7.16 CASE STUDY
Sagar Private Limited 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 labor 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-cycles 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 & 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. Rajnath Dube, a worker who is often pampered by management to get their way, dominates the company union. Rajnath is a man who ranks very low in personal & 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 Rajnath 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 Rajnath's proposal.
CASE QUESTIONS
1. Was the Maheshwari family's 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 management's position?
3. How would you handle Rajnath if you were in place of the Maheshwaris?
From India, Bangalore
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Sagar Private Limited 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 labor 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-cycles 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 & 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. Rajnath Dube, a worker who is often pampered by management to get their way, dominates the company union. Rajnath is a man who ranks very low in personal & 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 Rajnath 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 Rajnath's proposal.
CASE QUESTIONS
1. Was the Maheshwari family's 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 management's position?
3. How would you handle Rajnath if you were in place of the Maheshwaris?
From India, Bangalore
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Dear Ram, Pls let me know the status of workers (contrcatual, trainees, permanent etc). Expecting ur reply asap. Regards Sidheshwar
From India, Bangalore
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32From India, Bangalore
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Dear Ram,
I am pointing out some words used in your case study which convey special attention:
1) Typical labor needs ==> means chances of engaging a contractor. If the company engages a contractor, 50% of the problem is solved.
2) Packing of products ==> This is not the core business. The company can engage a contractor for such activities.
3) Bad records in industrial relations ==> very few chances of any assistance from the local authority.
4) Rajnath is good at politics ==> Rajnath must be associated with a political party. The MD of the company must have political relations so he should take advantage of it.
5) At least 6 months' time ==> Rajnath Dubey has no knowledge of Industrial Law or is trying to deceive the company. As per the ID Act, 1947, if the workforce is 100 or more, a retrenchment notice should be served at least 3 months before the retrenchment date; otherwise, 1-month notice is sufficient. At the same time, notice of intention to do so should be given to the government (RLC, ALC, EE, etc.) at least 60 days in advance. THE COMPANY SHOULD FOLLOW THE LEGAL PROCESS TO PROTECT ITS IMAGE AND PREVENT LOSSES.
6) Huge Sum ==> indicates that Rajnath Dubey is in need of money. The company should adopt the "DIVIDE AND RULE" policy and identify who the second in command among the workers is. The company should also groom a substitute for Rajnath Dubey simultaneously. This strategy is effective and widely used.
Now, onto your case:
Answer (1): The method of introducing change is a company requirement. The company is free to adopt such changes while considering business profits, product quality, etc. The company will adhere to the ID Act, 1947. Please refer to the clauses.
Answer (2): This is not a management tactic; it is a company need. When we talk about resistance to change, it is a human tendency to resist.
To convince Rajnath Dubey and the workers, I will employ the following techniques:
a) If there are units other than Mumbai where no automation is planned, I will transfer resistant workers there without affecting their wages. It should be noted that settled workers prefer not to move from Mumbai. The result: they may resign, easing the problem slightly.
b) Since automation is only being introduced in the packing area, while other areas remain manual, I will identify lazy workers and assign them to more demanding tasks. Eventually, they will be compelled to leave.
c) I will list the workers under probationary period and terminate them without giving a reason.
d) For workers with a tenure of 1 year or more, I will compensate them as per the ID Act and assure them of rehire if needed in the future.
e) If there is an opportunity for adjustment within the company, we will offer workers a chance to work in areas other than packing.
f) In case of an illegal strike threat, I will contact contractors who can provide relevant services on short notice.
g) If there is a gate-locking threat, I will seek assistance from local police or authorities.
h) We will conduct a meeting with all management personnel for a solution. We will instruct managerial staff to be prepared to work day and night until an amicable solution is reached.
All these practices should be planned well in advance.
Answer (3): Rajnath Dubey will be managed by applying the "Divide and Rule" policy. Personally, I aim to build good relations with local authorities and politicians. With external support, I will address Rajnath Dubey, who is detrimental to the organization. Another Rajnath will be brought in to resolve the company's issues.
Note: I am not an expert, but I have experience handling strikes.
Regards,
Sidheshwar
From India, Bangalore
Acknowledge(0)Amend(0)
I am pointing out some words used in your case study which convey special attention:
1) Typical labor needs ==> means chances of engaging a contractor. If the company engages a contractor, 50% of the problem is solved.
2) Packing of products ==> This is not the core business. The company can engage a contractor for such activities.
3) Bad records in industrial relations ==> very few chances of any assistance from the local authority.
4) Rajnath is good at politics ==> Rajnath must be associated with a political party. The MD of the company must have political relations so he should take advantage of it.
5) At least 6 months' time ==> Rajnath Dubey has no knowledge of Industrial Law or is trying to deceive the company. As per the ID Act, 1947, if the workforce is 100 or more, a retrenchment notice should be served at least 3 months before the retrenchment date; otherwise, 1-month notice is sufficient. At the same time, notice of intention to do so should be given to the government (RLC, ALC, EE, etc.) at least 60 days in advance. THE COMPANY SHOULD FOLLOW THE LEGAL PROCESS TO PROTECT ITS IMAGE AND PREVENT LOSSES.
6) Huge Sum ==> indicates that Rajnath Dubey is in need of money. The company should adopt the "DIVIDE AND RULE" policy and identify who the second in command among the workers is. The company should also groom a substitute for Rajnath Dubey simultaneously. This strategy is effective and widely used.
Now, onto your case:
Answer (1): The method of introducing change is a company requirement. The company is free to adopt such changes while considering business profits, product quality, etc. The company will adhere to the ID Act, 1947. Please refer to the clauses.
Answer (2): This is not a management tactic; it is a company need. When we talk about resistance to change, it is a human tendency to resist.
To convince Rajnath Dubey and the workers, I will employ the following techniques:
a) If there are units other than Mumbai where no automation is planned, I will transfer resistant workers there without affecting their wages. It should be noted that settled workers prefer not to move from Mumbai. The result: they may resign, easing the problem slightly.
b) Since automation is only being introduced in the packing area, while other areas remain manual, I will identify lazy workers and assign them to more demanding tasks. Eventually, they will be compelled to leave.
c) I will list the workers under probationary period and terminate them without giving a reason.
d) For workers with a tenure of 1 year or more, I will compensate them as per the ID Act and assure them of rehire if needed in the future.
e) If there is an opportunity for adjustment within the company, we will offer workers a chance to work in areas other than packing.
f) In case of an illegal strike threat, I will contact contractors who can provide relevant services on short notice.
g) If there is a gate-locking threat, I will seek assistance from local police or authorities.
h) We will conduct a meeting with all management personnel for a solution. We will instruct managerial staff to be prepared to work day and night until an amicable solution is reached.
All these practices should be planned well in advance.
Answer (3): Rajnath Dubey will be managed by applying the "Divide and Rule" policy. Personally, I aim to build good relations with local authorities and politicians. With external support, I will address Rajnath Dubey, who is detrimental to the organization. Another Rajnath will be brought in to resolve the company's issues.
Note: I am not an expert, but I have experience handling strikes.
Regards,
Sidheshwar
From India, Bangalore
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Change Management.ppt