MinI casE stUDiES...

ITC: Going Rural with e-Choupal

Abstract

The caselet explains the e-Choupal initiatives undertaken by ITC, a company engaged in the business of tobacco, paperboards & specialty papers, agri-business etc. The e-Choupal initiatives helped the company to streamline its supply chain. The company found that the investment that it made in the initiative can be recouped in one and a half years.

Issues:

» How a company used technology to bring about a change in the procurement side of the supply chain.
» The challenges faced by the company while implementing a technological change.
» Necessity of effective communication to stakeholders.

Introduction

ITC is one of India’s leading private sector companies with a market capitalisation of around US $ 4 billion and a turnover of US $ 2 billion. It has presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Branded Apparel, Packaged Foods & Confectionery, Greeting Cards and other FMCG products.




ITC believed that the profit margins were not as high as they could ideally have been. To a great extent, it was right. The company did not get the desired results due to several reasons - firstly, it did not have sufficient control over the supply chain of the agricultural produce.

For instance, in Madhya Pradesh, soya farmers were generally located at far flung villages scattered throughout the state....

Questions for Discussion:

1. ITC is one of India’s foremost private sector companies. It had been a highly successful company in almost all the industries it entered. Then why did it choose a radical initiative such as ‘e-choupal’?

2. What is ‘e-choupal’ initiative? And what problems did ITC face while implementing this initiative?
 
Reva Electric Car Company

Abstract

The caselet delves in to the journey undertaken by Reva Electric Car Company before they became one of the established leaders in the environment friendly car market. The caselet deals with the positioning of the car and how it used its unique pro-green image to promote its public relation activities. The caselet also explains the way in which the company went ahead with the implementation of dealer appointment and customer friendly schemes.

Issues:

» Using innovative customer-friendly schemes to generate customer loyalty.
» How a company used Public Relations as a marketing tool.
» Stages of launching a new product into the market.

Introduction

Reva Electric Car Company (RECC) was established in 1994 through a joint venture between the Maini Group and Amerigon. Amerigon helped RECC in building the chassis of Reva. The car uses electricity and was manufactured at RECC’s plants at Bommasandra in Bangalore.




The car’s key technologies included its steel frame, the energy management system and a motor controller. The motor controller was developed through a technical collaboration with Curtis, one of the world’s leading manufacturers of motor controller for electric vehicles...

Questions for Discussion:

1. RECC appears to have positioned Reva in the niche segment of two-wheeler owners graduating to a 4-wheeler. Do you agree with the company’s approach? What are the options and alternative strategies open to RECC to deal with the challenges?

2. RECC did not adopt any marketing or promotional strategies as the company felt that the cars should be sold without the help of advertisements. How is the company planning to sell its cars?
 
Evolution of Infosys

Abstract

The caselet looks into the creation of Infosys in 1981 and how Narayana Murthy and his team turned this small software development venture into one of the leading companies of the country. The caselet explains the strategies that Murthy adopted to make Infosys a globally recognized name in the information technology industry.

Issues:

» Factors that contributed to the success of Infosys.
» The role of leadership in making an organization successful.
» Role of alliances in facilitating an organization to build credibility in the market.

Introduction

In February 2001, Infosys Technologies Ltd. (Infosys) was voted as the best managed company in Asia in the Information Technology sector, by Euromoney’s Fifth Annual Survey of Best Managed Companies in Asia.




Infosys was started in 1981, with an equity capital of Rs.10,000 brought by seven professional entrepreneurs led by Narayana Murthy, Chairman and CEO of Infosys. By 2000, Infosys’ market capitalization reached Rs.11 billion. By 2001, Infosys was one of the biggest exporters of software from India.

From the beginning, Narayana Murthy focused on the world’s most challenging market - the US. He had two reasons for this. First, there was no market for software in India at the time. He believed that Indian software companies should export products in which they had a competitive advantage...

Questions for Discussion:

1. Infosys is one of the biggest exporters of software from India. Describe briefly, how Infosys reached this enviable position?

2. Narayana Murthy tried to position Infosys as a true global company. What are different features of the global strategy he used in this positioning effort?
 
Evolution of Infosys

Abstract

The caselet looks into the creation of Infosys in 1981 and how Narayana Murthy and his team turned this small software development venture into one of the leading companies of the country. The caselet explains the strategies that Murthy adopted to make Infosys a globally recognized name in the information technology industry.

Issues:

» Factors that contributed to the success of Infosys.
» The role of leadership in making an organization successful.
» Role of alliances in facilitating an organization to build credibility in the market.

Introduction

In February 2001, Infosys Technologies Ltd. (Infosys) was voted as the best managed company in Asia in the Information Technology sector, by Euromoney’s Fifth Annual Survey of Best Managed Companies in Asia.




Infosys was started in 1981, with an equity capital of Rs.10,000 brought by seven professional entrepreneurs led by Narayana Murthy, Chairman and CEO of Infosys. By 2000, Infosys’ market capitalization reached Rs.11 billion. By 2001, Infosys was one of the biggest exporters of software from India.

From the beginning, Narayana Murthy focused on the world’s most challenging market - the US. He had two reasons for this. First, there was no market for software in India at the time. He believed that Indian software companies should export products in which they had a competitive advantage...

Questions for Discussion:

1. Infosys is one of the biggest exporters of software from India. Describe briefly, how Infosys reached this enviable position?

2. Narayana Murthy tried to position Infosys as a true global company. What are different features of the global strategy he used in this positioning effort?
 
POM case study

Vivek and Nikhil are good friends.Both are young people, well qualified and well educated.Vivek is an engineer whereas Nikhil has an MBA in Finance.After working successfully in the corporate field for about 5 years, both of them decide to come together and set up a manufacturing business.

Please answer the foll. questions so as to enable Vivek and Nikhil to both set up and successfully operate their forthcoming business venture:-

a) What, according to you, should be (i)vision and (ii)mission of their business?

b) How best can Vivek and Nikhil attain "synergy" in their business?

c) What are the pitfalls that both of them should avoid to become sucessful businessmen?

d) Can you briefly attempt a SWOT analysis of their business venture.
 
EVM case study...

Pesticides and their harmful effects on agricultural lands are well-known.Recently the government has insisted upon creating awareness about sustainable development and identifying unsustainable practices and phasing them out from agricultural sector.

Questions:

1) As a district collector with responsibility for agricultural development prepare an action plan for spreading awareness and implementing plan for discontinuing the use of harmful pesticides and alternative methods.

2) What measures will you initiate to increase awareness on sustainable development?
 
LAW case study

X delivered to Y, a dry cleaner for dry cleaning and took the receipt . On the back of the receipt , certain conditions were printed in english language.One of the conditions printed on the back was "The liability of the dry cleaner company shall be limited to the 50% of the cost of the goods."X never looked at the back of the receipt. X's coat was lost and X claimed the actual value of the coat.

Discuss the legal position in each of the following cases:

Case (a): If there was nothing on the face of the receipt to draw attention to the conditions printed on the back side and X was a graduate in English.

Case (b): If on the face of the receipt , the words "see back" were printed in English but X did not read it.
 
case study:managerial economics

REAL WORLD:INDIAS GLOBAL COMPANIES AND THEIR OBJECTIVES

One of the most significant business and economic trends of the late 20th century is the rise of the "global" or "stateless" corporations.The trend toward global companies is unmistakable and is accelerating.

The sharpest weapon that a corp0oration can develop to survive and thrive, in the globalised marketplace, is competitiveness. Its cornerstone, as articulated by strategy guru Michael Porter, is its ability to create more value on a sustainable basis for the customer than its rivals can.
roshni bhatia: For the first time continental comparison has admitted an indian corporation to an exclusive club.The Rs. 9020 crore petrochemicals and textiles power house,Reliance industries, is ranked 9th in Asia and 1st in India.

The Rs. 1065.70 crore prime pharmaceuticals player, Ranbaxy, is ranked 11th in Asia and 2nd in the country.The Rs. 347 crore auto component Sundaram Fastners is ranked 16th in Asia and 3rd in the country.The Rs. 1012.80 crore denim and textiles star, Arvind Mills is ranked 19thin Asia and 4th in the country, and the Rs. 3454.10 crore two wheeler top gun, Bajaj Auto is ranked 20th in Asia and 5th in the country.

BAJAJ AUTO
Whatever product or service a company offers it must meet the customers wants in the most satisfactory manner.That should be tha aim of the company, not profits.Also one must customise the products to the needs of the market.

RELIANCE INDUSTRIES
The competitiveness of Reliance in the global marketplace comes from both quality and scale.The challenge is to remain atop the pyramid.That challenge is linked with productivity.Al thoguh Reliance is on a growth plan, its international competitors are not.

RANBAXY LABORATORIES
Ranbaxy's greatest strength lies in the fact that it is strongly backward integrated.This helps them manage costs across the entire value chain making the company extremely cost competitive.Cost leadership is a function of scale and technology.By upgrading technology, Ranbaxy will continue to be a cost leader.

SUNDARAM FASTNERS
In this company competitiveness is a continuous quest-it is not limited by time or efforts.A company has to continuously upgrade itselfon several parameters: production efficiency, product development, quality management and marketing skills.Sundaram has programmes to address all these parameters.

This competitiveness defined by its patron saint Micheal Porter as the sustained ability to generate more value for customers than the cost of creating that value is what will keep India's companies alive in the bitter battle for survival that they are waging even on their home turf with rivals pouring in from all corners of the globe.

Questions for discussion:
1.How important are these "global" corporations in thr growth of Indian economy?

2.Briefly describe the various companies whose examples are given in this text.

3.What is said about being "competitive" in this case study?
 
Samsung - The Making of a Global Brand

Abstract

The case explores Samsung’s brand building initiatives for transforming itself into a global brand. The company’s product initiatives and advertising campaigns for boosting its brand image worldwide are described in detail

Issues:

» The marketing strategies adopted by a Company aspiring to become a global brand.
» The factors that must be taken into account when a domestic company wants to undertake global brand building initiatives
» The role of advertising in brand building across the globe

Introduction

In 1997, Samsung launched its first corporate advertising campaign – Nobel Prize Series. This ad was aired in nine languages across Europe, Middle East, Latin America and CIS.




The advertisement showed a man (representing a Nobel Prize Laureate) passing through one scene to another and as the man passes through different scenes, Samsung products transform into more advanced models.

According to company sources, the idea was to give out message that Samsung uses Nobel Prize Laureates’ ideas for making its products. Samsung also signed an agreement with Nobel Prize foundation to sponsor Nobel Prize Series, worldwide.

The program was developed by Nobel Foundation, Sweden to spread achievements of the Nobel Prize Laureates. In 1999, Samsung unveiled a new campaign in the US with a new brand slogan – ‘Samsung DIGITall: Everyone’s invited’ on the eve of its 30th anniversary....

Questions for Discussion:

1. Narrate how the objective behind Samsung’s advertising campaigns shifted over a period of time?

2. Do you think its advertising campaign helped Samsung in positioning itself better in the market?
 
Air India - The Virgin Airways Saga

Abstract

The caselet deals with the code sharing agreement between Air India and Virgin Airways, the second biggest airlines in UK after British Airways. The arrangement was considered to be a significant development for the ailing Air India.

Issues:

» Why the code sharing arrangement between Air India and Virgin Airways did not yield the expected results.
» The advantages of tie-ups between major airline companies.

Introduction

In December 1999, India’s national carrier, Air India (A-I) signed an agreement with Virgin Atlantic Airways (VA) by which VA would fly three flights on the Delhi-London route on a code-sharing basis with A-I. A-I already had a code sharing arrangement with a number of foreign airlines.




These included Air France, Swiss Air, Bellview Airlines, Austrian Airlines, Asiana Airlines, Scandinavian Airlines, Singapore Airlines, Aeroflot, Air Mauritius, Kuwait Airways and Emirates.

Even VA had code-share agreements with Continental Airlines, Malaysian Airlines, and British Midland. In the late 1990s, Richard Branson, the chairman of VA, was targeting the lucrative Delhi-London route....

Questions for Discussion:

1. Air India’s code sharing arrangement with Virgin Atlantic was expected to benefit the ailing Air India. However, by the end of 2001, relation between Air India and Virgin Atlantic deteriorated and Virgin Atlantic threatened to pull out of India. Explain why the Air India-Virgin Atlantic code sharing arrangement failed to have the desired effect.

2. “Tie-ups between major airlines have become a key part of the global aviation strategy in the late 1990s. They range from mere code sharing arrangements and joint frequent flyer programmes to alliances.” Discuss.
 
The Resurgence of Radio in India

Abstract

The case examines the entry of private players in the FM radio market in India in the early 21st century. It discusses in detail the growth and decline of the radio industry in India.

Issues:

» The reasons for the entry of private players into the radio industry.
» The various problems faced by the private players in the industry.

Introduction

In July 1999, the Government of India decided to allow private players to enter the FM radio-broadcasting sector. It planned to offer ten-year licenses to private players in 40 cities across India.

These private broadcasters would be permitted to offer only music, education and entertainment-based programs, not news or current affairs programs.




Following the announcement, many companies bid for licenses to operate in various cities. The first private FM radio station Radio City began functioning in July 2001 in Bangalore, Karnataka. By October 2001, sixteen companies were issued licenses to operate private FM radio stations.

Vividh Bharati, All India Radio’s (AIR) main entertainment channel, was started in the 1960s. Commercial broadcasting was first introduced on Indian radio in 1967. In the mid-1970s, AIR started offering sponsored programs.....

Questions for Discussion:

1. Discuss the growth and decline of radio broadcasting in India and examine the reasons for the fall in the medium’s popularity during the 1990s.

2. Analyze the changes in the Indian radio market with the entry of private players into the FM sector. Critically evaluate the private players’ strategies to leverage the potential of radio. Do you suggest the new entrants might follow similar strategies to expand the market and ensure success?
 
Changing Trends in Retailing and FMCG Industry in India

Abstract

The caselet discusses the emerging trends in the retailing industry. It explains the changing dynamics in the FMCG sector through the late 20th century, which forced the FMCG majors to revamp their product, marketing, distribution formats to meet the changing customer requirements or preferences.

Issues:

» The nature and changing dynamics of the Indian retailing business and the reasons behind the evolution of many organized sector players.

» The need for innovations and customer-centric strategies in the retailing & FMCG businesses.

Introduction

With the penetration of their products reaching saturation levels in many urban markets, FMCG companies had to turn towards rural areas in order to sustain revenue growth and profitability.




Since the disposable income in the hands of rural people had been increasing in the late-1990s and the early 21st century, it made sense for companies to focus their energies on this segment. Industry observers also felt that HLL was at an advantage compared to most of its competitors – thanks to its consistent, pioneering efforts towards establishing well-entrenched distribution and marketing networks to reach the vast Indian rural masses.

Traditionally, HLL used both wholesalers and retailers to penetrate the rural markets. A fleet of motor vans covered small towns and villages...

Questions for Discussion:

1. Discuss the various measures taken by HLL to increase the awareness and penetration levels of its products in the Indian rural markets.

2. Comment on the marketing structure adopted by HLL to ensure the availability of its products in the rural areas? How far has the distribution strategy contributed to HLL’s growth in rural India?
 
Life Insurance Corporation of India

Abstract

The case provides a detailed insight into the strategies adopted by Indian insurance major Life Insurance Corporation (LIC) of India in various areas. The case also provides an insight into the life insurance industry’s structure in India and the changes that took place after the entry of private players into the market.

Issues:

» The changes sweeping the Indian insurance industry after the entry of private players

» Steps taken by LIC to combat the competition.

Introduction

Life Insurance Corporation was formed as a government regulated monopoly in September 1956 by an Act of Parliament, (LIC Act 1956) with a capital contribution of Rs. 50 million. Over the years, LIC built a strong distribution and agent network.




By 2000, LIC had 2048 branches and 500,000 agents across the country. With income from premiums totalling Rs. 6,262 crore and a Rs. 1,60,935 crore asset base for fiscal 2001, LIC was a financial powerhouse, with a presence in mutual funds and housing loans besides life insurance.

The company had insured more than 11.5 crore people in the country through its individual and group schemes. Of the 60-80 million life insurance policies outstanding, 48% were from the rural and semi urban areas. This was very impressive since no company in any other industry had been able to tap the rural market to this extent. LIC’s annual revenue growth rate was 8.8% during 1993-2000....

Questions for Discussion:

1. Write a brief note on LIC’s reaction to the entry of foreign players. Critically examine the steps taken by LIC to face the competition from MNCs.

2. Do you think LIC will be able to remain the market leader in the insurance business in the long run? Give reasons for your answer.
 
Citicorp

Abstract

The caselet gives an overview of the merger between Citicorp and Travelers, two large US based financial institutions. It focuses on the various problems faced by the merged entity, Citigroup, because of the two distinct styles of leadership of Co-CEOs.

Issues:

» It gives an overview of the merger between Citicorp and Travelers, two large US based financial institutions.

» The case focuses on the various problems faced by the merged entity, Citigroup, because of the two distinct styles of leadership of Co-CEOs.

Introduction

In April 1998, the financial services giants Travelers Group and Citicorp agreed to the largest merger in corporate history. The $166 billion merger created the world’s biggest company, Citigroup, with $700 billion in assets and a market value of nearly $160 billion.




The new entity was expected to have 162,600 employees and 3,200 offices, and offer some 100 million customers in 10 countries a range of financial services. Citigroup was likely to have a 24-member board, with an equal number of members from each merging entity. John S. Reed and Sandy Weill, the CEOs of Citicorp and Travelers, respectively, would serve as Co-CEOs and Co-Chairmen of the Board of Directors....

Questions for Discussion:

1. The Citicorp-Travelers merger was expected to be a perfect fit as the merger would facilitate cross-selling of each other’s products in each other’s territories. However, many hurdles hindered the realization of the synergies identified prior to the merger. According to you, what were the major hurdles that prevented the realization of synergies after the merger?

2. Citigroup’s Co-CEO structure did not work well and one of the CEOs had to step down. Explain why the Co-CEO structure failed to function efficiently. What are the problems associated with such a structure?
 
Cartoon Network - The Indian Experience

Abstract

The caselet examines the growth and evolution of Cartoon Network, the leader in the children’s TV entertainment segment in India. The localization and brand building initiatives taken by the channel are explored.

Issues:

» The business logic behind running a niche TV channel as against a general entertainment channel.

» The strategies that helped Cartoon Network not only emerge and remain the leader in the children’s entertainment segment but also in the overall Indian satellite TV market.

» The pros and cons of following a restrictive programming mix as against a varied programming mix for a niche TV channel.
Introduction

Cartoon Network was first launched in the US in October 1992, by one of the world's leading media companies, Turner Broadcasting System (TBS).




Cartoon Network not only showed famous cartoons, but also original shows developed in-house such as Mike, Lu & Og, Ed, Edd n Eddy, Johnny Bravo, The Powerpuff Girls, Cartoon Cartoons and Dexter's Laboratory. These cartoons became extremely popular across the world, making Cartoon Network one of the leading children's entertainment channels during the 1990s....

Questions for Discussion:

1. The Indian TV audience is largely ‘movie-sports-news’ centric.” In light of this statement, critically comment on Cartoon Network’s decision to enter the Indian market. Also discuss the initiatives that helped it become a leader in the children’s TV entertainment segment.

2. Do you think Cartoon Network’s localization of content destroyed the entertainment value of the original, classic cartoons?
 
Hindustan Motors’ Struggle for Survival

Abstract

The caselet explores the reasons behind Hindustan Motor’s poor performance after the liberalization of the Indian automobile industry. It examines in detail the company’s efforts to turnaround and make its brands successful.

Issues:

» How external environment affects a company

» Will diversification into the auto-component industry help HM?

Introduction

Until the 1980s, Hindustan Motors’ (HM) Ambassador and Premier Automobiles Ltd’s (PAL) Padmini were the only two cars available in the Indian market. However in 1981, with the entry of MUL, the scenario changed drastically. MUL’s small, fuel-efficient and well-designed car, Maruti 800, became a huge success. By the late 1980s, MUL became the market leader, leaving HM way behind.




In the early 1990s, when the Indian economy opened up, many multinational automobile companies entered the country....

Questions for Discussion:

1. ‘Hindustan Motors itself is responsible for its inability to sustain leadership position in the post-liberalization era.’ Critically comment on the above statement while analyzing the factors that led to the company’s downfall.

2. In the 1990s, HM had lost its position in the passenger car market to MUL and foreign automobile companies that entered the automobile market after the opening up of the Indian economy. To face the competition, HM had undertaken many restructuring initiatives. Examine the restructuring initiatives of HM.

3. External environment has a significant influence on the functioning of an organization. Of the elements of the external environment, political environment can have a positive or negative influence on an organization. Study the effects of the political environment on the functioning of HM.
 
Archies - The Way Indians Greet

Abstract

The caselet examines the growth of Archies, leader in the Indian social expression industry. It explores the company’s franchising and marketing initiatives. The caselet also discusses the measures the company took to meet the threat of new technologies i.e., e-greetings and SMS greetings.

Issues:

» The nature of the Indian social expression industry.

» The impact of new age technologies on a traditional business and the importance of upgrading a company’s offerings.

Introduction

To bridge the gap between its Internet and retail outlet models, Archies introduced the concept of e-kiosks that introduced shoppers to the company’s website and its services. The portal also came out with advertisements that targeted non-resident Indians in the US, UK and the Middle East with the help of India Abroad News Service, Khaleej Times, India Post and India West.




As a result of these initiatives, the portal claimed to have registered over four million page views and programming of 0.15 million e-greetings in September 2000. The website became very popular in a short span of time and began to receive over three million page views per month. The number of registered users reportedly reached a phenomenal 0.6 million. Even though the number of e-greetings sent through the site touched 54 million, Archies discovered that the company gained no monetary benefit...

Questions for Discussion:

1. Critically comment on Archies’ franchising and distribution strategies for expansion. Do you think the company’s strategy in the initial years was right in the light of the rationalization exercises? Give reasons to support your stand.

2. Discuss if Archies will be able to maintain its marketshare and leadership in the future with the entry of players such as ITC? Will the company’s current strategies help sustain its competitive position?
 
Wipro’s PCMM - Level 5 Certification

Abstract

The caselet examines the HR measures taken by software major Wipro to get itself assessed on the PCMM standards.

Issues:

» Importance of quality standards such as PCMM for a leading software player in a global market.

» Various steps and methods involved in the implementation of the program and its implications.

Introduction

Wipro decided to get People Capability Maturity Model (PCMM) certification after an internal HR meeting in 1996, where company officials discussed the possibility of becoming a ‘HR No 1’ company.




In December 1996, Corporate, Executive VP, Human Resources, Dilip Ranjekar (Dilip), and Ranjan Acharya (Ranjan) VP – Corporate, Human Resources Development, went to the US to conduct an in-depth analysis on the best global HR practices. During the next three years, Wipro officials spent a substantial amount of time and resources to understand the practices followed by global companies. They studied HR policies of various companies such as AT&T, GE, Tandem and British Telecom for the purpose.

By 1999, Wipro developed a ‘competency dictionary,’ wherein it identified 24 competency areas spread across the five levels of PCMM. The behavioral issues for each level were identified and the procedures to address them were also clearly defined.....

Questions for Discussion:

1. What is the nature of potential contribution that PCMM could make to companies like Wipro who are competing globally and dependent critically on export business?

2. Explain the methodology employed by Wipro in implementing the PCMM model and integrating it with its operations. How far do you think the existing infrastructure facilitated speedy and successful introduction?
 
e-Learning at IBM

Abstract

The caselet explains in detail the concept of ‘e-learning’ – the new mode of employee training adopted by IBM. It discusses in detail how IBM implemented different e-learning programs for different groups of employees, based on their requirements.

Issues:

» The various methods of employee training, and their advantages and disadvantages
» The concept of e-learning, and its advantages and disadvantages

Introduction

In 1999, IBM launched the pilot Basic Blue management training program, which was fully deployed in 2000. Basic Blue was an in-house management training program for new managers. It imparted 75 percent of the training online and the remaining 25 percent through the traditional classroom mode. The e-learning part included articles, simulations, job aids and short courses.




The founding principle of Basic Blue was that ‘learning is an extended process, not a one-time event.’ Basic Blue was based on a ‘4-Tier blended learning model’. The first three tiers were delivered online and the fourth tier included one-week long traditional classroom training. The program offered basic skills and knowledge to managers so that they can become effective leaders and people-oriented managers.

The managers were divided into groups of 24 members each. Each group then entered the first tier of the Basic Blue program (without interaction with the other members of the group – learning from information)....

Questions for Discussion:

1. IBM implemented different e-learning programs for its new managers, based on their requirements. Explain in detail how IBM implemented Basic Blue e-learning programs to train managers.

2. IBM claimed to have saved millions of dollars by adopting online training methods. What, according to you are the benefits of training employees through e-learning? How do employers gain from it? Explain.
 
Bata India’s HR Problems

Abstract

The caselet focuses on the HR problems faced by Bata India. Labor strife and the management’s inability to deal with it effectively has resulted in huge losses for the company.

Introduction

For Bata, labor had always posed major problems. Strikes seemed to be a perennial problem. Bata’s chronically restive factory at Batanagar had always been plagued by labor strife. In 1992, the factory was closed for four and a half months.

In 1995, Bata entered into a 3-year bipartite agreement with the workers, represented by the then 10,000 strong Bata Mazdoor Union (BMU), which also had the West Bengal government as a signatory. It was in 1998, that the company for the first time signed another long-term bipartite agreement with the unions without any disruption of work.




Apprehensive about labor problems spilling over to other units, the company entered into similar long-term agreements with the unions at its manufacturing units at Bangalore and Faridabad.

On July 21, 1998, Weston, the managing director, was severely assaulted by four workers at the company’s factory at Batanagar, while he was attending a business meet. The incident occurred after a member of BMU, Arup Dutta, met Weston to discuss the issue of the suspended employees.....

Questions for Discussion:

1. Maintaining good industrial relations have always been a problem for Bata. Why? How do you think Bata can maintain sound industrial relation practices?

2. In 1999, the Bata management in a bid to further cut costs announced phasing out several welfare schemes at its Batanagar unit. Do you think it right to phase out welfare schemes to cut costs? Give reasons for your answer?
 
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