St.

Joseph Evening College

SYNERGY 2012
THE DUKE
SIX FORCES
VARUN D

CASE STUDY SAGAR PVT. LTD. Is a small company, which manufactures plastic products such as mugs, buckets, and other household utility products. This company which is situated in an industrial belt in new Mumbai has typical labour needs. Since quite a few operations including packing of products are done manually, the company employs 80 workers on the shop floor. The company supplies its products to retailers in and around Mumbai. It has a long production run and longer product life-cyles and therefore the management believes that the company is making fewer profits because of this. As a result, the top management, which comprises of the members of Maheshwari family, since this is a family managed business, decided to invest resources on automation to have shorter production runs and shorter product life-cycles. It has decided to introduce packaging machines to reduce semi-skilled and unskilled labour.

The company has a bad record in industrial relations since workers in the past have had several problems pertaining to wages and working conditions .Rajnathdube, a worker who I soften pampered by management to get their way, dominates the company union. Rajnath is a man who ranks very low in personal and professional ethics but has a way with people and is good at politics. He has a substantial clout with the workers who trust him and would act on his advice. But the management is fully aware that rajanth may not be able to help much if the company thinks of retrenching workers. However the management decided to speak to rajnath regarding their decision to introduce automatic machines and subsequent lay off of workers. Rajnath immediately sensed a good opportunity to make a big sum so he pretended that convincing the workers was a herculean task and he would need at least 6 months time to do this. The management was however impatient to introduce automation and told rajnath to convince workers within 3 months to help them implement the decision. Of course rajnath Played his game and asked for a huge sum in reciprocation of his effort.

The maheshwari brothers were shocked at the price that rajnath wanted. They however knew that things would only get worse if they refused rajnaths proposal.

CASE QUESTIONS; 1. Was the maheshwari familys method of introducing change in sagar private limited appropriate? Please substantiate your response giving suitable reasons. 2. What was the tactic used by top management to overcome resistance to change? What tactic would you have used to overcome workers resistance to change if you were in the top managements position? 3. How would you handle rajnath if you were in place of the maheshwaris?

Case Study Report on Sagar Private Limited

1. In my opinion Maheshwaris family method of introducing change in Sagar Private Limited is appropriate assuming that the business proposal plan shows the need for the changes with higher profits and opportunity for expansion of other new products. Sagar Private Limited is currently making less profits than it is supposed to especially knowing that the company is totally dependent on the manual labor of unskilled and semi-skilled workers.

 Sagar Private Limited needs a plan going forward to show how it can make better profits with higher production efficiency and also has a big need of introducing newer products thereby increasing revenue as well. Sagar Private Limited business plan needs to show the need for automation thereby reducing the labor force of unskilled and semi-skilled workers. Implementation of the Management change will show increase in production efficiency and also enables return on investment in a short period. This plan will not only increase profit levels but also increase revenue by introducing newer products.

2. The tactic used by the top management was to introduce automation by bringing in the packaging machines in the production assembly lines and eliminate the unskilled and semiskilled work force. This change will shorten both the production runs and product life-cycles thereby increasing profits to the company. To execute this plan the management decided to bring in the their union leader Rajnath. Even though the company had several issues in the past with the workers pertaining to wages and working conditions, Rajnath has good relations with the labor force and knowing this fully well the management decided to negotiate with the labor force through their union leader.

 If I were to be in the top managements position I would bring in the same change with a different tactic. Management to bring in a memorandum to all employees that they are looking for a fewvolunteers (Should be equal to unskilled and semi-skilled workers)who are interested taking voluntary retirement package as a first come first serve basis. This will bring in reducing the labor workforce of unskilled and semi-skilled workers. This approach will not only avoid paying a huge sum to Rajnath but also is morale booster for the labor workforce as such because it does not force for laying off people. Obviously this plan should only to be taken forward if it agrees with the business plan, means the investment made on automation with additional cost of compensation package must have early returns to see higher profits in a short period of time. If there are no volunteers who wants to take this compensation package then I would pursue company management tactic with further negotiations with Rajnath. 3. I would handle Rajnath by questioning his strategy of laying off labor workforce in a 3 month timeframe. Understand in depth as to how his strategy affects the morale of the company knowing the past history. Also evaluate whether the business plan is effective or not after knowing how much Rajnath is expecting. Return on investment of automated machines including Rajnath cost of his effort must be recovered in a short period of time and start seeing higher profits.