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BUSINESS CASE ANALYSIS

Subject code -576122-(76)
submitted to

CHHATTISGARH SWAMI VIVEKANAND TECHNICAL

UNIVERSITY
BHILAI (C.G.), India
In fulfillment
For the award of the Degree
of
Master of business Administration
Submitted By
Group no. 5
Dishi Patel DivyaDawdaHarshitajain
Roll no. 13 Roll no. 14 Roll No. 15

Under the Guidance of

Mr. Abhishek
Assistant Professor,
Department of Master of Business Administration
B.I.T., Durg
Department of Management,
Bhilai institute of Technology
Bhilai House Durg-491001,(C.G)

Session: 2017-2019
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INDEX

CASE TITLE PAGE NO.

1.MR. VICE 1.1 Executive summary
CHANCELLOR
NEEDS LEARNING
THROUGH
DOINGS
1.2 Statement of problem
1.3 Cause of problem
1.4 conclusion
2-WHAT RIDES 2.1 Executive summary
OVER PROFIT OR
ETHICS
2.2 Statement of problem
2.3Cause of probloem
2.4 conclusion
2.5 sourcing
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Executive summary

Nagesh Iron and Steel Company Ltd. was established by Nagesh Samuel in the year 1980
with its head office at Delhi. The company was established in 400 acre of land at Bilaspur in
MP in which four plants were situated viz. Sponge Iron, Powerhouse, Furnace and Rolling
Mill. The project cost was around Rs.650 crore and annual turnover was around 1000 crore
and the company was recognized as a profit making unit. The workforce was 3000 in
number, out of which, 1200 workers were on the company’s pay roll while remaining were
affiliated to INTUC.

Headed by the chairman and managing director, Nagesh Samuel. He used to operate from
Delhi and was supported by the president and other three VPs in the field of finance,
marketing and technical fields respectively.

The CMD was 42 yrs of age and a religious, dynamic person who believed in quick decision
making with an autocratic style of leadership. The market for Nagesh Iron and Steel
Company Ltd. was exclusively on the domestic front however, it had to face competition
from Jindal, Nova and Special Steels. The relationship between management and the union
was bitter since the beginning. The CMD was directly involved in day to day activities and
the president reported directly to the CMD.

On Dec. 2, 1996, the President of the unit was shocked upon receiving a fax from CMD
stating that the listed 12 employees including the GM, Quality control and other officers
were to be sacked with immediate effect on the ground of lack of confidence.

A meeting was called immediately by the president which was attended by VP (Comm.
&Admn.) VP (Technical) Manager (R & A) HR Manager. After long discussion, every member
was of the opinion of terminating the officers and managers, gradually in phases, because
immediate termination would have resulted in bad consequences on the company.

Opinion was conveyed to the CMD. However, the CMD did not agree with the opinion.
Arnab Ray and others met the union leaders the same evening.

on December 3, 1996, at 6.30 A.M., all workers at the behest of the union went on strike.
Workers from all the four plants came out of the factory to the main gate and even workers
form night shifts were not allowed to start their machines. With the result half of the plat
was running without attendant and the remaining plant was closed at 8.30 A.M. The staff
members also formed the union and got associated with labour union and revised charter of
demand.
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Police was called in for maintaining law and order situation and for the protection of
executives. six managers stood by the management and they were gheraoed and locked for
twenty four hours inside the plant without food and water.

Consultants and advocates and a strike was declared illegal by the labour court and the
same was published in the newspaper. Since CMD started direct dialogue with the union,
the local management became powerless and the union stopped listening and interacting
with them. Strike had started in the first week of the month and salary could not be
distributed therefore, restlessness could be observed among the workers and management
reached to a conclusion that strike might be called off within a day or two and this was
communicated to the CMD also but the CMD didn’t succumb to the advise given by the
management as he was facing financial loss costing Rs. 300 – 400 crores and on December 9,
1996 he himself reinstated all the sacked employees and bowed down before the union and
accepted the charter of demand. In the next six months the president called back to the
Delhi office, HR Manager and VP (Technical) resigned and VP (Commercial & Administration)
was transferred to another unit at Jabalpur.

Statement of problem

1) Nepotism

In the Nagesh Iron and Steel Company Ltd , nepotism was encouraged by giving chance to
relative of Nagesh Samuel by him only.

Senior level officer was recureited on the basi of nepotism i.e based on favour granted to
relatives in various fiels , and other activities.

2) Autocratic style of leadership

In the organisation the autocratic syle of leadership was followed by chairman and managing
director i.e byNagesh Samuel.

a) Only one way communication was there.

b) There was no feedback system.

c) That leads to mis-understandings and communication backgrounds.

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d) There was erxistence of own decision making power

e) CMD fails to develop worker`s commitment to the objective of organisations.

f) Due to CMD behaviour problems created related to employee`s morale and

production in the long run ; due to their resentment.

g) Unsuitable condition was there because workforce was knowledgeable about their
jobs which calls for cooperative spirit.

3) Bitter Relationships

Bitter Relationships between union and management since the beginning which
affected the productivity of company.

4) No role of local management

No role of local management was there.so union didn’t listen or obeyed the local
management.

5) Control of activities by CMD

AlL the daily basis activities was controlled by nagesh Samuel the chair only which
was the highest post of the organisation due to this the local management was not in
function with union members.

6) No Interaction

Lack of ineraction was their between the general manager and president CMD and
work employees.

7) Strikes – a wrong way

Srikes for minor demands by working employees to the organisations without the
channel means without concerning local level management approached or appealed
directly to the seniors.

8) CMD Obsitatiness behaviour

Means not to listen to any one as he may be correct or uncorrect at that time , never
followed their subordinates suggestions.
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9) Huge loss

Due to loss of 300-400 crores in the business it compulsated the CMD to take
decision to sack out 12 employees.

10) Unethical practices

To solve any problem one has to talk to its just higher level of management but not to
the chairperson directly.

11) No remuneration

No salary could be distributed to toworkers because strike was started in the first
week of the month only.

12) Lack of Superior – subordinate realationship

There was no discussion or meeting was held out between the union members and
management.

CAUSE OF PROBLEM

In the Nagesh Iron and Steel Company Ltd ,

Only one way communication was there.There was no feedback system.That leads to
mis-understandings and communication backgrounds.There was erxistence of own
decision making powerCMD fails to develop worker`s commitment to the objective
of organisations.Due to CMD behaviour problems created related to employee`s
morale and production in the long run ; due to their resentment.Unsuitable condition
was there because workforce was knowledgeable about their jobs which calls for
cooperative spirit.

Means not to listen to any one as he may be correct or uncorrect at that time , never
followed their subordinates suggestions.

Lack of ineraction was their between the general manager and president CMD and
work employees.Srikes for minor demands by working employees to the
organisations without the channel means without concerning local level management
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approached or appealed directly to the seniors,All the daily basis activities was
controlled by nagesh Samuel the chair only which was the highest post of the
organisation due to this the local management was not in function with union
members. Senior level officer was recureited on the basi of nepotism i.e based on
favour granted to relatives in various fiels , and other activitiesnepotism was
encouraged by giving chance to relative of Nagesh Samuel by him only.

To solve any problem one has to talk to its just higher level of management but not to
the chairperson directly.No salary could be distributed to toworkers because strike
was started in the first week of the month only.
There was no discussion or meeting was held out between the union members and
management.and lack of superior subordinate relationships.

Decision criteria and Alternative solutions

Firstly , superior –subordinate relation should be strong between all types or level
of managments. So , that no break in channels of managementand ultimately much
better cccordination.

Secondly, there should be non – practice of nepotism all worker and employees
should be recruitedaccording to their skills , abilities and knowledge but not on the
basis of nepotism.

Third, strong and orderwise communication should be there in the organisation it

helps to maintain better relationships.

Fouth, there should control of the company in the hands of senior level only.

Fifth,democratic leadership of style should be followed by the chairperson or MD.

Sixth, no quick decision should be made without reffering pros and cons.

Recommendation solutions and implementation plan

Nageshsameaul should follow democratic type of leadership which will lead to :

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i) Better coordination.

ii) Better communication.

And also not favouring nepotism in the company which will help company to recover losses
of 300-400 crores and to raise profits also as recruited members will be selected on the basis
of his skills , knowledge and abilities and also specialisation . And instruction is to be
followed by union workers and subordinates given by whether it be by top level management
or local management which will result into storong relations. By appraising the performance
of low level of management by chief executives its gives more motivation and belongingness
towards the organisations. So automatically there will be more motivation higher produvtivity
better relation and hence successful organisation.No need of taking quick decision and also
there will be no need sackation or throwing out of employees due to losses.

Conclusion

Nagesh Samuel who was chairman and managing director as well , was 42 yrs of age and a
religious, dynamic person who believed in quick decision making with an autocratic style of
leadership and favoured nepotism and was obstinate in nature. The relationship between
management and the union was bitter since the beginning. On Dec. 2, 1996 receiving a fax
from CMD stating that the listed 12 employees including the GM, Quality control and other
officers were to be sacked with immediate effect due to heavy losses about 300-400 crores.
immediate termination would have resulted in badconsequences on the company and the
process of agreement with the union might have taken a ugly shape.it boosts the workers to
bycott and they started strike which resulted into lot of tension in company, heavy losses
and lack of coordination .

After police being called application made to labour court strike was over within a day and
hence , CMD started direct dialogue with the union, the local management became
powerless and the union stopped listening and interacting with them. And , he himself told
that he could not recognise the advise given by the management as he was facing financial
loss costing Rs. 300 – 400 crores and on December 9, 1996 he himself reinstated all the
sacked employees and bowed down before the union and accepted the charter of demand.

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Was the decision of CMD to terminate 12 employees right?

No, the decisio of CMD\ to terminate of 12 employees is not right because the
immediate termination would have resulted in bad consequence on the company and the
process of agreement with the union has change through that strike had started in the
first week of month could not be distributed so that CMD did not succumb to the
advise given by the management as he facing financial loss
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Q1. Was the decision of CMD to terminate 12 employees right?

No, the decisio of CMD\ to terminate of 12 employees is not right because the
immediate termination would have resulted in bad consequence on the company and the
process of agreement with the union has change through that strike had started in the
first week of month could not be distributed so that CMD did not succumb to the
advise given by the management as he facing financial loss

Q2 . Had you