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XAVIER RETAIL MANAGEMENT

Retail Management

N. B. : 1) Attempt all Four Case studies2) All questions carry equal marks.

CASE STUDY 1

Movie Merchandising: Is there a market for it?Introduction

Bollywood industry is exploring new vistas of revenue. From overseas distribution, ramp shows to selling merchandise related to movies are used to mobilize the collections. This phenomenon is not new to the film industry. Holly wood movie like star wars was able to sell $9 billion worth of merchandise Indian films are not behind the competition. They just adopted the success formula of Hollywood. The recent movie “Ghajini” sold its merchandise and had its own gaming software.

What is movie merchandising?

Selling the dolls, masks, key chains, kid’s bags, and apparels bearing a movie name to the public is known as movie merchandising. Fans of a particular actor or actress buy this merchandise. Move merchandise helps a film maker in many ways. First, it helps company to recover production costs by giving merchandising license. These days’ bollywood movies are giving merchandise license well before its release. This will ensure guaranteed revenue for the production house irrespective of success or failure of the movie. ‘Sawariya’ though a flop in the box office, was able to recover their cost through selling merchandise. Secondly, Movie merchandise provides word of mouth communication to film before and after its release.

Indian experience

The Indian movie merchandising industry is in a nascent stage. The industry observers feel that there is a great potential for movie merchandising. Many consulting firms,

distributors and manufacturers stepped into this arena to tap the opportunity. “Drona” merchandise rights bought by Zapak. It made growth of retail industry has fuelled the potential available for movie merchandising. Retail giant future group holds license with Percept Company and star group to sell the merchandise in its retail stores. Another retail company shopper’s stop boosted their revenue by selling Shahrukh Khan starrer movie “Om Shanti Om” merchandise.

All that is not well

Movie merchandise may be attractive and have great potential but it suffers form certain limitations. Movie merchandise sales are directly linked to its success in the box office. Cartoon network had brought out a range of retail products of Hary Baweja’s “love story 2050”. It experienced drop in sales after lack luster performance. UTV motion also suffers from piracy problems. Companies that bought merchandising rights saw pirated versions are sold in black market form day 1 itself. Rajshri Films had brought our a limited range merchandise of their supper hit movie “Hum Aapke Hain Kaun”, but pirated copies arrived in the market soon affecting the sale of the original products.

Question

Question 1 Do you think that people will buy merchandise related to movies? It yes please mentions the reasons.

Question 2:- Suggest ways to overcome from piracy problems in movie merchandising?

Question 3:- Suggest new type of merchandise that film producers can bring it to the market?

Question 4:- Are you aware of Hollywood movie merchandise? If yes specify how they are different from bollywood merchandise. Do you think that Indian consumer buy Hollywood merchandise?CASE STUDY 2

Virtual Retailing – Home Shop 18

Introduction

Network 18 one of the larges t media power houses in India. It has varied interests in television, print internet, filmed entertainment, and mobile content and allied businesses. Network 18 has significant market share in the broadcasting industry through its channels CNBC awaaz and CNBC TV 18. The company has its fine prints in the internet media through web 18. It is also planning to launch business magazine in collaboration with Forbes. Network 18 recently acquired ‘Informedia’ a well known B2B print and publishing house. It operates in general news and entertainment space with its two premier channels CNN-IBN and IBN-7. The success of new san entertainment channels made the company to come out with regional news channel in Marathi in joint venture with lokmat group.

Virtual Retailing – Home Shop 18

Network 18 in alliance with SAIF (South Asian Infrastructure Funds) is venturing into virtual shopping channel ‘Home shop 18’. The channel is India’s First comprehensive virtual retail business, operating in a multimedia environment including television, web, catalogue other media to reach customers across the country directly. It has merchandise from leading companies and offering at excellent value propositions. To cater to the channel requirement company established logistics centers in 1600 cities and well connected contact enter. The content is prepared in such a way that even lay man can understand the product details given on the TV and web.

New Product Development: strategy

The new product development of home shop is based on the ideas like providing the quality products with no questions asked money back guarantee, free home delivery and customer’ ease in paying for the products. The mode of payment included interest free EMI, Cheque / DD pick up and cash on delivery. Home shop offers products in electronics, health and beauty, home décor and kitchen, kids and toys, jewelry, gifts, services etc. Utmost importance is given to quality assurance and assessment of products. It is also committed to providing cost effective and innovative products to distinguishing consumers across India.

Target Customers

Home shop is commercializing its new product as 24 hour free home shopping channel. It is planning to reach 700 cities with a population of over one lakh. Company is targeting to modern house wife who is pressed for shopping and seeks the pleasure of a convenient and reliable shopping alternative. Company’s Unique selling proposition is to deliver quality products at reasonable prices delivered at one’s doorstep. To cater to the youth segment company offers latest gadgets, cosmetics, apparels and much more. Through this strategy the company is making home shop a shopping platform for the entire familyQuestion

Question 1:- Do you think that virtual retailing channel will have consumer confidence?

Question 2:- How the company should attract the modern house wife who addict to serials to watch home shop?

Question 3:- Discuss the new product development strategies used in the case?

Question 4:- Do you think Network 18’s segmentation is proper? Comment.CASE STUDY 3

Café Coffee Day: Drivers of Pricing Strategy

Café Coffee Day is part of India’s largest coffee conglomerate, Amalgamated Bean Coffee Trading Company Ltd (ABCTCL), a Rs. 250- core ISO 9002 certified company and the first to roll out the ‘coffee bar’ concept in India with its first café in Bangalore. Café Coffee Day is India’s only vertically integrated coffee company. Café Coffee Day’s menu ranges from hot and cold coffees to several exotic international coffees, food items, desserts, and pastries. The coffee is attractively priced between Rs. 16/- and Rs. 657 – while food items and desserts are priced between Rs. 151- and Rs. 60/-.

This is attributed to two factors:

a)To make in roads in this emerging market and

b) To more effectively target their market segment of college students and young professionals who have limited spending capacity. This is distinct from Barista whose market segment is more mature with high paying capacity. This explains the more premium price of Barista products.

Discussion questions1. Analyze the pricing strategies adopted by café coffee day to establish its own identity amongst its competitorsCASE STUDY 4Mriganaini

Mr. Sharma started the Mriganaini boutique; one –stop ladies wear shop, in 2001. Mriganaini houses an extensive range of ladies wear including ready-to-wear, dress materials, night dresses, etc. All these are available in the latest forms, patterns, styles, and colors .Mriganaini provides stitching facilities to its customers interested in made-to –order apprasel as per their specific preference. This work is done from the latest fashion and embroidery. They also offer machine and hand embroidered clothes. Dress materials bought from here can be stitched at their in-house tailoring and embroidery facility. .Costume, jewellery , and hair accessories are also available to complement the attire. The store also carries cosmetics (Indian and imported), nail enamels, lipsticks and perfumes of all quality companies. Shoppers are provided with personal attention and proper product guidance. Prompt service and the informal atmosphere make shopping at Mriganaini an experience in it. One can get ones dress stitched on the same day, at a very little extra cost, which is of excellent quality.

Discussion questions1. Analyze the marketing strategies adopted by Sharma to promote his boutique-Mriganani.2. What steps should Mr. Sharma take to promote the sales

XAVIER RISK AND INSURANCE MANAGEMENT

RISK AND INSURANCE MANAGEMENT

Maximum Marks: 80

Answer any 4 questions + Case study (Total 5 x 16 = 80 Marks)

1. Case study (Compulsory) :

The recent business trends have generated more interest among insurance carriers than business process outsourcing Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in. The combination of unrelenting pressure on expenses, vast improvements in networking and communication technology, and an increased appreciation of highly flexible business models has caused virtually all insurance carriers to explore non-traditional options for running their businesses. Though the adoption of BPO for core insurance services is progressing slowly, the market has grown.

Outsourcing offers a convincing business model that insurance companies can leverage in the constant drive to attain customer satisfaction, operational effectiveness, and market advantage that will ultimately drive the bottom line. In a highly competitive market where differences in policy premiums are insignificant, the focus must be on customer retention. BPO is growing within the insurance industry, driven by increasing comfort with vendors and the need to reduce costs. In fact insurance industry itself has born out of the need to outsource ones risks!

Question:

Discuss the scope of BPO in the Indian Insurance Sector.

2. Describe the process of risk management.

3. Explain the different types of insurance.

4. List and make a brief note of private and public sector companies in present in

insurance market.

5. What are the duties, powers and functions of IRDA?

6. Explain the different types of marine insurance policies.

7. List the risk faced by rural household? What does Health Insurance Policy cover

in India?

8. Give brief description of money insurance. Also mention the extensions and

exclusions of it.

9. Explain in detail the group mediclaim policy for the employees.

XAVIER CONSTRUCTION MANAGEMENT

Construction ManagementMarks – 80Answer any five of the following questions.

Q.1 – Enumerate the phases involved in a typical construction project.

Q.2 – What are the clearances in a typical construction project?

Q.3 – What are the three main issues involved in materials management?

Q.4 – What is organisation culture in a construction environment?

Q.5 – What is trial balancing?

Q.6 – What is quality circle?

Q.7 – list any four labour laws applicable in construction industry.

Q. 8 – Explain any two forms of project organization structure. Discuss the merits and demerits of each.

Q. 9 – Explain the following terms used in materials management.a. Vendor rating.b. Centralised Vs decentralised purchasing.c. VED classification.

Q.10 – Discuss the various techniques for selective inventory control. Discuss any two of these.

Q.11 – Write short notes on any four of the following :a. Special conditions of contract.b. Depreciation.c. Retention money.d. Performance characteristics of construction equipment.e. Quality Assurance and Quality control.

XAVIER FINANCE MANAGEMENT

Finance ManagementMaximum Marks: 80Note : Attempt any four questions. All questions carry equal marks.

1.(a) How does an accountant follow the principle “anticipate no profit, provide for all losses” ? On which accounting concept is this based ? Explain it and discuss its significance.

(b) Distinguish between Financial Accounting and Management Accounting. What is the most important role of a Management Accountant in a business organisation ? Discuss.

2.(a) Distinguish between revenue expenditure and Capital expenditure. How are they treated while preparing the final accounts ? If by mistake the accountant of a firm treats a capital expenditure as revenue expenditure, how will it affect the final accounts of the’ firm ? Give an example.

(b) Why is depreciation charged ? Explain the two methods of charging depreciation. In which method the value of the asset is reduced to zero earlier ? Which one is more rational ? Explain why ?

3. “Financial Leverage is one of the important considerations in planning the capital structure of a company.” Explain this statement giving an example. Briefly describe the other factors which are also considered while planning the Capital structure.

4. Distinguish between :(a)Profit maximisation and Wealth maximisation goals.(b)Accounting Rate of Return and Internal Rate of Return.(c)Operating Cash flows and Financial cash flows.(d)Direct Labour Rate Variance and Direct Labour Efficiency Variance.

5. Explain fully the following statements :(a)”Break – even Analysis is not without limitations”.(b)”Lenders prefer high interest coverage ratio but a low debt-equity ratio”.

(c)”Weighted average cost of capital would always be higher, if market value weights are used.”(d)Zero – based budgeting is a better alternative to traditional method of budgeting.

6.(a) “Sales Budget forms the basis on which all other budgets are built .” Explain.What factors are taken into consideration while preparing the sales budget ? Discuss.

(b) What is Rolling Budget ? How does it differ from flexible Budget ? What purposes do these budgets serve ? Explain.

XAVIER PORT AND SHIPPING MANAGEMENT

PORT AND SHIPPING MANAGEMENT

Maximum marks: 80

PART A — (2 ´ 10 = 20 marks)

Answer any TWO questions.

1. What is turnaround time?

2. List out the elements of dock safety.

3. What is meant by intermodal connectivity of ports?

4. What are performance indicators? Give examples.

5. Explain briefly about ISPS code.

1.

1.

2.

PART B — (4 ´ 15 = 60 marks)

Answer any FOUR questions.

1. Explain the factors affecting development of a port.

2. Explain the functions of stakeholders of a port.

3. Outline the factors affecting terminal productivity.

4. Explain in detail about green field projects.

5. Outline the various features of container terminal.

6. Outline the environmental issues connected with ports.

7. Explain in detail why inland waterways need to be developed for sustainable

economic development.

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XAVIER ORGANIZATIONAL BEHAVIOR

Organizational BehaviorATTEMPT ALL CASES

Case 1: Motivating through Total RewardIntroductionThe Royal Bank of’ Scotland Group (RBS) is one of the largest financial services companies in the world. It provides a range of services including banking and insurance. The RBS` Group operates in Europe, the US and Asia, serving more than 36 million customer’s world-wide. It employs more than 140,000 people.RolesAs a major company, RBS needs to recruit the best employees it can. RBS is a leading employer and therefore offers a range of great job opportunities. People can start their working life by joining from school or from university. There are many types of job available, for example. working in a branch of the bank, or at head office in roles like marketing or sales.MotivationWhat is it that makes people want to work harder than others? Some key theories are:* Taylor and ‘scientific management’. This theory said that every job could be measured by the amount of work done or the number of pieces made (this is known as the ‘piece rate’). Workers would work harder because they would earn more.* Herzberg and the ‘two factors’. Herzberg’s theory showed that certain motivation flews needed to be in place first. These were called Wed ‘hygiene’ Wtors, for example, a clean work place and good bade pay. Only once these were in place could other factors be brought in to motivate workers. RBS uses a number of factors tomotivate its people. These include recognition for a job well done, promotion and other rewards.* Maslow and the hierarchy of needs’. This theory showed that workers had to have their basic needs, such as feeling safe and secure, met first. Only then could they move on to be motivated by other things. However, RBS believes that meeting these higher needs, for example, by recognizing achievement, will motivate employees and help the company to grow. It has put in place a number of benefits to meet these needs.Total RewardRBS has a special benefits scheme called Total Reward. At the one of the scheme is good basic pay. RBS also provides many flexible benefits in areas like health cover, pensions and childcare. It uses this as part of its strategy to motivate employees. In

addition to these benefits, every employee is set targets. These are measured to see how well he or she is doing. Employees can earn a bonus if their targets are reached. There is also a profit-sharing scheme. All employees are paid a bonus of 10% if the company as a whole does well. RBS also supports community projects and charities that is people care about, for example, the NSPCC and youth charities. It does this by trebling any money the employees raise.Work-Life BalanceRBS knows that it is important to have a good work-life balance. This is the trade off between time spent at work and spent outside of work. RBS employees have the opportunity to work more flexibly. The RBS “Your Time” programme also helps by recognising that employees may need time off work for reasons other than sickness. They may want to spend more time with their family or perhaps take a career break to go travelling.

ConclusionRBS knows its employees are its future and rewards and encourages them. It provides a world-class employment package of benefits for every employee, at every level. In RBS, motivation theory comes to life.Issues for Discussion1. Name two motivating factors at RBS.2. Describe the differences between the theories of Taylor and Maslow.3. How does RBS’ Total Reward package fulfill Maslow’s higher levels of motivation?4. How does Total Reward contribute to RBS’ overall strategy?

Case 2: Using aims and objectives to create a business strategyIntroductionKellogg is the world’s leading supplier of breakfast cereal. It has 39 brands and a 42% share of the UK market. Kellogg makes a range of products for the various segments of the UK’s market. The market is worth 1.1 billion a year. Kellogg’s success is achieved through careful planning. It sets clear aims and objectives. It then uses the strength of its brands to help it reach them. Kellogg ensures that each brand has a unique place in the minds of its customers. This is called product positioning.

Developing aimsKellogg’s managers set aims. These must match what consumers want. In recent years, consumers have shown that they want to lead more healthy lives. Kellogg wanted to be part of this debate. It promotes the message ‘Get the Balance Right’. It also wanted to show that it corporate responsibility. This means showing that it is a company that cares for both its consumers and the environment. An aim is a broad statement of where a business wants to be. Kellogg’s aim was therefore to reinforce the idea of a healthy lifestyle.ObjectivesOnce a broad aim is put in place, objectives can then be set. These should be SMART. This stands for:• . Specific:• Measurable:• Achievable:• Realistic and• Time related.They were set in three main areas* promoting physical activity for health* using packaging to promote a balanced lifestyle

* using food labeling to help consumers make healthy choices.StrategyA strategy is a set of’ plans designed to reach the aims set. Kellogg’s strategy included helping people become active. It has worked with the Amateur Swimming Association (ASA) since 1997. The ASA’s want everyone to ‘enjoy swimming as part of’ a healthy, lit style’. These closely match those of Kellogg. Swimming, is also a family activity and a skill for life’. Kellogg became the main sponsor of swimming in the UK, providing over 1.8 million per The link with the ASA also helped Kellogg to support active lit stylesin other ways. It linked with Sustrans, which promotes sustainable transport. This led Kellogg to develop a cycling based promotion. It also encourages walking. A free pedometer given away with All Bran inspired people to walk further. Kellogg has also sponsored other walking events. Kellogg uses symbols on its packs to show healthy Guideline Daily Amounts of ingredients such as salt, sugar and fat. This helps consumers to make choices.

CommunicationKellogg’s success in reaching its aims is due to the clear ways by which it conveys them to customers. It uses cartoon characters to advise children and parents about exercise. It has also produced leaflets. These can be obtained from its website. Internally, Kellogg uses its in-house magazine to promote the message.ConclusionKellogg knows from research that a balanced diet and regular exercise help people stay Healthy. It is communicating this message through its brands and promotions.Issues for Discussion* Explain what is meant by a premium brand.* Describe the difference between an aim and an objective* Outline the purpose of Kellogg’s work with the ASA.* Using examples to support your dialogue, evaluate how Kellogg communicates and discuss how this enables it to position its brand.

Case 3 : Continuous improvement within an organisationIntroductionLeyland Trucks is part of a US company called Paccar Inc. It makes trucks under the DAF brand at Leyland, near Preston, as well as in Holland and Belgium. Leyland aims to gain a 20% market share. It has a strategy to help it reach this target. This is a set of plans linked to its aims. Sometimes a business can improve by taking a giant leap forward. Leyland Trucks improves through many small steps. This system of continuous improvement is called ‘Kaizen’.KaizenA Kaizen action is one designed to bring about improvement. Often this involves teams meeting to see where problems might lie. Lots of these small steps can lead to big improvements. A good example is Leyland’s introduction of robots in its paint process. Before going ahead.Setting goals_Leyland sets itself targets. It usesit made sure that it had the views of everyone who had been involved in a previous change and learned from this. Continuous improvement is vital for Leyland to meet its targets, keep customers happy and stay competitive. Added efficiency also keeps costs down and helps to protect jobs.It uses measures to see if it is reaching its goals. These are called Key Performance Indicators (KPIs). Leyland clusters its KPIs under themes. These are:• on-time performance

• productively• quality, using a Quality Index target• financial pleasures• stock control• health and safety• Kaizen

Information from these KPIs is charted. Managers can see from charts how close they are to targets and set new targets. Kaizen is measured through a statistical tool called Six Sigma.Culture`Culture’ describes the way in which a business works. The culture at Leyland Trucks is one of continuous improvement. It is based on all being involved. Everyone is trusted to take part in the process and to contribute where they can. Its values are based on team building and training. It involves everyone in decision making and gives them responsibility and power. It encourages everyone to try out new ideas. People ‘live the values’ every day by sharing working in teams and celebrating success.

Kaizen in actionThe success of Kaizen can be seen through a recent example. In May 2006, a Kaizen, event was held in the vehicle finishing part of the plant. A team of project leaders worked with other staff. All tried to spot problems and suggest solutions. This led to more than suggest solutions. This led to more than greater efficiency in a number of areas.200 ideas for improvement and greater efficiency in a number of areas.

ConclusionFor Leyland Trucks, Kaizen is a key part of its success. Kaizen has helped it to achieve results across all of its KPIs. In 2006 alone, there were:• multi-million pound savings from Six Sigma• a rise in on-time delivery to 95%• a fall in both defects on units and injuries.

Issues for Discussion1 . What is Kaizen? I low is this different from a one-step leap forward?2. How is Kaizen expected to help Leyland Trucks to increase its market share?3. How does Leland Trucks measure Its continuous improvement? Can you suggest K KPls for another type of business organisation e.g. a retailer or a leisure centre’?4. Why is continuous improvement most likely to be achieved in a company with a culture of trust’? Start your answer by explaining what is meant by a culture of trust.Case 4 : Managing risk through effective. team-based decision makingIntroductionRWE npower is an integrated energy company. It is the third largest supplier of electricity, through its npower brand and one of the largest electricity generators. It is part of the RWE Group, which is one of the largest European energy Utilities. Energy Companies have a responsibility to maintain supplies of energy 24/7. This means that they have to be aware of and manage risk. There is a risk involved in all business activity. Managing risk successfully means striking a balance between risk, cost and returns.ImportanceRWE npower is an important contributor to the economy. It provides jobs, helps people maintain and increase their standard of living by supplying energy and invests in large

capital projects. The most visible face of the business is its huge power stations but it is also involved in developing alternative forms of energy such as biomass plants and wind farms. It seeks green or sustainable solutions to problems wherever possible.Types of problemsThere are different types of business problems and therefore different solutions to them.• Deviation problems are where targets are not heing met. Problem solving in this case is centred on closing the gaps.• Improvement problems. Here Solutions need to address how the business can become for example more efficient or more green.• Open-ended problems where conventional solutions will not work. Solutions are generally linked to the idea of ‘thinking outside the box’ i.e. coming up with new and untried ideas.

Engineers at RWE npower have to handle these problems all the time. In the first two cases, there are often proven techniques and solutions which can be worked out in teams. Team work brings together engineers with different skills and experience. Teamwork encourages team members to bounce ideas off each other so can be fun as well as leading to solutions have saved RWE npower millions.Creative problem-solving.This is linked to open-ended problems. New solutions mean new risks, however, and engineers need to understand these. They have to take into account possible costs and health and safety issues along with the technical aspects of the solution. Solutions must take into account the needs of the customer. For example, small defects in turbine blades in power stations are inevitable during their working life. When these are reported, managers need weigh up the various options repair, up the various options (shutdown, repair, replace etc.), The first priority is health and safety, but then they consider commercial criteria, including cost and customer needs.GraduatesRWE npower employs graduate engineers straight from university. They are trained andhave a good career path in the company. They are encouraged to think for themselves and solutions to problems. Some solutions can save the company millions so as its investment in graduates is worthwhile.develop creative solutions to problems. Some solutions can save the company millions so RWE npower knows its investment in graduates is worthwhile.

ConclusionRWE n power needs good engineers to be able to fulfil its commitment to supply energy 24/7. These engineers need to be not Just skilled at their specialisms, but able to solve. problems in a creative way.Issues for Discussion1. What do you understand by the term, ‘thinking outside the box’? Give an example of how this can be applied to engineers working for RWE npower.2. How does encouraging thinking outside the box help RWE npower to make improvements in the way in which it operates?3. Explain how encouraging engineers at RWE npower to think outside the box has led to increased motivation for these employees.4. Recommend wavy in which another organisation of your choice might improve its employees to think in creative ways about work. results through encouraging its employees to think in creative ways about work-related problems.

Case 5:Creating a high performance cultureIntroductionThe culture of an organisation is a way of describing the typical way in which that organisation operate. It Is something that is created over time by the organisation and the people that work for it. Siemens is built on a high performance culture. This means that everyone share One shares the same vision and, values and busts each other’s contribution.Siemens is a global electronics business with a turnover of around £60 billion a year. Its global headquarters are based in Germany but has sites around the world including around100 in the UK with its UK HQ in Berkshire. Siemens products touch all our rangingfrom kitchen equipment to power generation and from traffic lights to hospital scanners.HR developmentSiemens is committed to helping its employees to develop and fulfil themselves at work. They may want more training, more interesting jobs or just a better work-life balance. Siemens knows that to maintain and develop the excellent workforce that, it hasgood people management. It believes that its human resources should be actively involved (called ‘engagement’) in its activities. This is a key plank of Siemens’ business strategy.People ExcellenceThis is the name given to the part of the strategy that relates to people management. It consists of four main elements:* achieving a high performance culture* increasing the global talent pool* strengthening expert careers* Siemens Leadership Excellence Programme (SLE).At its heart is the building of a high performance culture. Employees know that they are valued and busted and this helps to motivate them. Siemens uses a number of ways to make sure that it shows its appreciation of employees. This all helps them to feel part of a successful team and helps Siemens compete more effectiveIy.Creating the cultureThe high performance culture is based on teamwork. Targets are set for the business and these are related to individual and team targets. In this way, everyone is working towards better results. As team performance improves over time, so does the business.Talent managementSiemens makes sure that all of its employees, not just the high fliers, are supported to reach their potential. It matches individuals’ talents with tasks. Talent management allows for:* job enrichment. where extra tasks or responsibility can make a job more rewarding and* job enlargement, where the scope of a job is widened and extra skills developed.Talent management is applied to the business globally as a key par! the business strategy. It is closely linked to performance management. Performance management is Used to monitor progress and set objectives for employees. It allows an honest dialogue to take place so everyone knows how well they are performing and how they might improve. This feeds directly into the high performance culture.ConclusionThe success of an organisation can be traced back to its people. Siemens demonstrates thins well. Its high performance culture supports people and helps them to reach their potential. This helps Siemens to be competitive.Issues for Discussion

I1. How does Siemens seek to provide good career opportunities for employees?2. Describe one of the systems that Siemens has created which provides development opportunities for employees at work3. How important is the appraisal system in helping to create shared understandings the objectives of the organization and personal objectives of individual employees?4. How effective do you think the Siemens approach to people management will be 2 in creating great results?

XAVIER INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS

1. B.: 1) Attempt any four cases 2) All cases

carries equal marks.

No: 1

BPO – BANE OR BOON ?

Several MNCs are increasingly unbundling or vertical disintegrating their activities. Put in simple language, they have begun outsourcing (also called business process outsourcing) activities formerly performed in-house and concentrating their energies on a few functions. Outsourcing involves withdrawing from certain stages/activities and relaying on outside vendors to supply the needed products, support services, or functional activities.

Take Infosys, its 250 engineers develop IT applications for BO/FA (Bank of America). Elsewhere, Infosys staffers process home loans for green point mortgage of Novato, California. At Wipro, five radiologists interpret 30 CT scans a day for Massachusetts General Hospital.

2500 college educated men and women are buzzing at midnight at Wipro Spectramind at Delhi. They are busy processing claims for a major US insurance company and providing help-desk support for a big US Internet service provider-all at a cost upto 60 percent lower than in the US. Seven Wipro Spectramind staff with Ph.Ds in molecular biology sift through scientific research for western pharmaceutical companies.

Another activist in BOP is Evalueserve, headquarterd in Bermuda and having main operations near Delhi. It also has a US subsidiary based in New York and a marketing office in Australia to cover the European market. As Alok Aggarwal (co-founder and

chairman) says, his company supplies a range of value-added services to clients that include a dozen Fortune 500 companies and seven global consulting firms, besides market research and venture capital firms. Much of its work involves dealing with CEOs, CFOs, CTOs, CIOs, and other so called C-level executives.

Evaluserve provides services like patent writing, evaluation and assessment of their commercialization potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial service firms, to which it provides analysis of investment opportunities and business plans. Another major offering is multilingual services. Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations.

ICICI infotech Services in Edison, New Jersey, is another BOP services provider that is offering marketing software products and diversifying into markets outside the US. The firm has been promoted by $2-billion ICICI Bank, a large financial institution in Mumbai that is listed on the New York Stock Exchange.

In its first year after setting up shop in March 1999, ICICI infotech spent $33 million acquiring two information technology services firms in New Jersy-Object Experts and ivory Consulting – and command Systems in Connecticut. These acquisitions were to help ICICI Infotech hit the ground in the US with a ready book of contracts. But it soon found US companies increasingly outsourcing their requirements to offshore locations, instead of hiring foreign employees to work onsite at their offices. The company found other native modes for growth. It has started marketing its products in banking, insurance and enterprise resource planning among others. It has earmarket $10 million for its next US market offensive, which would go towards R & D and back-end infrastructure support, and creating new versions of its products to comply with US market requirements. It also has a joint venture – Semantik Solutions GmbH in Berlin, Germany with the Fraunhofer Institute for Software and Systems Engineering, which is based in Berlin and Dortmund, Germany – Fraunhofer is a leading institute in applied research and development with 200 experts in software engineering and evolutionary information.

A relatively late entrant to the US market , ICICI Infotech started out with plain vanilla IT services, including operating call centeres. As the market for traditional IT services started wakening around mid-2000, ICICI Infotech repositioned itself as a “Solutions” firm offering both products and services. Today , it offers bundied packages of products and services in corporate and retail banking and include data center and disaster recovery management and value chain management services.

ICICI Infotech’s expansion into new overseas markets has paid off. Its $50 million revenue for its latest financial year ending March 2003 has the US operations generating some $15 million, while the Middle East and Far East markets brought in another $9 million. It new boasts more than 700 customers in 30 countries, including Dow Jones, Glazo-Smithkline, Panasonic and American Insurance Group.

The outsourcing industry is indeed growing form strength. Though technical support and financial services have dominated India’s outsourcing industry, newer fields are emerging which are expected to boost the industry many times over.

Outsourcing of human resource services or HR BPO is emerging as big opportunity for Indian BPOs with global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33 percent of the outsourcing revenue and India has immense potential as more than 80 percent of Fortune 1000 companies discuss offshore BOP as a way to cut costs and increase productivity.

Another potential area is ITES/BOP industry. According to A NASSCOM survey, the global ITES/BOP industry was valued at around $773 billion during 2002 and it is expected to grow at a compounded annual growth rate of nine percent during the period 2002 – 06, NASSCOM lists the major indicators of the high growth potential of ITES/BOP industry in India as the following.

During 2003 – 04, The ITES/BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year. ITES exports accounted for $3.6 billion in revenues, up form $2.5 billion in 2002 – 03. The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003 – 04. The number of Indians working for this sector jumped to 245,500 by March 2004. By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and McKinsey & Co. Market research shows that in terms of job creation, the ITES-BOP industry is growing at over 50 per cent.

Legal outsourcing sector is another area India can look for. Legal transcription involves conversion of interviews with clients or witnesses by lawyers into documents which can be presented in courts. It is no different from any other transcription work carried out in India. The bottom-line here is again cheap service. There is a strong reason why India can prove to be a big legal outsourcing Industry.

India, like the US, is a common-law jurisdiction rooted in the British legal tradition. Indian legal training is conducted solely in English. Appellate and Supreme Court proceedings in India take place exclusively in English. Due to the time zone differences, night time in the US is daytime in India which means that clients get 24 hour attention, and some projects can be completed overnight. Small and mid – sized business offices can solve staff problems as the outsourced lawyers from India take on the time – consuming labour intensive legal research and writing projects. Large law firms also can solve problems of overstaffing by using the on – call lawyers.

Research firms such as Forrester Research, predict that by 2015 , more than 489,000 US lawyer jobs, nearly eight percent of the field, will shift abroad..

Many more new avenues are opening up for BOP services providers. Patent writing and evaluation services are markets set to boom. Some 200.000 patent applications are written in the western world annually, making for a market size of between $5 billion and $7 billion. Outsourcing patent writing service could significantly lower the cost of each patent application, now anywhere between $12,000 and $15,000 apiece-which would help expand the market.

Offshoring of equity research is another major growth area. Translation services are also becoming a big Indian plus. India produces some 3,000 graduates in German each year, which is more than that in Switzerland.

Though going is good, the Indian BPO services providers cannot afford to be complacent. Phillppines, Maxico and Hungary are emerging as potential offshore locations. Likely competitor is Russia, although the absence of English speaking people there holds the country back. But the dark horse could be South Affrica and even China

BOP is based on sound economic reasons. Outsourcing helps gain cost advantage. If an activity can be performed better or more cheaply by an outside supplier, why not outsource it ? Many PC makers, for example, have shifted from in – house assembly to utilizing contract assemblers to make their PCs. CISCO outsources all productions and assembly of its routers and witching equipment to contract manufactures that operate 37 factories, all linked via the internet.

Secondly, the activity (outsourced) is not crucial to the firm’s ability to gain sustainable competitive advantage and won’t hollow out its core competence, capabilities, or technical know how. Outsourcing of maintenance services, date processing, accounting, and other administrative support activities to companies specializing in these services has become common place. Thirdly, outsourcing reduces the company’s risk exposure to changing technology and / or changing buyer preferences.

Fourthly, BPO streamlines company operations in ways that improve organizational flexibility, cut cycle time, speedup decision making and reduce coordination costs. Finally, outsourcing allows a company to concentrate on its core business and do what it does best. Are Indian companies listening ? If they listen, BPO is a boon to them and not a bane.

Questions:

1. Which of the theories of international trade can help Indian services

providers gain competitive edge over their competitors?

2. Pick up some Indian services providers. With the help of Michael

Porter’s diamond, analyze their strengths and weaknesses as active

players in BPO.

3. Compare this case with the case given at the beginning of this chapter.

What similarities and dissimilarities do you notice? Your analysis should

be based on the theories explained.

No: 2

PERU

Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina) , and covers almost 500.000 square miles (about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow – capped Andes mountains, sparkling grass – covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous incas, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing , mining, and services, GDP is approximately $15 billion and per capita income in recent years has been around $4,3000. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country.

One of these potential investors is a large New York based bank that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner wants to refurbish the fleet and add one more ship.

During the 1970s, the Peruvian government nationalized a number of industries and factories and began running them for the profit of the state in most cases, these state – run ventures became disasters. In the late 1970s the fishing fleet owner was given back his ships and allowed to operate his business as before. Since then, he has managed to remain profitable, but the biggest problem is that his ships are getting old and he needs an influx of capital of make repairs and add new technology. As he explained it to the new York banker. “Fishing is no longer just an art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market, you have to have the latest equipment for both locating as well as catching and then loading and unloading the fish”

Having reviewed the fleet owner’s operation, the large multinational bank believes that the loan is justified. The financial institution is concerned, however, that the Peruvian government might step in during the next couple of years and again take over the business. If this were to happen, it might take an additional decade for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the fleet the way he has over the last decade, the loan could be repaid within seven years.

Right now, the bank is deciding on the specific terms of the agreement. Once theses have been worked out, either a loan officer will fly down to Lima and close the deal or the owner will be asked to come to New York for the signing. Whichever approach is used, the bank realizes that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to have the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.

Questions:

1. What are some current issues facing Peru? What is the climate for doing

business in Peru today?

2. What type of political risks does this fishing company need to evaluate?

Identify and describe them.

3. What types of integrative and protective and defensive techniques can

the bank use?

4. Would the bank be better off negotiating the loan in New York or in

Lima ? Why?

No: 3

RED BECOMING THICKER

The Backdrop

There seems to be no end to the troubles of the coloured – water giant Coca Cola. The cola giant had entered India decades back but left the country in the late 1970s. It staged a comeback in the early 1990s through the acquisitions route. The professional management style of Coca Cola did not jell with the local bottlers. Four CEOs were changed in a span of seven years. Coke could not capitalize on the popularity of Thums Up. Its arch rival Pepsi is well ahead and has been able to penetrate deep into the Indian market. Red in the balance sheet of Coke is becoming thicker and industry

observers are of the opinion that it would take at least two decades more before Coke could think of making profits in India.

The Story

It was in the early 1990s that India started liberalizing her economy. Seizing the opportunity, Coca Cola wanted to stage a comeback in India. It chose Ramesh Chauhan of Parle for entry into the market. Coke paid $100 million to Chauhan and acquired his well established brands Thums Up, Goldspot and Limca. Coke also bagged 56 bottlers of Chauhan as a part of the deal. Chauhan was made consultant and was also given the first right of refusal to any large size bottling plants and bottling contracts, the former in the Pune – Bangalore belt and the latter in the Delhi and Mumbai areas.

Jayadeva Raja, the flamboyant management expert was made the first CEO of Coke India. It did not take much time for him to realize that Coke had inherited several weaknesses from Chauhan along with the brands and bottlers. Many bottling plants were small in capacity (200 bottlers per minute as against the world standard of 1600) and used obsolete technology. The bottlers were in no mood to increase their capacities, nor were they willing to upgrade the trucks used for transporting the bottle. Bottlers were more used to the paternalistic approach of Chauhan and the new professional management styles of Coke did not go down well with them. Chauhan also felt that he was alienated and was even suspected to be supplying concentrate unofficially to the bottlers.

Raja was replaced by the hard – nosed Richard Niholas in 1995. The first thing Nicholas did was to give an ultimatum to the bottlers to expand their plants or sell out. Coke also demanded equity stakes in many of the bottling plants. The bottlers had their own difficulties as well. They were running on low profit margins. Nor was Coke willing to finance the bottlers on soft terms. The ultimatum backfired. Many bottlers switched their loyalty and went to Pepsi. Chauhan allegedly supported the bottlers, of course, from the sidelines.

Coke thought it had staged a coup over Pepsi when it (Coke) clamed the status of official drink for the 1996 Cricket World Cup tournament. Pepsi took on Coke mightily with the famous jingle “Nothing official about it”. Coke could have capitalized on the sporty image of Thums Up to counter the campaign, but instead simply caved in.

Donald Short replaced Nicholas as CEO in 1997. Armed with heavy financial powers, Short bought out 38 bottlers for about $700 million. This worked out to about Rs 7 per case, but the cost – effective figure was Rs 3 per case. Short also invested heavily in manpower. By 1997, Coke’s workforce increased to 300. Three years later, the parent company admitted that investment in India was a big mistake.

It is not in the culture of Coke to admit failure. It has decided to fight back. Coke could not only sustain the loss, it could even spend more money on Indian operations. It hiked the ad budget and appointed Chaitra Leo Burnett as its ad agency. During 1998 – 99, Coke’s ad spend was almost three times that of Pepsi.

Coke is taking a look at its human resources and is taking initiatives to re – orient the culture and inject an element of decentralization along with empowerment. Each bottling plant is expected to meet predetermined profit, market share, and sales volumes. For newly hired management trainees, a clearly defined career path has been drawn to enable them to become profit centre heads shortly after completion of their probation. Such a decentralized approach is something of a novelty in the Coke culture worldwide.

But Alezander “Von Behr, who replaced Short as Chef of Indian operations, reiterated Coke’s commitment to decentralization and local responsiveness. Coke has divided India into six regions, each with a business head. Change in the organization structure has disappointed many employees, some of whom even quit the company.

Coke started cutting down its costs. Executives have been asked to shift from farm houses to smaller houses and rentals of Gurgaon headquarters have been renegotiated. Discount rates have been standardized and information systems are being upgraded to enable the Indian headquarters to access online financial status of its outposts down to the depot level.

Coke has great hopes in Indian as the country has a huge population and the current per capita consumption of beverages is just four bottles a year.

Right now, the parent company (head – quartered in the US) has bottle full of problems. The recently appointed CEO-E Neville Isdell needs to struggle to do the things that once made the Cola Company great. The problems include –

Meddling Board

Coke’s star- studded group of directors, many of whom date back to the Goizueta era, has built a reputation for meddling.

Moribund Marketing

Once world class critics say that today the soda giant has become too conservative, with ads that don’t resonate with the teenagers and young adults that made up its most important audience.

Lack of Innovation

In the US market, Coke hasn’t created a best – selling new soda since Diet Coke in 1982. In recent years Coke has been outbid by rival Pepsi Co for faster growing noncarb beverages like SoBe Gatorade.

Friction with Bottlers

Over the past decade, Coke has often made its profit at the expenses of bottlers, pushing aggressive price hikes on the concentrate it sells them. But key bottlers are now fighting back with sharp increases in the price of coke at retail.

International Worries

Coke desperately needs more international growth to offset its flagging US business, but while some markets like Japan remain lucrative, in the large German market Coke has problems so far as bottling contracts go.

When its own house is not in order in the large country, will the company be able to focus enough on the Indian market?

Questions:

1. Why is that Coke has not been able to make profit in its Indian

operations?

2. Do you think that Coke should continue to stay in India? If yes, why?

3. What cultural adaptations would you suggest to the US expatriate

managers regarding their management style?

4. Using the Hofstede and the value orientations cultural models, how can

you explain some of the cultural differences noted in this case?

1. 4

THE ABB PBS JOINT VENTURE IN OPERATION

ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake. This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS. The new company started operations on April 15, 1993.

Business for the joint venture in its first two full years was good in most aspects. Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS. Orders received in 1995 were 2½ times those in 1994. The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent.

The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan. One of the goals was that exports should account for half of the total orders by 1999. (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed). In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before.

The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations. It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it. The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them. However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose

their ability to perform these services, and the retrofit and repair service business, would return to ABB-PBS.

ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged. Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s. Accordingly ABB-PBS boiler orders were flat in 1995.

Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance. Cash flow was not as good as expected. Cost reduction had to go further. The more we succeed, the more we see our shortcomings” said one official.

Restructuring

The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan. Plan logistics, information systems, and other physical capital improvements were in place. The restricting included :

Renovating and reconstructing workshops and engineering facilities.

Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)

Transfer of technology from ABB (this was an ongoing project)

Intallation of an information system.

Management training, especially in total quality assurance and English language.

Implementing a project management approach.

A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown. However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost.

The Technology Role for ABB-PBS

The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide. PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality. (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “Of course we do. We burn so much dirty coal in this country; we have to have better technology”)

However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996. Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events.

“ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABB-PBS to be recognized as a full-fledged company, not just a factory. We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero. Our engineers have many other good entrepreneurial opportunities. Now we’ve begun to stabilize our engineering workforce. The restructing helped. We have better equipment and a cleaner and safer work environment. We also had another problem which is a good problem to have. The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.”

ABB-PBS had benefited technologically from its relationship with ABB. One example was the development of a new steam turbine line. This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany. Nevertheless, technology transfer was not the most important early benefit of ABB relationship. Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.

Questions:

1. Where does the joint venture meet the needs of both the partners?

Where does it fall short?

2. Why had ABB-PBS failed to realize its technology leadership?

3. What lessons one can draw from this incident for better management of

technology transfers?

5. 5.

CHINESE EVOLVING ACCOUNTING SYSTEM

Attracted by its rapid transformation from a socialist planned economy into a

market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years have favored China as a site for foreign direct investment. Most see China as an emerging economic superpower, with an economy that will be as large as that of Japan by 2000 and that of the US before 2010, if current growth projections hold true.

The Chinese government sees foreign direct investment as a primary engine of China’s economic growth. To encourage such investment, the government has offered generous tax incentives to foreign firms that invest in China, either on their own or in a joint venture with a local enterprise. These tax incentives include a two – year exemption from corporate income tax following an investment, plus a further three years during which taxes are paid at only 50 per cent of the standard tax rate. Such incentives when coupled with the promise of China’s vast internal market have made the country a prime site for investment by Western firms. However, once established in China, many Western firms find themselves struggling to comply with the complex and often obtuse nature of China’s rapidly evolving accounting system.

Accounting in China has traditionally been rooted in information gathering and compliance reporting designed to measure the government’s production and tax goals. The Chinese system was based on the old Soviet system, which had little to do with profit or accounting systems created to report financial positions or the results of foreign operations.

Although the system is changing rapidly, many problems associated with the old system still remain.

One problem for investors is a severe shortage of accountants, financial managers, and auditors in China, especially those experienced with market economy transactions and international accounting practices. As of 1995, there were only 25,000 accountants in china, far short of the hundreds of thousands that will be needed if China continues on its path towards becoming a market economy. Chinese enterprises, including equity and cooperative joint ventures with foreign firms, must be audited by Chinese accounting firms, which are regulated by the state. Traditionally, many experienced auditors have audited only state-owned enterprises, working through the local province or city authorities and the state audit bureau to report to the government entity overseeing the audited firm. In response to the shortage of accountants schooled in the principles of private sector accounting, several large international auditing firms have established joint ventures with emerging Chinese accounting and auditing firms to bridge the growing need for international accounting, tax and securities expertise.

A further problem concerns the somewhat halting evolution of China’s emerging accounting standards. Current thinking is that China won’t simply adopt the international accounting standards specified by the IASC, nor will it use the generally accepted accounting principles of any particular country as its mode. Rather, accounting standards in China are expected to evolve in a rather piecemeal fashion, with the Chinese adopting a few standards as they are studied and deemed appropriate for Chinese circumstances.

In the meantime, current Chinese accounting principles present difficult problems for Western firms. For example, the former Chinese accounting system didn’t need to accrue unrealized losses. In an economy where shortages were the norm, if a state-owned company didn’t sell its inventory right away, it could store it and use it for some

other purpose later. Similarly, accounting principles assumed the state always paid its debts – eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the West.

Questions:

1. What factors have shaped the accounting system currently in use in

China?

2. What problem does the accounting system, currently in sue in China,

present to foreign investors in joint ventures with Chinese companies?

3. If the evolving Chinese system does not adhere to IASC standards, but

instead to standards that the Chinese governments deem appropriate

to China’s “Special situation”, how might this affect foreign firms with

operations in China ?

1. 6

UNFAIR PROTECTION OR VALID DEFENSE ?

“Mexico Widens Anti – dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world.

International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organization (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before.

We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998.

There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product ion. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations.

Emerging markets, too, are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a select list of countries) to notify Mexican officials of the amount and price of a shipment ten days prior to its expected arrival in Mexico. The ten-day notice gives domestic producers advance warning of incoming low – priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle antidumping cases. Even Argentina, China, Indonesia, South Africa, South Korea, and Thailand are using this recently – popularized tool of protectionism.

Why is dumping on the rise in the first place? The WTO has made major inroads on the use of tariffs, slashing tem across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus, the WTO cannot pass judgments against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an antidumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that : (1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home – market price.

Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market and driving them out of business. Another claim in support of antidumping is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping tariffs charge that once such tariffs are imposed they are rarely removed. They also claim that it costs companies and governments a great deal of time and money to file and argue their cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lose market share – forcing consumers to pay more for their goods.

Questions

1. “You can’t tell consumers that the low price they are paying for a

particular fax machine or automobile is somehow unfair. They’re not

concerned with the profits of companies. To them, it’s just a great

bargain and they want it to continue.” Do you agree with this

statement? Do you think that people from different cultures would

respond differently to this statement? Explain your answers.

2. As we’ve seen, the WTO cannot currently get involved in punishing

individual companies for dumping – its actions can only be directed

toward governments of countries. Do you think this is a wise policy ?

Why or why not? Why do you think the WTO was not given the authority

to charge individual companies with dumping? Explain.

3. Identify a recent antidumping case that was brought before the WTO.

Locate as many articles in the press as you can that discuss the case.

Identify the nations, products (s), and potential punitive measures

involved. Supposing you were part of the WTO’s Dispute Settlement

Body, would you vote in favor of the measures taken by the retailing

nation? Why or why not?

XAVIER BUSINESS COMMUNICATION

Business Communication

1. B. : 1) Attempt any Four Case studies

2) All case studies carry equal marks.

No: 1

A REPLY SENT TO AN ERRING CUSTOMER

Dear Sir,

Your letter of the 23rd, with a cheque for Rs. 25,000/- on account, is to hand.

We note what you say as to the difficulty you experience in collecting your outstanding accounts, but we are compelled to remark that we do not think you are treating us with the consideration we have a right to expect.

It is true that small remittances have been forwarded from time to time, but the debit balance against you has been steadily increasing during the past twelve months until it now stands at the considerable total of Rs. 85,000/-

Having regard to the many years during which you have been a customer of this house and the, generally speaking, satisfactory character of your account, we are reluctant to resort to harsh measures.

We must, however, insist that the existing balance should be cleared off by regular installments of say Rs. 10,000/- per month, the first installment to reach us by the 7 th. In the meantime you shall pay cash for all further goods; we are allowing you an extra 3% discount in lieu of credit.

We shall be glad to hear from you about this arrangement, as otherwise we shall have no alternative but definitely to close your account and place the matter in other hands.

Yours truly,

Questions:

1. Comment on the appropriateness of the sender’s tone to a customer.

2. Point out the old – fashioned phrases and expressions.

3. Rewrite the reply according to the principles of effective writing in

business.

1. 2

WAVE

(ATV : Advertising Radio FM Brand)

A young, gorgeous woman is standing in front of her apartment window dancing to the 1970s tune, “All Right Now” by the one – hit band free. Across the street a young man looks out of his apartment window and notices her. He moves closer to the window, taking interest. She cranks up the volume and continues dancing, looking out the window at the fellow, who smiles hopefully and waves meekly. He holds up a bottle of wine and waves it, apparently inviting her over for a drink. The lady waves back. He kisses the bottle and excitedly says, “Yesss.” Then, he gazes around his apartment and realizes that it is a mess. “No !” he exclaims in a worried tone of voice. Frantically, he does his best to quickly clean up the place, stuffing papers under the sofa and putting old food back in the refrigerator, He slips on a black shirt, slicks back his hair, sniffs his armpit, and lets out an excited , “Yeahhh!” in eager anticipation of entertaining the young lady. He goes back to the window and sees the woman still dancing away. He points to his watch, as if to say “ Come on. It is getting late.” As she just continues dancing, he looks confused. Then a look of sudden insight appears on his face, “Five,” he says to himself. He turns on his radio, and it too is playing “All Right Now.” The man goes to his window and starts dancing as he watches his lady friend continue stepping. “Five, yeah,” he says as he makes the “okay” sign with his thumb and forefinger. He waves again. Everyone in the apartment building is dancing by their window to “All Right Now.” A super appears on the screen: “Are you on the right wavelength ?”

Questions :

1. What is non – verbal communication ? Why do you suppose that this

commercial relies primarily on non-verbal communication between

a young man and a gorgeous woman ? What types of non – verbal

communication are being used in this case ?

2. Would any of the non-verbal communications in this spot (ad) not work

well in another culture ?

3. What role does music play in this spot ? Who is the target market ?

4. Is the music at all distracting from the message ?

5. How else are radio stations advertised on TV ?

1. 3

ARVIND PANDEY CAUGHT IN BUSINESS WEB

Arvind Pandey is a project manager at Al Saba Construction Company in Muscat. It s a flourishing company with several construction projects in Muscat and abroad. It is known for completing projects on time and with high quantity construction. The company’s Chairman is a rich and a highly educated Omani. A German engineer is Arvind’s Vice – President for urban and foreign construction projects.

Three months ago, Al Saba had submitted a tender for a major construction project in Kuwait. Its quotation was for $ 25 million. In Kuwait the project was sponsored and announced by a US – based construction company called Fuma. According to Al Saba, their bid of $ 25 million was modest but had included a high margin of profit.

On 25 April, Arvind was asked to go to Kuwait to find out from the Fuma project manager the status of their construction proposal. Arvind was delighted to know that Fuma had decided to give his company. (Al Saba) the construction project work. The project meant a lot of effort and money in planning the proposed construction in Kuwait.

But before Arvind could tank the Fuma project manager, he was told that their bird should be raised to $ 28 million. Arvind was surprised. He tried to convince the Fuma project manager that his (Arvind company had the bast reputation for doing construction work in a cost effective way . However, he could always raise the bid by $ 3 million. But he wanted to know why he was required to do so.

The Fuma manager’s reply was, “That’s the way we do our business in this part of the world, $ 1 million will go to our Managing Director in the US, I shall get $ 1 million, you, Mr. Pandey, will get $ 1 million in a specified account in Swiss Bank.

Arvind asked, “ But why me ?”

“ So that you never talk about it to any one.” The Fuma Project Manager said.

Arvind promised never to leak it out to any one else. And he tried to bargain to raise the bid by $ 2 million. For. Arvind was familiar with the practice of “ pay – offs” involved in any such thing. He thought it was against his loyalty to his company and his personal ethics.

Arvind promised the Fuma project manager that the bid would be raised to $ 28 million and fresh papers would be put in. He did not want to lose the job.

He came back to Muscat and kept trying to figure out how he should place the whole thing before his German Vice President. He obviously was at a loss.

Questions :

1. Analyse the reasons for Arvind Pandey’s dilemma.

2. Does Arvind Pandey really face a dilemma ?

3. In your view what should Arvind Pandey do ? Should he disclose it to

his German Vice President ?

4. 4.

COMPANY ACCEPTING A CONTRACT

A computer company was negotiating a very large order with a large size corporation. They had a very good track record with this client.

In this corporation, five different departments had pooled their requirements and budgets. A committee was formed which had representation from all the departments. The corporation wanted the equipment on a long lease and not outright purchase. Further, they wanted all the hardware and software form one supplier. This meant that there should be bought – out items from many suppliers since no one supplier could meet all the requirements of supply from its range of products.

The corporation provided an exhaustive list of very difficult terms and conditions and pressurized the vendors to accept. The computer company who was finally awarded the contract had agreed to overall terms that were fine as far as their own products were concerned but had also accepted the same terms for the brought – out items. In this case, the bought – out items were to be imported through a letter of credit. The percentage of the bought – out items versus their own manufacture was also very high. One of the terms accepted was that the “system” would be accepted over a period of 10 days after all the hardware had been linked up and software loaded.

The computer company started facing trouble immediately on supply. There were over 100 computers over a distance connected with one another with software on it. For the acceptance tests, it had been agreed that the computer company would demonstrate as a pre-requisite the features they had claimed during technical discussions.

Now, as you are aware, if a Hero Honda motorcycle claims 80 km to a litre of petrol, it is under ideal test conditions and if a motorcycle from the showroom were to be tried for this test before being accepted, it would never pass the test. In corporation’s case, due to internal politics, the corporation persons from one department – who insisted on going exactly by the contract – did not sign acceptance since the “ system” could not meet the ideal test conditions.

Further, in a classic case of, “ for want of a horse – shoe, payment for the horse was held up”, the computer company tried to get the system accepted and payment released. The system was so large that at any point of time over a period of 10 days something small or the other always gave problems. But the corporation took the stand that as far as they were concerned the contract clearly were concerned the contract clearly mentioned that the “system” had to be tested as a whole and not module by module.

Questions :

1. Comment on the terms and conditions placed by the corporation.

2. What factors influenced the computer company’s decision to accept the

contract ?

3. Was it a win – win agreement ? Discuss ?

1. 5

EMPLOYMENT INTERVIEW OF R P SINHA

Mr. R P Sinha is a MBA. He is being interviewed for the position of Management Trainee at a reputed company. The selection committee’s is chaired by a lady Vice – President. Mr. Sinha’s interview was as follows :

Committee : Good morning !

Mr. Sinha : Good morning to Sirs and Madam !

Chairperson : Please, sit down.

Mr. Sinha : Thank you (sits down at the edge of the chair, keeps his portfolio on the table)

1. Chairperson : You are Mr. R. P. Sinha

A Sinha : Yes, Madam. This is how I am called.

1. Chairperson : You have passed MBA with 1st Division.

2. Sinha : Yes, Madam.

3. Chairperson : Why do you want to work in our organization ?

A Sinha : It is just like that. Also, because it has good reputation.

1. Member A : This job is considered to be quite stressful. Do you think you can

manage the stress involved.

2. Sinha : I think there is too much talk about stress these days. Sir, would you tell

clearly what you mean by stress ? I am very strong for any stress.

3. Member B : What are your strengths ?

4. Sinha : Sir, who am I talk boastfully about my strengths. You should tell me my

strengths.

5. Member C : What are your weaknesses ?

6. Sinha : I become angry very fast.

7. Member A : Do you want to ask us any questions ?

A Sinha : Yes Sir ! What are the future chances for one who starts as a management trainee ?

The member tells M. Sinha the typical career path for those starting as Management Trainee. The Chairperson thanks Mr. Sinha. Mr. Sinha promptly says in reply, “you are welcome,” and comes out.

Questions :

1. Do you find Mr. Sinha’s responses to various questions effective ?

Give reasons for your view on each answer given by Mr. Sinha.

2. Rewrite the responses that you consider most effective to the above

questions in a job interview.

3. Mr. Sinha has observed the norm of respectful behaviour and polite

conversation. But, do you think there is something gone wrong in

his case ? Account for your general impression of Mr. Sinha’s

performance at the interview.

1. 6

Comment on the form and structure of the Report.

XAVIER OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT

Maximum Marks: 100

Note: Attempt any five questions. All questions carry equal marks. Assume any missing data suitably.

1. (a) Draw a systems view diagram of any service organization of your choice.

Identify its various

components. Explain its interdisciplinary nature. 10

(b) What are the major characteristics of a Production system? Discuss some of its upcoming issues

that provide economies in production and efficiency in the performance of the system. 10

2. (a) Explain with examples, how the TQM concept can integrate design

engineering, manufacturing

and service. 10

(b) What are process capability studies ? Explain the process capability index with applications to a

real life example. 10

3. (a) Compare traditional process planning with Computer Aided Process Planning

(CAPP). Also

explain a generative CAPP system. 10

(b) Explain the objectives of Total Productive maintenance. Give its importance. Also comment on

the concept of TPM promotion. 10

4. (a) Why is forecasting required in operations management ? Discuss the concept

of forecast error

as applied to different conditions. 10

(b) How are quantitative models of forecasting different from qualitative models ? Discuss in detail

time‐series model as used for forecasting. 10

5. (a) What is facility planning ? Explain with examples different types of layouts as

used in

manufacturing organisations. 10

(b) Discuss work measurement as a process to establish task time. Explain the various techniques for

developing time standards. 10

6. (a) Explain just in time manufacturing with the help of examples. Discuss its

advantages and

disadvantages. 10

(b) For an independent demand inventory model, derive the equation for Economic Order Quantity.

List all assumptions. 10

7. Write short notes on any four of the following: 4×5=20

(a) OPT

(b) Break even analysis

(c) Lean manufacturing

(d) Kanban system

(e) Line of Balance for Production Control

(f) Purpose of aggregate plans.

XAVIER SHIPPING MANAGEMENT

SHIPPING MANAGEMENT

Maximum marks: 80

PART A — (2 ´ 10 = 20 marks)

Answer any TWO questions.

1. What is turnaround time?

2. List out the elements of dock safety.

3. What is meant by intermodal connectivity of ports?

4. What are performance indicators? Give examples.

5. Explain briefly about ISPS code.

1.

1.

2.

PART B — (4 ´ 15 = 60 marks)

Answer any FOUR questions.

1. Explain the factors affecting development of a port.

2. Explain the functions of stakeholders of a port.

3. Outline the factors affecting terminal productivity.

4. Explain in detail about green field projects.

5. Outline the various features of container terminal.

6. Outline the environmental issues connected with ports.

7. Explain in detail why inland waterways need to be developed for sustainable

economic development.

——–––––––––

XAVIER PRINCIPLES & PRACTICE OF

MANAGEMENT

Principles & Practice of Management

Marks – 80

(Please attempt any 4 of the below mentioned case studies. Each Case study is for 20 marks)

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

LOSING A GOOD MAN

Sundar Steel Limited was a medium-sized steel company manufacturing special steels of various types and grades. It employed 5,000 workers and 450 executives.

Under the General Manager operation, maintenance, and headed by a chief. The Chief of and under him Mukherjee Maintenance Engineer. The total was 500 workers, 25

executives, (Production), there were services groups, each Maintenance was Shukla was working as the strength of Maintenance and 50 supervisors.

Chatterjee was working in Maintenance as a worker for three years. He was efficient. He had initiative and drive. He performed his duties in a near perfect manner. He was a man of proven technical ability with utmost drive and dash. He was promoted as Supervisor. Chattejee, now a Supervisor, was one day passing through the Maintenance Shop on his routine inspection. He found a certain worker sitting idle. He pulled him up for this. The worker retaliated by abusing him with filthy words. With a grim face and utter frustration, Chatterjee reported the matter to Mukherjee. The worker who insulted Chatterjee was a “notorious character” , and no supervisor dared to confront him. Mukherjee took a serious view of the incident and served a strong warning letter to the worker. Nothing very particular about Chatterjee or from him came to the knowledge of Mukherjee. Things were moving smoothly. Chatterjee was getting along well with others But after about three years, another serious incident took place. A worker came drunk to duty, began playing cards, and using very filthy language. When Chatterjee strongly objected to this, the worker got up and slapped Chatterjee. Later, the worker went to his union – and reported that Chatterjee had assaulted him while he was performing his duties.

Chatterjee had no idea that the situation would take such a turn. He, therefore, never bothered to report the matter to his boss or collect evidence in support of his case.

The union took the case to Shukla and prevailed over him to take stern action against Chatterjee. Shukla instructed Mukherjee to demote Chatterjee to the rank of a worker. Mukherjee expressed his apprehension that in such a case Chatterjee will be of no use to the department, and. the demotion would adversely affect the morale of all sincere and efficient supervisors. But Chatterjee was demoted.

Chatterjee continued working in the organisation with all his efficiency, competence, and ability for two months. Then he resigned stating that he had secured better employment elsewhere. Mukherjee was perturbed at this turn of events. While placing Chatterjee’s resignation letter before Shukla, he expressed deep concern at this development.

Shukla called Chief of Personnel for advice on this delicate issue. The Chief of Personnel said, “l think the incident should help us to appreciate the essential qualification required for a successful supervisor. An honest and hardworking man need not necessarily prove to be an effective supervisor. Something more is required for this as he has to get things done rather than do himself.” Mukherjee said, “l have a high opinion of Chatterjee. He proved his technical competence and was sincere at his work. Given some guidance on how to deal, with the type of persons he had to work with, the sad situation could h.ave been avoided.” Shukla said, “l am really sorry to lose Chatterjee, He was very honest and painstaking in his work. But I do not know how I could have helped him; I wonder how he always managed to get into trouble with workers. we know they are illiterates and some of them are tough. But a supervisor must have the ability and presence of mind to deal with such men. I have numerous supervisors, but I never had to teach anybody how to supervise his men.”

Questions:

(a) Identify the problems in this case.

(b) Do you think the decision taken by shukla is in keeping with the faith, trust and creating developmental climate in the organisation? Critically evaluate

(c) How would you help in improving rough and tough behavior of employees?

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

ABC manufacturing

The ABC Manufacturing Company is a metal working plant under the direction of a plant manager who is known as a strict disciplinarian. One day a foreman noticed Bhola, one of the workers, at the time-clock punching out two cards his own and the card of Nathu, a fellow worker. Since it was the rule of the company that each man must punch out his own card, the foreman asked Bhola to accompany him to the Personnel Director, who interpreted the incident as a direct violation of a rule and gave immediate notice of discharge to both workers. The two workers came to see the Personnel Director on the following day. Nathu claimed innocence on the ground that he had not asked for his card to be punched and did not know at the time that it was being punched. He had been offered a ride by a friend who had already punched out and who could not wait for him to go through the punch-out procedure. Nathu was worried about his wife who was ill at home and was anxious to reach home as quickly as possible. He planned to take his card to the foreman the next morning for reinstatement, a provision sometimes exercised in such cases. These circumstances were verified by Bhola. He claimed that he had punched Nathu’s card the same time he punched his own, not being conscious of any wrongdoing.

The Personnel Director was inclined to believe the story of the two men but did not feel he could reverse the action taken. He recognized that these men were good workers and had good records prior to this incident. Nevertheless, they had violated a rule for which the penalty was immediate discharge. He also reminded them that it was the policy of the company to enforce the rules without exception.

A few days later the Personnel Director, the Plant Manager, and the Sales Manager sat together at lunch. The Sales Manager reported that he was faced with the necessity of notifying one of their best customers that his order must be delayed because of the liability of one department to conform to schedule. The department in question was the one from which the two workers had been discharged. Not only had it been impossible to replace these men to date, but disgruntlement over the incident had led to significant decline in the cooperation of the other workers. The Personnel Director and the Sales Manager took the position that the discha rge of these two valuable men could have been avoided if there had been provision for onsidering the circumstances of the case. They pointed out that the incident was costly to the company in the possible loss of a customer, in the dissatisfaction within the employee group, and in the time and money that would be involved in recruiting and training replacements. The Plant Manager could not agree with this point of view. “We must have rules if we are to have efficiency; and

the rules are no god unless we enforce them. Furthermore, if we start considering all these variations in circumstances, we will find ourselves loaded down with everybody thinking he is an exception.” He admitted that the grievances were frequent but countered with the point that they could be of little consequence if the contract agreed to by the union was followed to the letter.

Questions

(a) Identify the core issues in the case

(b) Place yourself in the position of the Personnel Director. Which of the following courses of action would you have chosen and why?

(i) Would you have discharged both men? (ii) Would you have discharged Bhola only? (iii) Would you have discharged Nathu only? (iv) Would you have discharged neither of them? Justify your choice of decision. (c) What policy and procedural changes would you recommend for handling such cases in future?

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

PK Mills

PK Mills manufactures woolen clothes. Over the years, it has earned an envious reputation in the market. People associate PK Mills with high quality woolen garments. Most of the existing employees have joined the company long back and are nearing retirement stage. The process of replacing these old employees with younger ones, drawn from the nearby areas, has already begun. Recently, the quality of the garments has deteriorated considerably. Though the company employs the best material that is available, the workmanship has gone down. Consequently, the company has lost its customers in the surrounding areas to a great extent. The company stands, in the eyes of general public, depreciated and devalued. The production manager, in a frantic bid to recover lost ground, held several meetings with his staff but all in vain. The problem, of course, has its roots in the production department itself. The young workers have started resisting the bureaucratic rules and regulations vehemently. The hatred against regimentation and tight control is total. The old workers, on the verge of retirement, say that conditions have changed considerably in recent years. In. The days gone by, they say, they were guided by a process of self-control in place of bureaucratic control. Each worker did his work diligently and honestly under the old set-up. In an attempt to restructure the organizational set-up, the managers who have been appointed afterwards brought about radical changes. Workers under the new contract had very little freedom in the workplace. They are expected to bend their will to rules and regulations. Witnessing the difference between the two ‘cultures’ the young workers, naturally, began to oppose the regulatory mechanism devised by top management. The

pent-up feelings of frustration and resentment against management, like a gathering storm, have resulted in volcanic eruptions leading to violent arguments between young workers and foremen on the shop-floor. In the process production has suffered, both quantitatively and qualitatively. The production manager in an attempt to weather out the storm, is seriously thinking of bringing about a radical change in the control process that is prevailing now in the organization.

Questions:

(a) What are the core issues the case?

(b) Do you agree with the statement “The problem, of course, has its roots in the production department itself”? Reason out your stand.

(c) Critically evaluate the finding that old supervisors complain and new workers to resist any type of control.

(d) What type of control system would you suggest to the company to improve the production?

The AB Steel Plant

The Vice President for Production at the AB Steel Plant was giving the Production Department Manager, Mr. Singh, a hard time for not doing anything about his work group which was perpetually coming late to work and was behind schedule in the performance quotas for several months now. The vice President’s contention was that if the production’ crew was consistently tardy, the production process was delayed by about 15 minutes on an average per member per day, and this was no way for the department to meet the assigned quotas. “They are losing about 6 to 8 hours of production time per member per month, and you don’t seem one bit concerned about it,” he yelled at the manager. He added that he was pretty upset about the ‘lax management style’ of the manager and very clearly stated that unless the manager did something about the tardiness problem, another manager who can manage the crew effectively’ will have to be found.

Mr. Singh knows that he has an able and good group of workers but he also realizes that they are bored with their work and do not have enough incentives to meet the production quotas. Hence, they seem to respond to the situation by taking it easy and coming late to work by a few minutes every day. Mr. Singh has also noticed that they were taking turns leaving the workplace a few minutes early in the evenings. Even though Singh was aware of this, entire he pretended not to notice the irregularities and was satisfied that once the workers started their work, they were pretty good at their

jobs and often helped to meet rush orders whenever they knew that Mr. Singh was in a bind.

Questions:

(a) What do you think is the real, problem in this case?

(b) How do you perceive the stand of Mr. Singh? Analyze critically.

(c) What intervention should Mr. Singh use to rectify the type, of situation he is presently confronted with? Discuss giving the reasons.

(d) Discuss the implications of effecting them with your recommendations.

Dealing with an Employee’s Problem

Ms. Renu had graduated with a degree in foreign languages. As the child of a military family, she had visited many parts of the world and had travelled extensively in Europe. Despite these broadening experiences, she had never given much thought to a career until her recent divorce.

Needing to provide her own income, Ms. Renu began to look for work. After a fairly intense but unsuccessful search for a job related to her foreign language degree, she began to evaluate her other skills. She had become a proficient typist in college and decided to look into secretarial work. Although she still wanted a career utilizing her foreign language skills, she felt that the immediate financial pressures would be eased in a temporary secretarial position.

Within a short period fo time, she was hired as a clerk/typist in a typical pool at Life Insurance Company. Six months later, she became the top typist in the pool and and was assigned as secretary to Mrs. Khan’ manager of marketing research. She was pleased to get out of the pool and to get a job that had more variety in the tasks to perform. Besides, she also got a nice raise in pay.

Everything seemed to proceed well for the next nine months. Mrs. Khan was pleased with Renu’s work, and she seemed happy with her work. Renu applied for a few other more professional jobs in other areas during this time. However, each time her application was rejected for lack of related education and/or experience in the area.

Over the next few months, Khan noticed changes in Renu. She did not always dress as neatly as she had in the past, she was occasionally late for work, some of her lunches extended to two hours, and most of her productive work was done in the morning hours.

Khan did not wish to say anything because Renu had been doing an excellent job and her job tasks still were being accomplished on time. However, Renu’s job behavior continued to worsen. She began to be absent frequently on Mondays or Fridays. The two-hour lunch periods became standard, and her work performance began to deteriorate. In addition, Khan began to suspect that Renu was drinking heavily, due to her appearance some mornings and behavior after two-hour lunches.

Khan decided that she must confront Renu with the problem. However, she wanted to find a way to held her without losing a valuable employee. Before she could set up a meeting, Renu burst through her floor after lunch one day and said:

“I want to talk to you Mrs. Khan”

“That’s fine,” Khan replied. “Shall we set a convenient time?”

“No! I want to talk now.”

“OK, why don’t you sit down and let’s talk?”

Khan noticed that Renu was slurring her words slightly and she was not too steady.

“Mrs. Khan, I need some vacation time.”

“I’m sure we can work that out. You’ve been with company for over a year and have two weeks’ vacation coming.”

“No, you don’t understand. I want to start it tomorrow.”

“But, Renu, we need to plan to get a temporary replacement. We can’t just let your job go for two weeks”.

“Why not? Anyway anyone with an IQ above 50 can do my job. Besides, I need the time off. ”

“Renu, are you sure you are all right ?”

“Yes, I just need some time away from the job.”

Khan decided to let Renu have the vacation, which would allow her some time to decide what to do about the situation.

Khan thought about the situation the next couple of days. It was possible that Renu was an alcoholic.

However, she also seemed to have a negative reaction to her job. Maybe Renu was bored with her job. She did not have the experience or job skills to move to a different type of job at present. Khan decided to meet with the Personnel Manager and get some help developing her options to deal with Renu’s problem.

Questions:

(a) What is the problem in your opinion? Elaborate.

(b) How would you explain the behavior of Renu and Mrs. Khan? Did Mrs. Khan handle the situation timely and properly?

(c) Assume that you are the Personnel Manager. What are the alternatives available with Mrs. Khan?

(d) What do you consider the best alternative? Why?

XAVIER OPERATIONS MANAGEMENT

Operations Management

Total Marks – 80

Section A: 5 Marks Each (Attempt any 3)

1. Discuss the nature and scope of operations management in terms of production

decisions.

2. Explain the product selection and stages involved therein.

3. What are the various kinds of production systems? Discuss the nature of Mass

Production.

4. Discuss in brief how do you organise value engineering function in an electronic

industry?

5. Define .Purchase Systems. What are the common objectives of the purchasing

function?

Section B: 5 Marks Each (Attempt any 3)

1. Design an assembly line for a cycle time of 10 minutes for the following 10 work

elements: Elements : 1 2 3 4 5 6 7 8 9 10 Immediate predecessor : 0 1 2 2.3 4 5

6 5 7.9 9 Duration in minutes : 5 10 5 2 10 7 5 2 5 7

2. Discuss how a quality-management program can affect productivity.

3. Select three service companies or organizations you are familiar with and

indicate how process control charts could be used in each.

4. Explain the various factors that are to be taken into account for plant location.

Discuss in connection with setting up an Automobile industry.

5. Explain the term ‘Break-even analysis’. Draw imaginary BEP chart and briefly

describe its merits and demerits.

Section C: 10 Marks Each (Attempt any 3)

1. (a) Explain what you understand by the term “Total Quality Management”,

paying particular attention to the following terms : quality, supplier-customer

interfaces, and process.

(b) Define Productivity. List some factors that can affect productivity and some ways in which productivity can be improved.

2. (a) Give two examples (with supporting details) of the impact of technology in

product and service design, in the context of service and manufacturing firms.

(b) A firm uses simple exponential smoothing with α = 0.1 to forecast demand. The forecast for the first week of February was 500 units, whereas actual demand turned out to be 450 units.

(i) Forecast the demand for the second week of February. (ii) Assume that the actual demand during the second week of February turned out to be 505 units. Forecast the demand for the third week of February.

3. (a) Bloomsday Outfitters produces T-shirts for road races. They need to acquire

some new stamping machines to produce 30,000 good T-shirts per month. Their

plant operates 200 hours per month, but the new machines will be used for T-

shirts only 60 percent of the time and the output usually includes 5 percent that

are “seconds” and unusable. The stamping operation takes 1 minute per T-shirt,

and the stamping machines are expected to have 90 percent efficiency

considering adjustments, changeover of patterns, and unavoidable downtime.

How many stamping machines are required ?

(b) Give an example of a business that would use a push and one that would use a pull operations control system. Explain your choice and briefly describe how the system works.

4. (a) What are the various methods of judgemental forecasting ? Comment on

possible errors that are associated with judgemental forecasting.

(b) A time study of a restaurant activity yielded a cycle time of 2.00 minutes, and the waitress was rated at PR = 96 percent. The restaurant chain has a 20 percent allowance factor, Find the standard time.

5. (a) What are the advantages of having a company-wide data-bank ? Show how

different functions e.g. cost accounting, sales, inventory, manufacturing can be

integrated with a data-bank.

(b) A contractor has to supply 10,000 bearings per day to an automobile manufacturer. He finds that, when he starts a production run, he can produce 25,000 bearings per day. The cost of holding a bearing in stock for one year is Rs. 2 and the set-up cost of a production run is Rs. 1,800. How frequently should production runs be made ? (Assume 300 working days in a gear)

Section D: 20 Marks

1. Write short notes on any five of the following:

(a) Cellular manufacturing (b) ISO 9000 (c) Fish-bone Diagram (d) AGVS (e) Cross Impact Matrix (f) Benchmarking (g) CIM (h) Job Enlargement

XAVIER MARKETING MANAGEMENT

Marketing Management

1. B. : 1) Attempt all Four Case studies

2) All questions carry equal marks.

Case study 1

Case Study on Segmentation, Targeting & Positioning

Profiles Group is a leading interior decorator and designer in the country. Mr. Neerav Gupta, one of the partners in the group has invested a good amount of money in the business. The other two partners namely Mr. Pratham Gupta who is a distant cousin of Neerav and Mr. Dev Suri are mainly into managing the firm’s country wide operations. Mr. Stanley Pereira, who is more of a sleeping partner, looks after the administrative and financial aspects of the firm.

Profiles Group has around 44 service centers in the country including state capitals and several developing cities. Since the firm’s inception in 1998, its progress has been unstoppable. The clients include many reputed companies, hotel chains, popular celebrities and even hospitals and commercial banks.

A brief background of the Partners:

Neerav Gupta had a family owned business that was into manufacturing wooden furniture but Neerav‟s interest was more into decorating. So, after completing a Master’s course in interior designing from a reputed college abroad, he decided to start his own interior design services. Meanwhile, the furniture manufacturing business was handed over to Pratham Gupta due to property and family settlement issues. But, Pratham decided to join Neerav and they both started a partnership firm.

Dev Suri, a friend of Neerav who had been living abroad, sold out his real estate business and had decided to settle on the Indian soil itself. He offered help by providing additional capital and his knowledge of real estates did help the firm although in a small way. Stanley Pereira, an experienced teacher and consultant, had worked previously in

leading interior designing colleges and was instrumental in making required changes in syllabus structure and interior designing courses. He has also written many books and articles on the topic. He had retired early due to family commitments but landed up in Profiles Group as a Partner through mutual contacts.

The conversation:

All the four partners are comfortably sitting face to face on a peach colored cushioned sofa which is situated near the window corner inside Neerav’s well-structured office.

Pratham Gupta feels that since their firm has invested large funds, they must enter into more market segments especially the smaller ones. And, regarding this issue, a professional conversation takes place among the partners. The talks are as follows:

Pratham: “So, what do you think about expanding our market segments to smaller more ordinary markets?”

Stanley: “What are you exactly trying to say, Pratham? Will you explain it?”

Pratham: “Listen guys, right now, we have 44 centers and competent people to work under us, but when we see our customer base, it looks small and limited. What I mean to say is that we also need to have those individual household customers who are looking for service expertise in this field. Most household customers don’t get the necessary information as to how to go about the interiors or how to decorate their home/offices etc.”

Neerav: “I agree with your points Pratham, but don‟t you think if we have to reach the smaller segments of the market, we need a different approach to cater to their needs. We would have to advertise and communicate to these segments in a customised way. This will increase the promotion budget and our focus on the existing customers may be compromised.” Dev: “I think we need to get a balance here. Pratham‟s points are valid enough and it will make Profiles group more productive. If need be, we may have to take help of a service consultancy in order to penetrate deeper markets.”

Stanley: “Okay… so, even if we allocate these segments, we need to target them in a way where we will know the immediate impact of these segments. We have to position in such manner that we get this customer base to keep moving towards us… however, the problem lies in the demand for our product in these segments!”

Pratham: “What is that problem you are talking about, Stanley?”

Stanley: “I will tell the problem, we know our product… but these individual customer segments will see our product as a one time purchase… Interiors and designing is done by a household customer at one point… very rarely, he will seek for a change or improvement. So, is it acceptable that we cater to their one time need and then let go?”

Neerav: “I do understand that point… But, that’s always the case in our business. Interior decorations and designs are usually considered one-time expenditure by

household customers…. and as a matter of fact, that has not affected the way we do our business or on our returns.”

Pratham: “See, even otherwise it should not affect our firm because individual customer segments are willing to pay or spend on interiors. If they need a good, comfortable home along with a neat set of furniture then why don’t we cater to that need, even if it’s a one time demand from a particular customer? This is exactly what I meant earlier when I said, given the expertise we have, why don’t we use it to expand our customer base? Of course, we may have to develop suitable pricing strategies, promotion strategies for these market segments which is according to me, not a big thing to do.”

Dev: “Let’s first consult with our marketing hero and ask their opinion or suggestions as well”

Dev takes out his cell phone to dial Mr. Sunil’s number and he immediately gets the connection. Sunil is the head of the marketing section and he is very efficient in his job. He also has an acceptable humour quotient. Dev asks Sunil to come over to Neerav’s office.

Sunil enters the office:

Sunil: “What’s up, Bosses?”

Dev gives a brief explanation to Sunil about the potential market.

Sunil: “that’s a welcome sign actually… we have the necessary resources and we are available to any customer at any given point… So, I think it‟s a good idea that we update our customer profiles also… Only thing is we have to make sure we are targeting and positioning our customer segment in the way they feel comfortable to approach us…”

Pratham: “Nicely said Sunil… You are our man in this task…. We rely on you to make our markets bigger and customer segments broader…”

Sunil: “Always thinking in the interests of Profiles Group, Mr. Gupta… Not to worry… You tell me the confirmed plans and leave the execution on me…”

Neerav: “Well, what can I say? If we are sure about managing the newer segments which is existing out there, then our work is just to target them and position our product as per the given requirements”

Dev: “There is one important suggestion I would like to present here…. We need to ensure that we properly differentiate our existing customers from the newer ones so that we are not overriding one another or our customers don’t feel compromised at any point.”

Stanley: “That’s a really valuable suggestion, Dev… I completely agree with this point”

Sunil: “Me too… Mr. Suri has stated an absolute theory… But, it’s not that we can’t take the benefits from the two and use it for our purpose… Somewhere, we can link the newer segments with the existing ones and gradually Profiles Group will mean the same to every one. That is however applicable in the long term… For now, we need to attend our customer base on a one-to-one basis… So, we do it slow and steady”

Neerav: “Sunil, I don’t understand, but whenever you speak you visualize the big picture as well… I admire your quality and also that you are very loyal to Profiles Group”

Sunil: “Anytime Mr. Gupta, I am at your service….Just give the command and it will be done”

All of them laugh at that comment and decide to have an official meeting regarding the Segmenting, Targeting and Positioning strategies for the potential market. Within a month, the scheduled meeting is done with the involvement of key people and various points are noted down for implementation.

The marketing team after a brainstorming session also comes up with a collective idea about introducing Re-decorating and re-designing to be offered as a part of Profile’s group’s services. This meant that clients or customers can think about re-designing or re-decorating their homes/offices with the already available possessions and existing furniture. This also meant less cost to the clients. This idea was taken up seriously and plans to implement such services were already underway.

The Progress:

The next six months in the Profiles Group has made everyone busy with different tasks and agendas to be accomplished. Sunil is the busiest person around and he is actively engaged in marketing activities related to the targeting and positioning of their product to the new customer base.

Very soon, the results are noticeable in the Profiles Group. After a considerable amount of planning and hard work, the subsequent months showed positive results as given below:

The markets are segmented based on the income level of the household customers

Their needs, wants and demands are analyzed

These markets are targeted based on their desire, willingness and capabilities to attain the required interiors and furnishings.

Sunil headed a separate section namely Re-designing and Re-decorating Services at the firm’s main office. Sunil was immediately involved in making special centers for Re-designing and re-decorating services in different parts of the country.

Marketing section was taken over by a competent person – Ms. Sneha Agarwal who has over 8 years of experience in interior designing. She was chosen on the

recommendation of Stanley Pereira as Sneha had been a merit student previously and Stanley had been her teacher.

Neerav had even managed to get some MNC‟s as the firm’s clients.

Positioning of Profiles Group’s product and services was done in three ways –

For the already existing customer base which include the corporate and business houses, film industry and celebrities and other big units who spend huge amounts on the interior decorations.

For the newer segments also termed as the individual household segments who have limited spending abilities but have a desire for elegant interiors at reasonable rates.

For the collective market – re-design and re-decor services were offered.

The structure of the firm’s web-site was made more user-friendly and included several videos showing how proper layout and interiors increased efficiency, easy movement, allowed more lighting and ventilation and created a feeling of well-being and comfort.

A CD was also launched which included these videos and the necessary information of the Profile’s firm with the contact addresses and numbers. The CD also included interview with certain well-known clients who were highly satisfied with the firm’s services. This established trust and good communication in the market.

Soon enough, the firm launches into environmental friendly interiors and develops „Go Green‟ initiatives that uses more re-cycled and renewable substances.

There was a plan to begin annual contests and games which involved household customer segments to give their ideas or suggestions for a well laid out interiors using eco-friendly materials and “Go-Green‟ initiatives.

The Partners and the interview:

It’s been two years now since Profile’s Group had moved into individual household segments.

All four partners are seated on the sofa inside Neerav‟s office except this time the sofa is of cream shade and a press reporter namely Namitha Goel is sitting on a single sofa across them. Namitha Goel had scheduled this interview and later will be published in the “Living Designs”, a new monthly magazine that deals with interiors. She begins with a direct question to Neerav –

Namitha: “Mr. Neerav Gupta, do you think the reason for the substantial increase in your customer base is due to the Redesign and re-decoration services?

Neerav: “Well, to a considerable extent, I believe it is so. Re-design is not about my taste or your taste. It’s about working with what the client owns and making them

happy. Most people are good in re-arranging their stuff but they don’t have time or energy to do it. So, we offer them this assistance.”

Namitha: “How come you got this thought about making these household segments as your customers? I mean, your firm is associated with the influential clientele base and considering that, why did you feel that these household segments would prove to be a lucrative market for you?”

Neerav: “The entire credit for making individual household segments as our customers goes to my business partners here, my workforce and their efforts. Around two and a half years back, we had just got into a conversation in this very same office and Pratham suggested about tapping these markets with our available resources. Let me clarify that we decided to target this segment not for profits but we felt they too would benefit from our expertise in this field.”

Namitha: “According to the market survey, it seems that there is no close competitor for you in this business. So, your firm stands at the top like it’s been from a long time. What do you say in this matter?”

Neerav is about to answer but his cell phone rings and he attends to it quickly.

Neerav: “Excuse me, Ms. Namitha.., I have urgent business call that can’t wait…, Carry on with your questions and my team mates will answer. I have to go now.” He addresses his partners and leaves the office in a hurry.

The interview proceeds and remaining partners contribute their views. The interview takes another 45 minutes and Namitha Goel is satisfied with her work as a press reporter. She leaves the Profile’s Group office with a sense of achievement.

The next month’s issue of “Living Designs” carries the cover story of the Profiles Group with the partners‟ exclusive interview placed in the shaded column of the magazine pages.

Questions: 1 Examine the progress of Profile’s Group as a leading interior designer and decorator.

Questions: 2 What kind of change was observed in the STP strategy of the firm and how was it useful?

Questions: 3 Evaluate the working of Profile’s group with respect to the Segmenting, Targeting and Positioning of markets. Do you have any suggestions for the firm?

Case study 2

Determining the Marketing 4 P’s

Any business organization in order to be successful needs to have a clear picture about the 4 P’s of marketing. This forms the basis on which business functioning takes place. What are these 4 P’s and why are they important? Let’s assume that we are interested to start up a small business enterprise and for that we have the necessary capital, skills and people. And now, since we are in the initial stage of enterprise formation, we need to answer the previous question.

Marketing mix comprises of the four basic elements or components which are termed together as 4 P’s of marketing. They are:

Product: what is it that we have to offer to the market? What can it include? In what ways can it be modified, changed, expanded, diversified etc.? Will our products be accepted in the market? If not, how do we create a market for our products?

Price: at what value should the products be offered in the market? What should be the returns? Will it be worth to the buyers? What variations, differences and strategies can we adopt in order to earn a fair margin and also gain customer satisfaction?

Place: where must be our products available? How soon it’s demanded in the market? How quick we can deliver it to the consumption points? Who do we need to involve in the distribution of our products? How much will they charge for their services?

Promotion: why do we need to promote our products? Will people be aware of our products if we don’t do any promotion? If we need to promote our products, what kind of message we should convey to the market? In what ways and methods we can carry out the promotion?

Unless we know the answers to the above questions, we cannot make our business function. Therefore, after considering the strengths and weakness of our likely enterprise and studying the market opportunities, we decide to manufacture wax crayons.

The main reason behind this decision is –

1. We can come up with an effective 4 P’s either by marketing the crayons

ourselves and if not, we can take orders by being the suppliers to our clients.

2. We know that our market mainly comprises of educational institutions, drawing

and painting classes/centers, artistes, even big companies use crayons

extensively.

3. We realize the potential of wax crayons as we can offer variety in sizes, quality,

colors, price ranges, wholesale and retail prices etc. We can even venture into

related areas such as wax artic rafts, wax candles, oil colors, paint etc.

4. We can have direct contact with our clients and in the long term we can even

engage an agency to market the crayons.

5. We know that promotion strategies can be based on the type of our customer

segment and we could easily do it through advertising on Television,

newspapers, children’s comics, notebooks, school notice boards, etc. We can

even sponsor or conduct drawing competitions, art exhibitions or we can have

contractual agreements with the stationery outlets, art schools etc. However, we

are still apprehensive about our marketing mix. We are yet to confirm about our

marketing mix and until then we are unable to finalize on our decisions or start

with the implementation process.

Question 1.How will you determine the marketing mix for our enterprise?

Question 2.Do you have any ideas to make our enterprise successful particularly by enhancing or improving the marketing mix?

Question 3.What do you think will be the challenges in making an effective marketing mix since our enterprise is a new one?

Case study 3

Good Publicity vs. Bad Publicity

Roger Twain walked as usual with a pleasant aura and at a leisurely pace to his office. Roger is a PR Manager in one of the top FMCG companies of the world. His office along with the PR staff was recently shifted from sixth floor to the second floor of the building. The reason was simple enough. Top management did not want external parties to wander around the whole building in the excuse of meeting PR staff or the PR manager. Roger Twain in fact, welcomed this shift and was glad that he didn’t have to wait for the lift as he could now very well use the staircase. Roger has around 15 years of experience in PR and handling Publicity related issues. He had worked with several companies as well as non-business organisations and institutes.

Roger currently in his 53rd year has achieved lot of success in his career as a professional expert in the field of PR and Publicity handling. Although his plans to start his own PR Consultancy firm didn’t work out the way he wanted, he was actively involved in several worldwide workshops, seminars and presentations. He even wrote articles on PR strategies and published some books on PR. Roger’s ideologies as a PR professional was –

“No News is not good news… You have to be in the news – good or bad. And, the objective should

be to convert bad news into good news.”

“You cannot create bad news about your company. At the same time, you cannot create a good one. You can only communicate it in good or bad way.”

“PR is about being in the news – time and date don’t matter much.”

“It’s not about being right or wrong – it’s about being clear and sticking to the truth and using it positively.”

“Everyone has a right to express… But, a PR person should consider it as a righteous Duty”

“Your Company can show only performance. PR has to talk about it.”

A few of his career achievements in the different organizations that he worked for are as follows:

Problem Situation 1: Some of the cosmetic products of Jasper Ltd. were selling in the market beyond its expiry date. A media report exposed and presented this story to

the public that Jasper Ltd. was desperate to increase its sales and did not consider consumers’ interests or their well-being. This led to decrease in sales volume even in the other product categories of the company. Due to incorrect operations of some channel members and retail outlets, old stock was sold to the consumers after the expiry dates. The outcome was Jasper Ltd.’s low profit margins.

Challenge: Roger’s challenge was to make consumers more aware and responsible while purchasing the company’s products without ruining the distribution channel relations and at the same time making the company socially responsible.

Solution: Roger suggested to the advertising department to create a public awareness ad regarding the importance of checking product expiry dates before buying. He advised the management to take back old stock from the retail outlets and distributors by offering a reasonable price and also prescribing the time limit within which those products should reach the company. Roger’s view was that distributors will mostly see their benefit and continue to sell the old stock. If they sell it back to the company itself for a price, they would definitely make an effort to get the new stock and sell those to the consumers. Roger’s logic was “it is better to spend some money on getting back the old stock than let it sell in the market at the risk of company’s reputation.” Meanwhile, consumers will also be aware about expiry dates of cosmetics when they buy it.

Problem situation 2: Acorn Seeds Company’s assistant finance manager was involved in some fraudulent activity and was accused of misappropriation of funds. This news became public and soon enough, company’s investors and stakeholders began to question the integrity and trustworthiness of the company. Company found it difficult to convince people that one person’s immoral intentions does not mean that everyone in the company is beyond trust and moral obligations. Furthermore, company’s products and services got severely affected and consumers started opting for competing products. There was bad publicity all around. Sales declined and situation got worse when finance manager unable to handle pressure resigned. Even though finance manager was not involved with his assistant, he was linked with him and given a bad treatment from outsiders even including some of the employees. Media accelerated this issue and created more hype than was necessary.

Challenge: Roger’s challenges in this situation was handling bad press, dealing with media people with patience and uplift the company’s integrity with good reputation. He also needed to make the financial department integrated with other departments and boost the employee morale. At the same time he had to take care that company’s products do not suffer in the situation.

Solution: Roger suggested to the top management to issue a public message in the newspapers/magazines and also at the end of the Company’s product ads on TV. The message was – “We value your trust in us as you value our commitment towards you.” Roger’s view was that once the fraud was committed and was out in the open, there was nothing much to be done but to move on accepting that such incident occurred and will not happen again. Roger also advised for just one press conference regarding this issue to put an end to this matter. The assistant finance manager had confessed and

was told to resign instead of being fired. Soon enough, people forgave and forgot this issue, sales improved and company was on the track once again.

Problem Situation 3: One of the women’s facial creams produced by Jasper Ltd. was severely criticised by media and women. The belief was that the product contained acidic substance causing harmful chemical reactions on the skin. This belief was created when some women claimed that their skin discoloured/scalded after using this facial cream. Media reports provided some facts related to the product that made women who were using this cream more alert. As a result sales dropped drastically.

Challenge: First of all, Roger had to study the product and know its constituents. Secondly, he discussed with product research team as to why such claims could be targeted towards the product. Next, he had to face the media and women consumers addressing the claims and product’s safety.

Solution: Roger collected those facts provided in the media reports and sent them for verification with the skin specialists, research team and for laboratory testing. It was verified and proved that facts provided were immaterial in causing damaged skin. It was also proved that the cream contained no acidic substance or any sort of harmful chemical. Secondly, those women who claimed skin damage were questioned about their application of the skin cream. Two women confessed that they combined several other beauty products along with cream’s application. Others confessed that they were interested in making some quick money if company provided any compensation. Roger arranged a special press meet and provided all the relevant facts and information regarding this issue.

Problem Situation 4: Homely Anchor, a charitable organisation that mainly looked after elderly people in several old age homes was having a problem with its donations. There were anonymous donations coming from several places that it was difficult to track the funds and its allocation. The members of the organisation were themselves confused with the amount collected and amount spent since proper records were not maintained. There were gaps in the accuracy of the information and its updates. Somehow, a magazine columnist/writer got to know about this state of affairs and without much investigation published a small article in the magazine. The article stated how Homely Anchor was unable to manage funds and money received through anonymous donations remained anonymous. Although the article was not accusing of fraud, it hinted the readers in that direction. Within a few months of the article publication, some social activist groups and media started questioning Homely Anchor. There were questions raised on who were the anonymous fund raisers, amount of donations and what and how much was being spent where.

Challenge: Since Roger was working as a part-time Public Relations officer in Homely Anchor, he had to face the social activists and media on behalf of the organisation. He had to protect the privacy of anonymous donation givers and assure them as well as old age homes that funds are raised, managed and used for good intentions.

Solution: He merely gave open statements telling that a proper system will soon be in place that would ensure the accuracy and safety of records related to donations and fund raising. Shortly, he arranged for a small conference consisting of prominent social activists, charitable workers and media representatives to discuss and debate on the implementation of proper systems in charitable organisations. This conference gained lot of popularity and free publicity for Homely Anchor which resulted in more donations. An appropriate system was also implemented to record the transactions.

Problem Situation 5: The research and production team at Sparkly Company had designed a new and innovative technology of purifying water in their product – “Sparkler water purifiers”. This system was tested and proved that it was safe and that it purified water without destroying its minerals. Once it was approved, production plants were ready to manufacture water purifiers in the newly designed way. But, information had leaked to the rival competitor “Visor” Ltd. who immediately took advantage of the opportunity. Visor Ltd. issued statements in the press about this new technology of purifying water and that soon they will be marketing these products. There was a commotion in Sparkly Company due to this. Research and production teams began to accuse each other on the information leakage. Somehow, management was not able to control the situation. News spread about the rivalry issues and information leakage. Media was too interested in finding out which company would come out with the product first.

Challenge: Roger too found this situation difficult to handle. There was definitely an information leakage regarding the new method implemented in water purifiers. Roger’s immediate tasks were to find how information was leaked out and who would have done it. He knew the commitment levels of the company’s employees were not questionable. Second, he had to ensure that Sparkling Company was the first to introduce this technique and at the same time he could not accuse Visor Ltd. openly in public.

Solution: Since acquiring patents (exclusive rights) to the new technique in water purifiers was in process, Roger decided not to talk about it. He then released a statement in the press as “Sparkly Company’s dedicated effort towards manufacturing Sparkler Water purifiers with new technology was a long time process. It involved continuous research and lab experiments by the team. This technology shows our expertise and we will never compromise on our products.” After an internal investigation, Roger found that company’s certain e-mails were hacked and through that, information had leaked to Visor Ltd. So, systems and networks were made more secure. Roger made it clear in his public appearance in the media that crucial information did leak out due to the insecure network and computer systems. But, he

was careful not to mention names or make any accusations. Media turned their attention to Visor Ltd. questioning its integrity, ethical and business values.

Questions:

1) Identify the qualities of Roger as a PR professional and analyse his role in the companies that he worked for.

2) In the above problem situations, was there any other approach that Roger could have adopted? If yes, suggest some approaches. If no, why do you agree with Roger’s approach?

3) List the PR tools and strategies that were adopted by Roger in dealing with the problem situations.

Case study 4

Personal Selling – Professional approach

Background Information:

“Keep Fit” is a medium-sized outlet exclusively dealing in exercising equipments/machines and fitness accessories and sometimes in sports equipments also. It has 27 sales persons employed under it. Owners of the outlet – an active middle-aged couple have several contacts abroad through which they place orders for the necessary and required equipments. Once an order is placed for particular equipment, it takes atleast 2 weeks for the equipment to reach the outlet. Secondly, the sales force is involved in cold calls, constantly checking upon new orders from the existing customers and getting new customers to place orders for these equipments from in and around the city. Sometimes, they travel to other nearby cities seeking orders and new customers.

Some of the equipments that Keep Fit sells are –

Cardio equipments such as Treadmills, Stair climbers, Steppers, Bikes, Ellipticals, Rowers, so on.

Strength equipments such as Weight benches, Power racks and varieties, different kinds of Weight machines which is supplied as per customer’s requirements, lifting accessories, home gym systems, and other machines.

Fitness accessories such as pedometers, ankle and wrist weights, jump ropes, stretch mats, hand grips, exercise balls, pull and push up bars, so on.

Sports accessories such as soccer balls, volleyballs, basketballs, poles, boxing gloves, track pants and such other stuff if at all there is customer demand or they have placed such orders.

The owners have already realized the growth potential of these equipments/machines after analyzing the following:

1. a) Since most people are becoming health and fitness conscious, there is lot of

demand but supply is comparatively low.

2. b) Due to heavy work pressures and IT related jobs that require people to sit in

front of their computer systems for long, it has resulted into high demand for

creating and maintenance of gyms in the companies and at the workplaces.

3. c) The affluent class or groups especially celebrities and sports stars don’t mind

purchasing and owning these equipments in their homes, the objective being

creation of a personal gym at home.

4. d) Fitness centers, gymnasiums and sports clubs are increasing in number and so

is the demand for the exercising equipments and machines.

5. e) Encouragement given to different sports requires the sports men and women

to use such equipments and therefore, they have to be provided with such

resources so as to participate in national or international sports events like

Olympics.

Two more salespersons were recently recruited and selected by the owners. After the training and several exposures to the sales practices adopted by experienced salespersons, these two salespersons were ready for the actual job.

The first salesperson namely Mr. Jagan Das is hard-working and efficient in his work. It was observed in the training programme that he was alert to the situations and environment around him. But, at the same time he had a weakness of listening a lot to other people’s opinions and not contributing his thoughts or ideas. However, he was enrolled in a short-term communication course to improve his language skills and expressing his thoughts. The second salesperson namely Mr. Tarun Mehra is an enthusiastic and determined chap. He likes to share ideas and given the time, he would talk his way out. In the training programme, he asked lot of questions and after receiving answers would again question about why and how of things. His only weakness was his tendency to get over-enthusiastic about things and situations that he would forget about existing situation or problem.

In the first few months, Jagan and Tarun were getting along fine as they were assigned the same sales territory. Sometimes, they would go together to collect orders and even dispatch orders to the customers. Together, they were able to deal with complicated clients and achieve higher sales targets than what was assigned to them.

Lately, the owners observed small fights happening between Jagan and Tarun. They were not sure as to what caused the disagreements that led to fights but eventually, the couple decided that the salesmen needed to sort it out by themselves. On Jagan’s request, their sales territories were separated and now, Jagan and Tarun had to deal with different customers at different locations.

After Reading the Background Information, analyse the following two situations and answer the questions given at the end:-

Situation 1:

Jagan is at the outlet’s veranda listening to how another sales person handled a customer’s complaint. He receives a call from one of the old customers of the outlet. The telephonic conversation goes as follows:

Customer: “From “Shape-up” Gym, I am Raghav speaking… Two months back, I purchased this treadmill from you for our gymnasium located at the city’s east and now it is causing some problem… till now whatever gym equipments we purchased from you had no problems of any kind”

Jagan: “Please tell me your problem Sir…”

Customer: “See, actually I can fix the problem… I know some people who can do it very easily… but that’s not my point… I need to know why the machine caused problem.”

Jagan: “You tell me your problem Sir, and then we will fix it for free…”

Customer: “I am not having a problem; your machine has a problem”

Jagan: “I will come at your place Sir, tell me your exact problem so I can note it down and solve it as soon as possible”

Customer: “I can solve the problem… I need to know whether the treadmill comes with a guarantee period and why a brand new machine is causing this problem”

Jagan: “I will come over there Sir and if it’s possible, I will bring a technical member from my team along with me…”

Customer: “No Thanks for your help… I will speak to your Boss about the treadmill’s inefficiency!”

Jagan: “Wait… let me know what I can do for… …”

The call is dropped and Jagan is unclear as to what he must do next. Should he call back the customer on the same number as appearing on his mobile or should he find out if he can trace the customer information from the sales records of the last two months or should his superior know about this incident? The customer appeared to be in a hurry and didn’t even tell about the problem. Jagan also wondered about how Tarun would react to this kind of call.

Situation 2:

Tarun is busy entering some information into the sales records. He is asked to pick up a call from the superior’s office and following conversation takes place:

Customer: “Is this Keep Fit?”

Tarun: “Good evening Sir, yes it is… May I know your name Sir?”

Customer: “Who am I speaking to? … I am Jonathan from Lance Sports Club”

Tarun: “Mr. Jonathan, this is Tarun and I am a sales executive at Keep Fit… you can tell me your concern Sir,”

Customer: “I had placed an order for 7 pairs of weight plates, 6 pairs of dumbbells, and 2 exercising bikes – one upright and also 2 treadmills and volleyball”

Tarun: “I am listening Mr. Jonathan”

Customer: “Yes, good, now according to price-list, it says 3 treadmills, 3 exercising bikes, 6 pairs or weight plates, 6 pairs of dumbbells…. the thing is number of items mentioned in the bill are completely wrong”

Tarun: “Just tell me the Bill Number and I will get back to you Jonathan… But, how many items have you received in actual numbers?”

Jonathan: “Well, that’s the problem… I have received the same numbers as I placed in the order… but, the bill and the list says wrong numbers… and only that volleyball is not received”

Tarun: “Okay…. Just see on the top left of your list… you will find the Bill Number… please tell me that…”

Jonathan: “There is no Bill number in this…”

Tarun: “Please check it once again… there is a bill number mentioned at the top left or top right or somewhere at the top… Okay… tell me the date of the bill and your order placement date atleast”

Jonathan: “No, it’s alright, there must be a mistake… we will sort it out during the payment”

Tarun: “Mr. Jonathan… Please co-operate and tell me the bill number or the date so that I can verify it in the sales records and check the invoices also”

Jonathan: “No, that’s okay… do not bother about it… we will confirm later…”

Tarun: “Listen Mr. Jonathan, I can just…. …” But, before Tarun tells anything more, the customer has cut off the call. Tarun feels uneasy about the conversation. He was being so helpful and wanted to clarify the figures but it looked like the customer was not interested to do so. Should he follow up on the customer after finding out the necessary details or should he just keep quiet till the customer raises the issue once again? Should he tell this to his superior? He tried to imagine Jagan’s way of tackling these types of customers.

Note:

In both the situations, the salespersons have not met the customers personally. In Situation 1, Jagan is dealing for the first time with one of the old customers of the outlet. In Situation 2, Tarun had spoken to some other member of the sports club previously.

Questions:

Question 1:- Identify the approach (plus points and negative points) of the two salespersons in the above situations and make a comparative analysis.

Question 2:- In both the situations, were the customers satisfied with how the salespersons handled their queries? Analyse the sales person’s and customer’s interactions in the above situations.

Question 3:- If you were a salesperson, how would you have handled the above two situations? Do you have any suggestions for Jagan and Tarun?

XAVIER HUMAN RESOURCE MANAGEMENT

Human Resource Management

(i) There are three Sections A and B and C. (ii) Attempt any three questions each from Section A and B. All questions carry 10 marks each. (iii) Section C is compulsory for all and carries 40 marks.

SECTION A

1. Define and differentiate between Job Analysis, Job Description and Job Evaluation.

Select an appropriate job evaluation method and create a plan for evaluating

jobs of scientists in different grades.

2. Discuss the role of indoctrination in organizations. How can Performance

Appraisal, and Training and Development be made an integral part of Human

Resource Planning? Discuss.

3. Discuss the scope of Human Resource Audit. While auditing Reward systems for

employees in a manufacturing organization, which factors should be taken into

account and why? Explain with suitable examples.

4. Define and discuss the need for Human Resource Planning in an organization.

Briefly discuss various approaches to HRP

5. Write short notes on any three of the following: (a) Training methods (b) Value

determinants of HRP (c) Human Resource accounting (d) Labour Market Behavior

(e) Promotion and Reward Policies

SECTION B

1. Define and discuss the objectives of Human Resource Planning at organizational

level. How does it help in determining and evaluating future organizational

capabilities, needs and anticipated problems? Explain with suitable examples.

2. Define and describe Job Analysis. Briefly discuss several methods in which

information about a job is collected and evaluated.

3. What is the purpose and process of recruitment function? Discuss various

methods of sourcing manpower.

4. How is monetary value assigned to different dimensions of Human Resources

costs, investments, and worth of the employees? Briefly explain Cost and

Economic value approaches of measurement.

5. Write short notes on any three of the following : (a) MBO (b) Succession Planning

(c) Competency Mapping (d) Job Evaluation (e) H.R. Inventory

SECTION C

1. Quality control Department

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

Mr. Kapil Kumar and Mr. Abbas Ali were working in a scooter manufacturing public sector industry as Senior Quality Control Engineers in 1988. One post of Deputy Chief Quality Controller has fallen vacant due to the retirement of the incumbent and the management decided to recruit a qualified, knowledgeable and experienced professional from outside so that the present quality standard may be improved thus ensuring better marketability of their scooters in the face of stiff competition. Mr. Kapil Kumar, who was a mechanical engineer with about 15 years experience in the Quality Control Department dealing with mopeds and scooters, could have been promoted to fill the post on the basis of seniority. However, the management was looking for a graduate in statistics with experience in latest Quality Control (QC) techniques like statistical quality control, quality assurance and other related areas rather than a mechanical or automobile engineer with the routine experience in quality control. As such instead of promoting Kapil Kumar, the management advertised for the post of Deputy Chief Quality Controller – since as per company rules it was DR (Direct Recruitment) vacancy also.

Selection of Outsider

Out of the applications received in response to the advertisement, six candidates were called for interview including the two internal candidates, Mr. Kapil Kumar and Mr. Abbas Ali. The person selected was an outsider, one Mr. Ratnam, who had over 12 years experience SQC, quality assurance etc., in the two-wheeler private manufacturing industry. Mr. Ratnam joined within 2 months time expecting that in his new position he would be the main controller for quality. However, after joining the organization he came to know that he would be the second senior most person in the hierarchy for controlling the quality and would be reporting to one, Kirpal Sing,. The Chief for Quality Controls. Mr. Kirpal Singh had come up to this post by seniority and was basically a diploma holder in automobile engineering. He had to his credit about 28 years of industrial experience, out of which 20 years were spent in Quality Control Department of two industries. He joined the present organization in its Quality Control Department and had 17 years experience in the organization and was due for retirement within the

next 2 or 3 years. On learning about the retirement time of Mr. Kirpal Singh, Mt. Ratnam had the consolation that he would be able to take up the position of ‘Chief Controller of Quality’ very soon.

Interference from Top

Ratnam could not put forth many good suggestions (for quality control) because of the interference and direct supervision of Kirpal Singh. He, however, could pick up a good deal of knowledge about the working of the company, the nature-and tendency of different production department heads particularly with regard to care for quality, organization for ‘QC’ in the company, the various components required for assembly of the company’s two-wheeler scooter and the expected quality standards, drawback in the present system of quality controls. etc.

Right from the time the advertisement for the selection of Deputy Chief Quality Controller appeared, the O.A. (Officers Association) of the organization had been pressing the management to consider the case of Kapil Kumar for promotion to the above post based on his seniority in the organization.

Meanwhile, the management obtained a license in 1989 for producing Three-Wheeler Autos. As a result of this and the pressure from O.A., Ratnam was transferred to look after the Quality Control Department at the company’s new Three-Wheeler plant, whereas Kapil Kumar was promoted as Deputy Chief Quality Controller in the present two-wheeler scooter plant in 1990 (after creating one additional post of Deputy Chief Quality Controller for the new Project).

In 1991, the State Government, which controlled the company in question, changed the Managing Director. During the regime of this new Managing Director, Kapil Kumar was promoted as Chief (Quality Controls) next year, when Kirpal Singh retired. This decision was based on the recommendations of Kirpal Singh and partly attributed to pressure from O.A., for further promotion of Kapil Kumar based on his vast experience in the Quality Control function of this industry. Abbas Ali rose to the position held earlier by Kapil Kumar.

Allotment of Company Quarters

The Company had its own township near the factory. Its quarter allotment scheme was based on the length of service, i.e., date of joining. Ratnam had asked for a suitable quarter at the time of interview and was thus allotted a tile quarter meant for the Senior Engineer’s cadre. He learnt about this, after occupying the quarter. Ratnam asked for a change of Quarter – preferably a RCC-roof quarter, – but his request was turned down, since he had put in only few months of service whereas many others senior to him, on the beds of their longer length of service in the Company (having over 10 years service), were staying in tiled-roof quarters and were awaiting a chance for a RCC-roof quarter. Kapil Kumar and Abbas Ali were residing in RCC-roof quarters. Soon after Kapil Kumar’s promotion to the post of Chief (Quality Controls), he was allotted a bungalow.

The management’s decision in this case must be viewed in the context of the downtrend in the demand for scooters and three-wheeler autos during 1993 following complaints from dealers about the deteriorating quality of components as also their

short life. Notably the complaints had risen ten-fold in that year as compared to that in 1988.

Questions

(a) Was the management justified in taking a decision to recruit a qualified and experienced person from outside as Deputy Chief Quality Controller?

(b) Was it in the interest of the organization to transfer Ratnam to the new auto-wheeler plant and promote Kapil Kumar? What could have prompted the management to take this decision?

(c) How do you view the role of O.A.s in supporting only the local and internal candidates and overlooking the interests of direct recruits even when they were family members of the Association, particularly at a time, when the industry needed professionally qualified persons to fill key technical posts?

(d) How would you react to the management’s scheme for quarter allotment and why?

2. Pearl Engineering

Pearl Engineering Company was a large heavy-engineering unit. It attached great importance to the recruitment and training of its senior supervisors. Apart from selecting them from within the organization, the company recruited, every. Alternate year, about ten young engineering graduates and offered them training for a period of two years, before they were appointed as senior supervisors. Such appointments were made to about 40 per cent of the vacancies of senior supervisors that occurred in the organization. This was considered necessary by management as a planned programme of imparting vitality to the organization. Besides, many of the old-timers, who had risen from the ranks, did not possess the necessary academic background with the result that they could not keep pace with the technological changes. Management also believed that in the rapidly changing conditions of industry, a bank of technically competent supervisors played a pivotal role, besides serving as a pool from which to select future departmental managers.

Engineering Graduates were selected from amongst those who applied in response to an all-India advertisement. For the selection of one engineer, on an average, eight applicants were called for interview. A selection committee consisting of the General Manager, the Production Manager, the Personnel Manager and the Training Officer interviewed and selected the candidates. The selection interview was preceded by a written test and only those who secured 40 per cent marks qualified for interview.

The engineers thus selected had to undergo a two year intensive theoretical and practical training. A well-staffed and equipped Training Institute was directly responsible for the training of the graduate engineers, besides training trade apprentices and operatives required by the company. Lectures on theoretical subjects were given at the Training Institute and practical training was imparted in all the works departments under the guidance of qualified and experienced instructors. A few lectures by senior officers of the company were also arranged to acquaint them with the company policies on different matters. During the last quarter of their two-year training programme they were deputed to work fulltime to familiarize themselves with the conditions in departments where they were to be absorbed eventually.

On successful completion of training, the graduate engineers were offered appointments, depending on their performance and aptitude as revealed during training. On placement in the work departments, however, most of them faced some difficulty or the other.

According to management, some of the heads of departments, who were themselves not qualified engineers, did not have sufficient confidence in these younger men. They preferred the subordinates who came up from the ranks to hold positions of responsibility. A few discredited them saying that it would take years before these youngsters could pick up the job. Besides, some of the employees, whose promotional opportunities were adversely affected by the placement of graduate engineers, tried their best to run down the latter as a class, sometimes working on the group feelings of the workers. Some of the supervisors who were not graduate engineers also spoke derisively of them as “the blue-eyed boys” of the organization. Management knew that many of the graduate engineers were not utilized according to their capacity or training, nor was any attempt made to test or develop their potentialities. They also knew that many of the graduate engineers were, therefore, dissatisfied with their work life. Some of them who did not get equal promotional opportunities as their colleagues placed in other departments, were looking for better jobs elsewhere.

On the other hand, according to management, the young graduate engineers were themselves partly responsible for the hostile attitude of others in the organization. Some of them failed to appreciate that a newcomer invited hostility in the beginning and it took time before he was accepted as a member of the work-group. They did not realize that they would be fully productive only after gaining about five to seven years experience in the organization. A few thought that they belonged to a superior cadre and threw their weight around. They did not bother to understand and appreciate the problems of the rank-and-file of employees who worked under them.

In spite of these drawback, the General Manager of the company felt that these men were a set of disciplined supervisors. They had a sense of pride in their profession, and with the extensive training they had received, they would be able to take up any responsible position in the organization in course of time.

The General Manager could not allow the situation to continue especially when it was a difficult and costly process to recruit and train young engineering graduates of the requisite type and caliber. He knew that the prosperity of the company, to a large extent, depended on these young men. In addition, a large number of lucrative employment opportunities were available to these young engineers elsewhere and there was a systematic raid on them, He, therefore, called a meeting of all heads of departments to review the situation.

Questions:

(i) Identify the issues related to manpower planning as evident in the case.

(ii) Discuss the strategies to tackle the percentage of internal promotion at the organizational level.

(iii)What type of additional training programmes should be imparted for direct entrants?

(iv) Suppose you are the head of the personnel division. What would be your suggestions in the meeting – Which has been called by the General Manager?

XAVIER CONSUMER BEHAVIOUR

CONSUMER BEHAVIOUR

1. B. : 1) Attempt all Four Case studies

2) All questions carry equal marks.

CASE STUDY 1

Kellogg India ltd.

Top mangers of Kellogg India ltd received unsettling reports of a gradual drop in sales. Managers realized that it would be tough to get the Indian consumer to accept its products. Kellogg banked heavily on the quality of its crispy flakes. But pouring hot milk on the flakes made them soggy and did not take good and not many Indian consumers like to have them with cold milk.

A typical average middle class Indian family did not have breakfast on regular basis like their wetern counterparts. Those who did have breakfast, consumed parathas, idlis , bread, butter, jam, milk tea and local food preparations. According to analysis, a major reason for kellogg’s failure was the fact that the tastes of its product did not suit Indian breakfast habits. Kellogg sources were however quick to assert that the company was not trying to change these habits; the idea was only to launch its products on the health platform and make consumers see the benefit of this healthier alternative. Another reason for low demand was premium pricing adopted by the company

Disappointed with the poor performance, Kellogg decides to launch two of its highly successful brands- chocos and frosties in India. The success of these variants took even Kellogg by surprise and sales picked up significantly. This was followed by the launch of chocos breakfast cereal biscuits.

The success of chocos and Frosties also led to kellogg’s decision to focus on totally Indiansing its flavors in the future. Kellogg also introduced packs of different sizes to suit Indian consumption patterns and purchasing power.

Kellogg tied up with the Indian diet association to launch a nation wide public service initiative to raise awareness about iron deficiency problems. The company has also modified its product, particularly the addition of iron fortification in breakfast cereals.

However, Kellogg continued to have the image of a premium brand and its consumption is limited to a few well of sections of the Indian market.

Question

Question 1:- How effectively Kellogg has met conditions of marketing concept?

Question 2:- Suggest ways how Kellogg can have more influence on consumption behavior of Indian consumer?

Question 3:- SWOT Analysis of Kellogg?

CASE STUDY 2

Amway’s Relationship with Stakeholders

Amway is one of the largest direct sales companies in the world. It continues to be a family owned business which was founded in 1959. Today, it employs 14,000 people worldwide and markets over 450 product lines. Its vision is to help people lead better lives. Its success is largely due to its three million ABOs (Amway Business Owners) spread across 80 countries. Thanks to Amway, these people have a business of their own.

The only shareholders of Amway are the families that own Amway. The communication channels used by Amway to communicate regularly with its internal and external stakeholders are websites, email, events, publications and membership of trade bodies.

Amway sells directly to consumers, without the presence of retail outlets. It has its own supply chain through the ABOs. Amway seeks regular feedback from the ABOs and customers to find out how well it is doing and to improve service. The ABOs are independent small businesses, but depend on Amway suppliers to produce quality products.

Amway’s involvement with communities is a part of its vision to ‘help people lead better lives’. It promotes its corporate social responsibility (CSR) all over the world. Corporate social responsibility at Amway involves supporting social causes, acting in an ethical manner by making good products and supporting its stakeholders in a number of ways. For example, Amway has partnered with the children’s charity UNICEF. It helps provide

vaccinations to fight the world’s six most deadly diseases. It has chosen this charity because of its ABOs’ concern about families.

Ethical businesses get actively involved in improving the communities where they work. Amway’s business ethics not only provides a clear framework within which to work, but also gives it a positive business advantage. Its ‘One by One’ program is good for both the environment and for business. This program supports organic farming, seeks to reduce waste and packaging and to switch to renewable energy sources. There is a cost involved in these practices, but this can be balanced against the benefits derived by both the business and the community.

Amway has to balance the needs of its many different stakeholders. It sets high standards of ethics and codes of conduct, in order to make sure that these are upheld. Its CSR program helps the environment, its own employees and underprivileged children all around the world.

Question

Question 1:- Who are the external stakeholders that Amway communicates with?

Question 2:- What communication channels would you recommend to Amway, apart from what is mentioned in the case and why?

Question 3:- stakeholders are the consumer of Amway. Comment

CASE STUDY 3

A Consumer’s Buying Decision Process

Lalith is a stores manager and head of the distribution centre in an Indian company that’s located in one of the developing cities. His family includes his parents who have retired from their respective banking professions, his wife who is working as a librarian in a college, his twin sons who are now eligible for primary school admissions and an unemployed younger sister whose marriage is fixed. Lalith belongs to a middle class segment but more or less, the income level and family saving is good.

Lalith’s parents are conservative in nature. They prefer to spend on the basic necessities and those essential things that make up a living. However, Lalith likes to have a comfortable lifestyle and spends most of his earnings on furnishings and interior decor. Recently, Lalith had bought two air-conditioners but his parents didn’t let him install it in their room. So, he had to put the second one in the children’s room. Lalith often ignores his parent’s advices and does what he feels like doing. He is also planning to purchase a car within a year. His wife doesn’t mind Lalith’s spending habits but she is very particular to ensure that her salary is spent only on the household expenses and the rest goes to the Fixed Deposit of her Bank.

Now, since Lalith’s sister is getting married soon, his parents have insisted on Lalith to spend less and save more so that the marriage ceremony takes place in a splendid way. Lalith’s marriage was a small event because most of the relatives and friends had already informed that they could not attend the occasion for personal reasons. And so, Laith’s parents wanted to invite all the relatives and friends for their daughter’s wedding and make the occasion a grand success. Due to this reason, there are small fights happening in the house and Lalith feels that his income is not enough to meet the requirements. He is getting irritated over small things and he has lost concentration on his work.

Then, one particular working day when Lalith was carrying out his usual routine work at the warehouse he gets a sudden call from the Vice-President (VP) of the company asking him to meet within the next half an hour. He is surprised and at the same time nervous about the meeting wondering what was the meeting about. He delegates some work to his assistant and then hurries to the adjacent building block. The top authorities of the company had their offices in this block. No sooner he enters the building he is called inside the VP’s chamber and after some time when Lalith comes out of the room he realizes that he has received a cash reward for a record work he had accomplished a long time back. The top management even presented him a Certificate of Excellence and a personal letter asking him to lead by example. When he comes back to his office he also realizes that a copy of his certificate was put across the company’s internal e-mails and notice boards. He is very happy with the recognition he deserved especially with the Cash amount he received and commits himself to solving more complicated tasks at the workplace.

Realising the need for a car before his sister’s marriage, he even decides to purchase a car without wasting much time. He takes a friend along when selecting the type of car, the brand, the features and other attributes. Lalith is not particular about the brand but he prefers to have a big, spacious car which also is convenient for long distance traveling. He has an unclear budget above which he is not willing to pay for the car. His friend tells him that while deciding the features, color and other aspects, he may have to spend additional amount as well. At the end, he and his friend list down the three suitable brands that meets Lalith’s considerations. After thinking for about a week, regarding the three car choices, Lalith finally selects one among them. In the next two days, he completes all the formalities and payments with respect to the purchase. He also tells the showroom executives to deliver the car to his home. He already has a driving license but then he decides to keep a driver till he gets the confidence to drive a big car. 2 His parents are also happy seeing that Lalith, his wife and kids are excited about owning a car. Lalith manages to convince his conservative parents that savings are important but spending on finer things in life is not bad as well especially when you are in a position to do so. His sister’s marriage takes place with grandeur and Lalith gets the opportunity to display his big car in front of the guests.

After recognizing Lalith’s family background, status and situation,

Question 1) What do you think are the factors that influence Lalith’s buying behavior in general? According to Maslow’s need hierarchy theory, what are the needs of Lalith as a consumer and as an individual?

Question 2) Identify and analyze Lalith’s decision-making stages when he purchased the car.

CASE STUDY 4

ABC Electronics Ltd. – A Wrong Analysis of Consumer Behavior

ABC Electronics Ltd. was a company established in 1983 by Mr. Manoj Kumar and over the years had emerged as one of the leaders in the growing segment ofthe electronics and home appliances market in India. Currently it has a market share of 30% of the home appliances market. Its product strategy has been to offer a wide range, right from mono stereo, two in ones and sophisticated music systems to televisions, refrigerators, washing machines, ovens and microwave ovens. ABC’s marketing strategy also included offering the above products so as to match the needs and budget of the middle and upper middle classes.

In 1991, Prasad, son of Mr. Manoj Kumar, took over as the Managing Director of the company. Seeing the intense competition in the post liberalization scenario, Prasad was keen to follow the principle that once you have decided on your target customer, you follow him/her relentlessly with attractive offerings. In 1994, he developed a well focused promotion and distribution strategy. The promotion strategy involved an advertising budget of Rs. 10 crores, a special training program for the sales force and offering freebies and various other sales promotion techniques. In terms of distribution, Prasad selected exclusive showrooms and franchisees to display their wide range of products. The location of the exclusive retail outlets was also selected so as to match the perceptions of the consumers as an “exclusive showroom” for them.

However, even after two years of implementing the new promotion and distribution strategy, the sales of ABC Electronics did not pick up to the extent that the company thought it would. Prasad then directed the marketing manager to conduct a study of other retail outlets to know the trend. The results revealed that there was a change in consumers’ perceptions regarding purchasing consumer durables. There seemed to be a

preference for purchasing goods from multi brand, rather than from single brand outlets.

Questions

1. Where do you think Prasad went wrong in his analysis of consumer behavior?

2. Discuss the change in the role of the consumer today, as compared to the

consumer five years ago

XAVIER BUSINESS ETHICS

Business Ethics

Max. Marks: 80 SECTION – A 1. Answer any ten of the following in about 3-4 lines each: (2×10-20) a) Define Business Ethics. b) What is morality? c) How religion and ethics are related? d) What is ethical dilemma? e) Define Corporate Governance. f) Whar are attitudes? g) What is the psychological egoism? h) State the two unethical practices in Software Company? i) What are tax ratios? j) List four features of utilitarianism? k) What is whistle blowing? l) What is software privacy? SECTION – B Answer any three of the following. Each question carries 5 marks. (3×5=15) 2. Explain the significance of ethics in business planning and decision making. 3. What are corporate crimes? What are their effects on society? 4. What are the implications of unethical practices on human resource management? 5. What do you mean by classical utilitarianism? Explain its principles. 6. Explain the benefits of good corporate governance. SECTION – C Answer any three of the following. Each question carries fifteen marks. (3×15=45) 7. Explain the ethical issues involved in managing finance with an objective of maximizing shareholders wealth rather than shareholders interests. 8. Describe congnitivism and non-congnitivism ethical theories. 9. Explain the impact of corporate governance of Narayana Murthy Committee. 10. Explain the factors influencing ethical environment a service organization. 11. Explain the corporate social responsibility towards the educational institutions.

XAVIER ADVERTISING

Advertising

Max. Marks: 80 Answer any five questions All questions carry equal marks – – – 1. What is advertising? Bring out clearly the changing concept of advertising in modern business world. 2. Explain the objectives and functions of advertisement manager. 3. What is advertisement budget? How do you determine optimal expenditure through advertisement budget? 4. What are the characteristics of advertising media? Explain.. 5. Write a short note on: a) Visual layout. b) Production traffic copy. 6. How do you measure the effectiveness of advertisement? Explain. 7. Define sales promotion? Explain the types of sales promotion. 8. Explain the merits and demerits publicity.

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