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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

7th. 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.

NO. 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 ?

NO. 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 ?

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?

COURSE: MBA

SUB: Organizational Behavior

ATTEMPT ALL CASES

Case 1: Motivating through Total Reward

Introduction

The 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.

Roles

As 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.

Motivation

What 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 to

motivate 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 Reward

RBS 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 Balance

RBS 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.

Conclusion

RBS 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 Discussion

1. 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 strategy

Introduction

Kellogg 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 aims

Kellogg'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.

Objectives

Once 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.

Strategy

A 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.

Communication

Kellogg'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.

Conclusion

Kellogg knows from research that a balanced diet and regular exercise help people stay Healthy. It is

communicating this message through its brands and promotions.


* 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 organisation

Introduction

Leyland 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'.

Kaizen

A 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 uses

it 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 c

ompetitive. 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 action

The 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.

Conclusion

For 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.


1 . 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 making

Introduction

RWE 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.

Importance

RWE 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 problems

There 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.

Graduates

RWE npower employs graduate engineers straight from university. They are trained and

have 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.

Conclusion

RWE 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.


1. 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 culture

Introduction

The 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 around

100 in the UK with its UK HQ in Berkshire. Siemens products touch all our ranging

from kitchen equipment to power generation and from traffic lights to hospital scanners.

HR development

Siemens 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 has

good 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 Excellence

This 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 culture

The 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 management

Siemens 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.

Conclusion

The 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.


I

1. 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 work

3. 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?

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.

PART B — (4 15 = 60 marks)

Answer any FOUR questions.

6. Explain the factors affecting development of a port.

7. Explain the functions of stakeholders of a port.

8. Outline the factors affecting terminal productivity.

9. Explain in detail about green field projects.

10.Outline the various features of container terminal.

11.Outline the environmental issues connected with ports.

12.Explain in detail why inland waterways need to be developed for sustainable economic development.

——–––––––––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?

Business Communication

N. 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

7th. 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.

NO. 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 ?

NO. 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 ?

NO. 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 ?

SUB: Retail Management

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

2) 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 family

Question

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 questions

1. Analyze the pricing strategies adopted by café coffee day to establish its own identity amongst its competitors

CASE STUDY 4

Mriganaini

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 questions

1. Analyze the marketing strategies adopted by Sharma to promote his boutique-Mriganani.

2. What steps should Mr. Sharma take to promote the sales

Case study solutions & project reports provided 07

Education

construction project

major construction project

apartment window dancing

al saba construction

proposed construction

construction proposal

foreign construction

fuma project manager