TILcase Analysis

8/12/2019 TILcase Analysis

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Neha Maan

S133F0013

TIL Case Analysis: Downsizing and HRM

In an organisation, “People are the only element with the inherent power to generate value.

All other variables offer nothing but inert potential. By their nature, they add nothing and

they cannot add anything until some human being leverages that potential by putting it into

play.” (Fitz-enz)

In this case, TIL, a multiproduct company was manufacturing processed food, tetra packed

beverages and agro-chemicals in time frame of 1990’s, when India was going through

politico-economic transitional changes (liberalisation, globalisation and privatisation). The

case highlights interpersonal and functional conflicts in decision making due to changing

circumstances. It illustrates implications of downsizing and downscoping, through two major

decisions: the hiving-off of beverage division and downsizing of the Sweri plant of the TIL

company.

From a rational system perspective, organizations are instruments designed to attain specific

goals (Scott p. 29). Some of the rhetoric used in this perspective is words like information,efficiency, optimization, implementation, and design. Other "rational" expressions are

constraints, authority, rules, directives, jurisdiction, performance programs, and coordination.

The two main characteristics of rational systems are goal specificity and formalisation.

The rational schools tend to emphasize the rationality of the structure itself, not the rationality

of the people in it. Bennis dubbed the rational system perspective "organizations without

people" (Bennis, 1959). They focused on structure and ignored actual behaviour of

organization

In this case Mr. Munsiff, the former VP( HR), has rational school of thought and believes in

hierarchy of authority & impersonality. He along with Mr. Neogi, the Chairman, were goal

driven but stresses on oligarchy. They were deciding on fates of large number of people

without taking their concerns into consideration and hence inherently limiting to individual

freedom as in case of hiving off beverage unit without addressing the apprehensions and

difficulties of the (peoples) workers. Such situations results in people controlled by

bureaucracies.

On the other hand, Mr. Rai, the present VP (HRD) believed in human relation approach,

emphasising on affective and socio-psychological aspect of human behaviour in organization

and primarily concerns of concentrating on topics such as morale, leadership, communication



and counselling. He believed and sought after satisfactory interrelationship between

management and workers which stresses on sense of belongingness at workplace.

However, beyond above two perspectives, human resource development (HRD) approach is

more integrated toward managing people. The emphasis here is on managing developmentand expression of skills and intelligence that people as employees might bring toward adding

value to organization and its customer and other stakeholders. These are stated in TIL vision

and mission. Career planning for employees involves HRD activities which are completely

ignored in this (TIL) case; there was also breach of psychological contract from TIL side.By

not giving informed choice of employment, instead of supporting TIL, created hindrances and

difficulties to its employees. The incompatibilities in the grade structure in two organization,

Blue cow and TIL in terms of scales highlights this lack of concern. Adding to it TIL paid no

heed to attempt to protect its employee’s career and interests in the decision process.

Concept of best practices is contentious, however within management theorists assume that

efficiency imperatives press for a 'one best way' irrespective of context. Peffer outlined some

best practices as:

Employment security and internal promotion: The company talk about employees

growing with company, growing and developing managers. It needs to do human

resource maintenance. However, TIL’s business economics decided on reducing

Sewri workforce to be halved in two years. Some of these workers are with TIL for15

years.

Selective hiring and sophisticated selection: The company have to periodically take

stock of organizational needs and shed the audited surpluses in phased manner but

TIL were downsizing in large chunks and drastically.

Extensive training, learning and development: In Sewri plant union accuse

management of their overdue business plans and visions. They believed company had

not made sufficient efforts to foresee situation or in dealing with it. The external

environmental changes contributed to it but lack of management initiatives were also

clearly evident. Employee involvement and voice: When TIL beverage unit is sold to Blue Cow or

workforce downsizing at Sewri is decided, the employees had no say in this decision

process. Though it affected them adversely but their views, concerns and involvement

were not considered and interests not negotiated with.

Reduction of status differentials and thereby brings harmonisation: TIL had

agreed to handover all the staff of beverage division without even addressing basic

issues of HR like the grade compatibility.

Surprisingly, all these issues were completely ignored in this case.



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TILcase Analysis