Raju’s Dilemma

Submitted By :

Name - Junaid Shahid

Reg. ID - 7384

Decision Making-Raju's Dilemma

Case Study

Q1) What is the central issue to be addressed in this case?

The central issue to be addressed in this case is to decide that whether the Raju should stay with Wellbonne or shift back to his previous company Charkraj. If Raju Stays at Wellbonne he would have to face the downsizing or convince his vice president not to downsize and come up with alternatives. On the other hand if Raju shifts back to his old company Charkraj then he has to face his old colleagues who may not accept him.

Q2) If you were to be Raju what decision you will take?

If I were in Raju’s place my decision would be to stay at Wellbonne and convince vice president to avoid downsizing by suggesting him with alternatives. If in case the downsizing is necessary for Wellbonne’s survival I would have discussion with vice president to come up with effective alternatives by which we will be able to minimize downsizing and fix the problem that company is currently going through.

Q3) Please indicate how you will justify decision of Raju as suggested by you.

Raju left his company Charkraj for two reasons first one was to take up a senior job at Wellbonne and second one was getting a higher salary, almost double of what he was getting at Charkraj. Other than that there were no issue for him it was like going from one successful organization to another despite of the facts that there were major difference in both the organization which he found out later. There were differences in both companies in terms of the information sharing, the organization structure, organization hierarchy, barriers in information and inter organizational communication.

If Raju shift back to Charkraj he would have to face the following issues:

Raju would not have the image what he had earlier when he left Charkraj, instead other employees will not accept him because he left an Indian organization to join a MNC and came back when things got bad there.

Charkraj is an inefficient organization and in order to keep the organization healthy and growing in the bottom 20% of the employees have to be removed every year.

It will be difficult for Raju to manage in Charkraj as other employees will not accept him New hiring in Charkraj will improve the company as newer employees would be value based and

will work collectively for organizational goals. But this will benefit Charkraj only for a short while as the old employees would still be following the same old customs. This will create two large groups within an organization one of old employees and other of new employees thus it will take a long time for Charkraj to get on right track.

Raju will still have to implement downsizing in Charkraj to give the company a right direction but wasn’t this because of which he will leave Wellbonne.

If Raju Stays at Wellbonne he would have to face following issues

He will have to face downsizing but he can convince his vice president to go with alternatives and minimize downsizing or opt for effective downsizing.

This would raise his image in front of his vice president as well as he would think that Raju instead of just following orders came up with better options to minimize the negative impacts of downsizing and is thinking about the organization core values and ethics even though the organization is going through problems.

This would also increase the Raju’s reputation amongst the employees which will help Raju make better decision for a company with a workforce who likes him and works with him.

Based on the above factors I suggest Raju to stay in Wellbonne and not only face the downsizing but effectively implement it in order to minimize its negative impacts and optimize its positive impacts. Avoiding downsizing in Wellbonne will not help Raju as he will have to face same issue in Charkraj. Moreover jumping from one company to a former company within 3 years of joining from a much higher salary package and designation will raise serious questions on the capabilities and skills of Raju.

“A Rolling Stone Gathers No Moss”

(Publius Syrus)

Q4) Do you agree with the downsizing philosophy of Wellbonne because everybody worked according to organization directions?

Downsizing is done by companies for 2 major reasons one being the high number of employees and second one to minimize cost. In case of Wellbonne it was going to be done to minimize cost. Due to recession in Indian market and competition from Korean Majors made Wellbonne to rethink its strategy. Its profitability started coming down. It posted loss for second consecutive year. Well borne appointed a consultant to look into its operations. One of the major suggestions of the consultant is to downsize the organization by 30% every year for next two years.

Wellbonne could have avoided this if it would have planned proper strategies in past such as new product development, new SBUs, New Alliances, extensive R&D etc. This would have given the company a competitive advantage over the other companies and could have made possible for Wellbonne to survive recession in Indian market. Employees and their cost is rarely a source of problem in an organization. Employees are likely to be the source of innovation and creativity if utilized properly.

So I do not agree with the downsizing philosophy of Wellbonne. Downsizing of employees should be kept as a last option. Any company can fire employees and minimize its cost but the creative

ones are the organization that grows business even in such conditions by proper prediction of the company’s future and developing strategies that makes company achieve its objective efficiently and effectively.

Since Wellbonne was unable to make any strategies to overcome these issue, hence the way I see it downsizing is imminent and unavoidable but it can always be minimized. Wellbonne should focus on a effective downsizing to minimize the negative impact on employees and aid company in minimizing the costs.

Raju should suggest following steps to have an effective downsizing

Hiring Freeze Cut in Overtime Salary Reduction Cost reduction ideas from employees Removal of Incentives Inter-department hiring Invest in new products Invest in new technologies Manage Team Effective and Optimal utilization of employees Process Reengineering Partnerships and Joint Ventures Communicate