Principles of Management

Course Instructor: Sukhjinder Baring

Book: Essentials of Management, Koontz and Weihrich, Tata McGraw Hill.

Business Organisation and Management, Tulsian and Pandey, Pearson Education

Management, Robbins and Coulter, Pearson Education

Every organization, regardless of size, type, or location, needs managers who have a variety of characteristics. Today

simple management philosophy captures the essence of managing in the 21st century: “Take care of yourself and treat

others fairly. It makes better people who do good things. Better people translate into better business.” Today management

philosophy stems from personal challenges that have forced managers to put balance in their personal and work life. This

philosophy is transferred to the workplace. The new philosophy has resulted in many changes at the company and will

contribute to the successful accomplishment of the company’s goals including national expansion and doubling the size of

the firm.

Objectives of the course:

1. Who Are Managers? What Is Management?

2. What Do Managers Do?

3. Management Functions and Processes

4. Management Roles

5. Human Skills

6. How the Manager’s Job is Changing

7. What Is an Organization?

8. Why Study Management?

9. The Universality of Management

10. The Reality of Work

11. Rewards and Challenges of Being a Manager

Instructions for the students:

1. Students are required to study the course breakup thoroughly.

2. Students are required to make separate copies for notes and separate file for case

discussions/readings/excercises

3. Presentation and neatness in any work will make a difference in your internals.

4. Assignments should be submitted on time

5. Any student missing the test is liable for himself/herself

6. Presentations once missed would not be taken again

7. I expect everybody to be punctual not only in attending lectures but also completing work on time

8. MSE are strictly compulsory for everybody any student missing it without any genuine reason will

lose 15 marks.

9. Case discussions are must for everybody

10. Internals Bifurcation: MSE: 15 MARKS, Assignments:5, Presentation: 5, Class Test: 10, Case

studies/ Supplements: 5

PUNJAB COLLEGE OF TECHNICAL

EDUCATION

LUDHIANA

COURSE PLAN – MBA

Name of Teacher: SB Subject Name: PPMSubject Code: MB 101 Assignments: 3Case Study: 5 Tests: 5Total Lectures: 54

Lecture No TOPICS Case Study Assignment Test6

LECTURESIntroduction

Define Mgt in notebooks.(0.5)

Discussion on Course ModuleIntroduction to Management and Organizations to A Manager’s Dilemma. Management basics: Definitions, nature, functions. Purpose, goals of mgr, overview of functions. Is Managing a science or Art.

Management is work, and as such it has its own skills, its own tools, its own techniques. Management is the organ, the life giving, acting, Dynamic organ of the institution, it manages. Management is a discipline. Management is also people. Management is practice. It’s essence is not knowing but doing. Elaborate and Find more definitions related to it.

4 LECTURES

Ethics in managing and social responsibility of managers

Social Responsibility may be taken to mean intelligent and objective concern for the welfare of the society. Business Ethics deals with morality in the Business environment. Morality and Welfare?????

Define Morality and Welfare in notebooks (0.5)

Case Discussion 1a: CORPORATE SOCIAL RESPONSIBILTY AT ONGC ( Study more examples from industry)CASE STUDY 1 b: BUSINESS CONDUCT: The Heart of The Matter 1Discussion on Assignment No1:

1. By this time in your life , all of you have had to work with individuals in managerial positions either through work experiences at school, homes or through organizational experiences social, interest, religious. What do you think makes some managers better than others? Are there certain characteristics that distinguish good managers?

2. Tata Steel in Orissa: Providing medial aid to thousands of villagers, funding hospitals, helping all round development. Like this illustrate any example of company implementing CSR for society.

3. You have obviously already faced many ethical dilemmas in your life – at school, in social settings and even at work. Quote the incidents which you might have experienced as an employee, customer, client or an action observed informally.

2 (Neatly hand written)

10 Evolution of Mangement Thought: Taylor's Contribution:Scientific All the essential points of the theories

LECTURES mgmt,Taylor's Principle, Followers of Taylor: Henry L. Gantt( Gantt Chart), Frank & Lillkian Gilbreth, Modern operational Management Theory By Fayol(Activities, 14 principles, elements) , System approach to management-closed vs open system,subsystem, boundary, The Hawthrone Studies by Elton Mayo, Roethlisberger,et al.( Hawthrone effect), Social System Theory of Chester Barnard, Herzberg's two factor theory, Likert's 4-S, Maslows style and Mcgregor contribution, McKinsey 7-S, Approaches to management

Comparative management: Japanese management and Theory ZSpplement : What can Japanese do or what did the Japanese do?

and supplements should be written in notebooks.(0.5)

CLASS TEST 1: TILL NOW WHOLE SYLLABUS

TEST 16

LECTURESPlanning: Nature,Types( purpose, mission ,objectives, Goals, strategies, policies ,procedures, rules ,programs, budgets), Steps in planning( including planning premises), Planning Process: Rational Approach, Management by objectives, SWOT analysis, Strategic planning process, Portfolio Matrix, Premising and Forecasting

Planning is a process that involves defining the organisation’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work.

Will planning become more or less important to managers in the future? If planning is so crucial why do some managers choose not to do it? Does planning involve making decisions that will have an impact later???? (0.5)

Case 2: Discussion on the case “Social Strategies of Jack Welch that transformed GE into the most valuable company in the world”, (1 MARK)

Assignment No2: identify one business leader/entrepreneur/ intrapreneur/ whom you think has contributed to society or emerged as a buiness tycoon. (2 marks)

This assignment has to be done in a group of 2 members. 2

Discussion on Assignment No: 22 Computerized

4LECTURES

Decision Making: Decision-Making: Importance and steps in Decision Making; Traditional approaches to decision-making; Decision making under certainty - programmed decisions; Introduction to decision-making under uncertainty, non- programmed decisions; decision tree; group-aided decisions; Brain storming; Creativity - creative problem solving.

Decision Making is the selection based on some criteria from two or more possible alternatives.

Team Based Exercise: What is involved with being a good decision maker? Form groups of six. Discuss your experiences making decisions- for example, buying a car, choosing classes and professors, making summer or spring break plans and so forth. Share times when you felt you made good decisions. Analyse what happened during that decision making process that contributed to it to become good decision or a bad decision. ( 1 mark)

Management means making decisions and execution there of. Do you agree? Describe the essential steps in the process of decision making???? (0.5)

CLASS TEST 2: TILL NOW WHOLE SYLLABUS

TEST 210

LecturesOrganizing: Concept of organization, process of organizing, bases of departmentation, Authority & power - concept & distinction. Line & Staff concept; problems of use of staff & ways to avoid line-staff conflict, Delegation - concept of delegation; elements of delegation - authority, responsibility, accountability. Reasons for failure of delegation & how to make delegation effective. Decentralization - concept, reasons for decentralization and types (or methods) of decentralization. Span of Management - concept, early ideas on span of management, factors determining effective span-situational approach.

Organising is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them.

Case study 3: Organizing structure and design: learning organizations

CASE 3: 1 MARK. Is Delegation same as Decentralization. Is Authority, responsibility and accountability different? Is decentralization always effective????? (0.5 mark)

3lectures

Coordination- Concept and importance of coordination; factors which make coordination difficult; techniques or methods to ensure effective coordination.

Coordination is an orderly arrangement of group effort, to provide unity of action in pursuit of common purpose.

CASE DISCUSSION 4: YOUNG MANAGERSTelling The Difference

Is coordination known to be sense of management? Is coordination different from cooperation?????? (0.5 marks)

CLASS TEST 3: TILL NOW WHOLE SYLLABUS

TEST 34

LecturesControl: Concept, planning-control relationship, process of control -setting objectives, establishing standards, measuring performance, correcting deviations. Human response to control. Dimensions or Types of Control -(a) Feed forward control (b) Concurrent Control (Real Time Information & Control), (c) Feedback Control v) Techniques of Control - Brief review of Traditional Techniques & Modern Techniques of Control.

Controlling is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any deviations. Assignment No:3

1. “Haier and Higher”2. Wich Type of Control do you think is more important and

Why3. Which would be more important in protecting a company’s

3 (2 marks)

information or other valuable resources- employees, equipment or a written procedure? Explain your choice.

4. Planning is meaningless without control and control is aimless without planning. Planning is looking ahead and control is looking back. Planning and control are Siamese Twins. How will you determine the relationship between planning and control after reading these statements.

CLASS TEST 4: TILL NOW WHOLE SYLLABUS

TEST 4Case Discussion 5: King Fisher Airlines

Discussion on University question papersCLASS TEST 5: WHOLE SYLLABUS on UNIVERSTY PATTERN

CASE 1 A: CORPORATE SOCIAL RESPONSIBILTY AT ONGC

ONGC is continuously and consciously involved and focused towards corporate social responsibility in all decisions and activities undertaken in the organization. ONGC is committed to allocate 0.75% of net profit of the year towards socio-economic development programmes."1

- Dr. Madhav Mehra, President, World Council for Corporate Governance, in May 2006.

"If trade and commerce - and by extension, business and industry - is not sensitive to its social and environmental contexts, it will not be sustainable. And if it is not sustainable, it will collapse."2

- Kamal Nath, Union Minister (commerce and industry), in May 2005

Introduction

In May 2006, ONGC Ltd. (ONGC), a major Indian public sector company in the petroleum industry, received the 'Golden Jubilee Award for Corporate Social Responsibility in Emerging Economies - 2006', at the 7th International Conference on Corporate Governance organized by the World Council for Corporate Governance3.

Since its inception, ONGC had regularly contributed to various CSR initiatives in the areas of health, education, infrastructure, and culture. In 2003, it decided to allocate 0.75% of its net profit each year for various socio-economic developmental programs undertaken by the company. In 2004, it drafted a Corporate Citizenship Policy - a written guideline which was to provide a direction to the company's CSR initiatives. With growing globalization, Corporate Social Responsibility (CSR) had been increasing in importance as it helped organizations to improve their relationships with local communities, increase brand value, and build a good corporate image for themselves. Also, the socio-economic developmental activities undertaken by companies increased the purchasing power of the community, leading to an expansion in their market size.

In India, CSR began as a philanthropic activity where organizations contributed to social causes, but it was gaining in importance and becoming an essential activity for business Also it appeared that in the future, CSR in India would become more than a voluntary exercise. In a conference 'Implementing CSR as a Business Strategy - A Roadmap for Effective and Sustainable Penetration' organized by the Confederation of Indian Industry (CII)4 in December 2005, the possibility of a company reporting its CSR activities along with its financial reports was discussed. 5 said Kishore A. Chaukar, managing director, Tata Industries Ltd.

Background Note

ONGC's origin can be traced to the mid-1950s. After India achieved independence, the development of the petroleum industry was an important issue for the Government of India (GoI). It was crucial not only for the industrial development of the country but also for strategic reasons. Till 1955, exploration for hydrocarbon resources within the country's boundaries was mainly undertaken by private oil companies like Assam Oil Company6, Burmah Oil Company7 (both of which operated in Assam), and the Indo-Stanvac Petroleum project8 (in West Bengal). In 1955, the GoI decided to undertake exploration and production activities for oil and natural gas resources in different regions of the country.

In the same year, an Oil and Natural Gas Directorate was set up as a subordinate office under the then Ministry of Natural Resources and Scientific Research. In August 1956, the Directorate was elevated to the status of a commission and named the Oil and Natural Gas CommissionIn 1959, with the Oil and Natural Gas Commission Act 1959, the Commission became a statutory body. Its main objectives were "to plan, promote, organize, and implement programs for development of petroleum resources and the production and sale of petroleum and petroleum products."In 1991, as part of the liberalization initiatives of the GoI, core sectors like petroleum were deregulated and de-licensed. Consequently, in 1993, the Oil and Natural Gas Commission was converted into a public limited company, ONGC Ltd., under the Company's Act, 1956.

CSR at ONGC

The mission of ONGC stated that the company would have an "abiding commitment to health, safety, and environment to enrich quality of community life."And this mission was reflected in its CSR activities. CSR at ONGC began as a philanthropic activity where the company contributed to several socio-economic developmental programs like building schools and hospitals, developing agriculture and cottage industry, building infrastructure facilities, etc., around its areas of operation on an ad hoc basis...

Corporate Level Programs

ONGC's CSR programs at the corporate level focused on disaster relief management and water management projects. When disasters struck India, ONGC provided relief and helped state and central governments in rehabilitating those affected. For example, when a heavy cyclone hit the eastern state of Orissa in 1999, the company provided immediate relief like food, drinking water, temporary shelters, medicine, clothing, etc. ONGC doctors provided medical treatment round the clock. The company also contributed Rs. 80 million toward the Prime Minister's relief fund and took steps to rehabilitate the cyclone victims...

Work Center Level & Community Development Programs

ONGC was involved in various community development programs like promoting literacy and higher education by providing grants or scholarships to the economically disadvantaged, donating money for the construction and renovation of schools, promoting healthcare by organizing medical camps, eye camps, through mobile dispensaries, etc...

ONGC-PURA

In 2003, Dr. A. P. J Abdul Kalam, President of India, put forth the concept of PURA - 'Providing Urban Amenities in Rural Areas'. This aimed to bridge the urban-rural gap through a balanced socio-economic development program. The main idea was to provide four major connectivities -physical (transportation and power), electronic (communication network through telecom, the Internet, and IT services), knowledge (institutions and vocational training centers), and economic empowerment (through overall socio-economic development) - to rural communities...

ONGC and the Global Compact Program

The concept of 'global compact' was initiated by UN Secretary-General Kofi Annan in July 2000. The idea was to form an international corporate citizenship network for the advancement of universal social and environmental principles

Environment Protection Programs

ONGC took several measures to reduce pollution and support conservation of resources through the utilization of waste. The company formulated its Environment Policy as early as 1983 and adopted environment protection as one of its objectives in 1988.It even created a separate department called the Department of Environment (DoE) to ensure that environmental safeguards were in place. The environment policy of the company made it mandatory to submit an "environmental impact assessment report"to the DoE at the time of project formulation...

Safety

ONGC set up the Institute of Petroleum Safety, Health and Environment management (IPSHEM) in 1989 with the objective of improving the safety, health, and environment standards in the Indian petroleum industry. The institute offered training courses in safety and environment management and a special training program for off-shore personnel...

Other CSR Initiatives

ONGC also participated in promoting sports and games like cricket, football, hockey, athletics, basketball, chess, golf, billiards, and volleyball in India. In 2004, it received the "Best Corporate Initiative in Sports"award from the Federation of Indian Chambers of Commerce and Industry (FICCI)...

CSR: The Way to Go?

The importance of CSR has increased with globalization, as both investors and customers have become highly sensitive to societal and environment issues. According to Dr. Madhav Mehra (Mehra), President of the UK-based World Environment Foundation and the World Council for Corporate Governance, the importance of CSR would further increase as the future market would be driven by a younger population (around 54% of India's population is below 25) for whom social, ethical, and environmental issues were very important and who liked to be "informed"about the organizations they were buying from or investing in...

CASE STUDY 1 B : BUSINESS CONDUCT: The Heart of The Matter

“Ethics and religion must not stay at home when we go to work.” — Achille Silvestrini, Cardinal of the Roman Curia

Raghuveer Vats felt like a blender on pulse mode. Varsha Nigam Dorai had just left his office after dropping a hateful bombshell, and the flying splinters were tossing him around; that Varsha was also the wife of his senior vice-president, Tyaagi Dorai. Varsha, whom he had known for many years, had said, “It is Tyaagi. He is never home before midnight and always claims to have meetings with clients and overseas visitors. Ours is a large joint family, I am the eldest and the live-in daughter-in-law. I manage the entire household and run my dance academy, which keeps me busy round-the-clock. Busy also means that I am focusing less on anxieties and worries. Therefore, it has taken me three years to convert worry into suspicion into action. I fear Tyaagi is having an affair…”

And after some more explanation, she said, “It could be a person called Saarangi... Is there someone by that name in your company?” Raghuveer’s mind registered a vague recognition of the name, but he was badly shaken. Tyaagi? Of all people! Then he had valiantly even defended, “I work very closely with Tyaagi, Varsha, I would know.” But Varsha said, “You stole my line Veer. Those were my words, ‘I should know, I am his wife!’ Nonsense, Veer!”

But Varsha’s words did not make sense. Tyaagi was not just a terrific manager. He was ‘inner circle’ — part of the core strategy team. Two days later, he asked Tyaagi to join him for dinner at Konkan Café. Without much preamble, Raghuveer came to the point, “I believe you are having an affair with someone at work.” Tyaagi gasped but only briefly. Then he said, “Where did you get that impression?”

Raghuveer, or RV as he was known, took the menu card from the manager, and said, “We will call you as soon as we are ready, ok?” And then to Tyaagi, “You and I are too old to play cat-and-mouse games, Tyaagi. how I know, where I got the impression from... never mind. Let us come to the point. We are men, and we know what we are capable of; interestingly, we are also aware of what we are not capable of, that is honesty in situations like this. This won’t do at Gavinn. I am sorry that after so many years of great team work, we will have to part ways.”

Tyaagi was taken aback. “Part ways?” he asked, not even sure he was hearing right. “But what has that to do with anything? Besides, it is not even an affair in the real sense…” RV was angry now. “‘In the real sense?’ What does that mean? Anyway, look my relationship with you is that of an MD and colleague. So, I have no interest in your personal definitions. I am concerned with the business of Gavinn and that interest directs me to take a view of your conduct.” Tyaagi said, “I am sorry. but listen to me, it is not what you think. I am a married guy. I have kids. I don’t need all this, you know…”

“It is not about who leaves or stays, it is about protecting the integrity of a structure, a system that we all subscribe to. They are as simple as road safety rules.”

RV said, “There are men who stop lying when they are found out. You are a rare breed. I have had a long chat with Saarangi. Now tell me…” Tyaagi was shocked, but said, “I am simply friendly with her…” RV could bear it no more. He said, “If you want to talk, it has to be about corrective action, not the details of your relationship. So, either you have to leave Gavinn or I will have to ask you to.” Tyaagi could not understand, “Why? Why do I have to go? How has my personal life got anything to do with my work? Am I not delivering? And I don’t think it is sufficient ground for terminating my employment! You are making an issue of something quite commonplace; we are consenting adults, so what is the problem?”

“The problem?” said RV. “When a man changes his script on being caught, or pretends none of that happened, such a man is clearly one who lacks conviction. When a person dons two different profiles, one for the day and one for the dark, I would not trust my business in his hands. I do not know which is the real Tyaagi that works for Gavinn!” Tyaagi breathed deeply. “Alright! Let us not get theatrical!” he said in a low angry tone. “If it bothers you so much, I will tell her to leave Gavinn!”

“On cue, Visaka and Vishesh exchanged a disturbed glance. They were in fact not very far from that situation. Vishesh had sunk a huge amount into the India business.” That made RV furious. He said, “It is not about who leaves or stays, it is about protecting the integrity of a structure, a system that we all subscribe to. They are as simple as road safety rules. It does get inconvenient now and then, but then it is not about convenience, it is about common and greater good. Nobody forces you to get married, raise a family. But once you do, it is ‘till death do us part’, which incidentally is not a romantic notion but about responsibility. Now, as an organisation, Gavinn is part of that very society with its inconvenient rules. And what is good for the goose is good for Gavinn as well.”

Tyaagi now realised he was talking to a mad man. So he said, “Let me think about this. Let us meet again next week.” “Not next week Tyaagi. Two days is all I have for you,” said RV as he left the restaurant.

Next morning, HR head Kaushal Santrup walked into RV’s office and shut the door behind him. “Tyaagi has sent us a letter from his lawyer that seems like a preamble to a lawsuit for unfair termination of employment!” Kaushal announced. RV shrugged, “I knew he would. Fools and cowards respond like that.” Kaushal: We will have to fight it. Tell me your stance so that I can develop my defence.

RV: We are not ‘defending’ anything. He can do that. We have a stance and we are committed to it.

Kaushal: It is also Saarangi; she alleges sexual harassment. She could well be doing this to pre-empt being sacked herself. Whatever her ploy, fact remains that since Tyaagi is in a position of power, and his partner is much junior, it could well be construed that he is misusing his power!”

RV: I am not interested in putting modern day labels on this episode. This is about irresponsible behaviour, which will hold true in any age. And Gavinn will not subscribe to it.

Kaushal: Listen, she is accusing a senior manager. She alleges he brought pressure on her to reciprocate that there was no volition from her side.

RV: Why are you wasting time on this? All this is nonsense. He brought pressure on her’! Look Kaushal, she made the choice to toe his line. She could well have made a different choice and taken the management’s help. Period. We have been very supportive and helpful always and there is not one lady here at Gavinn who can fault us. I am not diminishing Saarangi’s words, but these are two-faced people. And both should go.

Kaushal: And if Saarangi alleges it is sexual harassment, then?

“Times have changed, RV. There is growing evidence that morals are on the low in organisations, and naturally management is either unsure or unwilling to take a stance.”

RV: Then she will have to give me a non-helpless explanation for why she did not seek management support. At one level, it is misuse of power by a person in authority and on top of that both are using the law as a fig leaf. It is being assumed that the junior cannot refuse, that she was ‘influenced’. Then the law says, “Oh but if she was ‘influenced’, it is not exactly consent, but a case of harassment!” But who is to prove consent or not? Then what happens? Then the case will weigh down on the male partner heavily. Therefore,

this sexual harassment is after all, nonsense. I am not even considering it.

Kaushal: Maybe we need to issue a caveat to employees on workplace liaisons...

RV: You interpret me hastily, Kaushal. This is about married people straying. He is guilty of decimating the home responsibility, and she for encroaching on what does not accrue to her. As an organisation we have to subscribe to the social framework. If as an organisation I can request consumers to deface and destroy mineral water bottles to prevent reuse, not buy pirated CDs, recycle paper, not use plastics, to enable our market environment, then can they not reciprocally ask organisations to save the moral environment? Tyaagi will have to go.

Kaushal: Maybe we must slow down. We have just yesterday received the clearance for the plant in Ahmednagar. Tyaagi has been negotiating with the government. Could we not soft pedal till that gets done?

RV (surprised): Kaushal, I am a leader, not a fixer or broker. If this deal gets sticky, so be it. But endorsing betrayal, valueless conduct, irresponsibility? Never. The home/family is an operating unit to be accorded the same respect. If the head of the home business unit cannot lead well and enable his profit centre, how am I to believe he can work for the benefit of his organisation’s business unit? It is easily extrapolated!

Kaushal: Given the times, such severity may be extreme…

RV: Tyaagi is not some management trainee. It is clearly the wrong example for a senior member of an organisation to set. Importantly, Gavinn has to always be an organisation where women feel safe. The MD’s vision has to be clear on this.

Kaushal: We could look at how others handled this: Teffer transferred its senior director out of the country to get him off a scandal he got into.

RV: What Teffer does is Teffer’s choice. What Gavinn does will be driven by our values. We must never run organisations to ‘look’ good. Covering up, pushing under the carpet, calling in PR… these are ego-driven exercises, born out of faith in falsehoods. I will manage my business and the careers of my managers. But they have to come with values. If their values break, they must go to ‘Start’. Life is not all ladders...

Kaushal: Times have changed, RV. There’s growing evidence that morals are on the low in organisations, and naturally management is either unsure or unwilling to take a stance.

RV: I am neither unsure nor unwilling. Besides, it is the very nature of time to change as it is of water to be wet. Hardly reason to recalibrate values! But some things should not change, the basic edifice on which we build homes should never change. If it does, orgnisations won’t have a foundation for survival. Now I need to work … Don’t forget our 4 pm meeting.

There it ended for the time being. but outside the sound-proofed walls of Raghuveer Vats’ office, the buzz of discussions was mounting. How news travels or leaks, is difficult to flowchart. “Why is RV being adamant?” “Seriously! What anyone does with his personal life should be nobody’s business.” “Seems very harsh a step. Why sack the guy? RV must be deranged…” “What a severe man!” “Tyaagi is dead. Indian law on sexual harassment will nail him any which way.”

Kaushal met Teerath Jain, his next in command, to discuss the letter from Tyaagi’s lawyer, which was a sort of pre-emptive legal opinion that clarified his rights and obligations.

Kaushal: India’s sexual harassment law rests on ‘absence of consent’. Only then is it construed to be. Other countries’ laws go further, where if someone is in a position of authority, then any sexual relationship is harassment. But RV does not even want to hear about it. He says, “Values don’t need the sanctity of law. What is wrong is wrong.

Period.”

Teerath: He has a point, but unfortunately when you are dealing with contractual employment, you have to work through the law. I can hardly see myself saying with conviction: ‘Tyaagi, you have to go, because I think what you did is inappropriate.’Lunch tables at Gavinn saw more huddled heads. “Say, is this code of conduct usually documented?” “Yes, it is supposed to be annexed to your contract. Many MNCs do this.” “But listen, if he is wants to file a suit, on what possible basis can he do so?” “Company will allege it tantamounts to harassment, while he will resort to the flimsy Indian definition and claim it was consensual. Finished. He wins.” “Absolutely, he will simply say that company cannot police personal life! Then what can we do?” “RV will put his tough foot down, and chant his pet mantra about unwritten commitment to the code of common conduct, which include the adherance to social norms. Simple. I can even hear him chant now…” “RV is a clear-headed guy... Tyaagi has no hope in hell. Legally, he may wrangle victory, but in the press he will look like a fool.”

Elsewhere, Teerath was in discussion with Kaushal and RV, “The Indian law is set out in a case called Vishaka versus State of Rajasthan, where the court set out guidelines to be adopted at all workplaces. There is no mention of ‘consensual sexual relationships’. That implies, in India, consensual sexual relationships between adults is not illegal. However, I say an Indian company can and should go further and prohibit this when people are in authority, as is Tyaagi. And I do think RV you are on solid ground. You are a man for policy, plus you have terrific conviction. Besides, we must push for a change because the Indian law only sets out a minimum standard, which is not only outdated but also dreadfully nebulous. It is essential to have a more rigorous definition of sexual harassment in workplaces and this prevents subtler forms of gender discrimination.”

Raghuveer heard him out keenly, while Kaushal added: “Look at the kind of domestic situations that arise daily. Right here at Gavinn. young trainees have married and divorced in eight months. Alcoholism, abusive conduct, domestic violence, and now extra-marital affairs. These kinds of moral delinquencies are present to some degree in many homes.

Where will you draw the line? And how many will you get to know about? Can we ask all these men and women to quit? “Why only men? The husband of one of our brand managers has complained that she has too many late night meetings and parties and their home life is derailing. Do I take that as an official complaint against her professional self or against her personal self? If Tyaagi’s case counts, then this one too does, no? You think a man is setting a bad example having an affair. But you don’t think the lady manager is setting a bad example neglecting her home? And then what do I tell her boss Vijay Cherian who asked me, ‘If she fails to meet her objectives, can I call her husband and report? No? Then why is he calling us?’ So, where will you draw the line RV?’

RV: Interesting arguments; but the case of Tyaagi is clear as day. The issue gets bad when one of them is already married, and break social convention. I have asked you this several times: Is an organisation not responsible for society’s values being maintained? For the upkeep of a moral standard in society? After all, an organisation is part of that very society. Isn’t that why we restrict cigarette and liquor companies from advertising? People will protest — it is in the nature of people to resist hindrance. But finally who is the watchdog? Organisations have to draw the line and make known these lines.”

“I am not saving any marriage, but trying to save the values that are being assaulted by his behaviour. He is polluting the workplace with an attitude that I see as unwholesome. That’s all.”

Kaushal: Pardon me if I come across as argumentative RV. if Tyaagi was having an affair with a lady outside Gavinn, would you have even known? There is also the view that society itself has changed its stance on such things as extra-marital affairs. It is rampant,

so how much can an organisation do? I think a point can be made to the employee that we are disturbed by his conduct. Then it is for the errant manager to take a call. He will then know the viewpoint of his management, and he cannot get abrasive at least, if he expects his career to move upwards.

Or if it was interfering with work... Then there is a case for action. I keep wondering, where do we draw the line?

RV: Why does everything have to have lines and boundaries and definitions? What ever happened to common sense? Why can we not have black and white, yes or not-yes, can or cannot? These grey zones are really nothing, but our own confused sense of democracy.

I agree, the organisation cannot go about sleuthing. But here I am, employing 20 hours of a man’s day to run my business. Does it not become Gavinn’s responsibility? When I hire a man, I hire his whole family’s support. That is how I see life. Maybe your vision is different, so I cannot even tell you you are wrong. You tell me how do I shut this window that shows me a different perspective from yours?

Organisation that have a passion for being value-driven will know right from wrong. And I say this, even if his performance is good, work unaffected, top drawer deliveries; but when his subordinates know he is married, and is having an extra-marital affair, is this good or not good for the value edifice that the organisation stands on? Is it not affecting the fabric with which we weave our businesses everyday? Does he not compromise his seniority and authority?”

Kaushal, then asked softly, “Yet, would you have saved the marriage by sacking him, RV?”

RV replied, “I am not saving any marriage. I am trying to save the values that are being assaulted by his behaviour. Values is the air I spray abundantly in my workplace for people to inhale. He is polluting it with an attitude that I see as unwholesome. That is all.”

Kaushal was satisfied, “Fair, but allow me to suggest a framework for this: Follow full process; set up a sexual harassment committee; give everyone concerned a right to be heard; and then terminate with reasons. You will be well within your rights then to say, “Gavinn strongly believes in social norms. Our code of conduct derives from society and breach of social convention is breach of organisational code of conduct.”

Raghuveer stood up and shook Kaushal’s hand, “Fair!” And then, “But remember, this is not about sexual harassment, but dishonest indulgence. That is really my point!”

Classroom/syndicate discussion

Is economy out there or inside us? Where does business begin? Is business an attitude or a series of acts?

Supplement: What did The Japanese do??? Can’t we do that???

The question whether the Japanese style of Management can be adopted in India may hold more than passing academic interest. We should remember that not long ago we as a nation were much better of than Japan was and in a matter of few decades Japan has transitioned into an economy we can only aspire for. At the end of world war II Japanese economy was practically non-existant. Such was the situation that they had even torn down metal statues of their beloved rulers and cast the metal into bullets. Add to this two nuked out cities and the stigma of being an axis power in the war, the situation was not exactly a planners dream platform for development. For a long time the label “Made in Japan” was eyed with suspicion, a fallout of Japan’s imperialist ambitions of the past. Even the goods manufactured by the Japanese industry in the post war period were of low quality and finish. No one in the world was ready to do business with Japan.I am sure all of you would agree that just about the time of Indian independence, Japan was in dire straits.

Now lets take a look at our great nation in 1947. Many of our worthy members of the parliament take great pains at explaining the “bad” situation the British government left us as a legacy. Tomes have been written about how the western imperialists “plundered” India “dry”. But if we take a rather dispassionate look at things, we might see that British rule was probably the best thing to happen for our nation. It was only after the Queen was proclaimed the ruler of Delhi in 1858 that India had come together under one flag. Lets leave unity out. Take railways, Post and Telegraphs, Bridges, Roads, the education system and of course the revered Civil Services that the Britishers left us. All in all in my humble opinion we were in a much better position than the Japanese were in 1947.The how did Japan in a matter of five decades become the most powerful economy in the world and we are still looking at MNCs as contemporary East India Companies. How did the lowly “Made in Japan” become the respected and coveted brand it is today???

The answer to all these and many more questions is “MANAGEMENT”. When it comes to succeding Nations don’t behave differently to individuals. Thus a nation which is able to discipline itself, marshall its resources and “manage” itself and it’s affairs efficiently will succeed. Japan not only did all this but in the process they gave birth to a school of management thought we know of today as “JAPANESE MANAGEMENT”.So now the question facing us is, why can’t we just copy their style of management and become successful??? Indeed why not??

For this first we have to answer whether management practices can be uprooted from a place and transplanted in a different one and still achieve the same results. The field of comparitive management has studied this dilemma for decades now. Gonzalez and MacMillan have conclusded after extensive studies that Principles and Theory of Management are applicable universally applicable but the philosophy and Interpretation of the theories may vary. The aspect of management, which lacks universality, has to do with interpersonal relationships, including those between management and workers, suppliers, customers, community, competition and government. Management thought like any other philosophy is a body of knowledge and application of knowledge is culturally bound. This fact in itself creates a lot of ifs and buts for adoption of Japanese management as India is probably more culturally diverse than it would have cared for. After examining classroom reading assignments as well as other outside research articles, I feel that there will be a decrease in the Japanese style of management found in the India. While I believe that the Japanese management style has several strong points that would

benefit the United States’ assembly line production and manegement style we so swear by here in India. I do not feel that we will see an increase in the management style being used as a whole. Instead, I feel that we will see only certain parts of the Japanese system put into practice in Indian businesses. The main ideas of the Japanese management system, Kaizen, teamwork, ‘Just in Time’ production, and lifetime employment all seem to be very positive. However, I feel a total revamping of our system will not take place due not only to the differences between the two cultures, but also for the diminished autonomy current workers would experience.

One of the main characteristics of the Japanese style of management is offering lifetime employment to company employees. Lifetime employment is highly regarded in the Japanese community and is very positive in the fact that it allows workers to better identify with the long-term goals and future of the company; however, I do not think the concept will be as warmly embraced in the India. In Japan, young adults are willing to start at the bottom with a low salary because they know that over time they will move up to higher positions like those above them. This is how they are raised. In India, people with higher credentials over other employees do not want to start at a lower wage rate simply because someone else has been there longer. I also feel as a result of the lifetime employment, there is much more intermixing of companies with their employees outside of work. Americans whom we feel proud to emulate like to keep their work and personal lives separate. When the bell signals quitting time, American employees want to leave their office work behind. Finally, the Japanese are able to promise lifetime employment to their employees because when finances need to be cut or layoffs made, management salaries are the first to be cut, due to their philosophy - equality of sacrifice. In America, so much emphasis is placed on the money you earn. I can’t see managers in the American workforce and consequently Indians taking pay-cuts to save an hourly-paid, production line employee. Another major factor of the Japanese management system is their emphasis on teamwork, rather than individual job tasks. Teamwork helps to make jobs wider in scope and eliminate multiple job descriptions, while emphasizing flexibility, rather than specialization. Japan also feels that teamwork increases productivity because whenever problems arise workers are allowed to stop the line and work together to solve problems, without evoking any disciplinary action. Although this seems like a very positive technique, further studies have determined that teamwork actually serves as a form of social control. Team peer pressure, instead of management supervision, now enforces high productivity and quality. If someone on a team messes up, they must now deal with fellow coworkers, whom they work with everyday and this would be difficult in our factories. They now must answer to each other, which increases the stress level of each employee. Also, with teams, individual benefits are never fully recognized; therefore, there is never a feeling to really do anything spectacular by employees. While adding stress to an already hectic day for employees, teamwork also reduces individual autonomy because employees aren’t able to make singular decisions. Also, the Japanese idea of ‘Just in Time" production coupled with their computerized assembly lines increasing stress and reduces autonomy. Although the idea of ‘Just in Time’ production does help eliminate space and cut down on costs, it adds tremendous stress to employees. It can easily lead to overtime work being demanded on short notice. Imagine that happening in India!!! The factories are not run by set shifts, instead, they are run by production schedules that make sure certain amounts of cars are produced daily. If the company does not have a certain part needed for a car in storage and the car has to get finished, then someone must work overtime. There aren’t to many American employees who enjoy being told that they have to work late. Japanese firms expect total commitment from their employees, and it works in Japan because the culture embraces the idea that the man works while the women takes sole responsibility of the family.

Finally, a large emphasis of the Japanese management system is placed on the idea of Kaizen, or the philosophy that constant changes are the easiest and fastest road to maximizing productivity and quality. Kaizen is the one thing that many Japanese managers think American and Indian companies lack. I think the philosophy is a very good one. While I agree that there is always room for change and improvement, the rate at which it occurs within Japanese plants again creates stress for many of the employees. As soon as they learn how to do something, they are being taught to do it differently. Kaizen’s goal is to reduce slack, but in the process it also takes away the relaxed environment of work. Since the Japanese feel that work should never stop, workers are scarred that if they have a moment’s free time, then they will be given more work. This line of thinking makes many employees take their time and do things slowly, so that they are not given more responsibility. I do not question that the Japanese have excelled in producing high quality cars with productive labor. What I do question is how well those practices will transfer to our society. In India we are use to a chain of command, but in Japan there is more of a belief that everyone is equal. This equilitarian approach has not been widely accepted in the India because a great deal of the decision-making is still done in a hierarchical structure. While other countries are successful in transferring to the Japanese style of management, strength for them is that they have never used the American Mass Production system, which we have whole-heartedly embraced. It is too hard to completely change old ways; therefore; I feel that the system most beneficial to India is one that would incorporate the positive ideas from the style of Japanese management and intertwine them with current practices that we use.

Case Study 2: Social Strategies of Jack Welch that transformed GE into the most valuable company in the world

Abstract

The case ‘GE and Jack Welch’ talks about the leadership style of Jack Welch, ex-Chairman and CEO of General Electric. Jack Welch joined GE in 1960, and was named the CEO in 1981. In the initial years as CEO, Jack Welch initiated a restructuring plan, which included massive job cuts, positioning the various businesses as number one or number two in the respective segments, and selling off unprofitable ones. He dismantled the 29 layers of hierarchy and made GE an informal company. The case also throws light on some of the other important aspects of Jack Welch’s strategies like six sigma, globalization, boundaryless organization etc. Issues:

Questions for Discussion:

1. Some Wall Street analysts and academics described Jack Welch as 'the most important and influential business leaders of the 20th Century.' Analyze the various aspects of Jack Welch's leadership style.

2. Analysts felt that where most top executives lost their effectiveness in ten years or less, Jack Welch was an exception, staying on the job and driving GE to elevated levels of accomplishment for 20 years. Analyze the strategies used by Jack Welch, which made GE the most valuable company in the world.

"If leadership is an art, then surely Welch has proved himself a master painter."

- Business Week, May 28, 1998.

"The two greatest corporate leaders of this century are Alfred Sloan of General Motors and jack Welch of GE. And Welch would be the greater of the two because he set a new, contemporary paradigm for the corporation that is the model of the 21st Century."

- Noel Tichy, Professor of Management, University of Michigan, and a longtime GE observer.

Introduction

On September 6, 2001, John Francis Welch Jr. (Jack Welch), Chairman and Chief Executive Officer of General Electric Co. (GE),1 retired after spending 41 years with GE. During the period, he made GE the most valuable company in the world. Analysts felt that, with his innovative, breakthrough leadership style as CEO, Jack Welch transformed GE into a highly productive and efficient company. During Jack Welch's two decades as CEO, GE had grown from a US$13 billion manufacturer of light bulbs and appliances in 1981, into a US$480 billion industrial conglomerate by 2000. Analysts felt that Jack Welch had become a 'deal-making' machine, supervising 993 acquisitions worth US$13 billion and selling 408 businesses for a total of about US$10.6 billion. Jack Welch was infact described as 'the most important and influential business leaders of the 20th Century' by some Wall Street analysts and academics alike. Management experts felt that Jack Welch's reputation as a leader could be attributed to four key qualities: he was an

intuitive strategist; he was willing to change the rules if necessary; he was highly competitive; and he was a great communicator...

The Making of a CEO Jack Welch graduated in chemistry from the University of Massachusetts and in 1959 got a Ph.D in chemical engineering from the University of Illinois. In 1960, he started his career at GE as a Junior Engineer... The Making of a CEO

..However, in 1961, Jack Welch decided to quit the US$10,500 job as he was unhappy with the company's bureaucracy. He was offended that he was given a raise of only US$1000, the same amount given to all his colleagues. He had even accepted a job offer from International Minerals and Chemicals in Skokie, Ill. However, Reuben Gutoff, an executive at GE convinced Jack Welch to stay back. Reuben Gutoff promised that he would prevent him from getting entangled in GE red tape and would create a small-company environment with big-company resources for him. This theme of 'small-company environment' with 'big-company resources' came to dominate Jack Welch's own thinking as the leader of GE. Jack Welch quickly rose to become the head of the plastics division in 1968. He became a group executive for the US$1.5 billion components and materials group in 1973. This included plastics and GE Medical Systems. In 1981, Jack Welch became GE's youngest CEO ever (Refer Exhibits I & II). His predecessor, Reg Jones said, "We need entrepreneurs who are willing to take well-considered business risks - and at the same time know how to work in harmony with a larger business entity…The intellectual requirements are light-years beyond the requirements of less complex organizations."

The Welch Era at GE: 1981-2001During the first five years as CEO, Jack Welch emphasized that GE should be No.1 or No.2 in all businesses or get out of them. He disposed off the businesses with low-growth prospects, like TVs and toaster ovens. He expanded the financial-service provider GE Capital into a powerhouse. He also entered the broadcasting industry with the acquisition of RCA Corp., the owner of NBC TV network...

Jack Welch's Leadership StyleAnalysts felt that Jack Welch's profound grasp on GE stemmed from knowing the company and those who worked for it. More than half of his time was devoted to "people issues". Most importantly, he had created something unique at a big company - Informality. The hierarchy that Jack Welch inherited with 29 layers of management was completely changed during his tenure. Everyone, from secretaries, to chauffeurs to factory workers, called him 'Jack'. Everyone could expect - at one time or another - to see him. Analysts felt that Jack Welch gave employees a sense that he knew them. Commenting on the informality at GE, Jack Welch said, "The story about GE that hasn't been told is the value of an informal place. I think it's a big thought... Jack Welch - The Strategist Analysts felt that Jack Welch was focused and analytical. He restructured GE's portfolio from 350 businesses during 1980s down to two-dozen core activities by late 1990s. During his initial years as CEO, he either expanded internally or made acquisitions to position all GE's businesses as either number one or number two in their fields. The planned acquisition of Honeywell, Inc., which didn't materialize, was expected to redefine GE for the years to come...

Jack Welch - The Leadership Guru After stepping down as the CEO, Jack Welch became an advisor to William Harrison, CEO, JP Morgan Chase. He also entered into an agreement to become a leadership guru to several other clients. He was also named the special partner at New York investment firm, Clayton, Dubilier & Rice. Jack Welch also

authored his autobiography, "Jack: Straight from the Gut', which was at the top of the best-sellers list in 2001. Analysts felt that Jack Welch's influence did not end at GE. Many executives who had worked under Jack Welch went on to head more than a dozen U.S. companies

CASE DISCUSSION 4: YOUNG MANAGERSTelling The Difference

By nature, men are nearly alike; by practice, they get to be wide apart. ` - The Confuscian

Analects

Prahlad sirur had been sacked from matio India where he was a trainee, for having wisened up to some wheeling dealing in the organisation. Shiv Ramdas, his father’s colleague, was keen to take Prahlad into Kafkat India as a trainee, but father Sirur was firm: “Let him figure it out...I dislike this whole madness of jump into a job without knowing anything about your turf experientially. Let him spend some months getting his hands dirty.”

We will now watch his experiences over the next 22 months.

Prahlad decided he was better off on his own and took the dealership of a computer company. Networking with batchmates found him an assignment at Daulat Cooperative Bank (DC). Unhappy with the current, vendor the GM handed him the computerisation of two branches.As it turned out, the ousted vendor was upset and turned hostile against Prahlad. Things came to a head one day with the IT committee asking Prahlad to present himself for an evaluation. Without much preamble, the 12 men around the table told Prahlad that he had not fulfilled the terms of the contract.

Prahlad had done exactly as agreed, exactly as they had told him to, but he was accused of supplying defective software. Prahlad was confused. He had been validating all the processes and he knew the software was working. But DC handed him a legal notice claiming Rs 2 lakh per branch towards the restoration of the defective software. Harried and harassed, Prahlad pleaded with the committee to not resort to legal means, but it was to no avail. He tried meeting others at the bank to find amicable solutions, but all he met with were grim, severe faces. Prahlad was scared; scared, because he did not know what his mistake was. With some help, he found a lawyer.

Lawyer Pinakin Varia heard Prahlad’s story with closed eyes and open mouth, nodding periodically. As soon as Prahlad’s narration ended, Varia opened his eyes abruptly. Then matter-of-factly, he said, “Arre! Branches chal raha hai na? kaam ho raha hai na? Bas! Then the software is working!” And he dictated a most stiff reply to DC and told them off summarily, adorning the letter with serious looking stamps and seals. The lawyer’s reply settled it all. The day Prahlad came to thank him, Varia said in his delectable colloquial Hindi, “The industry is filled with donkeys. Don’t be naïve. Their game is up. Why would you pay them Rs 4 lakh? Anyway, good experience. Now go take on the world! And hanh…don’t be scared!”

But Prahlad had developed more insights into the kind of slush there was. Matio and now DC…he felt depressed. He had been on his own for 10 months, this was not his cup of tea. Over the weekend, he sent out his CV to a few placement firms. A week later, Shiv Ramdas, his father’s colleague called him and offered him management training at Kafkat. Prahlad felt excited, at the idea of being relieved from all this, but for a brief moment only. “No uncle, I would not like to work where dad works. I won’t grow...people will make allowances for me because I am Sirur’s son…I have three interviews coming up.”

Prahlad panicked. He was in a Lacoste t-shirt! He ran up to his father’s office, shut the door and bolted it. He rushed him out of his shirt, handed him the tee and put on the pin-striped shirt But Prahlad ended up meeting Madhav Iyer, who was visiting Kafkat Bangalore to meet other candidates. Before he knew, he was told he was having tea with Naushad Latif, the CMD! Prahlad panicked. He was in a Lacoste t-shirt! He ran up to his father’s office, shut the door and bolted it. Then he rushed him out of his shirt, handed him his tee and putting on the pin-striped shirt, he said to a thoroughly confused Sirur, “They have arranged for a meeting with Mr Latif. I can’t meet him in a tee, dad!” Sirur was stricken as he saw the boy rush out again.

Prahlad’s heart pounded as he entered The Man’s room. Latif came to the door with a huge smile and a warm handshake. As the tea things were being laid out, Latif asked him about his business, “So, did you get around to finding out what the Branches meant when they said the software was not functioning?” Prahlad was thrown off his feet. Now why would the CMD of a Rs 2,000-crore company want to have coffee with him and, on top of that, want to know what a two-bit bank branch felt about anything at all? But he heard himself explain, “Yes sir, I did; it was some minor cosmetic issue like the passbook printout formats were different from the one they had been used to.”

“And what else do you think it was?” asked Latif. “Training, which should have run parallel. To an extent, I was impatient to show off my skills, the branch manager was in a hurry to have the system running too. I guess I was inexperienced.” Handing Prahlad his cup, Latif asked, “And what did you learn out of this experience?”

Said Prahlad, “Well...that there is a difference between selling hardware and selling a ‘solution’ — and this affects customer experience.” Latif hmm-ed then said, “Work with us for two years, get trained, then decide if you want to return to being a businessman. Shehnaz, my colleague, will give you a letter and explain the rest of it…welcome to Kafkat, young man. See you at 8 a.m. in the Mumbai office on Thursday.”

As a stunned Prahlad got up to go, Latif said, “And yes, while I don’t mind Friday dressing, Sirur looks dreadful in a tee!” Prahlad did believe he was going to die. All this was too much for him. The first three months were a whirlwind of training, functions, departments and regulations. Prahlad barely slept, as read up all kinds of manuals. Then he was placed in the new Track-4 division aimed at the small and medium entrepreneur. “You will not be called a trainee anymore,” said Madhav. “Having a title like ‘trainee’ will lessen the experience.”

Now, Kafkat had a very old, trusted dealer, Mittalbabu, also their largest. Mittal’s company Aspen had four divisions, each of which was aligned to a division of Kafkat, except Track-4. Mittalbabu was convinced Track-4 was hurting his other businesses, but it bothered him immensely that no one at Kafkat was wooing him. The ‘naya ladka’, Prahlad, was ignoring him, and working more with other dealers who were committed to Track-4.

What also bothered Mittal was the fact that whereas every new trainee at Kafkat was made to rub his nose on the Aspen ground, Prahlad had neither been assigned to Aspen nor was he personally paying homage. Mumblings of all this reached Prahlad — “Yaar, Mittal seems very annoyed with you. What did you do?” — and he was disturbed. Speaking to his mother that night, he said, “This is why I didn’t want to work in dad’s office. If Mittal finds out then everyone will be like ‘Sirur’s son is not like Sirur!’ What am I going to do?”

Mittalbabu came to Kaf Towers to meet the CEO, having sent him a message, “I am disturbed by your new trainee.” But CEO Anuj Rao did not meet him. Instead, he asked his VP, Soumil Vyas to meet him. Mittalbabu then said he wanted to talk to the VP alone. Vyas said, “I cannot talk to you alone, it is critical to have the GM in as I am also training him to take over from me, so…” Kaushal Dhir, the GM, came in, greeted Mittalbabu and ordered tea. Then he said, “Yes, I have those special biscuits from Lucknow this time! Let me get those and also the regional manager.” The RM, Madhav Iyer went to the main hall and scooped up Prahlad and said, “Come, we have to meet Mittalbabu...”

And thus, when they all arrived at the VP’s room, CEO Anuj Rao also walked in and said, “Ah, so here we have the whole team! Nice, nice. Now Mittalbabu, tell us your problems. I will start writing them on the white board.” And as Mittal spoke, Vyas wrote them all. Mittal noticed that once again Rao was up to his old trick. He never met customers without his team. But Mittal did not like seeing Prahlad in their midst. Presently, he was rattling off his complaints related to Prahlad, Track-4, ‘Prahlad and Track-4’.

Prahlad sat there shaking and surprised why he was in such august company and had he done something that had upset these men? Listening to Mittal condemn Track-4 and Prahlad’s neglect, rattled Prahlad even more. The corporate world was so complex…he had not intentionally ignored Mittal; why, no one asked him to attend to Mittal…but he decided he was not going to defend himself this time. I guess it is best to let them have their say…maybe there is something deep and profound in all this that I won’t understand yet…

As Mittal went on and on, Prahlad’s condition grew worse. But none of the men would ask him anything, none would even glance at him in reassurance or rebuke; Anuj Rao took one issue at a time, debated it threadbare till it was resolved to Mittal’s satisfaction and then he would wipe the issue off the board. When the board was clean, they stood up, shook hands, made all those polite happy sounds of relationships restored and Mittal was led to the lift by Madhav and Dhir. Prahlad felt heady and exhausted. He was now alone in the room with Rao. Rao watched him with a smile, then said, “What do you think, Prahlad, of what he said?”

Prahlad replied, “Sir, he is right, but I did not know I was supposed to consult him..” Rao simply nodded. He did not compliment him, did not chide him. Later Prahlad asked Madhav, “Why didn’t Mr Rao say anything to me?” Madhav smiled, “Because he did the ‘saying’ to me! You are training, when you err, we learn where our system has failed. It was my fault. I should have arranged for you to meet Mittal. He is an elderly man and almost a part of Kafkat, so yes, he gets upset when our business takes turns away from his! But I hope you learnt something about management? It takes great inner clarity for a CEO to gauge a customer’s tantrum, yet keep the dignity of a trainee! Relax!”

Prahlad felt a deep sense of something he could not define. But to his dad, he said, “They were so decent, dad! You know, Mittal is a big customer, but Mr Rao did not once put me down. And he kept referring to me as Mr Sirur!” A couple of months later he was to run headlong into another crisis. One of Track-4’s dealers placed an order for some hardware. As per rules, Prahlad was required to check the order for ‘effective servicing’. Part of the order was a hard disk controller of a certain type. Prahlad ordered a different type. That turned to be a costly mistake. Kafkat had to give a free replacement worth Rs 65,000.

When the dealer wrote in, it was the worst day of Prahlad’s life. He went to Madhav and explained most gingerly. Madhav nodded briefly, and said, “Send me a mail on this, please?” A week later, Prahlad received an email reply from Madhav with the approval.

The breath he had held in these seven days, he now exhaled in utter relief, when suddenly, he saw, there sat below Madhav’s reply a whole chain of mails! His first mail explaining the error and asking for replacement had gone right across the organisation and up, all the way to Anuj Rao! No one had hidden the issue: yes the sales guy made a mistake, he is a fresh recruit. He read each of the nine mails below, took in the language, and came up all the way to Rao’s reply: “If our guy made a mistake, we need to replace. Approved.”

He felt a deep sense of something he could not define. But to his dad, Prahlad said, “They were so decent, dad! Mr Rao did not once put me down. And he kept referring to me as Mr Sirur!” No bad mouthing, no reprimanding, no nothing. Prahlad met Madhav. “I am really sorry about this Madhav…I didn’t know…” Madhav shook his head in a dancing sort of way and said, “Prahlad, while growing our sales, we have to grow you also no? All of us here have our battle scars! Rao is Latif’s disciple almost! Both believe in open management styles. The fact that the mail chain was clear and transparent is education enough. But make sure you write out your ‘learning experience’ report and file it.” Soon, Prahlad became a key part of Track-4’s evolution. Therefore, he was assigned the task of working on the annual performance update presentation on Track-4 for the CMD. “And you will present it, Prahlad,” Madhav had said.

Around then, a sale got into conflict between direct sales and Track-4 sales. Madhav took a decision on it as regional head, and he gave Prahlad the go-ahead to run with it and settle it early. So, Prahlad got cracking with the implementation. One day, without a warning, the GM, Kaushal Dhir, walked into the conference room where Prahlad was test-running his presentation, and blew him up for going ahead with the implementation. “How can you do this? You should have bothered to ask me, no?” Prahlad’s face went white. He said, “Sir, Madhav told me to do it...” Dhir was annoyed. “What do you mean Madhav told you? I will talk to Madhav! These things are not done like that!” And Dhir shuffled to the telephone hastily.

It didn’t make sense, but Prahlad felt very vulnerable and small. And right before his eyes, Dhir called Madhav and said, “Yaar, you come to the conference room, please. This matter is serious.” When Madhav arrived, the sequence of events would have made anyone else laugh, but Prahlad, who was so worn out with eight days of working 17 hours on the presentation. So, Madhav arrived and Dhir said, “How can you?” And Madhav explained why he could, and Dhir swore he could not…Madhav heard him out and said, “Yes Kaushal, you are right. I will change that.” Then, turning to Prahlad, he said, “See me in the evening. I will explain this to you, OK?” When Madhav left, Dhir’s demeanour changed, and he slapped Prahlad on the back and said, “So, young man, how are you liking it? Are you happy?” And Prahlad broke down. It was most unexpected. Dhir was at a loss. For a minute, he was most flustered, then he said, “You come to my room, please.” There he got to the root of the issue. “What is the matter? Are you unhappy? Did anyone say anything to you? You just tell me, please!”

Prahlad had been in Mumbai eight months and had shifted transit houses thrice, unable to bear the smell of fish in Colaba. He missed home very much, but did not have the nerve to ask for leave, fearing that HR would agree since he was Sirur’s son. Last week, he had also learnt that his cocker spaniel Espresso had been put to sleep. He was working through the weekend, so he could not even bid Espresso farewell. And now Prahlad would not talk; he just apologised and called it a silly aberration. But Dhir was alarmed. He called Madhav and said, “You come here, please. And now.” When Madhav arrived, Dhir yelled at him. “What kind of a boss are you? The lad is new, he is young, you should counsel him well, now should you or not? Just look, please. See his condition.”

And turning in the same breath to Prahlad, he spoke at length about mistakes, how valuable they are. “This is how you grow. Why are we here then if we wanted to place responsibility on a trainee, correct?”“I used to wonder why people rave about Mr Latif. Now I have seen, it’s his ability to grow continuously, putting work and others above himself. He has always nurtured growth based on a foundation of ethics, not at any cost”

The door opened and Shiv Ramdas entered. Prahlad looked at him and as he yelled out a greeting, his voice cracked in happiness. Finally, he was meeting someone from home! Dhir was taken aback, “You two know each other?” Shiv laughed. “Why, you also know his father! He is Sirur’s son! He had this big bee in his bonnet about working where his father was and so, we decided, no one except HR will know who he is! But now it is OK, yes?” he asked Prahlad.

Even as Madhav looked shocked, Shiv said, “The venue for the chairman’s presentation on Track-4 has been changed to Bangalore. Mr Latif wanted Prahlad to meet his family...it’s been eight months. I have the pleasure of conveying this message!” This time there was a Diwali party at the Bangalore corporate office. Aroop Saxena, was quick to find Prahlad. “Hello there, timid one! How’s it going? I understand you are now working for the man you thought was a bubble? Kuch ban raha hai or would you like me to check at Anemore?” Prahlad smiled recalling the comments at yesterday’s presentation. Not loud, not exaggerated, not underplayed. Not even patronising. He felt a deep sense of relief….He now said, “You know…there are organisations that build you and there are organisations that ask to be built. Kafkat grows by building their resources. It’s real stuff, man!

“I used to wonder why people rave about Mr Latif. Now I have seen, it’s his ability to grow continuously, putting work and others above himself. You can say that about your J.B Aryaveer too except Latif has always nurtured growth based on a foundation of ethics; not growth at any cost. He has this ability to separate grain from chaff and then he works only on the grain… then he gives them opportunities to make mistakes and the freedom to play. I have seen this myself, and it is so secure, the feeling.” Aroop laughed. “Tell me, at 26, two years from now that is, will you be assistant vice president like I am? Will you be driving an Innova? Will you have club membership?” Prahlad shook his head. “If that’s what I wanted, I would have joined Aryaveer’s Anemore, no?”

Case Discussion 5: KINGFISHER AIRLINES

Kingfisher Airlines is a wholly owned subsidiary of United Breweries Holdings Limited, The UB Group’s investments holding company. The Airline has been allocated the IATA airline code of ‘IT’. The UB Group is one of India’s largest conglomerates with a turnover of US$ 2 billion and is the largest Indian manufacturer of beverage alcohol—beer and liquor. With the completion of a transaction to acquire a 54.54 per cent stake in Shaw Wallace and Company Ltd by end June 2005, the UB Group will become the second largest liquor company in the world with annual sales in excess of 60 million cases.

THE UB STORY

The UB group has solid Scottish genes, founded as it was (expectedly) by a Scottish gentleman- Thomas Leishmanin (1915). The Group took its initial lessons in manufacturing beer from South Indian based British breweries, elected its first Indian director in the year of Independence and survived through two World Wars and occasional jolts of prohibition, emerged as one of the top global beverage brands before growing and diversifying into a multifaceted conglomerate.

It was Vittal Mallya- aged 22, who assumed his responsibilities as the company's first Indian director, 13 days after India gained freedom.A year later, he replaced R G N Price as the Chairman. Thus, the Group's multi-faceted journey in both India and abroad began.

United Breweries made its initial impact by manufacturing bulk beer for the British troops, which was transported in huge barrels or "Hogsheads". Kingfisher, the Group's most visible and profitable brand, made a modest entry in the sixties. The flight of the "spirit", since then, has helped United Breweries reach dizzy heights in India's Rs 25,000 crore liquor industry. The diversifications that followed ensured a leadership position in industries as diverse as Alcoholic Beverages, Pharmaceuticals, Agrochemicals, Fertilizers, Engineering, Infrastructure Development and now Media and International Trading.

From Beer to a Formidable Group

The 1950s to 60s was time for rapid expansions and acquisitions. First was the addition of McDowell as one of the Group subsidiaries, a move which helped United Breweries to extend its portfolio to wines and spirits business. Strategically, the Group moved into agro-based industries and medicines when Mallya acquired Kissan Products and formed a long-term relationship with Hoechst AG of Germany to promote what is now known as Aventis Pharma. The acquisition run continued unabated against all odds, especially during the prohibition days of the late 70s under the premiership of Morarji Desai.

Following his father's untimely death, Vittal Mallya's son Mr. Vijay assumed the Group's mantle, also at an early age of 28, in 1983. Dr. Vijay Mallya shaped the Group as a true global conglomerate, with the aid of diverse businesses.

The Pegasus

The ubiquitous flying winged horse, which is the symbol of the United Breweries, irst found its exalted place as the Group logo nearly six decades ago. Then, the Helladic horse – associated with beer and nectar in Greek mythology - carried a beer cask between the wings, ostensibly because beer formed the core operations of the Group.

The current symbol, however, does not have the cask, a reflection of the Group’s multifaceted operations that stretches far beyond beer. The colour, gold and UB blue, reflects exclusivity and dynamism that have become the hallmark of the $1.1 billion conglomerate.

ANALYSIS OF KINGFISHER AIRLINES

IT’S VISION “The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel experience to all our guests.”

MISSION STATEMENT

We constitute a large, global group based in India. We associate with world leaders in order to adopt technologies and processes that will enable a leadership position in a large spectrum of activities.

We are focused on assuming leadership in all our target markets.

We seek to be the most preferred employer wherever we operate.

We recognize that our organization is built around people who are our most valuable asset.

We will always be the partner of choice for customers, suppliers and other creators of innovative concepts.

We will continually increase the long-term value of our Group for the benefit of our shareholders.

We will operate as a decentralized organization and allow each business to develop within our stated values.

We will be a major contributor to our National Economy and take full advantage of our strong resource base.

We commit ourselves to the ongoing mission of achieving Scientific Excellence.

VALUES

Safety This is our overriding value. In our line of business, there is no compromise.

Service We are all in the hospitality business; we must always seek to serve our guests and gain their trust, goodwill and loyalty.

Happiness We seek to build an organisation with people who choose to be happy, and will endeavour to influence our guests and co-workers to be happy too.

Teamwork We will succeed or fail as a team. Each one of us must respect our colleagues regardless of their rank, and we must work together to ensure our mutual success.

Accountability Each one of us will be held accountable for the successful execution of our duties, commitments and obligations, and we will strive to lead by example.

KEY PEOPLE INVOLVED

Kingfisher Airlines is led by a dynamic, extremely talented and experienced team:

Board of Directors

Dr. Vijay Mallya – Chairman & Managing Director

Dr. Vijay Mallya is the face of the $2 billion UB Group. Dr Mallya took over the reins of The UB Group in 1983 at the tender age of 28 and has, since then, steered The UB Group to a multinational conglomerate and the 2nd largest spirits group in the world. Dr. Mallya is instrumental in shaping the Kingfisher brand as a truly international superbrand.

Mr. Subhash Gupte,Vice–Chairman, The UB Group

Before joining The UB Group ten years back, Mr. Gupte has served as the acting Chairman and Managing Director of Air India. He comes on board Kingfisher Airlines as a strategic direction provider to the company.

Mr. A.K. Ravi Nedungadi

Mr. Nedungadi is The President & Group CFO of The UB Group and brings to Kingfisher Airlines a rich and diverse experience of corporate finance with him.

Mr. V K Rekhi

Mr. V K Rekhi is the President of the Spirits Division and has over 37 years of experience. He has served on the Board of various Public Companies both in India and abroad.

Mr. Rup Pillai

Assistant Vice President with The UB Group, has his valuable experience in the finance function available to Kingfisher Airlines on tap.

Operating Team

Mr. Nigel Harwood Chief Operating Officer

Nigel joins us from Airbus where he was Head of Sales for India & Asia concluding several high profile deals. Prior to that, he was Head of Rolls Royce, Toulouse. As an engineer, Nigel has extensive aircraft and engine knowledge, first hand experience of start up operations with the A320 and the IAE V2500 Engine and has worked alongside Indian Airlines in the 1990's.

Mr. Parvez Damania, Executive Director

Parvez is a well-known name in the aviation business in India. He has served as Executive Director of Sahara Airlines Ltd., and has also been the Chairman of Damania Airlines.

Mr. Hitesh Patel, Vice President – Engineering

Hitesh has joined Kingfisher Airlines from JetBlue where he was Head of Engineering. Hitesh has to his credit, the record of having maintained the best fleet with the highest dispatch reliability of Airbus A320s world-wide.

Captain D D Gandhi, Vice President – Operations

Capt. Gandhi is a senior Training Captain/Examiner on the A-320 aircraft. His distinguished career spans 32 years with Indian Airlines and a year with Air Deccan. He has a total flying experience of approximately 21000 hrs.

Mr. Vispi Damania, Vice President Finance

Vispi has served as Financial Advisor to several Indian and MNC corporates and was also heading the Finance function at Damania Airlines as Director –Finance.

Mr. Manoj Chacko, General Manager Sales

Manoj brings with him top-of-the-line experience in the Sales function having worked with Emirates, where he was Sales Manager- Western India. Prior to Emirates, Manoj has also worked with KLM Royal Dutch Airlines.

Mr. Girish Shah, General Manager Marketing

Moving from another UB Group company - MABL, Girish heads the Marketing function at Kingfisher Airlines as General Manager-Marketing. His rich experience of 12 years is with leading consumer products MNCs like Reckitts, Johnson & Johnson and Scottish & Newcastle/UB, Europe's largest brewer.

Ms. Rubi Arya, Head – HR

Rubi was heading HR with TDV, a UB Group company, before moving as Head HR for Kingfisher Airlines. Prior to The UB Group, Rubi has worked as a Senior Consultant with the Human Capital Solutions Group of PWC and before that with Asian Paints.

Mr. Bhupesh Joshi, General Manager – Airports

Bhupesh has over 20 years of experience in the Airline trade with leading companies like Smart Travel & Trade Services, New-Delhi as Head Charters & BPO Operations for 3 yrs. Bhupesh has also spent 6 years with Air Canada as Station Manager - New Delhi.

Mr. Sanjay Bahadur, Head - Corporate Affairs

Sanjay has served as CEO of Taj Air and prior to that as Head of Corporate Affairs for Sahara Airlines where he worked for over 10 years.

Mr. Ajit Bhagchandani eneral Manager - In-Flight-Services

Ajit heads the In-flight services function at Kingfisher Airlines. Ajit has worked with Qatar Airways and Jet Airways as Safety and Emergency Procedures Instructor. He has over 10 years of work experience.

Captain K.Ravindran General Manager - Flight Safety Captain Ravindran was an approved Check Pilot/Instructor and DGCA examiner on the Airbus 310. He was selected as Right Operations Inspector in 1991 and trained by ICAO specialists. He has logged over11,628 hours of flying.

Capt Jesudasan, Head - Training

Capt. Jesudasan is an Examiner on the Airbus A 320. He retired as Director of Training at Indian Airlines and has over 20,000 hours of flying experience with him.

Capt.Mistry, General Manager – Operations

Capt.Mistry was General Manager – Southern Region for Sahara Airlines. Prior to that he was Manager Operations - Western Region for Indian Airlines. He has also served as Director-Operations of Blue Dart. He has a rich experience of over 40 years.

SOME OF ITS SERVICES OFFERED

You’re flying Kingfisher Class

Up here, in every one of our brand new Airbus A320 Funliners, every guest is a class above; pardon the pun. Wipe your mind clear of terms like Business and Economy and J and Y and the rest. You are now flying Kingfisher Class. So, what can you expect? Simply put, a whole lot more.

In-flight entertainment to take-off with Personalized screens and headphones broadcasting 5 video channels and the exclusive Kingfisher Radio – 10 audio channels to make your journey an entertaining experience.

Let’s talk about your safety We’ve done everything possible to ensure it. With the most sophisticated communication, navigation and security systems – both in the air and on the

ground. As well as with a highly trained and skilled team of pilots and cabin crew who operate in completely state-of-the-art paperless environments.

Feeling comfortable, now? You will, with the seats we’ve got in store for you. Indulgently wide, plenty of legroom and adjustable headrests. Our superbly groomed flight attendants will ensure that you’re well taken care of.

Bon appetit A special selection of food and beverages are available on board.

Are you there yet? Your individual moving map on the personalized entertainment screen will let you know. It will continually keep track of your Funliner’s altitude and speed, as well as flight time remaining to keep you on top of things at all times.

The little details The Kingfisher Class experience begins even before you step on board. When you book your ticket online in the comfort of your home or office. At spacious terminals. At the convenient self check-in counters. And the attention to detail continues when you step on-board. With swanky designer interiors, spacious overhead storage bins, a professional crew decked in designer uniforms

FACT SHEET

Fleet-- First private Indian airline to commence operations with brand new aircraft -- A total of 33 brand new Airbus aircraft on order - 10 A320s and 3 A319s are on firm order, with options for buying a further 20 aircraft

-- All aircraft are powered by International Aero Engines (IAE) V2500- A5 -- Kingfisher Airlines aircraft will all have a single class of travel-Kingfisher Class-- The A320-200 will have seat 174 guests, all in Kingfisher Class while the A319s will seat 144 guests in Kingfisher Class -- All aircraft will be equipped with an advanced Airborne Communications Addressing and Reporting System --ACCARS -- that will continuously monitor and keep watch over every aircraft, even while it is in flight-- All aircraft will be equipped with an automated external defibrillator, a simple device used to treat sudden cardiac arrest

-- All aircraft feature a paperless cockpit

In-flight entertainment

-- Personal video screen for every seat

-- 10 channels of audio for the listening leisure of guests

-- 5 channels of video in every seat screen

Kingfisher class experience

-- Designer interiors

-- The widest seat in the Indian sky

-- Flying models in Kingfisher uniforms

-- Technologically advanced check-in facility

MAJOR PALYERS

1. Indian (erstwhile Indian airlines)2. Jet airways

3. Spicejet

4. Air Deccan

5. Paramount Airways

6. Air India

7. Go Airlines

8. Alliance airlines ( subsidiary of Indian)

9. Sahara Airlines( taken over by Jet)

ITS NETWORK

1 Agartala

2 Ahmedabad

3 Bagdogra

4 Bangalore

5 Chennai

6 Cochin

7 Delhi

8 Dibrugarh

9 Goa

10 Guwahati

11 Hyderabad

12 Jaipur

13 Kolkata

14 Mangalore

15 Mumbai

16 Pune

INTERNAL ENVIORMENT

SWOT ANALYSIS

STRENGTHS

Good brand name. Strong presence in other businesses.

A brand new fleet of quite and comfortable A320s and A319s

The largest comparable seat amongst domestic airlines in India with the greatest width and more legroom.

First Indian airline to order AIRBUS 380. Good financial back up. Healthy promotional strategies. Good inflight facilities.

WEAKNESSES

Less number of trained pilots.

Lack of proper channels. Less no. of planes to penetrate into market. No experience in this field. No special facility to travel in Foggy conditions.

EXTERNAL ANALYSIS

OPPORTUNITIES

Growing population.

Increase in spending power of people. Growing business transactions. Growing craze for air travel Expanding operations to overseas. Boom in tourism sector. Good money can be raised through IPO.

THREATS

Increase in number of players in aviation sector.

Infrastructure of airports is very poor. Safety concerns in air travel.

Consolidation of large players( JET taking SAHARA) Lack of support from Government. Rise in prices of ATF (Aviation turbine fuel)

EXTERNAL FACTOR EVALUATION OF

KINGFISHER AIRLINES

S.No OPPORTUNITIES WEIGHT RATING SCORE1 Growing Population 0.15 3 0.452 Higher Disposable income 0.05 3 0.153 Increase in no. of business transactions 0.05 2 0.14 Craze for air travel 0.05 3 0.155 Expanding operations in overseas 0.075 3 0.2256 Boom in tourism sector 0.075 2 0.157 Capital can be raised through IPO 0.1 3 0.3

THREATS1 Increase in no. of players in aviation 0.15 2 0.32 Infrastructural bottlenecks 0.05 2 0.13 Safety concerns 0.05 2 0.14 Consolidation of large players 0.1 3 0.35 Lack of Government support 0.025 2 0.056 Rise in ATF prices 0.075 1 0.075

TOTAL 1 2.45

INTERNAL FACTOR EVALUATION OF

KINGFISHER AIRLINES

SNo. STRENGHTS WEIGHT RATING SCORE1 Good brand name 0.05 3 0.152 Strong presence in other businesses 0.025 3 0.0753 A brand new fleet 0.25 4 0.14 The largest comparable seat 0.05 4 0.25 First Indian airline to order AIRBUS 380 0.1 4 0.46 Good financial back up 0.1 2 0.27 Healthy promotional strategies 0.15 3 0.458 Good inflight facilities 0.1 3 0.3

WEAKNESSES1 Less number of trained pilots 0.15 2 0.32 Lack of proper channels. 0.05 3 0.153 Less no. of planes to penetrate into market 0.05 3 0.154 No experience in this field 0.075 1 0.0755 No special facility to travel in Foggy

conditions0.075 1 0.075

TOTAL 1 2.625

COMPETITIVE PROFILE MATRIX

KINGFISHER AIR DECCAN AIR INDIA

S No

CRITICAL SUCCESS FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

1 Promotional strategies

0.2 4 0.8 2 0.4 2 0.4

2 Trained manpower

0.15 2 0.3 2 0.3 3 0.45

3 Network 0.1 1 0.1 2 0.2 3 0.34 Collaborations 0.05 2 0.1 2 0.1 3 0.155 Fleet size 0.1 1 0.1 2 0.2 3 0.36 Technology 0.1 3 0.3 2 0.2 4 0.47 Market Share 0.15 1 0.15 2 0.3 4 0.68 Brand name 0.05 4 0.2 2 0.1 3 0.159 Customer

Satisfaction0.1 4 0.4 3 0.3 2 0.2

Total 1 2.45 2.1 2.95