions of shoddiness and corner cutting. I cannot say exactly why the final product was never up to the mark, but causes probably lay in a combination of factors such as the quality of inks used, the layout perspective of the designers employed by the presses, the quality of skills of the machine-men operating the offsets, or God knows what Now since Vishala Printers started doing our prestigious jclbs, all our problems seem to have been taken care of. It is they who chase us for expediting the proof reading and return.
Their usual practice is to sit with us and understand every detail of the job before commencing work. As customers, we were first uncomfortable with this attitude from a supplier but then understood that ultimately we are the beneficiaries in terms of a superior product, , timely delivery, and sustained commitment. This keeps everybody on the toes. You know what, once they even refused to go ahead with our job because our man failed to deliver the proofs for two days, and were ready to bear as losses, all the costs that they had incurred till then on the work. They often improve upon the grammar of the sentences. I am not a technical man but the scientists admit that errors of scientific and technical notations (otherwise hard to detect) which inadvertently ueep in the original typed manuscript get corrected at Vishala. Probably, Mr. Mehta's engineering and rnanagement background' is the reason behind this. We even got the appreciation for improved quality and presentation of our reports from our top boss the Secretary in the ministry. With this new rule about annual rate contract being introduced, I do not know how we will tackle a new printer. "
Questions :
(a) What is the basic problem of CIMC ? How can it be overcome ?
(b) Do you think that the rationale behind opening a printing division was good ? Justify your answer, using the knowledge of Strategic Management.
