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Case Study 1 Modern Industries Limited Question.1. Is it right on the part of the Chairman to protect the senior employees, thereby causing problem to the new MD? Answer.1. When Mr. Anil Shah, the new MD tried to revitalise and diversify MIL (by modernising and change in management) the older employees felt threatened and resented the changes and the resulting pressures they collectively approached the Chairman and requested him to interfere and protect their interests. The Chairman (also himsel
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Case Study 1
Modern Industries Limited
Question.1. Is it right on the part of the Chairman to protect the senior employees,
thereby causing problem to the new MD?
Answer.1. When Mr. Anil Shah, the new MD tried to revitalise and diversify MIL (by
modernising and change in management) the older employees felt threatened and resented
the changes and the resulting pressures they collectively approached the Chairman and
requested him to interfere and protect their interests. The Chairman (also himself not happy
with changes) issued instruction to the MD that no old employee should be dislocated. Also,
when Mr. Kumar apprised the chairman of the troubled situation he was in turn blamed by
the Chairman.
Thus, we can say that though the senior employees are important and have contributed in
the growth of the company they are being over protected by the Chairman. The Chairman is
right to be concerned about the older employees but protecting them too much will lead to
company’s loss and backwardness.
His part on protecting the employees seems fair if we see that the present Chairman Mr.
Shah has been with the company right from the beginning. As he has been working for a
long period of time in MIL he has acquaintance with every senior employee (other
employees working from long). He continues to keep close touch with them and is easily
accessible overruling the hierarchy. He strongly believes that each one has them has
significantly contributed to the company.
But if we see the fact that the older employees who are not adequately qualified or
developed have grown into senior positions they are becoming dead weights and hindering
the further development and growth of the company. Thus the MD is unable to bring in the
changes required to revitalise the company and diversify into high technology areas. He
can’t modernise the plant and bring changes in the management style. The over protected
employees (Mr. Thakur) resent the changes and hinder other people’s work not able to
adapt to changes overcome frustration. He feels that the MD is powerless to do anything to
them and ignore him. Thus the MD caould not even try out the HRD approach to train all the
employees. Such employees will not allow MIL to move with the times. Hence, it is not right
on the part of the Chairman to protect the senior employees, thereby causing problem to
the new MD.
Question.2. Is the Chairman not over rewarding service?
Answer.2. The Chairman firmly believes that each of the old employees has contributed
significantly in the MIL’s growth. The company maintained a ‘strong utilitarian culture’ all
along, the contribution of each and every employee had to be substantial and they were
rewarded accordingly. Thus a high premium is placed on loyalty and their long services are
valued. The rewards make the employees loyal and encourage hard work. Though over
rewarding can be dangerous to the company itself.
Though he employees deserve the rewards for their service as MIL is well-known for its
aggressive personnel policies and there were many instances where the services were
terminated due to inadequate performance particularly in the case of new appointees the
Chairman is over rewarding the employees in the sense that he is giving security to older
employees in terms of job (issuing instruction to MD that no old employee to be dislocated)
and protecting employees such as Mr. Thakur who were a nuisance in the company who put
themselves (Mr. Thakur ignored Mr. Kumar) before the company and . This gives the
employees a feeling that they can do whatever they want to without any repercussions (Mr.
Thakur challenging Mr. Kumar he could neither promote nor demote him), which only
deteriorates the work atmosphere. The over rewarded employees begin to hope for even
more (Mr. Thakur wanted promotion when he was over promoted and over paid for the job
he was doing). The annual increments and general raises termed as ‘Janata raise’ given to
employees gave them ‘flat security’.
The employees are not being rewarded on the competence (such employees turn as
deadwoods), specially in the case of older employees who have had grown into senior
positions not being adequately qualified or developed.
Changes are needed if the company has to remain competitive and maintain profits. There
should be a formal performance appraisal system. Promotions and extra increments should
not be given randomly by the Chairman but on objective analysis of performance and
potential of an individual.
Question.3. Are the senior employees too sensitive and over reacting to the changes?
Answer.3. The senior employees have been working in the company for almost two decades
and were used to a different culture of work until the new MD came up with the changes to
modernise the plant and change the management style from traditional direct control
approach to a systems controlled approach.
The senior employees thus were the most concerned, because though they were not
enough qualified or developed, they had grown into senior positions in the light of the fact
that the company maintained a ‘strong utilitarian culture’ and earlier the touchstone was
loyalty and hard work rather than competence.
Thus, new competent professionals were needed to be hired to introduce the desired
changes in the company. And MIL was well-known for its aggressive personnel policies and
sacking those who did not meet the requirements. Hence, the employees felt they could
lose their jobs and felt threatened resenting the changes and the pressures they brought
with them. They had a good rapport with the Chairman of the company who himself was an
old employee and cared for them. He understood every minute detail of the company and
the senior employees rightly thought that he might understand their situation and do
something about it. So they collectively approached him and requested to intervene and
safeguard their interests which he did.
Thus, we can say that the senior employees are just sensitive and not over reacting to the
changes as if they wouldn’t have approached the Chairman many of them could have lost
their jobs. The Chairperson was accessible to them overruling the hierarchy and they just
used this to their interest.
Question.4. Did the MD adequately prepare the ground for introducing the changes? Was
he too hasty?
Answer.4. The MD Mr. Anil Shah, the son of the founder industrialist wanted to revitalise
the company and diversify into high technology areas. He wanted to modernise plant and
change management style from traditional direct control approach to a systems controlled
approach. The problem was the senior workers who were turning out to be deadwoods. His
situation in the company called for tact and sensitivity. It can be said that the MD did not
adequately prepare the ground for introducing changes and was too hasty.
He should have properly planned the change and worked on the following w.r.t senior
employees in MIL – Consider how they will be affected, involve them in the change, consult
and inform them frequently, try to be firm but flexible, make controversial change as
gradually as possible, monitor the change and develop a change philosophy.
He should have planned for short term results and tried to realise them. He should have
introduced the changes step wise so that the employees could get adjusted to the new
changes slowly with time. He instead created excess work pressure on them. He did not deal
with their fears and anxieties of losing their job due to introduction of new technology and
management practices that required skill not possessed by them.
He kind of ignored the resistance or took it lightly. With so much age gap, there’s an obvious
difference in attitude, mindset and approach to work and life he should have tried to
convince the senior employees that they will not be overlooked and their concerns will be
addressed. A little patience and some sensitivity while communicating can go a long way.
He failed to clearly communicate the vision. Employees do not understand the purpose or
even the need for change. The existing HR policies were not standard ones as the top man;
the Chairperson promoted and gave increments randomly. He should have shared the vision
with them by telling them how the changes in HRD approaches would only benefit them in
the long run. This is why Mr. Thakur went against Mr. Kumar.
MIL is well known for its aggressive personnel policies. Anybody who did not meet the
requirements was sacked. As a result when changes were introduced the senior employees
felt threatened and collectively approached the Chairman who was at their disposal. He
should first have collected information from employees about their fears, thoughts and
concerns relating to these events. Even if they were unfounded, should have treated them
with respect and honesty.
He should have talked to the Chairman beforehand so that the chairman could take a better
decision and not get influenced by the senior employees or tried adapted to the
environment and dealt with more tact and patience by forming a coalition with them. He
should have consulted with them.
Six ways of overcoming resistance by the MD to change by senior employees -
(1) Education and communication so that if senior employees understand the needs for
change and what is involved them are more likely to co-operate.
(2) Participation and involvement to encourage senior employees to feel ownership of the
change.
(3) Facilitation and support by listening to the real concerns of senior employees.
(4) Negotiation to come to an agreement/compromise if necessary.
(5) Manipulation e.g. “buying off” leaders of resistance.
(6) Explicit and implicit coercion threats where necessary but this is a high risk strategy.
Question.5. Would it not have been wise for Mr. Kumar to promote Mr. Thakur without
bothering about the logic which is not applicable in MIL?
Answer.5. Mr. Thakur was a senior employee of the company. Despite having not much
change in his job content he was promoted to the rank of training superintendent. Also with
the changing scenario, there was not much role of this person. Also the HRD was trying to
train all the employees. Mr. Thakur was given a job next to Assistant manager but still he
was not satisfied and demanded to be promoted to senior manager as he was the senior
most person in the previously existing department.
As Mr. Thakur was one of the senior employees of the organization, he cannot be thrown
out of the company as directed by the Chairperson, but he should be handled differently.
Mr. Kumar should be more flexible in his approach and try hard to win the faith of Mr.
Thakur as he has been a very loyal worker of the company. Mr. Kumar can have an easy way
out by giving promotion to Mr. Thakur but had Mr. Kumar wanted an easy way out he would
have not gone this far. Actually giving promotion to him will only in increase such incidents
in the company.
He should continue in his efforts to change the other difficult employees because if he
promotes Mr. Thakur, the other old employees will follow the example. They will not
perform their job seriously and will not care for their seniors in hierarchy. The purpose of
trying out new HRD practices would fell flat. The changes desired in the company will not be
achieved.
Employees do not understand the purpose or even the need for change. The existing HR
policies were not standard ones as the top man; the Chairperson promoted and gave
increments randomly. Mr. Kumar should have shared the vision of MD with Mr. Thakur by
telling them how the changes in HRD approaches would only benefit them in the long run.
Although loyalty and long services are valued in MIL but it is also known for its aggressive
personnel policies. If Mr. Thakur is not performing his natural work and behaving strangely,
he should be warned about it. Some minor actions can also be taken against him. Just
because older workers remember the days before computers doesn’t mean they’re
exempted from learning new technology.
So, it would not have been wise for Mr. Kumar to promote Mr. Thakur without bothering
about the logic which is not applicable in MIL.
Question.6. Is the assumption of the Training Manager that ‘Over protection is the root
cause of trouble’ right?
Answer.6. The assumption of the Training Manager that ‘Over protection is the root cause
of trouble’ is right as it creates a sense of over security among the employees. It always
makes them feel that they have someone to protect them if something happens. Sometime
they take full advantage of it and stop performing well. It causes lack of seriousness among
the employee, disinterest towards work and the organization. The senior employees are
backed by the Chairperson and have job security. Besides they get the ‘Janata raise’ every
year which is annual increments and a general raise which makes the employees more
secure. They need not work hard for promotions and begin to lack respect for authority.
Here, we can cite the example of Mr. Thakur who challenged Mr. Kumar and made him feel
powerless.
It can also create lack of good work environment with lack of clear values and goals and lack
of loyalty and hard work. Sometimes less skilled person acquire the job of high responsibility
and make everything wrong. This results in the loss of profitability, loss of value and loss of
fame of the organization. This basically hampers the growth of the organization and its
smooth running.
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