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June, 2013

MS-41 : WORKING CAPITAL MANAGEMENT

 1. Explain the concept of working capital and mention the important objectives of working capital management. Discuss the impact of inflation on working capital.

 2. Explain the walker's approach to investment in working capital. Explain the profitability -solvency tangle in the current asset holding.

 3. Household Appliances Ltd. deals with consumer durables having an annual turnover of

Rs.80 lakhs, 75% of which are credit sales effected through a large number of dealers, while the balance sales are made through show rooms on cash basis. Normal credit allowed is 30 days. The company proposes to expand its business substantially and there is good demand as well. The finance manager proposes the following two plans for a change in the credit policy :

The product yields an average contribution of 25% on sales. Fixed costs amount of Rs. 5 lakhs per annum. The company expects a pre-tax return of 20% on capital employed. The finance manager has also recommended increasing the provision for bad debts from the current 1% to 1.5% for Plan I and to 2% for Plan II. Evaluate the merits of the new proposals and recommend the best proposal.

4. Explain the Baumol's model and Miller - orr cash management models.

5. Write short notes on the following :

(a) Prudential norms for credit exposure limit for banks.

(b) Discounting of bills

(c) Syndication of credit

(d) Bridge loans

6. (a) What is meant by Commercial Paper ? Explain the guidelines issued by Reserve

Bank of India for the issuance of commercial paper by companies.

(b) What is factoring of Receivables ? Explain its mechanism and importance.

 7. Explain the cost of liquidity and illiquidity. What is the impact of these costs on the level of the current assets ?

 8. Discuss the types and determinants of trade credit. What are the costs involved in taking credit ?

June, 2013

MS-28 : LABOUR LAWS

SECTION-A

1. Discuss the sources of Industrial jurisprudence in India. Briefly describe the genesis, objectives and classification of the labour legislation in India.

2. Describe the historical development of the Factories Act, 1948. Explain the provisions relating to hazardous process under the Act.

3. Define and discuss the objectives of the Industrial Disputes Act, 1947. Explain the provisions regarding Lay-off, Retrenchment and closure under the Act.

4. Describe the scope and coverage of the Minimum Wages Act, 1948. Explain the powers which the government can exercise under the Act.

5. Write short notes on any three of the following :

(a) Act of misconduct

(b) Natural justice

(c) Res judicata

(d) The Employee's Provident Fund Scheme, 1952.

(e) Domestic enquiry.

SECTION - B

6. Read the following case and answer the questions given at the end.

Lakshmi Manufacturing Company is a registered factory employing 600 people. It

produces spare parts for cars and scooters. Its security staff at the gate are very rigid in checking people/vehicles going out of the works to prevent any theft of the company's material. On June 20, 1995, Ramesh, material chaser, services department, went to the stores department to draw 10 new GEC electric switches (15 amps each) for some urgent breakdown job. Ramesh drew the material at about 11 A.M. and kept the same in his hand bag and put it on the cycle handle. Thereafter, he came to the Cooperative Credit Society office to enquire about his loan application. He suddenly remembered at 11.30 A.M. his urgent work at the post office (which is situated just outside the works gate), so

that he could write and post an urgent letter and thereafter go to his department which is situated at a distance of about one km from the stores department. The distance between the stores department and the works gate is about 50 metres. Ramesh works in general shift, i.e. from 7 A.M. to 11.30 A.M. and 12.30 P.M. to 4 P.M. The lunch-break is from 11.30 A.M. to 12.30 P.M. and during this period, workers are allowed to go out of the works. Ramesh, like many others, arranged with a person to get his tiffin-carrier from home to his department every day at 11-45 A.M. on payment of a nominal amount every month. On June 20 also, his tiffin-carrier had come with his lunch as usual. At 11.35 A.M., there was telephone call to Mahesh Kumar, Manager Service Department from the security inspector Ramanand that Ramesh, T. No. 321 has been caught red-handed at the works gate while trying to go out of the works with 10 new GEC electric switches belonging to the company. The two security staff who detected the attempted theft were Ramadhin and Trilochan. The materials were kept in a bag hanging from the cycle handle of Ramesh. After the incident, a preliminary enquiry was held, when Ramesh confessed in writing that by mistake he was carrying the switches as he intended to come back to his department after his urgent work at the post office. As per procedure for drawing materials in the services department, on the basis of a written instruction in the Log Book from the supervisor, material chaser is supposed to prepare the material requisition after

entering the details himself in the Materials Requisition Register. After getting the Requisition signed by the supervisor and the departmental head, he is supposed to go to the stores department to draw the material. If the materials are heavy, he has to arrange for a transport. For small items like switch, fuse, etc. Ramesh himself carried the same to the department. Thereafter, he is supposed to hand over the material to the supervisor and obtain his signature in the Materials Requisition Register. On checking up the entries in the Log Book as well as in the Materials Requisition Register after the incident, it was found that Ramesh had correctly entered ten pieces GEC electric switches (15 amps each).

As per Standing Order No. 17 (iii) of the Company's Certified Standing Orders, "Theft, fraud or dishonesty in connection with company's business or property" is a misconduct warranting dismissal as per Standing Order No. 18. The rules also provide that the manager can issue a charge-sheet and also punish with dismissal any employee of his department who is alleged to have committed an act of misconduct.

Questions:

(a) Advise the Manager, Services Department on the steps required to be taken in this case.

(b) Assuming that a domestic enquiry is to be held, suggest various steps of enquiry, in

detail.

(c) Suggest what positive measures are to be taken by the company for maintaining and

promoting sound industrial discipline.

June, 2013

MS-27 : WAGE AND SALARY ADMINISTRATION

SECTION - A

1. Explain the role of Compensation and its structure in framing the corporates policy of an organization.

2. Explain the constitutional perspective on wages including the norms for fixation of wages. Discuss the role played by the International Labour organisation on protection of wages.

3. Define and differentiate between bonus and fringe benefits, how are they linked to social security. What are the components of pay packet ?

4. What is performance reward system ? Describe the various steps involved in designing a performance - linked reward system.

5. Write short notes on any three of the following :

(a) Tax planning

(b) Voluntary Retirement Scheme (VRS)

(c) Equal pay for equal work

(d) ESOP

(e) Minimum wage

SECTION-B

6. Read the case given below and answer the questions given at the end of the case.

The Indian Electric Company is a city based manufacturer of welding machines and motors. When Mr. Nirad Shah established the company in 1970, he was keenly aware of the importance of a highly motivated workforce, and how the company's success, in fact, depended on it. Therefore, Mr. Shah had to ensure that each employee would work as diligently as possible for the good of the organisation. Mr. Shah realised that the best way to motivate employees would be to link the company's reward and recognition system to its goals. To establish this connection, Shah developed and implemented an incentive system. Its aim was to improve the company's overall performance by allowing contributing workers to share in the proceeds. The plan rewards employees for turning out quality products efficiently while controlling costs. The system includes the following components : Paying by the piece rate : Production workers are paid according to the number of "pieces" or product units they produce that are not defective. If a customer sends a defective part back to the company, the employee who produced it must repair it on his or her own time. Providing year-end Bonus : To reward workers further for their efforts, Shah introduced a year-end bonus system that gives all workers opportunity to nearly double their base wages. Workers get the bonus if the company's annual profit increases. Providing Stock Options : Shah also provided his employees with the option of buying company's stock at a low cost. Employees are also given shares of the company's stock based on annual profits. All the above financial incentive payments enabled the employees to earn more and helped to improve their morale and motivation.

Questions :

(a) Identify the salient issues of this case in general.

(b) What are the additional financial incentive schemes you suggest for sustaining the

morale and motivation of the employees ?

(c) Suggest suitable non-financial incentives for further improving the morale and motivation of the employees of Indian Electric Company.

June, 2013

MS-26 : ORGANISATIONAL DYNAMICS

SECTION-A

1. Discuss the process and stages for formation of groups in an organisation. Why is cohesiveness important for group effectiveness ? Explain with reason.

2. Analyse decentralisation as a structured mechanism of empowerment. Discuss the need

of integrating mechanisms with decentralisation. Explain with suitable examples.

3. Define 'Burnout' and discuss the main reasons of Burnout. Identifying various stages of Burnout, describe how does an individual reach the 'Hitting the wall' stage. Cite examples.

4. Define and discuss the nature and forms of strategic Alliances. Briefly describe the tenets of strategic Alliances, with relevant examples.

5. Write short notes on any three of the following :

(a) Compliance

(b) Dimensions of Diversity

(c) Transformational leadership

(d) Role systems

(e) Social Responsibility of Organisations.

SECTION-B

6. Please read the case given below and answer the questions given at the end.

On 15 March 1949, Merry Joseph came in to see Mr. John, the plant personnel director, to talk over a problem that was troubling her. Merry was a hand assembly production worker in a modern 600-employee branch plant located in a large eastern city. After Merry told Mr. John her story, he asked her to write out a description of the situation. Her statement is reproduced here. Reconsider this case not unusual nor typical, but as having happened to me and to a few others. As I am not equipped to do the work, it offers little or no solution to the problem at hand. I would not be writing this report if I had not remembered the advice given by Mr. John of Personnel. He told a group that should we have a problem, to please consult him before walking out. However, I will mention here that I have seen a few very conscientious workers walk out without "fighting the case". When I was first hired, Mr. Nair, the foreman, introduced me to the young lady who taught me the process of soldering lead wires. I asked her how much production I would be expected to turn in daily, and she secured this information for me from the other girls. This seemed at the moment like a fantastic sum, but she assured me that after a few days I would become quite efficient, which I soon did. I am not one to "bite the hand that feeds me", so I began working and finally developed the system into a sort of game. A few weeks later, one of the girls asked me how I was doing, and I told her that I was doing fine. She looked at my production sheet and swore. She was astonished to see how much I was producing each hour. She bitterly reminded me that girls that had been here for several months or even years were not producing what I had accomplished in a few weeks ! I laughed that off as somewhat of a compliment. That was my big mistake as far as co-operating with the company or satisfying my gregarious tendencies was concerned. I was immediately and severely ostracized. During the weeks that ensued, I noticed I was not completely alone; there were a few others who were also "friendless". However, it was soon apparent that ostracism was not satisfying the desires of their fiendish little plan. Threats were to follow and they did follow. Having worked in the "violent ward" of a psychopathic hospital, I was not the least bit nervous because of these threats but others were. I noticed a few things about the character, temperament and education of those who were apparently "bossing". They were usually the old-timers and loafers __ girls with great deal of confidence and little reason for it. Sometimes, their reasons for fighting the enormous business organisation which represents their security, were quite convincing: "Your work is never appreciated," "They'll always want more and more", "You haven't got a chance to get a merit wage increase unless you go out with the boss..." After this general talking to, the poor girls began to wonder; some of them stayed a few days and then didn't turn up for work. The clique had scored again. I sat and wondered as I worked. What to do ? I was assured I had the bosses on my side, but the... The long dead silence and the vulgar, stupid remarks of the other girls soon began to get under my skin. I worked quite a while at the psychopathic hospital, and "they" never bothered me, but these stupid little people and their moronic remarks soon began to annoy me terribly. Because my production was high, I was asked to work Saturdays. This brought a violent counter thrust from the rebels. Soon their campaign began to affect me exactly as they had planned. (Or am I giving them too much credit ?) My production was dropping. The assistant foreman, Bert, asked me if I was ill. When I told him my troubles, he advised me to see Mr. Nair, which I did. Mr. Nair listened attentively and asked the names of the rebels, which I readily gave, not feeling at all like an informer. He then assured me, though stammering, that justice would prevail. I noticed little change. The little minds had other desires than to keep their jobs secure; they wanted to jeopardize the position of their immediate superiors. Philip, who had advised me to talk to Mr. Nair, commonly held the reputation of being a communist, nailed on him by "my rebels". I have always maintained in my philosophy that if one cannot become great by one's own methods of accomplishment, then one will probably pull everyone else down below him, until by comparison he is above the mob, hence great. This is commonly known as "scapegoatism". These girls carried this farther than I ever dreamed would be done. Scapegoating is a common activity of the uneducated. Education of the population while

not the solution, will greatly aid in the eventual solution of this problem. However, back to the practical aspects of the problem at hand. I had convinced myself that most of the girls were not the kind I would care to associate with, anyway, so my scope of activity was not ruptured too severely, As they ignored me, I ignored them. However, something

happened that I had not counted on. I became physically ill from the entire situation. Having had a few lectures on psychosomatic diseases, I knew I had not incorrectly diagnosed the case. My relief came in the form of a temporary transfer to another department. I know it would take some time before the girls would become acquainted with my case, and the rest was welcome. I was shocked to find that no one was interested in my "reputation". I was further shocked when I began to notice that harmony, tranquility, and cooperation prevailed in this department. It is my opinion that part of the cause for such cooperation in this department may be attributed to the fact of one boss and a capable, understanding man, at that. Then, I was told to return to my former department, where I was greeted by my boss with: "Enjoy your vacation". This does not strike me as being very complimentary to one who has been conscientious from the beginning. I had been taught to report all inferior-grade materials, and this particular morning I found the wire defective. After reeling yards of red tape from a few of my bosses, I finally was sent to Mr. Nair. Again, Mr. Nair was glad to see me, "I want you to get back to your machine, sit down, and mind your own business. Your production is falling. Why ?" This I was told before I had a chance to speak. Here, I explained about the strain I was under and about the inferior materials. He then told me to work as best I could with the inferior materials, as he didn't want to send any of the girls home. I then told him I had thought of leaving. He sarcastically mentioned that perhaps it was for the best. This shock drove me to Mr. John of Personnel, and to standing here in my living room dictating this to my husband, the typist of the family.

Questions :

(a) What is the case issue in the case ? Explain.

(b) Critically evaluate the work culture and climate of the organisation.

(c) How do you see the act and record of Merry vis-a-vis her colleagues in this case ? Explain with reasons.

(d) What would be your recommendations to the management ? Justify.

MS-25 : MANAGING CHANGE IN ORGANISATIONS

June 2013

SECTION – A

1. Bring out the differences between Transactional and Transformational Leadership and explain how a leader plays an important role to bring change in an organisation

2. Briefly discuss the need for indigenous Management and the complexity of anagement of change through indegenization.

3. Describe any two models of diagnosis of organisational change.

4. Describe Total Quality Management (TQM). How it could be used as an approach to bring change in an organisation.

5. Write short notes on any three of the following :

(a) Down Sizing

(b) Managing Resistance

(c) Action Research

(d) Type of change

(e) Cluster organisation

SECTION – B

6. Read the following case carefully and answer the questions given at the end :

The story of the restructuring of the Mahut Group (name disguised) in India is illustrative of the need for supporting any structure change with the relevant culture change. The Mahut Group, a family-owned business located in western India, is a US$350 million multinational, multi-activity enterprise group operating in four continents, with a diversified portfolio and employee strength of 15000.

The group has two cement plants-the US$51 million Heera Cement and the US$39 million Moti Cement (names disguised) - each with a production capacity of 1.2 million tonnes of cement per annum. The plants use 'dry process precalcination technology, which conforms to international standards. Both plants had been operating at more than 100 percent capacity and were among the most cost-effective cement plants in India, but had been making losses since the deregulation of the cement industry in India in the late 1980s. Prior to deregulation, the cement companies operated under governmental capacity, production, distribution and price controls to ensure fair prices and availability to priority sectors and small users. Because capacity was controlled, there were severe shortages and obviously no competition, and all cement companies were making good money despite price control.

Deregulation led to huge increases in the capacity of the cement industry in India, which also included foreign players. Heera and Moti now found themselves in competition not only with other companies but with each other. The competition between the sister companies was particularly damaging because their executives had private knowledge of each other's strategies. Mahut Group's management realised the problem and wanted to develop synergies rather than competition between the two companies. In order to facilitate this change, Mahut appointed an American consultant in 1998 to study the problem and submit a report.

The consultant found that the solution lay in structurally integrating the marketing functions of the two plants, and recommended: merging their sales and marketing; creating a new division called 'brands' to promote, position and build the brands together; creating two new positions, director-technical services, irector-market research; changing the structure to support the new arrangements, especially by creating new roles and redefining old ones; and redeploying redundant people rather than retrenching them.

Mahut Group decided to implement the ecommendations. Although the implementation process was fraught with intense politicking, especially for the top positions in the restructured company, the company culture was such that this

phenomenon was not perceived an unusual. It was natural for the owners to give the coveted positions and perquisites to those who were close to them. In the restructured company the managing director was appointed from Moti; senior joint president-sales (in change of sales in the state where the company was located) was appointed from Moti, superseding a more senior executive from Heera; senior joint president-marketing (in charge of sales outside the state, where volumes were extremely low) was appointed from Heera; general manager (brands) was appointed from Heera.

Commenting on the cultural practices and processes that came in the way of performance, employees pointed out several issues. Decisions in the organisation were highly centralised. Almost all decisions were made by the managing director, because of which they were a lot of delays. Salaries and perks were arbitary and based on a person's closeness to the power centres. For example, one of the senior joint presidents was given two semi-luxury cars, the other was given a single old-fashioned car. There were wide

Questions.

(a) How would you describe the organisational culture of the Mahut Group ? Explain your answer citing decisions that illustrate the nature of the culture.

(b) Would it be possible that the decision to restructure the organisation was largely influenced by the culture of the organisation ?

(c) Comment on the way the restructuring proposals were implemented. Explain the

influence of the organisational culture, if any, on the implementation process.

(d) How do you explain the decline in employee morale and performance after the

restructuring ? Why were the expected synergies not realised ?

MS-24 : EMPLOYMENT RELATIONS

June 2013

SECTION – A

1. Briefly explain the Gandhian approach to industrial relations.

 2. Briefly explain the reasons for the formation of managerial unions and its activities. Explain with suitable examples.

 3. What are the special features of collective bargaining, in India ?

 4. Briefly discuss the factors responsible for the failure of participative management schemes in India.

 5. Explain the bases of classification of act of misconduct relating to discipline. Give examples

SECTION – B

6. Read the case given below and answer the questions given at the end :

 The Standard Textile Printing Works conduct business in high quality printing of superior ' textiles. It has a good reputation in the market. The Company employs about 500 workers and works in three shifts a day. There is no union in the plant. The chief executive of the works is the General Manager who is assisted by three Shift Managers, six Supervisors and twelve Assistant Supervisors.

For the past few months, the General Manager had been receiving frequent complaints from Shift Managers that a large number of pieces of customer's cloth were missing from the plant and they could not account for the losses. The General Manager took a serious view of the losses because it meant not only payment of damages to the customers but also the company's reputation in the market. He therefore, ordered a close search of workers at the time of their leaving the work-place for home. As a result of these searches, a couple of workers were caught with pieces of cloth hidden inside their dresses. They were chargesheeted for theft subsequently dismissed after the domestic enquiry.

Some day's back, during lunch interval, Vinayak, a worker in the folding department saw an Assistant Supervisor taking a piece of cloth and putting it in his brief case. Vinayak immediately reported the matter to the Shift Manager who came to the department and found the said piece of cloth in the briefcase of the Assistant Supervisor. Without any discussion, he asked the Assistant Supervisor to see him in his office. A week passed, and the concerned Assistant Supervisor continued to attend to his work.

During this period, the Assistant Supervisor threatened Vinayak that the latter's days here were numbered. This upset Vinayak. He approached the Shift Manager and enquired of him as to what action was taken against the Assistant Supervisor. The Shift Manager politely replied, "I am thankful to you for whatever you did; it is none of your business to know what action we are taking against him. Remember that, after all, he is your officer." Vinayak felt irritated, but left the Shift Manager's office without a word.

On the same day, when the watchman was about to search Vinayak while he was leaving the plant, Vinayak shouted at the watchman saying. " I will not allow myself to be searched unless the officers are also searched. They are the thieves." The watchman detained Vinayak at the gate and reported the matter to the General Manager, who called vinayak to his office. On being questioned by the General Manager, Vinayak told him all about the piece of cloth in the Assistant Supervisor's briefcase and subsequent events and repeated what he had said to the watchman. The General Manager thereupon asked him angrily, "Do you mean to say that we are thieves ?" Vinayak replied, "You can take it that way, if you like." The General Manager recorded the incident along with Vinayak's reply to his question and took Vinayak's signature on it.

 Next day Vinayak was served with a suspension order for his "Act of insubordination and indecent behaviour." Thereafter, the General Manager referred the case to the Personnel Manager.

 Questions :

(a) How far is the action of General Manager Justified ?

(b) As the Personnel Manager how would you deal with this case ?

(c) Give reasons for the way you would handle this case.

MS-23 : HUMAN RESOURCE PLANNING

June 2013

SECTION – A

1. Describe the various forecasting techniques. What are the issues that affect demand forecasting ? Give examples.

 2. Define Job Analysis and identify the steps involved in it. Briefly discuss the methods of collecting information for a job analysis.

 3. What is recruitment ? Briefly discuss the methods and techniques of recruitment. Compare the advantages of recruiting from internal sources and external sources.

 4. Explain HR audit, Identify its need and scope in the organisational context. Enumerate and briefly discuss the steps involved in HR audit .

 5. Write short notes on any three of the following :

(a) Career Planning

(b) Trends in labour demand

(c) Induction Training

(d) Potential Appraisal

(e) Competency Mapping

SECTION – B

6. Read the case given below and answer the questions given at the end of the case :

 When Adite Technologies Ltd. (ATL) moved one of their divisions to Bangalore, the branch manager in Mumbai decided to transfer those employees who did not wish to go to Bangalore to other local divisions. Ten of the thirty chose to stay and be transferred to another division. Madhuri was one of those. She was assigned to the computer moving - head division.

 When Madhuri reported to the new job, Narendar Kumar, her new supervisor, told her he did not know whether or not he would have a permanent position for her. For three days Madhuri sat and watched other employees at their work. On Friday, Narendar announced that their division had received another big contract and he would brief Madhuri on her new assignment on Monday.

 Madhuri arrived at 9.00 a.m. Monday morning and waited anxiously to learn about her new job. Narendar did not arrive until 10.30. He was being briefed on the new contract, he said, and would not be able to meet Madhuri before lunch. At 1.30 p.m. Narendar returned to show Madhuri the operation, "we are reworking model 10-D and it only requires changing two spot welds. With this jig, you can turn one out in about three to five minutes." Narendar added, "By the way, you will be the quality control supervisor on this job. Just double check these six spots on the blueprint." He did not write on the blue prints or mark areas in any way. Madhuri was given no idea how important the checks might be.

"Please - watch me," said Narendar to Madhuri, taking up the welding torch. "Any one can do it easily," He repeated the operation five or six times. Madhuri tried it and experienced no difficulty. Neither of them checked their reworked pieces with the blue print to see if they would pass the quality control check and as a result, Madhuri never checked any pieces after that demonstration. Narendar did not see Madhuri again until Friday.

 During the week several things happened. More than half the motors did not work correctly by the time they reached the final assembly. It could not be determined whether the faulty motors were the result of Madhuri's work or the result of a lack of quality checks. A box of 20 parts had been approved by Madhuri since her initials were on the inspection card, but she had not made the necessary alterations. That was when Narendar found time to talk to Madhuri again.

 Questions :

(a) Identify the issues inherent in this case.

(b) What incidents showed that Narendar was not performing a good job as a trainer ?

(c) If you were Narendar, what would you have done to improve Madhuri's performance ?

MS-22 : HUMAN RESOURCE DEVELOPMENT

June 2013

SECTION-A

1. Define HRD and discuss value-anchored processes of HRD. Explain how do these processes help an organisation in achieving excellence ? Explain with relevant examples.

 2. Describe how are reward systems designed in an organisation, and explain the ways in which employees are rewarded in an organisational set up.

 3. Define and describe the objectives and advantages of Multisource Feedback and Assessment Feedback System (MAFS). Discuss what are the indicators of an organisation's readiness to participate in MAFS.

 4. Explain the concept of knowledge Management. Briefly discuss various approaches to knowledge Management, with relevant examples.

 5. Write short on any three of the following :

(a) Systems Theory and Human Performance

(b) Vertical Re-skilling

(c) Career Transition and Choices

(d) HRD Audit

(e) Managing Technological changes in work organisation

SECTION-B

6. Please read the case and answer the questions given at the end.

Hara Food Products Company, which was founded in 1955 to manufacture grocery and other food products, had in the course of years grown into a vast enterprise having offices and branches in almost all the important cities of the country. Its annual sales amounted to about Rs. 50 to 60 lakhs a year.

 The Company's Head Office and factory were situated at Calcutta. Its products were distributed through five zonal sales offices which directed 25 district sales offices throughout the country.

The administrative responsibility of each zonal office was brone by a manager whose duty was to promote sales in his zone. He was advised and instructed by the Head Office from time to time.

Under the control of each Zonal Manager, there were four functional heads, viz., Personnel Manager, Accounts Manager, Sales Manager and Office Manager. These executives advised and assisted the Zonal Manager on various functions relating to the zonal administration. Each functional head enjoyed sufficient freedom and independence in respect of his work.

On matters relating to sales, the Zonal Manager received advice from Sales Manager. The latter often formulated policies, plans and schedules for sales operations and submitted his views on all the matters concerning sales to the Zonal Manager. Many a times, he also issued orders and instructions to the District Sales Managers but all these were routed through the Zonal Manager. Ordinarily all his views and advice were accepted and approved by the Zonal Manager.

The Sales Manager was assisted in his work by three product managers, who were considered to be experts in their respective fields. Their duty was to travel with the sales supervisors of various districts and study the market for the company's products; survey the competitive position of the company's products; study dealer and consumer reactions, trend in sales, etc., and advise the district sales supervisors from time to time regarding the steps to be taken for promoting sales in the districts. Every month each one of them

submitted a report on the sales activities of the company to the Sales Manager. The relationship between the Product Manager and the Sales Manager is the same as that between the Zonal Manager and the Sales Manager.

 Directly responsible to the Zonal Manager were five District Sales Manager besides the four functional heads. Each District Sales Manager was responsible for sales in his territory. In promoting the sales of the company, each District Manager was assisted by five sales supervisors besides several salesmen. The duties and functions of the District Sales Manager were to :

(1) Select, train and supervise his sales supervisors and salesmen in consulation with the Zonal Manager ;

(2) Make a study of the nature of consumer demand, changing markets existing stocks

and formulate sales campaigns and promotional methods ;

(3) Fix up targets of sales to be attained in his territory from time to time ;

(4) Formulate credit policies to be followed in consulation with the Zonal Manager ;

(5) Develop better team work among the sales supervisors and salesmen ;

(6) See that the customers are satisfied with the company's services ; and

(7) Do such other functions and duties as might be assigned to him from time to time by the Zonal Manager.

Every month each District Sales Manager submitted a detailed report on the sales activities of the company in his district, to the Zonal Manager. Ordinarily these reports were passed on to the Sales Manager for necessary action to be taken with respect to each district.

On the morning of June 6, 1981, the following conversation took place over phone between Mr. Raju the Sales Manager at the South Zonal Office and Mr. Hari one of the District Managers in the Zone.

Hari : "I wish to bring to your notice an important matter that needs your urgent

consideration The Product Managers are interfering too much with the sales activities of

my district. I receive frequent complaints from the supervisors that they are not able to carry out my instructions due to unnecessary interference from these people. If this state of affairs continues it would be very difficult to maintain our sales. The morale of the supervisors would be seriously affected. I will not be responsible if sales go down this year in our area on this account. You must take some steps to see that the relationship between the line and staff is maintained on good terms."

Raju : "Mr. Hari, you need not worry I shall call the Product Managers and see that they maintain proper relationship with you " Next day Mr. Raju called all the Product

Managers and after discussing routine matters, he said, "I was told by Mr. Hari that his sales supervisors are complaining that you are interfering with their activities. Definitely you are all expected to advise them on the steps to be taken for increasing sales. But at the same time please remember that you have to play only an advisory role. While advising these people you must also see that the line authority is respected ...."

 The product Managers did not say anything.

In the subsequent months Mr. Raju did not receive any complaint from the District Office. But in the first week of October, while scrutinising the sales progress reports of the various districts for the previous quarter, the Zonal Manager found an unusual decline in sales in the District which was under the supervision of Mr. Hari.

The Zonal Manager called Mr. Hari and asked him why there was so much decline in sales in his territory while all the other districts showed very good progress.

 Hari replied " during the past three months the Product Managers did not seem to have advised our men properly. In fact, they never cared to advise the supervisors on the recent changes and the latest trends in the market. They seem to be unwilling to co-operate with our men to maintain sales.

When asked about this by the Zonal Manager, one of the Product Managers said, "We used to give advice to this district office also as we usually do with other district offices. On a complaint, seems from Mr. Hari, we had been told by Mr. Raju that we were exceeding our authority and unnecessarily interfering with the activities in the district. We had been asked to restrain ourselves. The District Manager takes advice directly from the Zonal Sales Manager, We have got nothing to do in this matter ...."

 Questions :

(a) What is the core issue in the case ?

(b) Analyse the causes which led to the problem.

(c) As a member of the management team, what would you do to solve the problem immediately ?

(d) Suggest a suitable organisation structure and HRD system for this company so that

such problems do not occur in future.

MS-11 : STRATEGIC MANAGEMENT

June 2013

 SECTION - A

1. (a) Differentiate between objectives and goals and the need for setting the objectives.

(b) Describe the features and the process of setting objectives.

 2. What do you understand by the competitive environment of an industry ? Explain with the help of examples.

3. (a) Whit are the two variants of focus ? Discuss each giving examples.

(b) Discuss the advantages and disadvantages of a focus strategy.

 4. Explain the process and importance of Turnaround Strategy. Support your answer with the help of examples.

 5. Write short notes on:

(a) Critical Success Factors (CSFs)

(b) Balanced score card.

 SECTION - B

6. Read the following case and answer the questions given at the end of the case.

 Whirlpool's Dramatic Turnaround Through Internationalization Home appliance maker Whirlpool Corporation, headquartered in Benton Harbor, Michigan, generated over $19 billion in annual sales in 2006, an increase of 26 percent from the previous year. Key factors influencing this performance include the acquisition of the Maytag Corporation in 2006 and an increased global demand for its brands and innovative products. During the next several years, the company expects growth in Asia and Latin America to be significantly higher than in North America and Europe.

 Whirlpool employs more than 80,000 employees in over 60 manufacturing and technology centers world wide. The firm manufactures washers, dryers, refrigerators, dishwashers, freezers, ranges, compactors, and microwave ovens in 13 countries and sells them in 170 others under brand names such as Whirlpool, Maytag, Magic Chef, Jenn-Air, Amana, KitchenAid, Kenmore, Brastemp, and Bauknecht. Whirlpool generates almost 60 percent of its sales from North America, 25 percent from Europe, 15 percent from Latin America, and just 2 percent from Asia.

International Expansion

As the U.S. appliance market matured in the 1990s, Whirlpool faced intense domestic competition and more demanding buyers, resulting in lower profit margins. Meanwhile, international market trade barriers fell, consumer affluence grew, and capitalism flourished. Management realized that it could best deal with these threats and opportunities by undertaking a systematic program of internationalization. As a result, Whirlpool engaged in a series of moves over the next decade.

Whirlpool acquired the appliance business of Philips in Europe, 65 percent of Italian cooling compressor manufacturer Aspera, and purchased Poland's second largest appliance maker. In Eastern Europe, Whirlpool created subsidiaries to sell and service appliances in Bulgaria, Hungary, Romania, Russia, Slovakia, and the Czech Republic.

In China, Whirlpool formed a joint venture to produce air conditioners and established a corporate headquarters and product development/technology center in Shanghai. The company also opened regional offices in I-Iong Kong, New Delhi, and Singapore. In Mexico, Whirlpool acquired Vitromatic, a former joint venture partner in Mexico. It also developed low-cost versions of popular models to target customers in low-income markets in Latin America, China, and India.

 Three factors have driven this global expansion. First, Whirlpool sought to reduce its costs of R & D, manufacturing, and service by locating plants and other operations in lower-cost locations such as China, Mexico, and Poland. Second, flat to declining sales growth in the United States pressured management to target sales in new markets abroad. Third, Whirlpool realized the firm's manufacturing and assembly operations would benefit from a more global approach. Management redesigned products with more standardized parts and ramped up marketing to make Whirlpool a globally recognized brand. The company integrated the activities of regional subsidiaries so that Whirlpool's most advanced expertise in appliance technology, production, and distribution could be shared with the firm's divisions world-wide.

 Innovation

 Whirlpool conducted an internal critical assessment in the late 1990s. It became apparent

that a consumer walking into any appliance store anywhere in the world would witness a "sea of white" appliances with little differentiation, even between manufacturers. The industry became known as the "white goods business." Consumers perceived the products as commodities, which offered little differential advantage and commanded ever lower prices due to increasing competition.

 In 1999, Whirlpool management launched a major campaign to differentiate the firm's offerings by emphasizing innovative, value-added products. In early 2000, Whirlpool enlisted 75 employees from almost every job classification and assigned them in groups to Benton Harbor, Italy, and Brazil. Training lasted nearly a year and was conducted by an outside consulting group.

The next step was to get the rest of the global workforce involved. Whirlpool established an intranet site and created a do-it-yourself course in innovation. Throughout 2001 and 2002 Whirlpool's "knowledge management" intranet site recorded up to 300,000 hits per month. The company established a rating system to identify high potential, innovative ideas. Since 2003, revenue has quadrupled annually. Whirlpool estimates that the new appliances in development from this system, once marketed, could produce $ 3 billion in annual sales, up from projections of $ 1.3 billion in 2003. Whirlpool developed microwave ovens that can grill steaks, bake pizzas, or come in the form of a drawer that slides out for easy access to large dishes. The firm invented a washer with a built-in sensor that detects the size of the load and automatically picks the water level, spin speed, and type of wash cycle, essentially making all decisions for the user.

Local Preferences

Cross-regional R&D teams also collaborate on innovations to adapt offerings to meet local demands in diverse international environments. For example, due to very different climates, Italians often line-dried their clothing, while the Danes need to spin-dry then clothes. Capacity requirements vary greatly for refrigerators. The Spanish care about capacity for meats, the British want well-constructed units, and the French are more concerned about the capacity for keeping fruits and vegetables fresh. Germans are particularly concerned about environmental features, while child safety features are very important to the Italians. In India, Whirlpool developed a washing machine that delivers a higher level of cleanliness for consumers who believe whiteness of clothing expresses purity. The washer's gentle handscrub movement and unique "hot wash. technology" maximize the effectiveness of laundry detergent.

Whirlpool has benefited immensely from international business. The firm is a leading example of how internationalization can revive declining sales and optimize cost structures. It has developed international distribution that reduces expenses, leading to higher profits, and has positioned itself to challenge competitors on a global scale. The firm has thrived through sensitivity and commitment to consumers in diverse cultural and economic settings around the world.

Growing Competitive Threat from Abroad

Yet not all is bright and sparkling on Whirlpool's horizon. Haier, China's largest appliance maker, established a production base and a distribution center in South Carolina in the United States. The firm also bought a six-story landmark. structure in New York, dubbed the Haier Bulding, to house its U.S headquarters. The world', fifth- nearly 20 percent and 50 percent of the markets for window air conditioners and small refrigerators, respectively Now it is expanding into full-size refrigerators, Haier's moves are especially troubling given. that Whirlpool generates very little of its sales from Asia, the world's most populous region, where Haier already has a strong presence.

Ironically, Haier's South Carolina factory is creating new jobs in a state that witnessed a mass exodus of textile jobs to factories in China, South Carolina receives foreign direct investment from various countries and is home to four Japanese and 18 European facilities. These trends show that globalization both benefits and poses new threats to Whirlpool's international ambitions.

As it struggles to remain a world-class player in a key industry, Whirlpool faces

new challenges. Management wants to expand sales in emerging markets while defending the home market from global rivals from China and elsewhere. The firm seeks to continue to leverage and enjoy all the benefits of international business.

 Questions

(a) What is the nature of Whirlpool's domestic and international business environments? What types of risk does the firm face ?

(b) How can Whirlpool benefit from going international? What types of advantages can the firm obtain ? What advantages acquired abroad can help management improve Whirlpool's performance in its home market ?

(c) What actions has Whirlpool management taken to ensure that the firm succeeds in local markets throughout the world? To what extent is the appliance business local/regional rather than global ?

(d) How can Whirlpool effectively compete with new rivals originating from low-cost countries, such as Haier from China? Should Whirlpool's response differ in its home and foreign markets? If so, how ?

MS-10 : ORGANISATIONAL DESIGN, DEVELOPMENT AND CHANGE

June 2013

SECTION - A

1. What are the objectives of T-Group training and briefly discuss the benefits of T-Group Training at individual, group and organisational levels.

 2. Discuss the elements that need to be reviewed for organisational analysis and briefly describe the analysing organisations.

 3. Briefly describe the contemporary approaches to job design and their relevance.

 4. What is the purpose of organisation design ? Briefly describe the factors which affect

organisation design.

5. Write short notes an any three of the following :

(a) Task force

(b) Centralisation Vs Decentralisation

(c) Quality of work life

(d) Interview as a diagnostic tool

(e) Process of change

SECTION – B

6. Read the following case carefully and answer the questions given at the end :

 ABB: A HUGE GLOBLE MATRIX

 If lean and mean could be personified, Percy Barnevik would walk through the door. A thin, bearded Swede, Barnevik is Europe's leading hatchet man. He is also creator of what is fast becoming the most successful cross-border merger since Royal Dutch Petroleum linked up with Britain's Shell in 1907.

In four years, Barnevik, 51, has welded ASEA, a Swedish engineering group, to Brown Boveri, a Swiss competitor, bolted on seven more companies in Europe and the U.S.A. and created ABB, a global electrical equipment giant that is bigger than Westinghouse and head to head with GE. It is a world leader in high-speed trains, robotics and environmental control.

To make this monster dance, Barnevik cut more than one in five jobs, closed dozens of factories and decimated headquarters staffs around Europe and the U.S.A. Whole businesses were shifted from one country to another. He created a corps of just 25 global managers to lead 21,000 employees. IBM has talked with Barnevik and his team about how to pare down its own overstaffed bureaucracy. Du Pont recently put Barnevik on its board. Says a senior executive at Mitsubishi Heavy Industries. "They're as aggressive as we are. I mean this as a compliment. They are sort of super Japanese."

 ABB is not Japanese, nor is it Swiss or Swedish. It is a multinational without a national identity, though its mailing address is in Zurich. The company's top 13 managers hold frequent meetings in different countries. Since they share no common first language, they speak only English, a foreign tongue to all but one. Like their boss, senior ABB managers are short on sentiment and long on commitment. An oil portrait of a 19th century founder of Brown Boveri hangs in ABB's headquarters, but few are sure what his name is. (It's Charles Brown). Ask for a fax number, though and you're likely to get two, office and home.

 To Barnevik, today's competitive market economy is a 'cruel world'. Not making it any kinder, he has launched a personal war on what he sees as excess capacity-2 percent to 3 percent in the electrical equipment industry in Europe alone. Educated in Sweden and the U.S.A (he studied business administration and computer science at Stanford in the mid-1960s), Barnevik thinks European industry must be restructured massively to become competitive in world markets. He foresees billions of dollars and mergers and acquisitions in the next three to five years. Europe's best strategy against the Americans and Japanese, he believes, is to break free of protected national markets.

 Before the merger, Brown Boveri had four people in Baden, Switzerland, and ASEA had as many as 2 in Vasteras, Sweden. The combined company now employs just 15 in a modest six-storey building across a train station in west Zurich. Where did everybody go? Many were fired. The rest were sent to subsidiaries or offered jobs in new companies set up or assume many headquarters functions. (ABB Marketing Services, for example, creates and runs campaigns for ABB, but also takes on a few other clients). And Barnevik expects to make money). It's not just cost cutting Barnevik is after, though that is obviously important. Says he. "Ideally you should have a minimum of staff to disturb the operating people and prevent them from doing their more important jobs."

 Barnevik's master matrix gives all employees a country manager and a business sector manager. The country managers run traditional, national companies with local boards of directors, including eminent outsiders. ABB has about two such managers, most of them citizens of the country in which they work. Of more exalted rank, are 65 global managers who are organised into eight segments: transportation, process automation and engineering environmental devices, financial services, electrical equipment (mainly motors and robots) and three electric power businesses: generation,transmission and distribution.

 Barnevik is well aware that the once popular management by matrix is in disfavour in the U.S.business schools and has been abandoned by most multinational companies. But he says he uses a loose, decentralised version of it-the two bosses are not always equal-that is particularly suited to an organisation composed of many nationalities.

 The matrix system makes it easier for managers like Gerhard Schulmeyer, a German who heads ABB's U.S. businesses as well as the automation segment, to make use of technology from other countries. Because of the matrix, Schulmeyer has a better idea of what is available where.

 He says that the techniques developed by ABB in Switzerland that he uses to service U.S. steam turbines are more reliable and efficient than those of General Electric and Westinghouse, his main American competitors. Schulmeyer also relied on European technology to convert a Midland, Michigan, nuclear reactor into a natural gas-fired plant.

 ABB executives say the value of the company's matrix system extends beyond the swapping of technology and products. For example, the power transformer business segment consists of 31 factories in 16 countries. Barnevik wants each of these business to be run locally with intense lobal coordination. So every month the business segment headquarters in Mannheim, Germany, tells all the factories how all the others are doing according to dozens ofmeasurements. If one factory is lagging, solutions to common problems can be discussed and worked out across borders.

 Questions :

(a) Which of the four basic departmentalisation formats do you detect in ABB's structure of eight segments ? Explain.

(b) Has Barnevik created an effective balance between centralisation and decentralisation ? How can you tell ?

(c) Relative to the advantages and disadvantages, is ABB's matrix structure appropriate to its situation ?

(d) How does ABB apparently avoid unity-of-command problems with its matrix structure ?