Final Case 2 [PDF]

Citation preview

1



BUSINESS CASE ANALYSIS Subject code -576122-(76) submitted to



CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSITY BHILAI (C.G.), India In fulfillment For the award of the Degree of Master of business Administration Submitted By Group no. 5 Dishi Patel DivyaDawdaHarshitajain Roll no. 13 Roll no. 14 Roll No. 15 Under the Guidance of Mr. Abhishek Assistant Professor, Department of Master of Business Administration B.I.T., Durg Department of Management, Bhilai institute of Technology Bhilai House Durg-491001,(C.G)



Session: 2017-2019



2



INDEX



CASE TITLE 1.MR. VICE 1.1 Executive summary CHANCELLOR NEEDS LEARNING THROUGH DOINGS 1.2 Statement of problem 1.3 Cause of problem 1.4 conclusion 2-WHAT RIDES 2.1 Executive summary OVER PROFIT OR ETHICS 2.2 Statement of problem 2.3Cause of probloem 2.4 conclusion 2.5 sourcing



PAGE NO.



3



Executive summary



Nagesh Iron and Steel Company Ltd. was established by Nagesh Samuel in the year 1980 with its head office at Delhi. The company was established in 400 acre of land at Bilaspur in MP in which four plants were situated viz. Sponge Iron, Powerhouse, Furnace and Rolling Mill. The project cost was around Rs.650 crore and annual turnover was around 1000 crore and the company was recognized as a profit making unit. The workforce was 3000 in number, out of which, 1200 workers were on the company’s pay roll while remaining were affiliated to INTUC. Headed by the chairman and managing director, Nagesh Samuel. He used to operate from Delhi and was supported by the president and other three VPs in the field of finance, marketing and technical fields respectively. The CMD was 42 yrs of age and a religious, dynamic person who believed in quick decision making with an autocratic style of leadership. The market for Nagesh Iron and Steel Company Ltd. was exclusively on the domestic front however, it had to face competition from Jindal, Nova and Special Steels. The relationship between management and the union was bitter since the beginning. The CMD was directly involved in day to day activities and the president reported directly to the CMD. On Dec. 2, 1996, the President of the unit was shocked upon receiving a fax from CMD stating that the listed 12 employees including the GM, Quality control and other officers were to be sacked with immediate effect on the ground of lack of confidence. A meeting was called immediately by the president which was attended by VP (Comm. &Admn.) VP (Technical) Manager (R & A) HR Manager. After long discussion, every member was of the opinion of terminating the officers and managers, gradually in phases, because immediate termination would have resulted in bad consequences on the company. Opinion was conveyed to the CMD. However, the CMD did not agree with the opinion. Arnab Ray and others met the union leaders the same evening. on December 3, 1996, at 6.30 A.M., all workers at the behest of the union went on strike. Workers from all the four plants came out of the factory to the main gate and even workers form night shifts were not allowed to start their machines. With the result half of the plat was running without attendant and the remaining plant was closed at 8.30 A.M. The staff members also formed the union and got associated with labour union and revised charter of demand.



4



Police was called in for maintaining law and order situation and for the protection of executives. six managers stood by the management and they were gheraoed and locked for twenty four hours inside the plant without food and water. Consultants and advocates and a strike was declared illegal by the labour court and the same was published in the newspaper. Since CMD started direct dialogue with the union, the local management became powerless and the union stopped listening and interacting with them. Strike had started in the first week of the month and salary could not be distributed therefore, restlessness could be observed among the workers and management reached to a conclusion that strike might be called off within a day or two and this was communicated to the CMD also but the CMD didn’t succumb to the advise given by the management as he was facing financial loss costing Rs. 300 – 400 crores and on December 9, 1996 he himself reinstated all the sacked employees and bowed down before the union and accepted the charter of demand. In the next six months the president called back to the Delhi office, HR Manager and VP (Technical) resigned and VP (Commercial & Administration) was transferred to another unit at Jabalpur.



Statement of problem



1) Nepotism In the Nagesh Iron and Steel Company Ltd , nepotism was encouraged by giving chance to relative of Nagesh Samuel by him only. Senior level officer was recureited on the basi of nepotism i.e based on favour granted to relatives in various fiels , and other activities.



2) Autocratic style of leadership In the organisation the autocratic syle of leadership was followed by chairman and managing director i.e byNagesh Samuel. a) Only one way communication was there. b) There was no feedback system. c) That leads to mis-understandings and communication backgrounds.



5



d) There was erxistence of own decision making power e) CMD fails to develop worker`s commitment to the objective of organisations. f) Due to CMD behaviour problems created related to employee`s morale and production in the long run ; due to their resentment. g) Unsuitable condition was there because workforce was knowledgeable about their jobs which calls for cooperative spirit.



3) Bitter Relationships Bitter Relationships between union and management since the beginning which affected the productivity of company.



4) No role of local management No role of local management was there.so union didn’t listen or obeyed the local management. 5) Control of activities by CMD AlL the daily basis activities was controlled by nagesh Samuel the chair only which was the highest post of the organisation due to this the local management was not in function with union members. 6) No Interaction Lack of ineraction was their between the general manager and president CMD and work employees. 7) Strikes – a wrong way Srikes for minor demands by working employees to the organisations without the channel means without concerning local level management approached or appealed directly to the seniors. 8) CMD Obsitatiness behaviour Means not to listen to any one as he may be correct or uncorrect at that time , never followed their subordinates suggestions.



6



9) Huge loss Due to loss of 300-400 crores in the business it compulsated the CMD to take decision to sack out 12 employees.



10) Unethical practices To solve any problem one has to talk to its just higher level of management but not to the chairperson directly.



11) No remuneration No salary could be distributed to toworkers because strike was started in the first week of the month only. 12) Lack of Superior – subordinate realationship There was no discussion or meeting was held out between the union members and management.



CAUSE OF PROBLEM



In the Nagesh Iron and Steel Company Ltd , Only one way communication was there.There was no feedback system.That leads to mis-understandings and communication backgrounds.There was erxistence of own decision making powerCMD fails to develop worker`s commitment to the objective of organisations.Due to CMD behaviour problems created related to employee`s morale and production in the long run ; due to their resentment.Unsuitable condition was there because workforce was knowledgeable about their jobs which calls for cooperative spirit. Means not to listen to any one as he may be correct or uncorrect at that time , never followed their subordinates suggestions. Lack of ineraction was their between the general manager and president CMD and work employees.Srikes for minor demands by working employees to the organisations without the channel means without concerning local level management



7



approached or appealed directly to the seniors,All the daily basis activities was controlled by nagesh Samuel the chair only which was the highest post of the organisation due to this the local management was not in function with union members. Senior level officer was recureited on the basi of nepotism i.e based on favour granted to relatives in various fiels , and other activitiesnepotism was encouraged by giving chance to relative of Nagesh Samuel by him only.



To solve any problem one has to talk to its just higher level of management but not to the chairperson directly.No salary could be distributed to toworkers because strike was started in the first week of the month only. There was no discussion or meeting was held out between the union members and management.and lack of superior subordinate relationships.



Decision criteria and Alternative solutions Firstly , superior –subordinate relation should be strong between all types or level of managments. So , that no break in channels of managementand ultimately much better cccordination. Secondly, there should be non – practice of nepotism all worker and employees should be recruitedaccording to their skills , abilities and knowledge but not on the basis of nepotism. Third, strong and orderwise communication should be there in the organisation it helps to maintain better relationships. Fouth, there should control of the company in the hands of senior level only. Fifth,democratic leadership of style should be followed by the chairperson or MD. Sixth, no quick decision should be made without reffering pros and cons.



Recommendation solutions and implementation plan Nageshsameaul should follow democratic type of leadership which will lead to :



8



i) Better coordination. ii) Better communication. And also not favouring nepotism in the company which will help company to recover losses of 300-400 crores and to raise profits also as recruited members will be selected on the basis of his skills , knowledge and abilities and also specialisation . And instruction is to be followed by union workers and subordinates given by whether it be by top level management or local management which will result into storong relations. By appraising the performance of low level of management by chief executives its gives more motivation and belongingness towards the organisations. So automatically there will be more motivation higher produvtivity better relation and hence successful organisation.No need of taking quick decision and also there will be no need sackation or throwing out of employees due to losses.



Conclusion



Nagesh Samuel who was chairman and managing director as well , was 42 yrs of age and a religious, dynamic person who believed in quick decision making with an autocratic style of leadership and favoured nepotism and was obstinate in nature. The relationship between management and the union was bitter since the beginning. On Dec. 2, 1996 receiving a fax from CMD stating that the listed 12 employees including the GM, Quality control and other officers were to be sacked with immediate effect due to heavy losses about 300-400 crores. immediate termination would have resulted in badconsequences on the company and the process of agreement with the union might have taken a ugly shape.it boosts the workers to bycott and they started strike which resulted into lot of tension in company, heavy losses and lack of coordination . After police being called application made to labour court strike was over within a day and hence , CMD started direct dialogue with the union, the local management became powerless and the union stopped listening and interacting with them. And , he himself told that he could not recognise the advise given by the management as he was facing financial loss costing Rs. 300 – 400 crores and on December 9, 1996 he himself reinstated all the sacked employees and bowed down before the union and accepted the charter of demand.



I



9



Was the decision of CMD to terminate 12 employees right? No, the decisio of CMD\ to terminate of 12 employees is not right because the immediate termination would have resulted in bad consequence on the company and the process of agreement with the union has change through that strike had started in the first week of month could not be distributed so that CMD did not succumb to the advise given by the management as he facing financial loss



10



11



Q1. Was the decision of CMD to terminate 12 employees right? No, the decisio of CMD\ to terminate of 12 employees is not right because the immediate termination would have resulted in bad consequence on the company and the process of agreement with the union has change through that strike had started in the first week of month could not be distributed so that CMD did not succumb to the advise given by the management as he facing financial loss



. Q2 . Had you