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Disaster Recovery at Marshall Field’s case study solution provided

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Attempt Any Five Case Study

Case 1 – Disaster Recovery at Marshall Field’s (Another Chicago River Story)

Early in the morning on April 13, 1992, basements in Chicago’s downtown central business district began to flood. A hole the size of an automobile had developed between the river and an adjacent abandoned tunnel. The tunnel, built in the early 1900s for transporting coal, runs throughout the downtown area. When the tunnel flooded, so did the basements connected to it, some 272 in all, including that of major retailer Marshall Field’s.
The problem was first noted at 5:30 A.M. by a member of the Marshall Field’s trouble desk who saw water pouring into the basement. The manager of maintenance was notified and immediately took charge. His first actions were to contact the Chicago Fire and Water Departments, and Marshall Field’s parent company, Dayton Hudson in Minneapolis. Electricity—and with it all elevator, computer, communication, and security services for the 15-story building—would soon be lost. The building was evacuated and elevators were moved above basement levels. A command post was quickly established and a team formed from various departments such as facilities, security, human resources, public relations, and financial, legal, insurance, and support services. Later that day, members of Dayton Hudson’s risk management group arrived from Minneapolis to take over coordinating the team’s efforts. The team initially met twice a week to evaluate progress as the store recovered. The goal of the team was to ensure the safety of employees and customers, minimize flood damage, and resume normal operations as soon as possible. The team hoped to open the store to customers 1 week after the flood began.
An attempt was made to pump out the water; however, as long as the tunnel hole remained unrepaired, the Chicago River continued to pour into the basements. Thus, the basements remained flooded until the tunnel was sealed and the Army Corps of Engineers could give approval to start pumping. Everything in the second-level basement was a loss, including equipment for security, heating, ventilation, air-conditioning, fire sprinkling, and mechanical services. Most merchandise in the first-level basement stockrooms also was lost.
Electricians worked around the clock to install emergency generators and restore lighting and elevator service. Additional security officers were hired. An emergency pumping system and new piping to the water sprinkling tank were installed so the sprinkler system could be reactivated. Measures were taken to monitor ventilation and air quality and dehumidifiers and fans were installed to improve air quality. Within the week, inspectors from the City of Chicago and OSHA gave approval to reopen the store.
During this time, engineers had repaired the hole in the tunnel. After water was drained from the Marshall Field’s basements, damaged merchandise was removed and sold to a salvager. The second basement had to be gutted to assure removal of contaminants. Salvageable machinery had to be disassembled and sanitized.
The extent of the damage was assessed and insurance claims filed. A construction company was hired to manage restoration of the damaged areas. Throughout the ordeal, the public relations department dealt with the media, being candid yet showing confidence in the recovery effort. Customers had to be assured that the store was safe and employees kept apprised of the recovery effort.
This case illustrates crisis management, an important aspect of which is having a team that moves fast to minimize losses and quickly recover damages. At the beginning of a disaster there is little time to plan, though companies and public agencies often have crisis guidelines for responding to emergency situations. Afterwards they then develop more specific, detailed plans to guide longer-term recovery efforts.

QUESTIONS

1. In what ways are the Marshall Field’s flood disaster recovery effort a project? Why are large-scale disaster response and recovery efforts projects?
2. In what ways do the characteristics of crisis management as described in this case correspond to those of project management?

3. Who was (were) the project manager(s) and what was his or her (their) responsibility? Who was assigned to the project team and why were they on the team?

4. Comment on the appropriateness of using disaster recovery efforts such as this.

5. What form of project management (basic, program, and so on) does this case most closely resemble?

Case 2 -Flexible Benefits System Implementation at Quick Medical Center

The management committee of Quick Medical Center wanted to reduce the cost and improve the value and service of its employee benefits coverage. To accomplish this it decided to procure and implement a new benefits system. The new system would have no meet four goal; improved responsiveness to employee needs, added benefits flexibility, better cost management, and greater coordination of human resource objectives with business strategies. A multifunctional team of 13 members was formed by selecting representatives of departments at Quick that would rely most on the new system—Human Resources (HR), Financial Systems (FS), and Information Services (IS). Representation from each department was important to assuring all departmental needs would be met. The team also included six technical experts from the software consulting firm of Hun and Bar Software (HBS).

Early in the project a workshop was held with team members from Quick and HBS to clarify and finalize project objectives and develop a project plan, milestones, and schedules. Project completion was set at 10 months. In that time HBS had to develop and supply all hardware and software for the new system; the system had to be brought on-line, tested, and approved; HR workers had to be trained how to operate the system and load existing employee data; all Quick employees had to be educated about and enrolled in the new benefits process; and the enrollment data had to be entered in the system.

The director of FS was chosen to oversee the project. She had a technical background and, prior to serving as director, had worked in the IS group where she assisted in implementing Quick’s patient care information system. Everyone on the team approved of her appointment as project leader, and many team members had worked with her previously. Two team members had worked with her previously. Two team leaders were also selected, one each from HR and IS. The HR leader’s task was to ensure that the new system met HR requirements and the needs of Quick employees, and the IS leader’s task was to ensure that the new software interfaced with other Quick systems.

Members of the Quick team were committed to the project on a part-time basis. Roughly 50 percent of the time they worked on the project; the rest of the time they performed their normal daily duties. The project manager and team leaders also worked on the project part-time. When conflicts arose, the project took priority. Given specific performance requirements and time deadlines, the Quick top management committee made it clear that successful project completion was imperative. The project manager was given authority over functional managers and project team members regarding all project related decisions.

QUESTIONS

1. What form of project management (basic, program, and so on) does this case most closely resemble?

2. The project manager is also the director of FS, only one of the departments that will be affected by the new benefits system. Does this seem like a good idea? What are the pros and cons of her selection?

3. Comment on the team members’ part time assignment to the project and the expectation that they give the project top priority.

4. Much of the success of this project depends on the performance of team members who are not employed by Quick, namely the HBS consultants. They must develop the entire hardware/software benefits system. Why was an outside firm likely chosen for such an important part of the project manager in meeting project goals?

Case 3 Glades County Sanitary District

Glades Country is a region on the Gulf Coast with a population of 600,000. About 90 percent of the population is located in and near the city of Sitkus. The main attractions of the area are its clean, sandy beaches and nearby fishing. Resorts, restaurants, hotels, retailers, and the Sitkus/Glades County economy in general rely on these attractions for tourist dollars.

In the last decade, Glades Country has experienced a near doubling of population and industry. One result has been the noticeable increase in the level of water pollution along the coast due primarily to the increased raw sewage dumped by Glades County into the Gulf. Ordinarily, the Glades County sewer system directs effluent waste through filtration plants before pumping it into the Gulf. Although the Glades County Sanitary District (GCSD) usually is able to handle the county’s sewage, during heavy rains the runoff from paved surfaces exceeds sewer capacity and must be diverted past filtration plants, directly in to the Gulf. Following heavy rains, the beaches are cluttered with dead fish and debris. The Gulf fishing trade also is affected; pollution drives away desirable fish. Recently, the water pollution level has become high enough to damage both the tourist and fishing trade. Besides coastal pollution, there is also concern that as the population continues to increase, the county’s primary fresh water source, Glades River, will also become polluted.

The GCSD has been mandated to prepare a comprehensive water waste management program that will reverse the trend in pollution along the Gulf Coast as well as handle the expected increase in effluent wastes over the next 20 years. Although not yet specified, it is known that the program will include new sewers, filtration plants, and stricter anti-pollution laws. As a first step, GCSD must establish the overall direction and mission of the program.

Wherever possible, answer the following questions (given the limited information, it is okay to advance some logical guesses; if you are not able to answer a question for lack of information, indicate how and where, as a systems analyst, you would get it):

Questions:
1. What is the system? What are its key elements and subsystems? What are the boundaries and how are they determined? What is the environment?

2. Who are the decision makers?

3. What is the problem? Carefully formulate it.

4. Define the overall objective of the water waste management program. Because the program is wide-ranging in scope, you should break this down into several sub- objectives.

5. Define the criteria or measures of performance to be used to determine whether the objectives of the program are being met. Specify several criteria for each sub-objective. As much as possible, the criteria should be quantitative, although some qualitative measures should also be included. How will you know if the criteria that you define are the appropriate ones to use?

6. What are the resources and constraints?

7. Elaborate on the kinds of alternatives and range of solutions to solving the problem.

8. Discuss some techniques that could be used to help evaluate which alternatives are best.

Case 4 – West Coast University Medical center

(This is a true story.) West Coast University Medical Center (Pseudonym) is a large university teaching and research hospital with a national reputation for excellence in health care practice, education, and research. Always seeking to sustain that reputation, the senior executive board at the Medical Center (WCMC) decided to install a comprehensive medical diagnostic system. The system would be linked to WCMC’s computer servers and be available to physicians via the computer network. Because every physician’s office at WCMC has a PC, doctors and staff could access the system from these offices as well as from their homes or private-practice offices. By simply clicking icons to access a medical specialty area, then keying in answers to queries about a patient’s symptoms, medical history, and so on, a physician could get a list of diagnostics with associated statistics.

The senior board sent a questionnaire to manager in every department about needs in their areas and how they felt the system might improve doctor’s performances. Most managers felt it would save the doctor’s time and improve their performances. The hospital computing and information systems (CIS) group was assigned to investigate the cost and feasibility of implementing the system. CIS staff interviewed medical-center managers and software vendors specializing in diagnostic systems. The study showed high enthusiasm among the respondents and a long list of potential benefits. Based on the study report, the senior board approved the system.

The CIS manager contacted three well-known consulting firms that specialized in medical diagnostic systems and invited each to give a presentation. Based on the presentations, he chose one firm to assist the CIS group in identifying, selecting, and integrating several software packages into a single, complete diagnostic system.

One year and several million dollars later the project was completed. However, within a year of its completion it was clear that the system had failed. Although it did everything the consultants and software vendors had promised, the few doctors that did access it complained that many of the system “benefits” were irrelevant, and that certain features they desired were lacking.

QUESTIONS

1. Why was the system a failure?

2. What was the likely cause of its lack of use?

3. What steps or procedures were absent or poorly handled in the project conception phase?

Case 5 – X-philes Data Management Corporation

X-philes Data Management Corporation (XDM) requires assistance in tow large projects it is about to undertake: Agentfox and Mulder. Although the projects are comparable in terms of size, technical requirements, and estimated completion time, they are independent and will have their own project managers and teams. Work for both projects is to be contracted to outside consultants.

Two managers at XDM, one assigned each to Agentfox and Mulder, prepare RFPs and send them to several contractors. The RFP for Agentfox includes a statement of work that specifies system performance and quality requirements, a desired completion deadline, and contract conditions. As an incentive, the contractor will receive a bonus for exceeding minimal quality measures and completing the project early, and will be charged a penalty for poor quality and late completion. The project will be tracked using precise quality measures, and the contractor will have to submit detailed monthly status reports. The REP for Mulder simply includes a statement of the type of work to be done, an expected budget limit, and the desired completion date.

Based on proposals received in response to the REPs, the managers responsible for Mulder and Agentfox each select a contractor. Unknown to either manager is that they select the same contractor, Yrisket Systems. Yrisket is selected for the Mulder project because its specified price is somewhat less than the budget limit in the REP, and Yrisket has a good reputation in the business. Yrisket is chosen for the Agentfox contract for similar reasons—good price and good reputation. In responding to the Agentfox REP, Yrisket managers had to work hard to get the price down to the amount specified, but they felt that by doing quality work on the project they could make a tidy profit through the incentive offered.

A few months after the projects are underway, some of Yrisket’s key employees quit their jobs. Thus, to meet their commitments to both projects, Yrisket workers have to work long hours and weekends. It is apparent, however, that these extra efforts might not be enough, especially because Yrisket has a contract with another customer and will have to start a third project in the near future.

QUESTIONS

1. What do you think will happen?

2. How do you think the crisis facing Yrisket will affect the Mulder project? The Agentfox project?

Case 6 – Star-Board Construction/West-Starr Associates

Star-Board Construction (SBC) is the prime contractor for Gargantuan Project, a large skyscraper project in downtown Manhattan. SBC is working directly from drawings received from the architect, West-Starr Associates (WSA). Robert Starr, owner and chief architect of WSA, had designed similar buildings and viewed this one as similar to the others. However, one difference between this building and the others is in its facing, which consists of very large granite slabs—slabs much larger than traditionally used and larger than anything with which either WSA or SBC has had prior experience.

Halfway into project, Kent Star, owner and project manager for SBC, started to receive reports from his site superintendent about recurring problems with window installation. The windows are factory units, premanufactured according to WSA’s specifications. Plans are to install the granite facing on the building according to specifications that allow for dimensional variations in the window units. The architect provided the specification that a ½-inch tolerance for each window space be made (that is, the window space between granite slabs could vary as much as ¼ inch larger or smaller than the specified value). This created a problem for the construction crew that found the granite slabs too huge to install with such precision. As a result, the spacing between slabs is often too small, making it difficult or impossible to install window units. Most of the 2,000 window units for the building have already been manufactured so it is too late to change their specifications, and most of the granite slabs have been hung on the building. The only recourse for making window units fit into tight spaces would be to grind away or reinstall the granite. It is going to be very expensive and will certainly delay completion of the building.

QUESTION

1. What steps or actions should the architect and contractor have taken before committing to the specifications on the window units and spacing between granite slabs the would have reduced or eliminated this problem?


Dabur India Limited Growing Big and Global case study solution provided

Dabur India Limited Growing Big and Global case study solution provided whatsapp 91 9924764558
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DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Managerial Economics
Marks – 100

Attempt Any Four Case Study

CASE – 1 Dabur India Limited: Growing Big and Global

Dabur is among the top five FMCG companies in India and is positioned successfully on the specialist herbal platform. Dabur has proven its expertise in the fields of health care, personal care, homecare and foods.
The company was founded by Dr. S. K. Burman in 1884 as small pharmacy in Calcutta (now Kolkata), India. And is now led by his great grandson Vivek C. Burman, who is the Chairman of Dabur India Limited and the senior most representative of the Burman family in the company. The company headquarters are in Ghaziabad, India, near the Indian capital New Delhi, where it is registered. The company has over 12 manufacturing units in India and abroad. The international facilities are located in Nepal, Dubai, Bangladesh, Egypt and Nigeria.
S.K. Burman, the founder of Dabur, was trained as a physician. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. Soon, he started preparing natural remedies based on Ayurved for diseases such as Cholera, Plague and Malaria. Due to his cheap and effective remedies, he became to be known as ‘Daktar’ (Indianised version of ‘doctor’). And that is how his venture Dabur got its name—derived from Daktar Burman.
The company faces stiff competition from many multi national and domestic companies. In the Branded and Packaged Food and Beverages segment major companies that are active include Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic medicines and products, the major competitors are Baidyanath, Vicco, Jhandu, Himani and other pharmaceutical companies.

Vision, Mission and Objectives

Vision statement of Dabur says that the company is “dedicated to the health and well being of every household”. The objective is to “significantly accelerate profitable growth by providing comfort to others”. For achieving this objective Dabur aims to:
• Focus on growing core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology.
• Be the preferred company to meet the health and personal grooming needs of target consumers with safe, efficacious, natural solutions by synthesising deep knowledge of ayurveda and herbs with modern science.
• Be a professionally managed employer of choice, attracting, developing and retaining quality personnel.
• Be responsible citizens with a commitment to environmental protection.
• Provide superior returns, relative to our peer group, to our shareholders.

Chairman of the company

Vivek C. Burman joined Dabur in 1954 after completing his graduation in Business Administration from the USA. In 1986 he was appointed Managing Director of Dabur and in 1998 he took over as Chairman of the Company.
Under Vivek Burman’s leadership, Dabur has grown and evolved as a multi-crore business house with a diverse product portfolio and a marketing network that traverses the whole of India and more than 50 countries across the world. As a strong and positive leader, Vivek C. Burman has motivated employees of Dabur to “do better than their best”—a credo that gives Dabur its status as India’s most trusted nature-based products company.

Leading brands

More than 300 diverse products in the FMCG, Healthcare and Ayurveda segments are in the product line of Dabur. List of products of the company include very successful brands like Vatika, Anmol, Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant Manjan with turnover of Rs.100 crores each.
Strategic positioning of Dabur Honey as food product, lead to market leadership with over 40% market share in branded honey market; Dabur Chyawanprash is the largest selling Ayurvedic medicine with over 65% market share. Dabur is a leader in herbal digestives with 90% market share. Hajmola tablets are in command with 75% market share of digestive tablets category. Dabur Lal Tail tops baby massage oil market with 35% of total share.
CHD (Consumer Health Division), dealing with classical Ayurvedic medicines has more than 250 products sold through prescription as well as over the counter. Proprietary Ayurvedic medicines developed by Dabur include Nature Care Isabgol, Madhuvaani and Trifgol.
However, some of the subsidiary units of Dabur have proved to be low margin business; like Dabur Finance Limited. The international units are also operating on low profit margin. The company also produces several “me – too” products. At the same time the company is very popular in the rural segment.

Questions

1. What is the objective of Dabur? Is it profit maximisation or growth maximisation? Discuss.
2. Do you think the growth of Dabur from a small pharmacy to a large multinational company is an indicator of the advantages of joint stock company against proprietorship form? Elaborate.

CASE – 2 IT Industry: Checkered Growth

IT industry is now considered as vital for the development of any economy. Developing countries value the importance of this industry due to its capacity to provide much needed export earnings and support in the development of other industries. Especially in Indian context, this industry has assumed a significant position in the overall economy, due to its exemplary potentials in creating high value jobs, enhancing business efficiency and earning export revenues. The IT revolution has brought unexpected opportunities for India, which is emerging as an increasingly preferred location for customised software development. Experts are estimating the global IT industry to grow to US$1.6 million over the coming six years and exports to reach Rs. 2000 billion by 2008. It is envisaged that Indian IT industry, though a very small portion of the global IT pie, has tremendous growth prospects.

Stock Taking

The decade of 1970 may be taken as the stage of introduction of the Indian IT industry. The early years were marked by 75 per cent of software development taking place overseas and the rest 25 per cent in India. Exports of Indian software until the mid-1970s was mainly Eastern Europe, followed by US. Tata Consultancy Services (TCS) was among the pioneers in selling its services outside India, by working for IBM Labs in the US. The hardware segment lagged behind its software counterpart. With instances of exports worth US$ 4 million in 1980, the software segment of the industry has shown an uneven profile. It was not until 1980s that vigorous and sustained growth in software exports begun, as MNCs like Texas Instruments started to take serious interest in India as a centre of software production. Destinations of export also underwent changes, with US dominating the main export market with 75 per cent of the exports. The IT Enabled Services (ITeS) segment, however, had not emerged at this stage.
It was also during the mid to late 1980s that computer firms shifted focus from mainframe computers (the mainstay of MNCs) to Personal Computers (PCs). In March 1985, Minicomp installed the first ever PC at CSI, Delhi; this changed the entire industry for good. With the entry of networking and applications like CAD/CAM, PC sales soared in 1987-88, touching 50,000 units.
From a modest growth in the mid-1980s software exports moved up to Rs. 3.8 billion in 1991-92. Since then, it grew at an incredible rate, up to 115 per cent in 1993. The hardware could also register an annual growth of 40 per cent in this period, backed by a surging demand for PCs and networking. Growth of the industry was also driven by the emergence and rapid growth of the ITeS segment.
IT sector’s share of GDP rose steadily in this period, rate of increase being the highest at 44.91 per cent in 2000-01. It was in the same year that the size of the total IT market was the biggest in the decade, at Rs. 56,592 crore. The overall IT market was also found to increase till 2000-01. The overall IT market was also found to increase till 2000-01, with the only exception of 1998-99. The domestic market also showed an overall increase till 2000-01, registering a spectacular CAGR of 50.39 per cent. Aggregate output of software and services also increased in this period, though at an uneven rate. Of approximately $1 billion worth of sales in 1991-1992, domestic hardware sales constituted 37.2 per cent (13.4 per cent growth over the previous year), exports of hardware 6.6 per cent.
During 2000-01 the growth in the hardware segment was driven mainly by PCs, which contributed about 58 per cent of the total hardware market. This period also witnessed the phenomenon of increasing share of Tier 2 and cities in PC sales, thereby indicating PC penetration into the hinterland. PC shipments had increased by 35 per cent every year from 1997 till 2000-01 when it reached 1.8 million PCs. The commercial PC market saw a growth of 23.5 per cent mainly due to slashing of prices by major vendors.
It was in 2001-02 that the industry had a sharp fall in rate of growth of its share of GDP to 5.90 per cent, from 44.91 per cent in the previous year. The total IT market also showed a fall in growth rate from 56.42 per cent in 2000-01 to a mere 16.24 per cent in the next year, growing further at the rate of 16.25 per cent in the next year. Software export was also affected, registering a low growth of 28.74 per cent and failed to maintain its growth rate of 65.30 per cent in the previous year. It got further lowered to 26.30 per cent in 2002-03. CAGR of total output of software and services (in Rs. crore) came down to 25.61 in 2001-02 and further to 25.11 in 2002-03. The domestic market showed a steep decline in growth to 3 per cent in 2001-02 from an outstanding 50.39 per cent in 2000-01. It could, however, recover by growing at 4.11 per cent in the next year.

Table 1: Indian IT Industry: 1996-97 to 2002-03

Year A* B* C* D* E*
1996 97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
1.22
1.45
1.87
2.71
2.87
3.09

18,641
25,307
36,179
56,592
65,788
76,482
3,900
6,530
10,940
17,150
28,350
36,500
46,100
6,594
10,899
16,879
23,980
37,350
47,532
59,472
9,438
12,055
14,227
18,837
28,330
29,181
30,382

*A: share of GDP of the Indian IT market, B: size of the Indian IT market (in Rs. crore), C: software and services exports (in Rs. crore), D: size of software and services (in Rs. crore), E: size of the domestic market (in Rs. crore)

Questions

1. Try to identify various stages of growth of IT industry on basis of information given in the case and present a scenario for the future.

2. Study the table given. Apply trend projection method on the figures and comment on the trend.

3. Compute a 3 year moving average forecast for the years 1997-98 through 2003-04.

CASE – 3 Outsourcing to India: Way to Fast Track

By almost any measure, David Galbenski’s company Contract Counsel was a success. It was a company Galbenski and a law school buddy, Mark Adams, started in 1993; it helps companies find lawyers on a temporary contract basis. The growth over the past five years had been furious. Revenue went from less than $200,000 to some $6.5 million at the end of 2003, and the company was placing thousands of lawyers a year.
At then the revenue growth began to flatten; the company grew just 8% in 2004 despite a robust market for legal services estimated at about $250 billion in the United States alone. Frustrated and concerned, Galbenski stepped back and began taking a hard look at his business. Could he get it back on the fast track? “Most business books say that the hardest threshold to cross is that $10 million sales mark,” he says. “I knew we couldn’t afford to grow only 10% a year. We needed to blow right through that number.”
For that to happen, Galbenski knew he had to expand his customer base beyond the Midwest into large legal supermarkets such as Boston, New York, and Washington, D.C. He also knew that in doing so, he could run into stiff competition from larger publicly traded rivals. Contract Counsel’s edge has always been its low price, Clients called when dealing with large-scale litigation or complicated merger and acquisition deals, either of which can require as many as 100 lawyers to manage the discovery process and the piles of documents associated with it. Contract Counsel’s temps cost about $75 an hour, roughly half of what a law firm would charge, which allowed the company to be competitive despite its relatively small size. Galbenski was counting on using the same strategy as he expanded into new cities. But would that be enough to spur the hyper growth that he craved for?
At that time, Galbenski had been reading quite a bit about the growing use of offshore employees. He knew companies like General Electric, Microsoft and Cisco were saving bundles by setting up call and data centers in India. Could law firms offshore their work? Galbenski’s mind raced with possibilities. He imagined tapping into an army of discount-priced legal minds that would mesh with his existing talent pool in the U.S. The two work forces could collaborate over the Web and be productive on a 24-7 basis. And the cost could be massive.
Using offshore workers was a risk, but the payoff was potentially huge. Incidentally Galbenski and his eight-person management team were preparing to meet for their semiannual review meeting. The purpose of the two-day event was to decide the company’s goals for the coming year. Driving to the meeting, Galbenski struggled to figure out exactly what he was going to say. He was still undecided about whether to pursue an incremental and conservative national expansion or take a big gamble on overseas contractors.

The Decision

The next morning Galbenski kicked off the management meeting. Galbenski laid out the facts as he saw them. Rather than look at just the next five years of growth, look at the next 20, he said. He cited a Forrester Research prediction that some 79,000 legal jobs, totaling $5.8 billion in wages, would be sent offshore by 2015. He challenged his team to be pioneers in creating a new industry, rather than stragglers racing to catch up. His team applauded. Returning to the office after the meeting, Galbenski announced the change in strategy to his 20 full-timers.
Then he and his team began plotting a global action plan. The first step was to hire a company out of Indianapolis, Analysts International, to start compiling a list of the best legal services providers in countries where people had comparatively strong English skills. The next phase was vetting the companies in person. In February 2005, just three months after the meeting in Port Huron, Galbenski found himself jetting off on a three months trip to scout potential contractors in India, Dubai, and Sri Lanka. Traveling to cities like Bangalore, Chennai and Hyderabad, he interviewed executives from more than a dozen companies, investigating their day-to-day operations firsthand.
India seemed like the best bet. With more than 500 law schools and about 200,000 law students graduating each year, it had no shortage or attorneys. What amazed Galbenski, however, was that thanks to the Web, lawyers in India had access to the same research tools and case summaries as any associate in the U.S. Sure, they didn’t speak American English. “But they were highly motivated, highly intelligent, and extremely process-oriented,” he says. “They were also eager to tackle the kinds of tasks that most new associated at law firms look down upon” such as poring over and coding thousands of documents in advance of a trial. In other words, they were perfect for the kind of document-review work he had in mind.
After a return visit to India in August 2005, Galbenski signed a contract with two legal services companies: QuisLex, in Hyderabad, and Manthan Services in Bangalore. Using their lawyers and paralegals, Galbenski figured he could cut his document-review rates to $50 an hour. He also outsourced the maintenance of the database used to store the contact information for his thousands of contractors. In all, he spent about 12 months and $250,000 readying his newly global company. Convincing U.S. based clients to take a chance on the new service hasn’t been easy. In November, Galbenski lined up pilot programs with four clients (none of which are ready to publicise their use of offshore resources). To help get the word out, he launched a website (offshore-legal-services.com), which includes a cache of white papers and case studies to serve as a resource guide for companies interested in outsourcing.

Questions

1. As money costs will decrease due to decision to outsource human resource, some real costs and opportunity costs may surface. What could these be?

2. Elaborate the external and internal economies of scale as occurring to Contract Counsel.

3. Can you see some possibility of economies of scope from the information given in the case? Discuss.

CASE – 4 Indian Stock Market: Does it Explain Perfect Competition?

The stock market is one of the most important sources for corporates to raise capital. A stock exchange provides a market place, whether real or virtual, to facilitate the exchange of securities between buyers and sellers. It provides a real time trading information on the listed securities, facilitating price discovery.
Participants in the stock market range from small individual investors to large traders, who can be based anywhere in the world. Their orders usually end up with a professional at a stock exchange, who executes the order. Some exchanges are physical locations where transactions are carried out on a trading floor. The other type of exchange is of a virtual kind, composed of a network of computers and trades are made electronically via traders.
By design a stock exchange resembles perfect competition. Large number of rational profit maximisers actively competing with each other, trying to predict future market value of individual securities comprises the main feature of any stock market. Important current information is almost freely available to all participants. Price of individual security is determined by market forces and reflects the effect of events that have already occurred and are expected to occur. In the short run it is not easy for a market player to either exit or enter; one cannot exit and enter for few days in those stocks which are under no delivery. For example Tata Steel was in no delivery from 29/10/07 to 02/11/07. Similarly one cannot enter or exit on those stocks which are in upper or lower circuit for few regular trading sessions. Therefore a player has to depend wholly on market price for its profit maximizing output (in this case stock of securities). In the long run players may exit the market if they are not able to earn profit, but at the same time new investors are attracted by rise in market price.
As on 01/11/07 total market capital at Bombay Stock Exchange (BSE) is $1589.43 billion (source: Business Standard, 1/11/2007); out of this individual investors account for only $100bn. In spite of the fact that individual investors exist in a very large number, their capital base is less than 7% of total market capital; rest of capital is owned by foreign institutional investor and domestic institutional investors (FIIs and DIIs), which are very small in number. Average capital owned by a single large player is huge in comparison to small investor. This situation seems to have prompted Dr Dash of BSE to comment ‘The stock market activity is increasingly becoming more centralised, concentrated and non competitive, serving interest of big players only.” Table 2 shows the impact of change in FII on National Stock Exchange movement during three different time periods.

Table 2: Impact of FIIs’ Investment on NSE

Wave

Date

Nifty
close
Change in Nifty Index
FLLS Net Investment
(Rs.Cr.)
Change in Market Capitalisation
(Rs.Cr.)
Wave 1
From
To
17/05/04
26/10/05
1388.75
2408.50

1019.75

59520

5,40,391
Wave 2
From
To
27/10/05
11/05/06
2352.90
3701.05

1348.15

38258

6,20,248
Wave 3
From
To
12/05/06
13/06/06
3650.05
2663.30

-986.75

-9709

-4,60,149

By design, an Indian Stock Market resembles perfect competition, not as a complete description (for no markets may satisfy all requirements of the model) but as an approximation.

Questions

1. Is stock market a good example of perfect competition? Discuss.
2. Identify the characteristics of perfect competition in the stock market setting.
3. Can you find some basic aspect of perfect competition which is essentially absent in stock market?
4.
CASE – 5 The Indian Audio Market

The Indian audio market pyramid is featured by the traditional radios forming its lower bulk. Besides this, there are four other distinct segments: mono recorders (ranking second in the pyramid), stereo recorders, midi systems (which offer the sound amplification of a big system, but at a far lower price and expected to grow at 25% per year) and hi-fis (minis and micros, slotted at the top end of the market).
Today the Indian audio market is abound with energy and action as both national and international majors are trying to excel themselves and elbow the others, ushering in new concepts, like CD sound, digital tuners, full logic tape deck, etc. The main players in the Indian audio market are Philips, BPL and Videocon. Of these, Philips is one of the oldest and is considered at the leading national brands. In fact it was the first company to introduce a range of international products such as CD radio cassette recorder, stand alone CD players and CD mini hi-fi systems. With the easing of the entry barriers, a number of new international players like Panasonic, Akai, Sansui, Sony, Sharp, Goldstar, Samsung and Aiwa have also entered the arena. This has led to a sea of changes in the industry and resulted in an expanded market and a happier customer, who has access to the latest international products at competitive prices. The rise in the disposable income of the average Indian, especially the upper-income section, has opened up new vistas for premium products and has provided a boost to companies to launch audio systems priced as high as Rs. 50,000 and beyond.

Pricing across Segments

Super Premium Segment: This segment of the market is largely price-insensitive, as consumers are willing to pay a premium in order to obtain products of high quality. Sonodyne has positioned itself in this segment by concentrating on products that are too small for large players to operate in profitably. It has launched a range of systems priced between Rs. 30,000 to Rs. 60,000. National Panasonic has launched its super premium range of systems by the name of Technics.

Premium Segment: Much of the price game is taking place in this segment, in which systems are priced around Rs. 25,000. Even the foreign players ensure that the pricing is competitive. Entry barriers of yester years compelled the demand by this segment to be partially met by the grey market. With the opening up of the market, the premium segment is witnessing a rapid growth and is currently estimated to be worth Rs. 30 crores. Growth of this segment is also being driven by consumers who want to upgrade their old music systems. Another major stimulating factor is the plethora of financing options available, bringing more and more consumers to the market.
Philips has understood the Indian listener well enough to dictate the basic principles of segmentation. It projects its products as high quality at medium price. In fact, Philips had successfully spotted an opportunity in the wide price gap between portable cassette players and hi-fi systems and pioneered the concept of a midi system (a three-in-one containing radio, tape deck and amplifier in one unit). Philips has also realised that there is a section of the rich consumer which values not just power but also clarity and is willing to pay for it. The pricing strategy of Philips was to make the most of its image as a technology leader. To this end, it used non-price variables by launching of a range of state of art machines like the FW series, and CD players. Moreover, it came up with the punch line in its advertisements as, “We Invent For You”.
BPL stands second only to Philips in the audio market and focuses on technology as its USP. Its kingpin in the marketing mix is its high technology superior quality product. It is thus at being the product-quality leader. BPL’s proposition of fidelity is translated in its punchline for its audio systems as, ‘e-fi your imagination’ (d-fi stands for digital fidelity). The company follows a market skimming strategy. When a new product was launched, it was placed in the top end of the market, and priced accordingly. The company offers a range of products in all price segments in the market without discounting the brand.
Another major player, Videocon, has managed to price its products lower even in the premium segment. The success of the Powerhouse (a 160 watt midi launched by Philips in 1990) had prompted Videocon to launch the Select Sound range of midi stereo systems at a slightly lower price. At the premium end, Videocon is making efforts to upgrade its image to being “quality-driven” by associating itself with the internationally reputed brand name of Sansui from Japan, and following a perceived value pricing method.
Sony is another brand which is positioning itself as a premium product and charges a higher price for the superior quality of sound it offers. Unlike indulging into price wars, Sony’s ad-campaigns project the message that nothing can beat Sony in the quality and intensity of sound. National Panasonic is another player that has three products in the top end of the market, priced in the Rs. 21,000 to Rs. 32,000 range.

Monos and Stereos: Videocon has 21% share I the overall audio market, but has been a major player only in personal stereos and two-in-ones. Its history is written with instances where it has offered products of similar quality, but at much lower prices than its competitors. In fact, Videocon launched the Sansui brand of products with a view to transform its image from that of being a manufacturer of cheap products to that of being a company that primes quality, and also to obtain a share of the hi-fi segment. Sansui is being positioned as a premium brand, targeting the higher middle, upper income groups and also the sensitive middle class Indian consumer.
The objective of Philips in this segment is to achieve higher sales volumes and hence its strategy is to expand its range and have a product in every segment of the market. The pricing method used by Philips in this segment is providing value for money.
National Panasonic offers products in the lower end of the market, apart from the top of the range. In fact, it reduced the price of one of its small two-in-ones from Rs. 3,500 to Rs. 2,400, with the logic that a forte in the lower end of the market would help in building brand reliability across a wider customer base. The company is also guided by the logic that operating in the price sensitive region of the market will help it reach optimum levels of efficiency. Panasonic has also entered the market for midis.
These apart, there also exists a sector in the Indian audio industry, with powerful regional brands in mono and stereo segments, having a market share of 59% in mono recorders and 36% in stereo recorders. This sector has a strong influence on price performance.

Questions

1. What major pricing strategies have been discussed in the case? How effective these strategies have been in ensuring success of the company?

2. Is perceived value pricing the dominant strategy of major players?

3. Which products have reached maturity stage in audio industry? Do you think that product bundling can be effectively used for promoting sale of these products?


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CASE: I Enterprise Builds On People

When most people think of car-rental firms, the names of Hertz and Avis usually come to mind. But in the last few years, Enterprise Rent-A-Car has overtaken both of these industry giants, and today it stands as both the largest and the most profitable business in the car-rental industry. In 2001, for instance, the firm had sales in excess of $6.3 billion and employed over 50,000 people.
Jack Taylor started Enterprise in St. Louis in 1957. Taylor had a unique strategy in mind for Enterprise, and that strategy played a key role in the firm’s initial success. Most car-rental firms like Hertz and Avis base most of their locations in or near airports, train stations, and other transportation hubs. These firms see their customers as business travellers and people who fly for vacation and then need transportation at the end of their flight. But Enterprise went after a different customer. It sought to rent cars to individuals whose own cars are being repaired or who are taking a driving vacation.
The firm got its start by working with insurance companies. A standard feature in many automobile insurance policies is the provision of a rental car when one’s personal car has been in an accident or has been stolen. Firms like Hertz and Avis charge relatively high daily rates because their customers need the convenience of being near an airport and/or they are having their expenses paid by their employer. These rates are often higher than insurance companies are willing to pay, so customers who these firms end up paying part of the rental bills themselves. In addition, their locations are also often inconvenient for people seeking a replacement car while theirs is in the shop.
But Enterprise located stores in downtown and suburban areas, where local residents actually live. The firm also provides local pickup and delivery service in most areas. It also negotiates exclusive contract arrangements with local insurance agents. They get the agent’s referral business while guaranteeing lower rates that are more in line with what insurance covers.
In recent years, Enterprise has started to expand its market base by pursuing a two-pronged growth strategy. First, the firm has started opening airport locations to compete with Hertz and Avis more directly. But their target is still the occasional renter than the frequent business traveller. Second, the firm also began to expand into international markets and today has rental offices in the United Kingdom, Ireland and Germany.
Another key to Enterprise’s success has been its human resource strategy. The firm targets a certain kind of individual to hire; its preferred new employee is a college graduate from bottom half of graduating class, and preferably one who was an athlete or who was otherwise actively involved in campus social activities. The rationale for this unusual academic standard is actually quite simple. Enterprise managers do not believe that especially high levels of achievements are necessary to perform well in the car-rental industry, but having a college degree nevertheless demonstrates intelligence and motivation. In addition, since interpersonal relations are important to its business, Enterprise wants people who were social directors or high-ranking officers of social organisations such as fraternities or sororities. Athletes are also desirable because of their competitiveness.
Once hired, new employees at Enterprise are often shocked at the performance expectations placed on them by the firm. They generally work long, grueling hours for relatively low pay.

And all Enterprise managers are expected to jump in and help wash or vacuum cars when a rental agency gets backed up. All Enterprise managers must wear coordinated dress shirts and ties and can have facial hair only when “medically necessary”. And women must wear skirts no shorter than two inches above their knees or creased pants.

So what are the incentives for working at Enterprise? For one thing, it’s an unfortunate fact of life that college graduates with low grades often struggle to find work. Thus, a job at Enterprise is still better than no job at all. The firm does not hire outsiders—every position is filled by promoting someone already inside the company. Thus, Enterprise employees know that if they work hard and do their best, they may very well succeed in moving higher up the corporate ladder at a growing and successful firm.

Question:

1. Would Enterprise’s approach human resource management work in other industries?

2. Does Enterprise face any risks from its human resource strategy?

3. Would you want to work for Enterprise? Why or why not?

CASE: II Doing The Dirty Work

Business magazines and newspapers regularly publish articles about the changing nature of work in the United States and about how many jobs are being changed. Indeed, because so much has been made of the shift toward service-sector and professional jobs, many people assumed that the number of unpleasant an undesirable jobs has declined.
In fact, nothing could be further from the truth. Millions of Americans work in gleaming air-conditioned facilities, but many others work in dirty, grimy, and unsafe settings. For example, many jobs in the recycling industry require workers to sort through moving conveyors of trash, pulling out those items that can be recycled. Other relatively unattractive jobs include cleaning hospital restrooms, washing dishes in a restaurant, and handling toxic waste.
Consider the jobs in a chicken-processing facility. Much like a manufacturing assembly line, a chicken-processing facility is organised around a moving conveyor system. Workers call it the chain. In reality, it’s a steel cable with large clips that carries dead chickens down what might be called a “disassembly line.” Standing along this line are dozens of workers who do, in fact, take the birds apart as they pass.
Even the titles of the jobs are unsavory. Among the first set of jobs along the chain is the skinner. Skinners use sharp instruments to cut and pull the skin off the dead chicken. Towards the middle of the line are the gut pullers. These workers reach inside the chicken carcasses and remove the intestines and other organs. At the end of the line are the gizzard cutters, who tackle the more difficult organs attached to the inside of the chicken’s carcass. These organs have to be individually cut and removed for disposal.
The work is obviously distasteful, and the pace of the work is unrelenting. On a good day the chain moves an average of ninety chickens a minute for nine hours. And the workers are essentially held captive by the moving chain. For example, no one can vacate a post to use the bathroom or for other reasons without the permission of the supervisor. In some plants, taking an unauthorised bathroom break can result in suspension without pay. But the noise in a typical chicken-processing plant is so loud that the supervisor can’t hear someone calling for relief unless the person happens to be standing close by.
Jobs such as these on the chicken-processing line are actually becoming increasingly common. Fuelled by Americans’ growing appetites for lean, easy-to-cook meat, the number of poultry workers has almost doubled since 1980, and today they constitute a work force of around a quarter of a million people. Indeed, the chicken-processing industry has become a major component of the state economies of Georgia, North Carolina, Mississippi, Arkansas, and Alabama.
Besides being unpleasant and dirty, many jobs in a chicken-processing plant are dangerous and unhealthy. Some workers, for example, have to fight the live birds when they are first hung on the chains. These workers are routinely scratched and pecked by the chickens. And the air inside a typical chicken-processing plant is difficult to breathe. Workers are usually supplied with paper masks, but most don’t use them because they are hot and confining.
And the work space itself is so tight that the workers often cut themselves—and sometimes their coworkers—with the knives, scissors, and other instruments they use to perform their jobs. Indeed, poultry processing ranks third among industries in the United States for cumulative trauma injuries such as carpet tunnel syndrome. The inevitable chicken feathers, faeces, and blood also contribute to the hazardous and unpleasant work environment.
Question:

1. How relevant are the concepts of competencies to the jobs in a chicken-processing plant?

2. How might you try to improve the jobs in a chicken-processing plant?

3. Are dirty, dangerous, and unpleasant jobs an inevitable part of any economy?

CASE: III On Pegging Pay to Performance

“As you are aware, the Government of India has removed the capping on salaries of directors and has left the matter of their compensation to be decided by shareholders. This is indeed a welcome step,” said Samuel Menezes, president Abhayankar, Ltd., opening the meeting of the managing committee convened to discuss the elements of the company’s new plan for middle managers.
Abhayankar was am engineering firm with a turnover of Rs 600 crore last year and an employee strength of 18,00. Two years ago, as a sequel to liberalisation at the macroeconomic level, the company had restructured its operations from functional teams to product teams. The change had helped speed up transactional times and reduce systemic inefficiencies, leading to a healthy drive towards performance.
“I think it is only logical that performance should hereafter be linked to pay,” continued Menezes. “A scheme in which over 40 per cent of salary will be related to annual profits has been evolved for executives above the vice-president’s level and it will be implemented after getting shareholders approval. As far as the shopfloor staff is concerned, a system of incentive-linked monthly productivity bonus has been in place for years and it serves the purpose of rewarding good work at the assembly line. In any case, a bulk of its salary will have to continue to be governed by good old values like hierarchy, rank, seniority and attendance. But it is the middle management which poses a real dilemma. How does one evaluate its performance? More importantly, how can one ensure that managers are not shortchanged but get what they truly deserve?”
“Our vice-president (HRD), Ravi Narayanan, has now a plan ready in this regard. He has had personal discussions with all the 125 middle managers individually over the last few weeks and the plan is based on their feedback. If there are no major disagreements on the plan, we can put it into effect from next month. Ravi, may I now ask you to take the floor and make your presentation?”
The lights in the conference room dimmed and the screen on the podium lit up. “The plan I am going to unfold,” said Narayanan, pointing to the data that surfaced on the screen, “is designed to enhance team-work and provide incentives for constant improvement and excellence among middle-level managers. Briefly, the pay will be split into two components. The first consists of 75 per cent of the original salary and will be determined, as before, by factors of internal equity comprising what Sam referred to as good old values. It will be a fixed component.”
“The second component of 25 per cent,” he went on, “will be flexible. It will depend on the ability of each product team as a whole to show a minimum of 5 per cent improvement in five areas every month—product quality, cost control, speed of delivery, financial performance of the division to which the product belongs and, finally, compliance with safety and environmental norms. The five areas will have rating of 30, 25, 20, 15, and 10 per cent respectively.
“This, gentlemen, is the broad premise. The rest is a matter of detail which will be worked out after some finetuning. Any questions?”
As the lights reappeared, Gautam Ghosh, vice-president (R&D), said, “I don’t like it. And I will tell you why. Teamwork as a criterion is okay but it also has its pitfalls. The people I take on and develop are good at what they do. Their research skills are individualistic. Why should their pay depend on the performance of other members of the product team? The new pay plan makes them team players first and scientists next. It does not seem right.”
“That is a good one, Gautam,” said Narayanan. “Any other questions? I think I will take them all together.”
“I have no problems with the scheme and I think it is fine. But just for the sake of argument, let me take Gautam’s point further without meaning to pick holes in the plan,” said Avinash Sarin, vice-president (sales). “Look at my dispatch division. My people there have reduced the shipping time from four hours to one over the last six months. But what have they got? Nothing. Why? Because the other members of the team are not measuring up.”
“I think that is a situation which is bound to prevail until everyone falls in line,” intervened Vipul Desai, vice president (finance). “There would always be temporary problems in implementing anything new. The question is whether our long term objectives is right. To the extend that we are trying to promote teamwork, I think we are on the right track. However, I wish to raise a point. There are many external factors which impinge on both individual and collective performance. For instance, the cost of a raw material may suddenly go up in the market affecting product profitability. Why should the concerned product team be penalised for something beyond its control?”
“I have an observation to make too, Ravi,” said Menezes, “You would recall the survey conducted by a business fortnightly on ‘The ten companies Indian managers fancy most as a working place’. Abhayankar got top billings there. We have been the trendsetters in executive compensation in Indian industry. We have been paying the best. Will your plan ensure that it remains that way?”
As he took the floor again, the dominant thought in Narayanan’s mind was that if his plan were to be put into place, Abhayankar would set another new trend in executive compensation.
Question:

But how should he see it through?
CASE: IV Crisis Blown Over

November 30, 1997 goes down in the history of a Bangalore-based electric company as the day nobody wanting it to recur but everyone recollecting it with sense of pride.
It was a festive day for all the 700-plus employees. Festoons were strung all over, banners were put up; banana trunks and leaves adorned the factory gate, instead of the usual red flags; and loud speakers were blaring Kannada songs. It was day the employees chose to celebrate Kannada Rajyothsava, annual feature of all Karnataka-based organisations. The function was to start at 4 p.m. and everybody was eagerly waiting for the big event to take place.
But the event, budgeted at Rs 1,00,000 did not take place. At around 2 p.m., there was a ghastly accident in the machine shop. Murthy was caught in the vertical turret lathe and was wounded fatally. His end came in the ambulance on the way to hospital.
The management sought union help, and the union leaders did respond with a positive attitude. They did not want to fish in troubled waters.
Series of meetings were held between the union leaders and the management. The discussions centred around two major issues—(i) restoring normalcy, and (ii) determining the amount of compensation to be paid to the dependants of Murthy.
Luckily for the management, the accident took place on a Saturday. The next day was a weekly holiday and this helped the tension to diffuse to a large extent. The funeral of the deceased took place on Sunday without any hitch. The management hoped that things would be normal on Monday morning.
But the hope was belied. The workers refused to resume work. Again the management approached the union for help. Union leaders advised the workers to resume work in al departments except in the machine shop, and the suggestions was accepted by all.
Two weeks went by, nobody entered the machine shop, though work in other places resumed. Union leaders came with a new idea to the management—to perform a pooja to ward off any evil that had befallen on the lathe. The management accepted the idea and homa was performed in the machine shop for about five hours commencing early in the morning. This helped to some extent. The workers started operations on all other machines in the machine shop except on the fateful lathe. It took two full months and a lot of persuasion from the union leaders for the workers to switch on the lathe.
The crisis was blown over, thanks to the responsible role played by the union leaders and their fellow workers. Neither the management nor the workers wish that such an incident should recur.
As the wages of the deceased grossed Rs 6,500 per month, Murthy was not covered under the ESI Act. Management had to pay compensation. Age and experience of the victim were taken into account to arrive at Rs 1,87,000 which was the amount to be payable to the wife of the deceased. To this was added Rs 2,50,000 at the intervention of the union leaders. In addition, the widow was paid a gratuity and a monthly pension of Rs 4,300. And nobody’s wages were cut for the days not worked.
Murthy’s death witnessed an unusual behavior on the part of the workers and their leaders, and magnanimous gesture from the management. It is a pride moment in the life of the factory.

Question:

1. Do you think that the Bangalore-based company had practised participative management?

2. If your answer is yes, with what method of participation (you have read in this chapter) do you relate the above case?

3. If you were the union leader, would your behaviour have been different? If yes, what would it be?

CASE: V A Case of Burnout

When Mahesh joined XYZ Bank (private sector) in 1985, he had one clear goal—to prove his mettle. He did prove himself and has been promoted five times since his entry into the bank. Compared to others, his progress has been fastest. Currently, his job demands that Mahesh should work 10 hours a day with practically no holidays. At least two day in a week, Mahesh is required to travel.
Peers and subordinates at the bank have appreciation for Mahesh. They don’t grudge the ascension achieved by Mahesh, though there are some who wish they too had been promoted as well.
The post of General Manager fell vacant. One should work as GM for a couple of years if he were to climb up to the top of the ladder, Mahesh applied for the post along with others in the bank. The Chairman assured Mahesh that the post would be his.
A sudden development took place which almost wrecked Mahesh’s chances. The bank has the practice of subjecting all its executives to medical check-up once in a year. The medical reports go straight to the Chairman who would initiate remedials where necessary. Though Mahesh was only 35, he too, was required to undergo the test.
The Chairman of the bank received a copy of Mahesh’s physical examination results, along with a note from the doctor. The note explained that Mahesh was seriously overworked, and recommended that he be given an immediate four-week vacation. The doctor also recommended that Mahesh’s workload must be reduced and he must take physical exercise every day. The note warned that if Mahesh did not care for advice, he would be in for heart trouble in another six months.
After reading the doctor’s note, the Chairman sat back in his chair, and started brooding over. Three issues were uppermost in his mind—(i) How would Mahesh take this news? (ii) How many others do have similar fitness problems? (iii) Since the environment in the bank helps create the problem, what could he do to alleviate it? The idea of holding a stress-management programme flashed in his mind and suddenly he instructed his secretary to set up a meeting with the doctor and some key staff members, at the earliest.

Question:

1. If the news is broken to Mahesh, how would he react?

2. If you were giving advice to the Chairman on this matter, what would you recommend
CASE: VI “Whose Side are you on, Anyway?”

It was past 4 pm and Purushottam Mahesh was still at his shopfloor office. The small but elegant office was a perk he was entitled to after he had been nominated to the board of Horizon Industries (P) Ltd., as workman-director six months ago. His shift generally ended at 3 pm and he would be home by late evening. But that day, he still had long hours ahead of him.
Kshirsagar had been with Horizon for over twenty years. Starting off as a substitute mill-hand in the paint shop at one of the company’s manufacturing facilities, he had been made permanent on the job five years later. He had no formal education. He felt this was a handicap, but he made up for it with a willingness to learn and a certain enthusiasm on the job. He was soon marked by the works manager as someone to watch out for. Simultaneously, Kshirsagar also came to the attention of the president of the Horizon Employees’ Union who drafted him into union activities.
Even while he got promoted twice during the period to become the head colour mixer last year, Kshirsagar had gradually moved up the union hierarchy and had been thrice elected secretary of the union. Labour-management relations at Horizon were not always cordial. This was largely because the company had not been recording a consistently good performance. There were frequent cuts in production every year because of go-slows and strikes by workmen—most of them related to wage hikes and bonus payments. With a view to ensuring a better understanding on the part of labour, the problems of company management, the Horizon board, led by chairman and managing director Aninash Chaturvedi, began to toy with idea of taking on a workman on the board. What started off as a hesitant move snowballed, after a series of brainstorming sessions with executives and meetings with the union leaders, into a situation in which Kshirsagar found himself catapulted to the Horizon board as work-man-director.
It was an untested ground for the company. But the novelty of it all excited both the management and the labour force. The board members—all functional heads went out of their way to make Kshirsagar comfortable and the latter also responded quite well. He got used to the ambience of the boardroom and the sense of power it conveyed. Significantly, he was soon at home with the perspectives of top management and began to see each issue from both sides.
It was smooth going until the union presented a week before the monthly board meeting, its charter of demands, one of which was a 30 per cent across-the board hike in wages. The matter was taken up at the board meeting as part of a special agenda.
“Look at what your people are asking for,” said Chaturvedi, addressing Kshirsagar with a sarcasm that no one in the board missed. “You know the precarious finances of the company. How could you be a party to a demand that can’t be met? You better explain to them how ridiculous the demands are,” he said.
“I don’t think they can all be dismissed as ridiculous,” said Kshirsagar. “And the board can surely consider the alternatives. We owe at least that much to the union.” But Chaturvedi adjourned the meeting in a huff, mentioning, once to Kshirsagar that he should “advise the union properly”.
When Kshirsagar told the executive committee members of the union that the board was simply not prepared to even consider the demands, he immediately sensed the hostility in the room. “You are a sell out,” one of them said. “Who do you really represent—us or them?” asked another.
“Here comes the crunch,” thought Kshirsagar. And however hard he tried to explain, he felt he was talking to a wall.
A victim of divided loyalities, he himself was unable to understand whose side he was on. Perhaps the best course would be to resign from the board. Perhaps he should resign both from the board and

the union. Or may be resign from Horizon itself and seek a job elsewhere. But, he felt, sitting in his office a little later, “none of it could solve the problem.”

Question:
1. What should he do?


Your job and your passion you can purse both case study solution provided

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Subject – General Management
Marks – 100

Attempt Any Four Case Study

CASE – 1 Your Job and Your Passion—You Can Pursue Both!

The 21st century offers many challenges to every one of us. As more firms go global, as more economies interconnect, and as the Web blasts away boundaries to communication, we become more informed citizens. This interconnectedness means that the organizations you work for will require you to develop both general and specialized knowledge—such as speaking multiple languages, using various software applications, or understanding details of financial transactions. You will have to develop general management skills to foster your ability to be self-reliant and thrive in a changing market-place. And here’s the exciting part: As you build both types of knowledge, you may be able to integrate your growing expertise with the causes or activities you care most about. Or, your career adventure may lead you to a new passion.
Former presidents George H. W. Bush and Bill Clinton are well known for combining their management skills—running a country—with their passion for helping people around the world. Together they have raised funds to assist disaster victims, those with HIV/AIDS, and others in need. Jake Burton turned his love of snow sports into an entire industry when he founded Burton Snowboards. Annie Withey poured her business and marketing knowledge into her two famous business ventures: Smart food and Annie’s Homegrown. Both products were the result of her passion for healthful foods made from organic ingredients.
As you enter the workforce, you may have no idea where your career path will lead. You may be asking yourself, “How will I fit in?” “Where will I live?” “How much will I earn?” “Where will my business and personal careers evolve as the world continuous to change at such a fast pace?” If you are feeling nervous because you don’t know the answers to these questions yet, relax. A career is a journey, not a single destination. You may have one type of career or several. It is likely you will work for several organisations, or you may run one or more businesses of your own.
As you ask yourself what you want to do and where you want to be, take a few minutes to review the chapter and its main topics. Think about your personality, what you like and dislike, what you know and what you want to learn, what you fear and what you dream. Then try the following exercise.

Questions

1. Create a three-column chart in which the first column lists nonmanagement skills you have. Are you good at travel? Do you know how to build furniture? Are you a whiz at sports statistics? Are you an innovative cook? Do you play video games for hours? In the second column, list the causes or activities about which you are passionate. These may dovetail with the first list, but they might not.

2. Once you have you two columns complete, draw lines between entries that seem compatible. If you are good at building furniture, you might have also listed a concern about families who are homeless. Remember that not all entries will find a match—the idea is to begin finding some connections.

3. In the third column, generate a list of firms or organizations you know about that reflect your interests. If you are good at building furniture, you might be interested working for the Habitat for Humanity organization, or you might find yourself gravitating towards a furniture retailer like Ikea or Ethan Allen. You can do further research on organizations via Internet or business publications.

CASE – 2 Biyani – Pioneering a Retailing Revolution in India

“I use people as hands and legs. I prefer to do thinking around here.”

─ Kishore Biyani, CEO & MD, Pantaloon Retail (India) Ltd.

Kishore Biyani (Biyani), CEO& MD of Pantaloon Retail (India) Ltd., planned to have 30 Food Bazaar outlets, 22 outlets in Big Bazaar, 21 Pantaloons outlets, and four seamless malls under the Central logo, by the end of 2005. He also planned to launch at least three businesses every year and had already selected music, footwear and car accessories as his next areas of investments. He was already the top retailer in India followed by Raghu Pillai of RPG. As of 2004, Biyani headed a company that had a turnover of Rs 6,500 million and operated 13 Pantaloon apparel stores, 9 Big Bazaars, 13 Food Bazaars, and 3 seamless malls (Central), one each located in Bangalore, Hyderabad, and Pune.
Biyani’s journey from a person who looked after his family business to India’s top retailer in 1987, when he launched Manz Wear Pvt. Ltd. The company launched one of the first readymade trousers brands – ‘Pantaloon’ – in the country. The company also launched its first jeans brand called ‘Bare’ in 1989. On September 20, 1991, Manz Wear Pvt. Ltd. went public and on September 25, 1992, it changed its name to Pantaloon Fashions (India) Limited (PFIL). ‘John Miller’ was the first formal shirt brand from PFIL.
The company opened its first apparel stores, called ‘Pantaloons’ at Kolkata in August 1997. The stores generated Rs 70 million. Biyani then realized the potential of the Indian market and started to aggressively tap it. Accordingly, Biyani decided to expand into other segments of retailing besides apparel. To reflect this change in focus, the company changed its name to Pantaloon Retail (India) Limited (PRIL) in July 1999 and set itself a target of achieving Rs 10 billion in sales by June 2005. In course of time he launched three other retail formats — Big Bazaar, Food Bazaar, and Central.
Biyani didn’t believe in copying ideas from western retailers. He was critical of his peers who felt just copied ideas form the west without making any effort to mold them to Indian conditions. He ensured that his store formats such as Big Bazaar, Food Bazaar, and Pantaloons were all suited to the purchasing style of Indian consumers.
Biyani was a huge risk taker and his planning was always different from the conventional way of doing business. This was also one of the factors that had prompted Biyani to move away from his father’s conventional way of doing business. During the initial stages of his success, his risk-taking attitude sometimes had the effect of turning away financiers. The biggest risk that Biyani took was in opening Big Bazaar in Mumbai in 2001. The company needed money to expand Big Bazaar’s operations. However, it had profits of only Rs 40 million with a low share price at eighteen rupees. Therefore, Biyani could not raise money through equity. In light of this situation, Biyani took a loan of Rs 1,200 million from ICICI for launching the operations of Big Bazaar, which increased his debt exposure. However, Big Bazaar proved to be a resounding success with 100,000 customer visits in its first week of operations. According to analysts, if Big Bazaar had failed, Biyani would have landed in a severe debt crisis. The success of Big Bazaar not only increased the company profits, it also changed the perception of investors.
Many people criticized Biyani for not delegating authority and Biyani himself accepted the criticism. He said, “I use people as hands and legs. I prefer to do the thinking around here.” He preferred taking individual decision on activities like strategic planning, ideas for other ventures, and other important issues. It was because of this that managers like Kush Medhora of Westside were initially apprehensive about joining Biyani’s business. However, Biyani changed his attitude gradually with the launch of Big Bazaar, Food Bazaar, and Central and appointed different people for managing different business units.
Biyani believed in leading a simple life and in being simply dressed. His vision came from his diverse reading connected to retailing and other areas. He made it a point to visit each of his stores across the country. He aimed to spend at least seven hours a week at the stores. In the stores, he would stand at a corner and observe people. He also walked on streets, met common people, and talked to local leaders to plan and put up new products in his stores. Each of his stores was set with a weekly target, which was reviewed every Monday. Whenever a new store was opened, the details of its operations during the first 45 days were to be sent to him. Sometimes, he suggested remedies to some problems. Biyani believed in extensive advertising to make more people know about the product. His decision making was quick and devoid of unnecessary delays. Biyani was also a good learner and learned quickly from his mistakes. He planned to improve inventory management through responding effectively to the demands of the customers rather than forecasting them, as he felt that forecasting would pile up the inventory in this dynamic market.

Questions

1. The tremendous success of the ‘Pantaloons’, ‘Big Bazaar’ and ‘Food Bazaar’ retailing formats, easily made PRIL the number one retailer in India by early 2004, in terms of turnover and retail area occupied by its outlets. Explain how Biyani is further planning to consolidate his businesses.

2. “Our striving toward looking at the Indian market differently and strategizing with the evolving customer helped us perform better.” What other qualities of Kishore Biyani do you think were instrumental in making him top retailer of India?

CASE – 3 The New Frontier for Fresh Foods Supermarkets

Fresh Foods Supermarket is a grocery store chain that was established in the Southeast 20 years ago. The company is now beginning to expand to other regions of the United States. First, the firm opened new stores along the eastern seaboard, gradually working its way up through Maryland and Washington, DC, then through New York and New jersey, and on into Connecticut and Massachusetts. It has yet to reach the northern New England states, but executives have decided to turn their attention to the Southwest, particularly because of the growth of population there.
Vivian Noble, the manager of one of the chain’s most successful stores in the Atlanta area, has been asked to relocate to Phoenix, Arizona, to open and run a new Fresh Foods Supermarket. She has decided to accept the job, but she knows it will be a challenge. As an African American woman, she has faced some prejudice during her career, but she refuses to be stopped by a glass ceiling or any other barrier. She understands that she will be living and working in an area where several cultures combine and collide, and she will be hiring and managing a diverse workforce. Noble has the support of top management at Fresh Foods, which wants the store to reflect the surrounding community—in both staff makeup and product selection. So she will be looking to hire employees with Hispanic and Native American roots, as well as older workers who can relate to the many retired residents in the area. And she will be seeking their inputs on the selection of certain food products, including ethnic brands, so that customers know they can buy what they need and want a Fresh Foods.
In addition, Noble wants to make sure that Fresh Foods provides services above and beyond those of a standard supermarket to attract local consumers. For instance, she wants the store to offer free delivery of groceries to home-bound customers who are either senior citizens or physically disabled. She wants to be sure that the store has enough bilingual employees to translate for and otherwise assist customers who speak little or no English. Noble believes that she is a pioneer of sorts, guiding Fresh Foods Supermarkets into a new frontier. “The sky is almost blue here,” she says of her new home state. “And there’s no glass ceiling between me and the sky.”
Questions

1. What steps can Vivian Noble take to recruit and develop her new workforce?
2. What other ways can Noble help her company reach out to the community?
3. How will Fresh Foods Supermarkets as whole benefit from successfully moving into this new region of the country?
CASE – 4 The Law Offices of Jeter, Jackson, Guidry, and Boyer

THE EVOLUTION OF THE FIRM

David Jeter and Nate Jackson started a small general law practice in 1992 near Sacramento, California. Prior to that, the two had spent five years in the district attorney’s office after completing their formal schooling. What began as a small partnership—just the two attorneys and a paralegal/assistant—had now grown into a practice that employed more than 27 people in three separated towns. The current staff included 18 attorneys (three of whom have become partners), three paralegals, and six secretaries.
For the first time in the firm’s existence, the partners felt that they were losing control of their overall operation. The firm’s current caseload, number of employees, number of clients, travel requirements, and facilities management needs had grown far beyond anything that the original partners had ever imagined.
Attorney Jeter called a meeting of the partners to discuss the matter. Before the meeting, opinions about the pressing problems of the day and proposed solutions were sought from the entire staff. The meeting resulted in a formal decision to create a new position, general manager of operations. The partners proceeded to compose a job description and job announcement for recruiting purposes.
Highlights and responsibilities of the job description include:
• Supervising day-to-day office personnel and operations (phones, meetings, word processing, mail, billings, payroll, general overhead, and maintenance).
• Improving customer relations (more expeditious processing of cases and clients).
• Expanding the customer base.
• Enhancing relations with the local communities.
• Managing the annual budget and related incentive programs.
• Maintaining annual growth in sales of 10 percent while maintaining or exceeding the current profit margin.

The general manager will provide an annual executive summary to the partners, along with specific action plans for improvement and change. A search committee was formed, and two months later the new position was offered to Brad Howser, a longtime administrator from the insurance industry seeking a final career change and a return to his California roots. Howser made it clear that he was willing to make a five-year commitment to the position and would then likely retire.
Things got off to a quiet and uneventful start as Howser spent few months just getting to know the staff, observing day-today operations; and reviewing and analyzing assorted client and attorney data and history, financial spreadsheets, and so on.
About six months into the position, Howser became more outspoken and assertive with the staff and established several new operational rules and procedures. He began by changing the regular working hours. The firm previously had a flex schedule in place that allowed employees to begin and end the workday at their choosing within given parameters. Howser did not care for such a “loose schedule” and now required that all office personnel work from 9:00 to 5:00 each day. A few staff member were unhappy about this and complained to Howser, who matter-of-factly informed them that “this is the new rule that everyone is expected to follow, and anyone who could or would not comply should probably look for another job.” Sylvia Bronson, an administrative assistant who had been with the firm for several years, was particularly unhappy about this change. She arranged for a private meeting with Howser to discuss her child care circumstances and the difficulty that the new schedule presented. Howser seemed to listen half-heartedly and at one point told Bronson that “assistance are essentially a-dime-a-dozen and are readily available.” Bronson was seen leaving the office in tears that day.
Howser was not happy with the average length of time that it took to receive payments for services rendered to the firm’s clients (accounts receivable). A closer look showed that 30 percent of the clients paid their bills in 30 days or less, 60 percent paid in 30 to 60 days, and the remaining 10 percent stretched it out to as many as 120 days. Howser composed a letter that was sent to all clients whose outstanding invoices exceeded 30 days. The strongly worded letter demanded immediate payment in full and went on to indicate that legal action might be taken against anyone who did not respond in timely fashion. While a small number of “late” payments were received soon after the mailing, the firm received an even larger number of letters and phone calls from angry clients, some of whom had been with the firm since its inception.
Howser was given an advertising and promotion budget for purposes of expanding the client base. One of the paralegals suggested that those expenditures should be carefully planned and that the firm had several attorneys who knew the local markets quite well and could probably offer some insights and ideas on the subject. Howser thought about this briefly and then decided to go it alone, reasoning that most attorneys know little or nothing about marketing.
In an attempt to “bring all of the people together to form a team,” Howser established weekly staff meetings. These mandatory, hour-long sessions were run by Howser, who presented a series of overhead slides, handouts, and lectures about “some of the proven management techniques that were successful in the insurance industry.” The meetings typically ran past the allotted time frame and rarely if ever covered all of the agenda items.
Howser spent some of his time “enhancing community relations.” He was very generous with many local groups such as the historical society, the garden clubs, the recreational sports programs, the middle-and high-school band programs, and others. In less than six months he had written checks and authorized donations totaling more than $25,000. He was delighted about all this and was certain that such gestures of goodwill would pay off handsomely in the future.
As for the budget, Howser carefully reviewed each line item in search of ways to increase revenues and cut expenses. He then proceeded to increase the expected base or quota for attorney’s monthly billable hours, thus directly affecting their profit sharing and bonus program. On the other side, he significantly reduced the attorneys’ annual budget for travel, meals, and entertainment. He considered these to be frivolous and unnecessary. Howser decided that one of the two full-time administrative assistant positions in each office should be reduced to part-time with no benefits. He saw no reason why the current workload could not be completed within this model. Howser wrapped up his initial financial review and action plan by posting notices throughout each office with new rules regarding the use of copy machines, phones, and supplies.
Howser completed the first year of his tenure with the required executive summary report to the partners that included his analysis of the current status of each department and his action plan. The partners were initially impressed with both Howser’s approach to the new job and with the changes that he made. They all seemed to make sense and were directly in line with the key components of his job description. At the same time, “the office rumor mill and grape vine” had “heated up” considerably. Company morale, which had been quite high, was now clearly waning. The water coolers and hallways became the frequent meeting places of disgruntled employees.
As for the marketplace, while the partner did not expect to see an immediate influx of new clients, they certainly did not expect to see shrinkage in their existing client base. A number of individual and corporate clients took their business elsewhere, still fuming over the letter they had received.
The partners met with Howser to discuss the situation. Howser urged them to “sit tight and ride out the storm.” He had seen this happen before and had no doubt that in the long run the firm would achieve all of its goals. Howser pointed out that people in general are resistant to change. The partners met for drinks later that day and looked at each other with a great sense of uncertainty. Should they ride out the storm as Howser suggested? Had they done the right thing in creating the position and hiring Howser? What had started as a seemingly, wise, logical, and smooth sequence of events had now become a crisis.

Questions

1. Do you agree with Howser’s suggestion to “sit tight and ride out the storm,” or should the partners take some action immediately? If so, what actions specifically?

2. Assume that the creation of the GM—Operation position was a good decision. What leadership style and type of individual would you try to place in this position?

3. Consider your own leadership style. What types of positions and situations should you seek? What types of positions and situation should you seek to avoid? Why?

CASE – 5 The Grizzly Bear Lodge

Diane and Rudy Conrad own a small lodge outside Yellowstone National Park. Their lodge has 15 rooms that can accommodate up to 40 guests, with some rooms set up for families. Diane and Rudy serve a continental breakfast on weekdays and a full breakfast on weekends, included in the room they charge. Their busy season runs from May through September, but they remain open until Thanksgiving and reopen in April for a short spring season. They currently employ one cook and two waitpersons for the breakfasts on weekends, handling the other breakfasts themselves. They also have several housekeeping staff members, a groundkeeper, and a front-desk employee. The Conrads take pride in the efficiency of their operation, including the loyalty of their employees, which they attribute to their own form of clan control. If a guest needs something—whether it’s a breakfast catered to a special diet or an extra set of towels—Grizzly Bear workers are empowered to supply it.
The Conrads are considering expanding their business. They have been offered the opportunity to buy the property next door, which would give them the space to build an annex containing an additional 20 rooms. Currently, their annual sales total $300,000. With expenses running $230,000—including mortgage, payroll, maintenance, and so forth—the Conrads’ annual income is $70,000. They want to expand and make improvements without cutting back on the personal service they offer to their guests. In fact, in addition to hiring more staff to handle the larger facility, they are considering collaborating with more local business to offer guided rafting, fishing, hiking, and horseback riding trips. They also want to expand their food service to include dinner during the high season, which means renovating the restaurant area of the lodge and hiring more kitchen and wait staff. Ultimately, the Conrads would like the lodge to open year-round, offering guests opportunities to cross-country ski, ride snow-mobiles, or hike in winter. They hope to offer holiday packages for Thanksgiving, Christmas, and New Year’s celebrations in the great outdoors. The Conrads report that their employees are enthusiastic about their plans and want to stay with them through the expansion process. “This is our dream business,” says Rudy. “We’re only at the beginning.”
Questions

1. Discuss how Rudy and Diane can use feedforward, concurrent, and feedback controls both now and in future at the Grizzly Bear Lodge to ensure their guests’ satisfaction.
2. What might be some of the fundamental budgetary considerations the Conrads would have as they plan the expansion of their logic?
Describe how the Conrads could use market controls plans and implement their expansion


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Human Resource Management

(i) There are three Sections A and B and C.
(ii) Attempt any three questions each from Section A and B. All questions carry 10 marks each.
(iii) Section C is compulsory for all and carries 40 marks.
SECTION A
1. Define and differentiate between Job Analysis, Job Description and Job Evaluation. Select an appropriate job evaluation method and create a plan for evaluating jobs of scientists in different grades.
2. Discuss the role of indoctrination in organizations. How can Performance Appraisal, and Training and Development be made an integral part of Human Resource Planning? Discuss.
3. Discuss the scope of Human Resource Audit. While auditing Reward systems for employees in a manufacturing organization, which factors should be taken into account and why? Explain with suitable examples.
4. Define and discuss the need for Human Resource Planning in an organization. Briefly discuss various approaches to HRP
5. Write short notes on any three of the following:
(a) Training methods
(b) Value determinants of HRP
(c) Human Resource accounting
(d) Labour Market Behavior
(e) Promotion and Reward Policies
SECTION B
1. Define and discuss the objectives of Human Resource Planning at organizational level. How does it help in determining and evaluating future organizational capabilities, needs and anticipated problems? Explain with suitable examples.
2. Define and describe Job Analysis. Briefly discuss several methods in which information about a job is collected and evaluated.
3. What is the purpose and process of recruitment function? Discuss various methods of sourcing manpower.
4. How is monetary value assigned to different dimensions of Human Resources costs, investments, and worth of the employees? Briefly explain Cost and Economic value approaches of measurement.
5. Write short notes on any three of the following :
(a) MBO
(b) Succession Planning
(c) Competency Mapping
(d) Job Evaluation
(e) H.R. Inventory

SECTION C
1. Quality control Department
Read the case given below and answer the questions given at the end.
Mr. Kapil Kumar and Mr. Abbas Ali were working in a scooter manufacturing public sector industry as Senior Quality Control Engineers in 1988. One post of Deputy Chief Quality Controller has fallen vacant due to the retirement of the incumbent and the management decided to recruit a qualified, knowledgeable and experienced professional from outside so that the present quality standard may be improved thus ensuring better marketability of their scooters in the face of stiff competition. Mr. Kapil Kumar, who was a mechanical engineer with about 15 years experience in the Quality Control Department dealing with mopeds and scooters, could have been promoted to fill the post on the basis of seniority. However, the management was looking for a graduate in statistics with experience in latest Quality Control (QC) techniques like statistical quality control, quality assurance and other related areas rather than a mechanical or automobile engineer with the routine experience in quality control. As such instead of promoting Kapil Kumar, the management advertised for the post of Deputy Chief Quality Controller – since as per company rules it was DR (Direct Recruitment) vacancy also.
Selection of Outsider
Out of the applications received in response to the advertisement, six candidates were called for interview including the two internal candidates, Mr. Kapil Kumar and Mr. Abbas Ali. The person selected was an outsider, one Mr. Ratnam, who had over 12 years experience SQC, quality assurance etc., in the two-wheeler private manufacturing industry. Mr. Ratnam joined within 2 months time expecting that in his new position he would be the main controller for quality. However, after joining the organization he came to know that he would be the second senior most person in the hierarchy for controlling the quality and would be reporting to one, Kirpal Sing,. The Chief for Quality Controls. Mr. Kirpal Singh had come up to this post by seniority and was basically a diploma holder in automobile engineering. He had to his credit about 28 years of industrial experience, out of which 20 years were spent in Quality Control Department of two industries. He joined the present organization in its Quality Control Department and had 17 years experience in the organization and was due for retirement within the next 2 or 3 years. On learning about the retirement time of Mr. Kirpal Singh, Mt. Ratnam had the consolation that he would be able to take up the position of ‘Chief Controller of Quality’ very soon.
Interference from Top
Ratnam could not put forth many good suggestions (for quality control) because of the interference and direct supervision of Kirpal Singh. He, however, could pick up a good deal of knowledge about the working of the company, the nature-and tendency of different production department heads particularly with regard to care for quality, organization for ‘QC’ in the company, the various components required for assembly of the company’s two-wheeler scooter and the expected quality standards, drawback in the present system of quality controls. etc.
Right from the time the advertisement for the selection of Deputy Chief Quality Controller appeared, the O.A. (Officers Association) of the organization had been pressing the management to consider the case of Kapil Kumar for promotion to the above post based on his seniority in the organization.
Meanwhile, the management obtained a license in 1989 for producing Three-Wheeler Autos. As a result of this and the pressure from O.A., Ratnam was transferred to look after the Quality Control Department at the company’s new Three-Wheeler plant, whereas Kapil Kumar was promoted as Deputy Chief Quality Controller in the present two-wheeler scooter plant in 1990 (after creating one additional post of Deputy Chief Quality Controller for the new Project).
In 1991, the State Government, which controlled the company in question, changed the Managing Director. During the regime of this new Managing Director, Kapil Kumar was promoted as Chief (Quality Controls) next year, when Kirpal Singh retired. This decision was based on the recommendations of Kirpal Singh and partly attributed to pressure from O.A., for further promotion of Kapil Kumar based on his vast experience in the Quality Control function of this industry. Abbas Ali rose to the position held earlier by Kapil Kumar.
Allotment of Company Quarters
The Company had its own township near the factory. Its quarter allotment scheme was based on the length of service, i.e., date of joining. Ratnam had asked for a suitable quarter at the time of interview and was thus allotted a tile quarter meant for the Senior Engineer’s cadre. He learnt about this, after occupying the quarter. Ratnam asked for a change of Quarter – preferably a RCC-roof quarter, – but his request was turned down, since he had put in only few months of service whereas many others senior to him, on the beds of their longer length of service in the Company (having over 10 years service), were staying in tiled-roof quarters and were awaiting a chance for a RCC-roof quarter. Kapil Kumar and Abbas Ali were residing in RCC-roof quarters. Soon after Kapil Kumar’s promotion to the post of Chief (Quality Controls), he was allotted a bungalow.
The management’s decision in this case must be viewed in the context of the downtrend in the demand for scooters and three-wheeler autos during 1993 following complaints from dealers about the deteriorating quality of components as also their short life. Notably the complaints had risen ten-fold in that year as compared to that in 1988.
Questions
(a) Was the management justified in taking a decision to recruit a qualified and experienced person from outside as Deputy Chief Quality Controller?
(b) Was it in the interest of the organization to transfer Ratnam to the new auto-wheeler plant and promote Kapil Kumar? What could have prompted the management to take this decision?
(c) How do you view the role of O.A.s in supporting only the local and internal candidates and overlooking the interests of direct recruits even when they were family members of the Association, particularly at a time, when the industry needed professionally qualified persons to fill key technical posts?
(d) How would you react to the management’s scheme for quarter allotment and why?

2. Pearl Engineering
Pearl Engineering Company was a large heavy-engineering unit. It attached great importance to the recruitment and training of its senior supervisors. Apart from selecting them from within the organization, the company recruited, every. Alternate year, about ten young engineering graduates and offered them training for a period of two years, before they were appointed as senior supervisors. Such appointments were made to about 40 per cent of the vacancies of senior supervisors that occurred in the organization. This was considered necessary by management as a planned programme of imparting vitality to the organization. Besides, many of the old-timers, who had risen from the ranks, did not possess the necessary academic background with the result that they could not keep pace with the technological changes. Management also believed that in the rapidly changing conditions of industry, a bank of technically competent supervisors played a pivotal role, besides serving as a pool from which to select future departmental managers.
Engineering Graduates were selected from amongst those who applied in response to an all-India advertisement. For the selection of one engineer, on an average, eight applicants were called for interview. A selection committee consisting of the General Manager, the Production Manager, the Personnel Manager and the Training Officer interviewed and selected the candidates. The selection interview was preceded by a written test and only those who secured 40 per cent marks qualified for interview.
The engineers thus selected had to undergo a two year intensive theoretical and practical training. A well-staffed and equipped Training Institute was directly responsible for the training of the graduate engineers, besides training trade apprentices and operatives required by the company. Lectures on theoretical subjects were given at the Training Institute and practical training was imparted in all the works departments under the guidance of qualified and experienced instructors. A few lectures by senior officers of the company were also arranged to acquaint them with the company policies on different matters. During the last quarter of their two-year training programme they were deputed to work fulltime to familiarize themselves with the conditions in departments where they were to be absorbed eventually.
On successful completion of training, the graduate engineers were offered appointments, depending on their performance and aptitude as revealed during training. On placement in the work departments, however, most of them faced some difficulty or the other.
According to management, some of the heads of departments, who were themselves not qualified engineers, did not have sufficient confidence in these younger men. They preferred the subordinates who came up from the ranks to hold positions of responsibility. A few discredited them saying that it would take years before these youngsters could pick up the job. Besides, some of the employees, whose promotional opportunities were adversely affected by the placement of graduate engineers, tried their best to run down the latter as a class, sometimes working on the group feelings of the workers. Some of the supervisors who were not graduate engineers also spoke derisively of them as “the blue-eyed boys” of the organization. Management knew that many of the graduate engineers were not utilized according to their capacity or training, nor was any attempt made to test or develop their potentialities. They also knew that many of the graduate engineers were, therefore, dissatisfied with their work life. Some of them who did not get equal promotional opportunities as their colleagues placed in other departments, were looking for better jobs elsewhere.
On the other hand, according to management, the young graduate engineers were themselves partly responsible for the hostile attitude of others in the organization. Some of them failed to appreciate that a newcomer invited hostility in the beginning and it took time before he was accepted as a member of the work-group. They did not realize that they would be fully productive only after gaining about five to seven years experience in the organization. A few thought that they belonged to a superior cadre and threw their weight around. They did not bother to understand and appreciate the problems of the rank-and-file of employees who worked under them.
In spite of these drawback, the General Manager of the company felt that these men were a set of disciplined supervisors. They had a sense of pride in their profession, and with the extensive training they had received, they would be able to take up any responsible position in the organization in course of time.
The General Manager could not allow the situation to continue especially when it was a difficult and costly process to recruit and train young engineering graduates of the requisite type and caliber. He knew that the prosperity of the company, to a large extent, depended on these young men. In addition, a large number of lucrative employment opportunities were available to these young engineers elsewhere and there was a systematic raid on them, He, therefore, called a meeting of all heads of departments to review the situation.
Questions:
(i) Identify the issues related to manpower planning as evident in the case.
(ii) Discuss the strategies to tackle the percentage of internal promotion at the organizational level.
(iii)What type of additional training programmes should be imparted for direct entrants?
(iv) Suppose you are the head of the personnel division. What would be your suggestions in the meeting – Which has been called by the General Manager?


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Communicating in a Crisis

Overview Valley High School, situated in Kodaikanal, was established in 1980 and is owned by a well respected charitable trust. It overlooks a lake and is a modern building equipped with state-of-the-art facilities. The total student enrolment is 2000, out of which more than 50% are girls and the rest boys. The students are all from affluent, educated families. The school has established a good reputation for itself, thanks to the consistently good performance of students in the public examinations. The school is headed by a lady Principal and also has a couple of Supervisors and a team of 25 teachers. The teachers have had extensive experience, are well qualified and are known for their commitment to imparting quality education to students. Due to the recent heavy monsoons, the school was faced with the problem of flooding, with water entering the rooms on the ground floor and water seepage on the terrace. Since repair work had to be done, the school had to be closed for a couple of weeks. The work was carried out by reputed contractors, but the building still looks a little run down.
The crisis the school had just reopened after this two week break. The same morning, a fire suddenly broke out on the third floor and spread to other floors, blocking the stairways. There was widespread panic, as the children started jumping off the balconies, injuring themselves in the process. The Principal and staff had a tough time trying to calm down the children and take control of the situation. Fire engines were called and several of them arrived and began their fire fighting operations. In the meanwhile, many parents also arrived and tried to enter the building to speak to the Principal. The phones were ringing continuously. There was total chaos.

Question 1 :- How communication crises arise?
Question 2 :- What Principal should do to calm down the angry parents?
Question 3 :- How school will regain its reputation? What services school should provide in order to maintain its reputation?

Case Study 2

Case Study on The power of Non-Verbal Communication

The Power of Nonverbal Communication Soon after I graduated from engineering college, I accepted a position with the Sundaram Foundry, a medium-sized firm located in a small town in Tamil Nadu. It was a good position, since I was the assistant to Mr. Vishwanath, the General Manager and president of this family owned company, although there were many technical problems, the work was extremely interesting and I soon learnt all about the foundry business. The foundry workers were mostly older men and were a closely knit team. Many of them were related and had been in the foundry for several years. Therefore, they felt that they knew the business in and out and that a technical education had no value. In fact, Mr. Vishwanath had mentioned to me even at the time of my joining, that I was the only engineer ever to be employed in the foundry. He also let me know that the foundry workers, although a good group, were very clannish, since they had been working together for several years. Therefore, it would probably take them some time to accept me. I introduced myself to the group of foundry workers, a few days after my joining. As I went around in turn, I felt them eyeing me coldly. As I went down the main aisle of the foundry, I heard them talking to each other in low voices and laughing. I found their behavior to be very childish and felt that it was best to ignore these signs of hostility. I thought that if I ignored them, they would automatically stop these antics. A few weeks after this incident, I happened to visit the enamel shop. As I entered, I noticed a worker cleaning the floor with a hose, from which water flowed at high pressure. I was aware that it was the practice to clean the shop at least once a week. I turned my back on the worker and was busy near a dipping tank, when I suddenly felt the force of a stream of water hitting me. I was almost knocked down by the pressure and slipped on the wet floor. When I turned around, the worker looked away in the other direction, as if he had not noticed this happening. However, I was pretty sure that he had intentionally turned the hose on me.

Question 1 – What message did the foundry workers and the new engineer convey to each other through their non-verbal behavior?

Question 2 – Mr. Vishwanath, the General Manager and President, was not often present at the foundry. What could this non-verbal behavior mean to the workers and the new engineer?

Question 3. How could the engineer, the foundry workers and Mr. Vishwanath be more effective, both verbally and nonverbally?

Question 4. What do you suggest that the engineer should do, after the hosing incident?

Case Study 3

BS GETS A D-PLUS ON DIVERSITY FROM MULTIETHNIC COALITOIN

On February 3, 2000, President and CEO of CBS Leslie Moonves signed a pact with Kweisi Mfume, president and CEO of the national association for advancement of colored people (NAACP), who had joined forces with the Hispanic media coalition, and the American Indians in film and television to request the CBS help to increase Indians in film and television to request that CBS help to increase ethnic presence in the television industry. The agreement stipulated the CBS would increase minority participation both on and off screen by June 30.

In April 2000, CBS announced the appointment of Josie Thomas to the newly created position of senior vice president of Diversity at CBS Television. Her job was to improve outreach and recruitment, hiring, promotion, and monitoring practices in all divisions of CBS. That fall Moonves announced that 16 of the 21 CBS shows, including news magazines, would prominently feature minorities. “We think we are a leader in this area,” Moonves said “We think we are ahead of the curves”

Despite Mooves’s Statement that as “broadcasters, we believe strongly that it is our duty to reflect the public that makes up our viewing audience,” there were many who did not feel the company was sincere in its efforts to improve hiring practices. The national Hispanic Foundation for the Arts criticized CBS for not scheduling “American Family,” A pilot drama about middle – class Hispanic family. Moonves said “American Family” simply did not fit in CBS’s schedule, since there were already too many strong dramas planned. He said he took the unusual step of allowing the show’s producer to pitch the CBS-developed networks but no one picked it up. Meanwhile, the June 30 deadline had come and gone without much outward sign of change at CBS television.

Josie Thomas is committed to CBS’s new mandate for multicultural diversity. Twelve of CBS’ prime time series will have minorities in permanent roles and other series will have minority in recurring role. Fore of the network’s shows- C.S.I., the district, the fugitive and welcome to New York have minorities in leading roles.

Since signing the agreement, CBS has established a strong working relationship with national minority supplier council in order to help minority supplier council and women’s businesses. The company has bolstered its internship program to include paid internships on the west coast, pairing up interns with their areas of interest, Such as finance or entertainment. There are 10 minority interns in the program. Moreover, CBS has now made diversity a factor in employee job performance evaluation. “Each area of the network has developed a detailed plan for diversity,” said Thomas. “Manager will be reviewed with respect to their diversity efforts and that will be a factor in compensation decisions.” Ms. Thomas noted that Ghen Maynard, an Asian American Pacific Islander, had just been promoted form director to vice president of alternative programming for the entertainment division.

“Will all believe there is a long way to go,” Thomas said. “What I have found is there are some things that already exist that are positive, such as news magazines having minority anchors. We think ‘city of angels’ renewal was an important step. The ratings were mediocre to low, and we did feel the program was a risk. It says a lot about our commitment”

In June 2001, the coalition gave the Big 4 Broadcast Networks (all of whom had signed an agreement) a report card for their efforts to diversity shows on – air and behind the scenes. CBS got a D-plus.

Mr. Nogales, of the National Hispanic Media Coalition, said he was disappointed “We expect progress; we signed for progress” “The numbers in comparison to last year actually look better” Nogales says. “There have been gains for people of color. There was movement. But it has to be movement across the board, not just for one group.” He is referring to the fact that most of the gains have been made by black actors, writes and producers. Black actors appear as regular in at least 19 of the six major networks’30 new prime-time series. Hispanics shows up in only eight, Asians in five and Native Americans in one.

The pressure being put on the networks- including threats of “boycott” and legal action – is having results. At CBS the number of minority writers and producer has more than tripled, from four to fourteen, including six executive or co executive producer however, obstacles to a fully integrated future remain serious-particularly because of misconceptions about the nature of the television audience and about the way pop culture works. Network executive worry that “ghetto shows” might promote stereotypes. They wonder if shows like The cosby show are “black” enough. Then again, they think that casting too many minorities may drive white viewers away. Some network executives are afraid to cast minority actors in “negative” roles because they may be criticized for it minority writers, who have been getting more work lately, wonder if they are not just “tokens”; and despite some progress it is still almost impossible for Hispanic actor to get non- Hispanic roles.

Both the NAACP and the coalition have been battling discrimination for years. CBS is just finding out that a profound change toward pluralism can take place only with true insight on the part of management. CBS spokesperson Chris Ender says “We have made tremendous strides to increase diversity on screen, behind the camera and in the executive suites. However we certainly recognize that more can be done and more will be done.”

As far as Nogales is concerned. “It’s still a white guy’s world,” and the june 2001 statics for network television prove he is right.

Questions
Question 1:- What advantages would accrue to CBS if it becomes a more diverse workplace?

Question 2:- Where would you have placed CBS on the organizational diversity continuum and where would you place CBS now? Why?

Question 3:- Which approach (es) to pluralism best sums up the diversity policy that is being developed at CBS? Explain

Question 4:- How do the attitudes of management at CBS as depicted in your case study affect the company’s progress toward forming a more diverse workforce? Explain.

Case Study 4

McDonald’s Listening Campaign

At the end of 2002, the world’s largest quick service retailer made its first ever quarterly loss and faced a number of challenges. It responded by launching its Plan to Win program, part of a global strategy to modernize the business, followed by the Listening Campaign in the UK. Here, Ali Carruthers explains how the two initiatives were linked in the UK, and the impact The Listening Campaign has had on communication, culture, image and media perception.

In 2003, things were looking bleak for McDonald’s. Its share price was the lowest it had been in a decade and it faced a series of seemingly insurmountable problems: It was demonized by the UK media in the fierce debate raging over obesity; it faced huge competition on the high street; and it was suffering under a wave of Anti-Americanism in the wake of the wars in Afghanistan and Iraq.
Added to this was the fact that the restaurants themselves were beginning to look dated and UK health lobbyists were determined to push home the message that McDonald’s food was bad for people.
Speaking earlier this year to the BBC, the UK CEO Peter Beresford said: “We had taken our eye off the customer, we were not customer focused, we were not customer driven. And so we reorganized and regrouped. We decided we had to stop and take stock of where we were. We had to be better, but we had to change the way we were running this business.”
The Plan to Win
The senior management put their heads together and devised the Plan to Win program, which went public in the last quarter of 2003. A key part of its focus was a shift to more choice and variety foods, with salads appearing permanently on the menu for the first time in the organization’s history. Key restaurants began to receive make over and a supporting advertising campaign with international stars was planned, all of which were intended to turn the food chain’s image around.
But just as things were beginning to look up for the organization, trouble raised its head again in the shape of the documentary film “Supersize me,” which in turn re-ignited the obesity debate in the media. It was then discovered that one of the salads McDonald’s was marketing contained more calories than one of its hamburgers. The UK press reacted with predictable glee and once again McDonald’s was in the spotlight for all the wrong reasons.
The Listening Campaign. The company responded promptly. Working with agency Blue Rubicon, the in-house communication and media relations team devised the Listening Campaign. It made the most of the arrival of new UK CEO Peter Beresford in July 2004, building on his personal credibility and that of McDonald’s with the Listening Tour. Beresford spoke directly to customers in focus groups, met with franchise holders and with employees in 12 UK cities over the space of six weeks, starting at the end of October.
The key ingredient was listening to customers and staff and then showing the results of this. “Part of the reason [for doing it] was that we had to introduce Peter very quickly to employees, customers and stakeholders,” says head of internal communications AIi Carruthers. “It was also signaling that he’d continue to work to change our culture and lead the drive for a real transparency of approach. We’ve been building on that work ever since.”
Focus groups for stakeholders

The communication team made the most of Beresford’s time by booking ahead so that local franchisees could meet him when he travelled to regional centers for customer focus groups. Next, Listening Groups were created for the company’s regional offices with corporate rather than restaurant-based employees taking part. Initial meetings were centered around three classic focus group questions:
* What works?
* What would you change?
* How would you change it?
In each session, six to 10 employees took part and the sessions lasted around two hours. After the first session, an action plan was drawn up and fed back to the employees in a second round of focus groups. Then the agreed proposed changes were put in place by the organization.
Proposed changes put in place
A range of short, medium and long term actions have been instigated as a result of the focus groups. These include a firm commitment to hold monthly town-hall sessions to regularly address key issues within the organization. “We’ve agreed to use these sessions to feature various departmental heads,” says Carruthers.
“That’s so people can put names to faces, understand the organizational structure better and get an understanding of what goes on outside their own departments.” The company has also committed itself to involving a new group of employees every six months, and to being more transparent about its promotion process and how people are assessed for promotion. It now holds regular Plan to Win meetings, which are related to the global strategy. “We’re using the town-hall sessions to communicate the global strategy to thebroader office group rather than just senior management so there’s a wider understanding of what we’re doing,” says Carruthers.
The company has also committed to a peer-nominated quarterly recognition scheme for the regional and head offices. It’s planned that the town halls will also be used in the recognition scheme. “People need to say well done to each other and be acknowledged by the senior team,” says Carruthers.
A change in company culture
According to Carruthers, the strategy has been recognized globally – a drive for greater face-to-face communication, more transparency, a growth in leadership behavior and accountability. “Basically we’ve been trying to make people feel they’re able to ask questions,” she says. “There’s nothing wrong with challenging the status quo as long as it’s done in a constructive and respectful way. If we can use some of those ideas we can probably make it a more enjoyable place for everyone to work.”
There’s no doubt that the Listening Campaign has had an impact on the senior team and general employees alike. Carruthers has had feedback from both groups and believes the exercise has been an eye-opener for the senior team: “They frequently mention experiences they’ve had in those groups. There’s nothing quite like hearing issues for yourself; the good ones and the more awkward ones.”
The feedback from focus-group participants has been very good; employees say they feel listened to and think their feedback is being taken on board. “They feel confident to ask questions or send e-mails directly to people they thought wouldn’t have listened to their suggestions previously. It’s changing the culture. Anything that builds trust and transparency is good. Now it’s about delivering on the changes that we said we’d make.”
A hotline to the CEO
A hotline to the CEO has made the company’s drive for transparency and commitment to employees even more credible. The “Ask Peter” e-mail address was established when Beresford took up his post and has seen a fair amount of traffic. “It’s word of mouth – people see that it’s well responded to,” says Carruthers. She sees it as important to be straight with employees about how e-mails are dealt with and who sees them. “We’re very up-front about the fact that I see all e-mails as well as Peter, but if we forward them to other departments, they’ll be anonymous.”
A combination of high and low technology adds to the feeling of personal contact: Beresford will often answer e-mails with a hand-written reply. In one famous instance he replied to nearly 100 in one week. “It doesn’t always happen that way, but it’s these things that make a difference. People see it’s coming from him and it’s quite a personal touch.”
Committing to communication, A new round of Listening focus groups with fresh employees is due to kick off in October. The whole cycle of questions, action-planning and feedback will be replayed. “We’re working with a new group of employees because we want to keep changing and avoid having a formalized council of volunteers,” says Carruthers. “They’ll look at what they think has happened so far, whether anything could have been done differently and then we’ll hold a review of the proposals.”
It’s a genuine commitment to keep the focus groups running on an ongoing basis. Carruthers is also expecting that the flexibility and fresh new faces will ensure that new topics arise: “They’re things that inevitably come up along the way and get added to the agenda for change. We just need to follow them through and then tell people the results.”
The results
Since Beresford’s Listening Tour there’s been a turnaround in the media coverage of McDonald’s, which has been much more positive. The Listening Campaign is changing the internal culture of the company and its focus group cycles are becoming permanent two-way communication channels.
Results back in August this year from the last employee survey showed that internal communication is now ranked by employees as number four out of 25 departments. “The communications strategy has helped people become aware of who we are and what we do,” says Carruthers. The Listening Campaign has also helped McDonald’s raise its profile externally, as it was nominated in this year’s UK Chartered Institute of Public Relations Excellence Awards and short-listed for Best Use of Media Relations in the PR Week Awards.

Questions

Question1. Based on this case, develop guidelines for improving communication with each of different stakeholders, through better listening.

Question 2:- What are the essentials for the effective communication?

Question 3:- Write about McDonald marketing plan which they have implemented for the success?

Question 4:- Do the SWOT analysis of following:-

• McDonald
• Food Industry


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CONTACT;
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Strategic Management
Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choice & Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. A plan of action designed to achieve a particular goal is:
a. Tactic
b. Strategy
c. Financial benefits
d. None of the above
2. It is important to develop mission statement for:
a. Allocating organizational resources
b. Provide useful criteria
c. Company creed
d. Customer orientation
3. The five forces model was developed by :
a. Airbus
b. Karin Larsson
c. Michael E.Porter
d. Boeing
4. How many elements are involve in developing in an organizational strategy:
a. Six
b. Two
c. Four
d. Nine
5. The three important steps in SWOT analysis are:
a. Identification, Conclusion, Translation
b. Opportunities, Threats, Strengths
c. People, Corporate cultures, Labour
d. Power, Role, Task
6. GE matrix consists of how many cells?
a. Nine cells
b. Six cells
Examination Paper of Strategic Management
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c. Eight cells
d. Three cells
7. Which of these is the type of Games:
a. Simultaneous Games
b. Sequential Games
c. Repeated Games
d. All of the above
8. SBU stands fora.
Simple Basic Unit
b. Strategic Basic Unit
c. Strategic Business Unit
d. Speed Business Unit
9. The BCG matrix is known as:
a. Growth share matrix
b. Directional policy matrix
c. GE nine-cell matrix
d. Space matrix
10. ______________ specifies sales revenues and selling distribution and marketing costs.
a. Financial budget
b. Sales budget
c. Operating budget
d. Expenses budget
Part Two:
Q. 1 What are the dimensions of Strategic management?
Q. 2 Critically analyze the concept of BCG Matrix.
Q. 3 What is SWOT analysis?
Q. 4 What are the characteristics of Short-term Objectives?
END OF SECTION A
Examination Paper of Strategic Management
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
National Competitive Advantage of IKEA Group, a Swedish company founded in 1943 with its
headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and
furniture. It is the world‟s largest retailer, which specializes, in stylish but inexpensive Scandinavian
designed furniture. At the end of 2005 the IKEA Group of Companies had a total of 175 stores in 31
countries. In addition there are 19 IKEA stores owned and run by franchisees, outside the IKEA store
around the world.
In Sweden, nature and a home both play a big part in people‟s life. In fact one of the best ways to describe
the Swedish home furnishing style is to describe nature-full of light and fresh air, yet restrained and
unpretentious.
To match up the artist Carl and Karin Larsson combined classical influences with warmer Swedish folk
styles .They created a model of Swedish home furnishing design that today enjoys world-wide renown. In
the 1950s the styles of modernism and functionalism developed at the same time as Sweden established a
society founded on social equality .The IKEA product range –The IKEA product range- modern but not
trendy, functional yet attractive, human-centered and child friendly – carries on these various Swedish
home furnishing traditions.
The IKEA Concept, like lots founder, was born in Samaland. This is a part of Southern Sweden where the
soil is thin and poor. The people are famous for working hard, living on small means and using their
heads to make the best possible use of the limited resources they have. This way of doing things is at the
heart of the IKEA approach to keeping prices low.
IKEA was founded when Sweden was fast becoming an example of the caring society, where rich and
poor alike were well looked after. This is also a theme that fits well with the IKEA vision. In order to give
the many people a better everyday life, IKEA asks the customer to work as a partner. The product range is
child-friendly and covers the need of the whole family, young and old. So together we can a better
everyday life for everyone.
In addition to working about around 1,800 different suppliers across the world, IKEA produces many of
its own products through sawmills and factories in the IKEA industrial group, Swedwood.
Swedwood also has a duty to transfer knowledge to other suppliers, for example by educating them in
issues such as efficiency, quality and environmental work.
Swedwood has 35 industrial units in 11 countries.
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Purchasing: IKEA has 42 Trading Service Offices (TSO‟s) in 33 countries. Proximity to their suppliers
is the key to rational, long term cooperation. That‟s why TSO co-workers visit suppliers regularly to
monitor production, test new ideas, negotiate prices and carry out quality audits and inspection.
Distribution: The route from supplier to customer must be as direct, cost- effective and environmentally
friendly as possible. Flat packs are important aspects of this work: eliminating wasted space means we
can transport and store goods more efficiently. Since efficient distribution plays a key role in the work of
creating the low price, goods routing and logistics are a focus for constant development.
The business Idea: The IKEA business idea is to offer a wide range of home furnishings with good design
and function at prices so low that as many people as possible will be able to afford them. And still have
many left! The company targets the customer who is looking for value and is willing to do a little bit of
work serving themselves, transporting the items home and assembling the furniture for a better price. The
typical IKEA customer is young low to middle income family.
The Competition Advantage: The competition advantage strategy of IKEA‟s product is reflected through
IKEA‟s success in the real industry. It can be attributed to its vast experience in the retail market, product
differentiation, and cost leadership.
IKEA Product Differentiation: A wide product range The IKEA product range is wide and versatile in
several ways. First, it‟s versatile in function. Because IKEA think customer, shouldn‟t have to run from
one small specialty shop to another to furnish their home, IKEA gather plants, living room furnishings,
toys , frying pans, whole kitchens i.e.; everything which in a functional way helps to build a home – in
one place , at IKEA stores.
Second, it‟s wide in style. The romantic at heart will find choices just as many as the minimalist at IKEA.
But There is only one thing IKEA don‟t have, and that is, the far- out or the over-decorated. They only
have what helps build a home that has room for good living.
Third, by being coordinated, the range is wide in function and style at the same time. No matter which
style you prefer, there‟s an armchair that goes with the bookcase that goes with the new extending table
that goes with the armchair. So their range is wide in a variety of ways.
Cost Leadership: A wide range with good form and function is only half the story. Affordability has a part
to play – the largest part. A wide range with good form and function is only half the story. Affordability
has a part to play- the largest part. And the joy of being able to own it without having to forsake
everything else. And the customers help, too, by choosing the furniture, getting it at the warehouse,
transporting it home and assembling it themselves , to keep the price low.
Questions
1. Do you think that IKEA has been successful to utilize Porter‟s Five force analysis? Give
reasons.
2. Where do you think can IKEA improve?
Examination Paper of Strategic Management
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Caselet 2
For ITC Ltd., 2007-2008 continued to be year of quiet growth. Just more launches in its relatively new
segment of non-cigarettes fast moving consumer goods, and solid growth. As in the past few years, ITC‟s
non-cigarettes businesses continued to grow at a scorching pace, accounting for a bigger share of overall
revenues. “The non-cigarette portfolio grew by 37.6% during 2006-2007 and accounted during that year
for 52.3% of the company‟s net turnover.” An ITC spokesman said. In fact, over the first three quarters of
2007-08, ITC‟s non-cigarette FMCG businesses have grown by 48% on the same period last year,
“Indicating that its plans for increasing market share and standing are succeeding.”
The branded packaged foods business continued to expand rapidly, with the focus on snacks range Bingo.
The biscuit category continued its growth momentum with the „Sun feast‟ range of biscuits launching
„Coconut‟ and „Nice‟ variants and the addition of „ Sunfeast BenneVita Flaxseed‟ biscuits. Aashirwad atta
and kitchen ingredients retained their top slots at the national level, with the spices category adding an
organic range. In the confectionery category which grew by 38% in the third quarter, ITC cited AC
Nielsen data it claims market leader status in throat lozenges. Instant mixes and pasta powdered the sales
of its ready to eat foods under the kitchens of India and Aashirwad brands.
In Lifestyle apparel, ITC launched Miss Players fashion wear for young women to compliment its range
for men.
Overall, the biscuit category grew by 58% during the last quarter, ready to eat foods under the kitchens of
India and Aashirwad brands by 63% and the lifestyle business by 26%.
For the Industry, the most significant initiative to watch the ITC foray into premium personal care
products with its Fiama Di Wills range of shampoos , conditioners, shower gels, and soaps. In the popular
segment, ITC has launched a range of soaps and shampoos under the brand name Superia.
Ravi Naware, Chief executive of ITC‟s food business was quoted recently as saying that the business will
make a positive contribution to ITC‟s bottom line in the next two to three years.
In hotels, ITC‟s Fortune Park brand was making the news during the year, with a rapid rollout of first
class business hotels.
In the agri-business segment, the e-choupal network is trying out a pilot in retailing fresh fruits and
vegetables. The e-choupals have already specialized in feeding ITC high quality wheat and potato, among
other commodities grown by farmers with help from e-choupal.
Questions:
Q1. Do you think the progress of ITC Ltd. is realistic?
Q2. After analyzing the above case, do you think every company should aim at cost leadership with high
quality product?
END OF SECTION B
Examination Paper of Strategic Management
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Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
Q.1. What are the basic principles of Organizational structure? What are the different types of
Organizational structures?
Q.2. What do you understand by SBU? Explain various models of business level strategies
END OF SECTION C
S-2-250613


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Attempt Any Four Case Study

Case 1: Zip Zap Zoom Car Company

Zip Zap Zoom Company Ltd is into manufacturing cars in the small car (800 cc) segment. It was set up 15 years back and since its establishment it has seen a phenomenal growth in both its market and profitability. Its financial statements are shown in Exhibits 1 and 2 respectively.
The company enjoys the confidence of its shareholders who have been rewarded with growing dividends year after year. Last year, the company had announced 20 per cent dividend, which was the highest in the automobile sector. The company has never defaulted on its loan payments and enjoys a favorable face with its lenders, which include financial institutions, commercial banks and debenture holders.
The competition in the car industry has increased in the past few years and the company foresees further intensification of competition with the entry of several foreign car manufactures many of them being market leaders in their respective countries. The small car segment especially, will witness entry of foreign majors in the near future, with latest technology being offered to the Indian customer. The Zip Zap Zoom’s senior management realizes the need for large scale investment in up gradation of technology and improvement of manufacturing facilities to pre-empt competition.
Whereas on the one hand, the competition in the car industry has been intensifying, on the other hand, there has been a slowdown in the Indian economy, which has not only reduced the demand for cars, but has also led to adoption of price cutting strategies by various car manufactures. The industry indicators predict that the economy is gradually slipping into recession.

Exhibit 1 Balance sheet as at March 31,200 x
(Amount in Rs. Crore)

Source of Funds
Share capital 350
Reserves and surplus 250 600
Loans :
Debentures (@ 14%) 50
Institutional borrowing (@ 10%) 100
Commercial loans (@ 12%) 250
Total debt 400
Current liabilities 200
1,200

Application of Funds
Fixed Assets
Gross block 1,000
Less : Depreciation 250
Net block 750
Capital WIP 190
Total Fixed Assets 940
Current assets :
Inventory 200
Sundry debtors 40
Cash and bank balance 10
Other current assets 10
Total current assets 260
-1200

Exhibit 2 Profit and Loss Account for the year ended March 31, 200x
(Amount in Rs. Crore)
Sales revenue (80,000 units x Rs. 2,50,000) 2,000.0
Operating expenditure :
Variable cost :
Raw material and manufacturing expenses 1,300.0
Variable overheads 100.0
Total 1,400.0
Fixed cost :
R & D 20.0
Marketing and advertising 25.0
Depreciation 250.0

Personnel 70.0
Total 365.0

Total operating expenditure 1,765.0
Operating profits (EBIT) 235.0
Financial expense :
Interest on debentures 7.7
Interest on institutional borrowings 11.0
Interest on commercial loan 33.0 51.7
Earnings before tax (EBT) 183.3
Tax (@ 35%) 64.2
Earnings after tax (EAT) 119.1
Dividends 70.0
Debt redemption (sinking fund obligation)** 40.0
Contribution to reserves and surplus 9.1
* Includes the cost of inventory and work in process (W.P) which is dependent on demand (sales).
** The loans have to be retired in the next ten years and the firm redeems Rs. 40 crore every year.
The company is faced with the problem of deciding how much to invest in up
gradation of its plans and technology. Capital investment up to a maximum of Rs. 100
crore is required. The problem areas are three-fold.
• The company cannot forgo the capital investment as that could lead to reduction in its market share as technological competence in this industry is a must and customers would shift to manufactures providing latest in car technology.
• The company does not want to issue new equity shares and its retained earning are not enough for such a large investment. Thus, the only option is raising debt.
• The company wants to limit its additional debt to a level that it can service without taking undue risks. With the looming recession and uncertain market conditions, the company perceives that additional fixed obligations could become a cause of financial distress, and thus, wants to determine its additional debt capacity to meet the investment requirements.
Mr. Shortsighted, the company’s Finance Manager, is given the task of determining the additional debt that the firm can raise. He thinks that the firm can raise Rs. 100 crore worth debt and service it even in years of recession. The company can raise debt at 15 per cent from a financial institution. While working out the debt capacity. Mr. Shortsighted takes the following assumptions for the recession years.
a) A maximum of 10 percent reduction in sales volume will take place.
b) A maximum of 6 percent reduction in sales price of cars will take place.
Mr. Shorsighted prepares a projected income statement which is representative of the recession years. While doing so, he determines what he thinks are the “irreducible minimum” expenditures under

recessionary conditions. For him, risk of insolvency is the main concern while designing the capital structure. To support his view, he presents the income statement as shown in Exhibit 3.

Exhibit 3 projected Profit and Loss account
(Amount in Rs. Crore)
Sales revenue (72,000 units x Rs. 2,35,000) 1,692.0
Operating expenditure
Variable cost :
Raw material and manufacturing expenses 1,170.0
Variable overheads 90.0
Total 1,260.0
Fixed cost :
R & D —
Marketing and advertising 15.0
Depreciation 187.5
Personnel 70.0
Total 272.5
Total operating expenditure 1,532.5
EBIT 159.5
Financial expenses :
Interest on existing Debentures 7.0
Interest on existing institutional borrowings 10.0
Interest on commercial loan 30.0
Interest on additional debt 15.0 62.0
EBT 97.5
Tax (@ 35%) 34.1
EAT 63.4
Dividends —
Debt redemption (sinking fund obligation) 50.0*
Contribution to reserves and surplus 13.4

* Rs. 40 crore (existing debt) + Rs. 10 crore (additional debt)
Assumptions of Mr. Shorsighted
• R & D expenditure can be done away with till the economy picks up.
• Marketing and advertising expenditure can be reduced by 40 per cent.
• Keeping in mind the investor confidence that the company enjoys, he feels that the company can forgo paying dividends in the recession period.

He goes with his worked out statement to the Director Finance, Mr. Arthashatra, and advocates raising Rs. 100 crore of debt to finance the intended capital investment. Mr. Arthashatra does not feel comfortable with the statements and calls for the company’s financial analyst, Mr. Longsighted.
Mr. Longsighted carefully analyses Mr. Shortsighted’s assumptions and points out that insolvency should not be the sole criterion while determining the debt capacity of the firm. He points out the following :
• Apart from debt servicing, there are certain expenditures like those on R & D and marketing that need to be continued to ensure the long-term health of the firm.
• Certain management policies like those relating to dividend payout, send out important signals to the investors. The Zip Zap Zoom’s management has been paying regular dividends and discontinuing this practice (even though just for the recession phase) could raise serious doubts in the investor’s mind about the health of the firm. The firm should pay at least 10 per cent dividend in the recession years.
• Mr. Shortsighted has used the accounting profits to determine the amount available each year for servicing the debt obligations. This does not give the true picture. Net cash inflows should be used to determine the amount available for servicing the debt.
• Net Cash inflows are determined by an interplay of many variables and such a simplistic view should not be taken while determining the cash flows in recession. It is not possible to accurately predict the fall in any of the factors such as sales volume, sales price, marketing expenditure and so on. Probability distribution of variation of each of the factors that affect net cash inflow should be analyzed. From this analysis, the probability distribution of variation in net cash inflow should be analysed (the net cash inflows follow a normal probability distribution). This will give a true picture of how the company’s cash flows will behave in recession conditions.

The management recognizes that the alternative suggested by Mr. Longsighted rests on data, which are complex and require expenditure of time and effort to obtain and interpret. Considering the importance of capital structure design, the Finance Director asks Mr. Longsighted to carry out his analysis. Information on the behaviour of cash flows during the recession periods is taken into account.
The methodology undertaken is as follows :
(a) Important factors that affect cash flows (especially contraction of cash flows), like sales volume, sales price, raw materials expenditure, and so on, are identified and the analysis is carried out in terms of cash receipts and cash expenditures.

(b) Each factor’s behaviour (variation behaviour) in adverse conditions in the past is studied and future expectations are combined with past data, to describe limits (maximum favourable), most probable and maximum adverse) for all the factors.
(c) Once this information is generated for all the factors affecting the cash flows, Mr. Longsighted comes up with a range of estimates of the cash flow in future recession periods based on all possible combinations of the several factors. He also estimates the probability of occurrence of each estimate of cash flow.

Assuming a normal distribution of the expected behaviour, the mean expected
value of net cash inflow in adverse conditions came out to be Rs. 220.27 crore with standard deviation of Rs. 110 crore.
Keeping in mind the looming recession and the uncertainty of the recession behaviour, Mr. Arthashastra feels that the firm should factor a risk of cash inadequacy of around 5 per cent even in the most adverse industry conditions. Thus, the firm should take up only that amount of additional debt that it can service 95 per cent of the times, while maintaining cash adequacy.
To maintain an annual dividend of 10 per cent, an additional Rs. 35 crore has to be kept aside. Hence, the expected available net cash inflow is Rs. 185.27 crore (i.e. Rs. 220.27 – Rs. 35 crore)
Question:
Analyse the debt capacity of the company.

CASE – 2 GREAVES LIMITED

Started as trading firm in 1922, Greaves Limited has diversified into manufacturing and marketing of high technology engineering products and systems. The company’s mission is “manufacture and market a wide range of high quality products, services and systems of world class technology to the total satisfaction of customers in domestic and overseas market.”
Over the years Greaves has brought to India state of the art technologies in various engineering fields by setting up manufacturing units and subsidiary and associate companies. The sales of Greaves Limited has increased from Rs 214 crore in 1990 to Rs 801 crore in 1997. The sales of Greaves Limited has increased from Rs 214 crore in 1990 to Rs 801 crore in 1997. Profits before interest and tax (PBIT) of the company increased from Rs 15 crore to Rs 83 crore in 1997. The market price of the company’s share has shown ups and downs during 1990 to 1997. How has the company performed? The following question need answer to fully understand the performance of the company:

Exhibit 1

GREAVES LTD.
Profit and Loss Account ending on 31 March (Rupees in crore)
1990 1991 1992 1993 1994 1995 1996 1997
Sales
Raw Material and Stores
Wages and Salaries
Power and fuel
Other Mfg. Expenses
Other Expenses
Depreciation
Marketing and Distribution
Change in stock 214.38
170.67
13.54
0.52
0.61
11.85
1.85
4.86
1.18 253.10
202.84
15.60
0.70
0.49
15.48
1.72
5.67
3.10 287.81
230.81
18.03
1.11
0.88
16.35
1.52
5.14
4.93 311.14
213.79
37.04
3.80
2.37
25.54
4.62
5.17
0.48 354.25
245.63
37.96
4.43
2.36
31.60
5.99
9.67
– 1.13 521.56
379.83
48.24
6.66
3.57
41.40
8.53
10.81
5.63 728.15
543.56
60.48
7.70
4.84
45.74
9.30
12.44
11.86 801.11
564.35
69.66
9.23
5.49
48.64
11.53
16.98
– 5.87
Total Op Expenses 202.72 239.40 268.91 291.85 338.77 493.41 672.20 731.75

Operating Profit
Other Income
Non-recurring Income
11.61
2.14
1.30
13.70
3.69
2.28
18.90
4.97
0.10
19.29
4.24
10.98
15.48
7.72
16.44
28.15
14.35
0.46
55.95
11.35
0.52
69.36
13.08
1.75
PBIT 15.10 19.67 23.97 34.51 39.64 42.98 65.67 82.64
Interest 5.56 6.77 11.92 19.62 17.17 21.48 28.25 27.54
PBT 9.54 12.90 12.05 14.89 22.47 21.50 37.42 55.10
Tax
PAT
Dividend
Retained Earnings 3.00
6.54
1.80
4.74 3.60
9.30
2.00
7.30 4.90
7.15
2.30
4.85 0.00
14.89
4.06
10.83 4.00
18.47
7.29
11.18 7.00
14.50
8.58
5.92 8.60
28.82
12.85
15.97 15.80
39.30
14.18
25.12

Exhibit 2

GREAVES LTD.
Balance Sheet (Rupees in crore)
1990 1991 1992 1993 1994 1995 1996 1997
ASSETS
Land and Building
Plant and Machinery
Other Fixed Assets
Capital WIP
Gross Fixed Assets
Less: Accu. Depreciation
Net Tangible Fixed Assets
Intangible Fixed Assets
3.88
11.98
3.64
0.09
19.59
12.91
6.68
0.21
4.22
12.68
4.14
0.26
21.30
14.56
6.74
0.19
4.96
12.98
4.38
10.25
23.57
15.79
7.78
0.05
21.70
33.49
5.18
11.27
71.64
19.84
51.80
4.40
30.82
50.78
6.95
34.84
123.39
25.74
97.65
22.03
39.71
75.34
8.53
14.37
137.95
33.90
104.05
22.45
42.34
92.49
8.87
13.92
157.62
42.56
115.06
20.04
43.07
104.45
10.35
14.36
172.23
53.87
118.86
21.11
Net Fixed Assets 6.89 6.93 7.83 56.20 119.68 126.50 135.10 139.97

Raw Materials
Finished Goods
Inventory
Accounts Receivable
Other Receivable
Investments
Cash and Bank Balance
Current Assets
Total Assets
LIABILITIES AND CAPITAL
Equity Capital
Preference Capital
Reserves and Surplus
5.26
29.37
34.63
38.16
32.62
3.55
8.36
117.32
124.21

9.86
0.20
27.60
6.91
33.72
40.63
53.24
40.47
14.95
8.91
158.20
165.13

9.86
0.20
32.57
7.26
38.65
45.91
67.97
49.19
15.15
12.71
190.93
198.76

9.86
0.20
37.42
21.05
53.39
74.44
93.30
24.54
27.58
13.29
233.15
289.35

18.84
0.20
100.35
28.13
52.26
80.39
122.20
59.12
73.50
18.38
353.59
473.27

29.37
0.20
171.03
44.03
58.09
102.12
133.45
64.32
75.01
30.08
404.98
531.48

29.44
0.20
176.88
53.62
69.97
123.59
141.82
76.57
75.07
33.46
450.51
585.61

44.20
0.20
175.41
50.94
64.09
115.03
179.92
107.31
76.45
48.18
526.89
666.86

44.20
0.20
198.79
Net Worth 37.66 42.63 47.48 119.39 200.60 206.52 219.81 243.19
Bank Borrowings
Institutional Borrowings
Debentures
Fixed Deposits
Commercial Paper
Other Borrowings
Current Portion of LT Debt 14.81
4.13
4.77
12.31
0.00
2.33
0.00 19.45
3.43
16.57
14.45
0.00
3.22
0.00 26.51
9.17
19.99
15.03
0.00
3.10
0.08 24.82
38.09
4.56
14.08
0.00
3.18
0.12 55.12
38.76
4.37
15.57
15.00
17.08
15.08 64.97
69.69
4.37
17.75
0.00
1.97
0.02 70.08
89.26
2.92
20.81
0.00
2.36
1.49 118.28
63.60
1.49
19.29
0.00
2.57
1.57
Borrowings 38.35 57.12 73.72 84.61 130.82 158.73 183.94 203.66
Sundry Creditors
Other Liabilities
Provision for tax, etc.
Proposed Dividends
Current Portion of LT Dept 37.52
5.70
3.18
1.80
0.00 49.40
10.16
3.82
2.00
0.00 59.34
10.70
5.14
2.30
0.08 77.27
3.59
0.31
4.06
0.12 113.66
1.42
4.40
7.29
15.08 148.13
1.99
7.70
8.58
0.02 153.63
1.70
12.19
12.85
1.49 179.79
3.04
21.43
14.18
1.57
Current Liabilities 48.20 65.38 77.56 85.35 141.85 166.42 181.86 220.01
TOTAL LIABILITIES
Additional information:
Share premium reserve
Revaluation reserve
Bonus equity capital 124.21

8.51 165.13

8.51 198.76

8.51 289.35

47.69
8.91
8.51 473.27

107.40
8.70
8.51 531.67

107.91
8.50
8.51 585.61

93.35
8.31
23.25 666.86

93.35
8.15
23.25

Exhibit 3

GREAVES LTD.
Share Price Data
1990 1991 1992 1993 1994 1995 1996 1997
Closing share price (Rs)
Yearly high share price (Rs)
Yearly low share price (Rs)
Market capitalization (Rs crore
EPS (Rs)
Book value (Rs) 27.19
29.25
26.78
65.06
4.79
35.64 34.74
45.28
21.61
67.77
6.82
37.22 121.27
121.27
34.36
236.56
9.73
42.54 66.67
126.33
48.34
274.84
1.93
57.75 78.34
90.00
42.67
346.35
2.66
40.61 71.67
100.01
68.34
316.87
7.16
64.98 47.5
90.00
45.00
210.02
5.03
45.35 48.25
85.00
43.75
213.34
9.01
50.73

Questions

1. How profitable are its operations? What are the trends in it? How has growth affected the profitability of the company?
2. What factors have contributed to the operating performance of Greaves Limited? What is the role of profitability margin, asset utilisation, and non-operating income?
3. How has Greaves performed in terms of return on equity? What is the contribution of return on investment, the way of the business has been financed over the period?

CASE – 3 CHOOSING BETWEEN PROJECTS IN ABC COMPANY

ABC Company, has three projects to choose from. The Finance Manager, the operations manager are discussing and they are not able to come to a proper decision. Then they are meeting a consultant to get proper advice. As a consultant, what advice you will give?

The cash flows are as follows. All amounts are in lakhs of Rupees.

Project 1:
Duration 5 Years
Beginning cash outflow = Rs. 100
Cash inflows (at the end of the year)
Yr. 1 – Rs 30; Yr. 2 – Rs 30; Yr. 3 – Rs 30; Yr.4 – 10; Yr.5 – 10

Project 2:
Duration 5 Years
Beginning Cash outflow Rs. 3763
Cash inflows (at the end of the year)
Yr. 1 – 200; Yr. 2 – 600; Yr. 3 – 1000; Yr. 4 – 1000; Yr. 5 – 2000.

Project 3:
Duration 15 Years
Beginning Cash Outflow – Rs. 100
Cash Inflows (at the end of the year)
Yrs. 1 to 10 – Rs. 20 (for 10 continuous years)
Yrs. 11 to 15 – Rs. 10 (For the next 5 years)

Question:
If the cost of capital is 8%, which of the 3 projects should the ABC Company accept?

CASE – 4 STAR ENGINEERING COMPANY

Star Engineering Company (SEC) produces electrical accessories like meters, transformers, switchgears, and automobile accessories like taximeters and speedometers.
SEC buys the electrical components, but manufactures all mechanical parts within its factory which is divided into four production departments Machining, Fabrication, Assembly, and Painting—and three service departments—Stores, Maintenance, and Works Office.
Though the company prepared annual budgets and monthly financial statements, it had no formal cost accounting system. Prices were fixed on the basis of what the market can bear. Inventory of finished stocks was valued at 90 per cent of the market price assuming a profit margin of 10 per cent.
In March, the company received a trial order from a government department for a sample transformer on a cost-plus-fixed-fee basis. They took up the job (numbered by the company as Job No 879) in early April and completed all manufacturing operations before the end of the month.
Since Job No 879 was very different from the type of transformers they had manufactured in the past, the company did not have a comparable market price for the product. The purchasing officer of the government department asked SEC to submit a detailed cost sheet for the job giving as much details as possible regarding material, labour and overhead costs.
SEC, as part of its routine financial accounting system, had collected the actual expenses for the month of April, by 5th of May. Some of the relevant data are given in Exhibit A.
The company tried to assign directly, as many expenses as possible to the production departments. However, It was not possible in all cases. In many cases, an overhead cost, which was common to all departments had to be allocated to the various departments using some rational basis. Some of the possible bases were collected by SEC’s accountant. These are presented in Exhibit B.
He also designed a format to allocate the overhead to all the production and service departments. It was realized that the expenses of the service departments on some rational basis. The accountant thought of distributing the service departments’ costs on the following basis:
a. Works office costs on the basis of direct labour hours.
b. Maintenance costs on the basis of book value of plant and machinery.
c. Stores department costs on the basis of direct and indirect materials used.
The accountant who had to visit the company’s banker, passed on the papers to you for the required analysis and cost computations.

REQUIRED

Based on the data given in Exhibits A and B, you are required to:

1. Complete the attached “overhead cost distribution sheet” (Exhibit C).
Note: Wherever possible, identify the overhead costs chared directly to the production and service departments. If such direct identification is not possible, distribute the costs on some “rational basis.
2. Calculate the overhead cost (per direct labour hour) for each of the four producing departments. This should include share of the service departments’ costs.
3. Do you agree with:
a. The procedure adopted by the company for the distribution of overhead costs?
b. The choice of the base for overhead absorption, i.e. labour-hour rate?

Exhibit A

STAR ENGINEERING COMPANY
Actual Expenses(Manufacturing Overheads) for April
RS RS
Indirect Labour and Supervisions:
Machining
Fabrication
Assembly
Painting
Stores
Maintenance

Indirect Materials and Supplies
Machining
Fabrication
Assembly
Painting
Maintenance

Others
Factory Rent
Depreciation of Plant and Machinery
Building Rates and Taxes
Welfare Expenses
(At 2 per cent of direct labour wages and Indirect labour and supervision)
Power
(Maintenance—Rs 366; Works Office Rs 2,200, Balance to Producing Departments)
Works Office Salaries and Expenses
Miscellaneous Stores Department Expenses

33,000
22,000
11,000
7,000
44,000
32,700

2,200
1,100
3,300
3,400
2,800

1,68,000
44,000
2,400
19,400

68,586

1,30,260
1,190

1,49,700

12,800

4,33,930

5,96,930

Exhibit B
STAR ENGINEERING COMPANY
Projected Operation Data for the Year
Department Area
(sq.m) Original Book of Plant & Machinery
Rs Direct Materials
Budget

Rs Horse
Power
Rating Direct
Labour
Hours Direct
Labour
Budget

Rs
Machining
Fabrication
Assembly
Painting
Stores
Maintenance
Works Office
Total
13,000
11,000
8,800
6,400
4,400
2,200
2,200
48,000 26,40,000
13,20,000
6,60,000
2,64,000
1,32,000
1,98,000
68,000
52,80,000 62,40,000
21,60,000

10,80,000

94,80,000 20,000
10,000
1,000
2,000

33,000 14,40,000
5,28,000
7,20,000
3,30,000

30,18,000 52,80,000
25,40,000
13,20,000
6,60,000

99,00,000

Note

The estimates given in this exhibit are for the budgeted year January to December where as the actuals in Exhibit A are just one month—April of the budgeted year.

Exhibit C
STAR ENGINEERING COMPANY
Actual Overhead Distribution Sheet for April
Departments
Overhead Costs Production Departments Service Departments Total Amount Actuals for April (Rs) Basis for Distribution

A. Allocation of Overhead to all departments
A.1 Indirect Labour and Supervision

1,49,700
A.2 Indirect materials and supplies
12,800
A.3 Factory Rent 1,68,000
A.4 Depreciation of Plant and Machinery
44,000
A.5 Building Rates and Taxes

2,400

A.6 Welfare Expenses

19,494
A.7 Power 68,586
A.8 Works Office Salaries and Expenses
1,30,260

A.9 Miscellaneous Stores Expenses
1,190
A. Total (A.1 to A.9) 5,96,430
B. Reallocation of Service Departments Costs to Production Departments
B.1 Distribution of Works Office Costs
B.2 Distribution of Maintenance Department’s Costs
B.3 Distribution of Stores Department’s Costs
Total Charged to Producing
C. Departments (A+B)

5,96,430
D. Labour Hours Actuals for April
1,20,000
44,000
60,000
27,500
E. Overhead Rate/Per Hour (D)

Case 5: EASTERN MACHINES COMPANY

Raj, who was in charge production felt that there are many problems to be attended to. But Quality Control was the main problem, he thought, as he found there were more complaints and litigations as compared to last year. With the demand increasing, he does not want to take any chances.

So he went down to assembly line, but was greeted by an unfamiliar face. He introduced himself.

Raj: I am in charge of checking the components, which we use, when we assemble the machines for customers. For most of the components, suppliers are very reliable and we assume that there will not be any problem. When we generally test the end product, we don’t have failures.

Namdeo: I am Namdeo. I was in another dept. and has been transferred recently to this dept.

Raj: Recently we have been having problems, and there has been some complaint or other about the machines we have supplied. I am worried and would like to check the components used. I would like to avoid lot of expensive rework.

Namdeo: But it would be very expensive to test every one of them. It will take at least half an hour for each machine. I neither have the staff nor the time. It will be rather pointless as majority of them will pass the test.

Raj: There has been more demand than supply for these machines in last 2 years. We have been buying many components from many suppliers. We have been producing more with extra shifts. We are trying to capture the market and increase our market share.

Namdeo: We order for components from different places, and sometimes we do not have time to check all. There is a time lag between order and supply of components, and we cannot wait as production will stop. We use whatever comes soon as we want to complete our orders.

Raj: Oh! Obviously we need some kind of checking. Some sampling technique to check the quality of the components. We need to get a sample from each shipment from our component suppliers. But I do not know how many we should test.

Namdeo: We should ask somebody from our statistics dept. to attend to this problem.

As a Statistician, advice what kind of Sampling schemes can we consider, and what factors will influence choice of scheme. What are the questions we should ask Mr. Namdeo, who works in the assembly line?


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Caselet 1
Uptron Electronics Limited, is a pioneering and internationally reputed firm in the electronics
industry. It is one of the largest firm in the country. It attracted employees from internationallyreputed
institute and industries by offering high salaries, perks, etc. It has advertized for the position
of an electronic engineer recently. Nearly 150 candidates applied for the jobMr. Sashidhar, an
electronics Engineering Graduate from the Indian Institute Of Technology with 5 years working
experience in a medium sized electronics firm, was selected from among the 130 candidates who took
tests and interview. The interview board recommended an enhancement in his salary by Rs 5,000
more than his present salary at his request. Mr Sashidhar was very happy to achieve this and he was
congratulated by a number of people including his previous employer for his brilliant interview
performance, and wished him good luck.
Mr Sashidhar joined Uptyron Electronics Ltd., on 21st January, 2002, with greater enthusiasm. He
also found his job to be quite comfortable and a challenging one and he felt it was prestigious to work
with this company during the formative years of his career. He found his superiors as well as
subordinates to be friendly and cooperative. But this climate did not live long. After one year of his
service, he slowly learnt about a number of unpleasant stories about the company, management, the
superior subordinate relations, rate of employee turnover, especially at higher level But he decided to
stay on as he has promised several things to the management in the interview. He wanted to please
and change the attitude of management through his diligent performance, firm commitment and
dedication. He started maximizing his contributions and the management got the impression that Mr.
Sashidhar had settled down and will remain in the company.
After some time, the superiors started riding rough- shod over Mr Sashidhar. He was overloaded with
multifarious jobs. His freedom in deciding and executing was cut down. He was ill treated on a
number of occasions before his subordinates. His colleagues also started assigning their
responsibilities to Mr Sashidhar. Consequently there were imbalances in his family life and
organizational life. But he seemed to be calm and contented. Management felt that Mr Sashidhar had
the potential to bear with many more organizational responsibilities.
So the general manager was quite surprised to see the resignation letter of Mr Sashidhar along with a
cheque equivalent to a month’s salary one fine morning on 18th January, 2004. The General Manager
failed to convince Mr Sashidhar to withdraw his resignation. The General Manager relieved him on
25th January, 2004. The General Manager wanted to appoint a committee to go into the matter
immediately, but dropped the idea later.
Questions:
1. What is wrong with the recruitment policy of the company?
2. Why did Mr. Sashidhar’s resignation surprise the General Manager?
Examination Paper of Human Resource Management

Caselet 2
The contexts in which human resources are managed in today’s organizations are constantly,
changing. No longer do firms utilize one set of manufacturing processes, employ a homogeneous
group of loyal employees for long periods of time or develop one set way of structuring how work is
done and supervisory responsibility is assigned. Continuous changes in who organizations employ
and what these employees do require HR practices and systems that are well conceived and
effectively implemented to ensure high performance and continued success.
1. Automated technologies nowadays require more technically trained employees possessing
multifarious skills to repair, adjust or improve existing processes. The firms can’t expect these
employees (Gen X employees, possessing superior technical knowledge and skills, whose attitudes
and perceptions toward work are significantly different from those of their predecessor organizations:
like greater self control, less interest in job security; no expectations of long term employment;
greater participation urge in work activities, demanding opportunities for personal growth and
creativity) to stay on without attractive compensation packages and novel reward schemes.
2. Technology driven companies are led by project teams, possessing diverse skills, experience and
expertise. Flexible and dynamic organizational structures are needed to take care of the expectations
of managers, technicians and analysts who combine their skills, expertise and experience to meet
changing customer needs and competitive pressures.
3. Cost cutting efforts have led to the decimation of unwanted layers in organizational hierarchy in
recent times. This, in turn, has brought in the problem of managing plateau employees whose careers
seem to have been hit by the delivering process. Organizations are, therefore, made to find alternative
career paths for such employees’
4. Both young and old workers, these days, have values and attitudes that stress less loyalty to the
company and more loyalty to oneself and one’s career than those shown by employees in the past,
Organizations, therefore, have to devise appropriate HR policies and strategies so as to prevent the
flight of talented employees
Question:-
1. Discuss that technological breakthrough has brought radical changes in HRM.
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of applied theory Questions.
 Answer all the questions.
 Each question carries 15 marks
 Detailed information should form the part of your answer (Word limit 150-200 words).
1. Several types of interviews are commonly used depending on the nature & importance of the
position to be filled within an organization. Explain the different types of Interviews.
2. How would you explain Organizational Change and Development?

Caselet 1
Ask the company top brass what „almost there‟ means. The answer: a premier Indian retail company
that has come to be known as a specialty chain of apparel and accessories. With 52 product categories
under one roof, Shoppers‟ Stop has a line-up of 350 brands. Set up and headed by former Corona
employee, B. S. Nagesh, Shoppers‟ Stop is India‟s answer to Selfridges and Printemps. As it proudly
announces, „We don‟t sell, we help you buy.‟ Back in 1991, there was the question of what to retail.
Should it be a supermarket or a departmental store? Even an electronics store was considered. Finally,
common sense and understanding won out. The safest bet, for the all-male team was to retail men‟s
wear. They knew the male psyche and felt that they had discerning taste in men‟s clothing. The
concept would be that of a lifestyle store in a luxurious space, which would make for a great shopping
experience. The first Shoppers‟ Stop store took shape in Andheri, Mumbai, in October 1991, with an
investment of nearly Rs. 20 lakh. The original concept that formed the basis of a successful marketing
campaign for seven years is here to stay. And the result is an annual turnover of Rs. 160 crores and
five stores, nine years later. Everything went right from the beginning, except for one strange
happening. More than 60 per cent of the customers who walked into Shoppers‟ Stop in Mumbai were
women. This gave rise to ideas. Soon, the store set up its women‟s section. Later, it expanded to
include children‟s wear and then, household accessories. The second store in Bangalore came in
1995. The store at Hyderabad followed in 1998 with the largest area of 60,000 sq. ft. The New Delhi
and Jaipur stores were inaugurated in 1999. All this while, the product range kept increasing to suit
customer needs. The most recent experiment was home furnishings. Secure in the knowledge that
organized retailing in global brands was still in its infancy in India, Shoppers‟ Stop laid the ground
rules which the competition followed. The biggest advantage for Shoppers‟ Stop is that it knows how
the Indian consumer thinks and feels while shopping. Yes, feeling – for in India, shopping remains an
outing. And how does it compare itself to foreign stores? While it is not modeled on any one foreign
retailer, the „basic construct‟ is taken from the experience of a number of successfully managed retail
companies. It has leveraged expertise for a critical component like technology from all over the
world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERP models.
Shoppers‟ Stop went a step further by even integrating its financial system with the ERP model.
Expertise was imported wherever it felt that expertise available in-house was inadequate. But the
store felt there was one acute problem. A shortage of the most important resource of them all was
trained humans. Since Indian business institutes did not have professional courses in retail
management, people were hired from different walks of life and the training programme was
internalized. By 1994, the senior executives at Shoppers‟ Stop were taking lectures at management
institutes in Mumbai. The Narsee Monjee Institute of Management Studies (NMIMS) even
restructured its course to include retail management as a subject. Getting the company access to the
latest global retail trends and exchange of information with business greats was an exclusive
membership to the Intercontinental Group of Department Stores (IGDS). It allows membership by
invitation to one company from a country and Shoppers‟ Stop rubs shoulders with 29 of the hottest
names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza from Dubai
and the like. With logistics I in place, the accent moved to the customer. Shoppers‟ Stop conducted
Examination Paper of Marketing Management
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IIBM Institute of Business Management
surveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-house
wardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving
and is very different from, say, a European customer, who knows exactly what he wants to purchase,
walks up to a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch
and feel the merchandise, and scout for options. Also, the majority of Indian shoppers still prefer to
pay in cash. So, transactions must be in cash as against plastic money used the world over.
Additionally, the Indian customer likes being served – whether it is food, or otherwise. The
company‟s customer profile includes people who want the same salesperson each time they came to
the store to walk them through the shop floors and assist in the purchase. Others came with families,
kids and maids in tow and expected to be suitably attended to. Still others wanted someone to carry
the bags. So, the shops have self-help counters, with an assistant at hand for queries or help. The inhouse
wardrobe audit also helped with another facet of the business. It enabled Shoppers‟ Stop to
work out which brands to stock, based on customer preferences. In fact, the USP of Shoppers‟ Stop
lies in judiciously selected global brands, displayed alongside an in-house range of affordable
designer wear. The line-up includes Levi‟s, Louis Philippe, Allen Solly, Walt Disney, Ray Ban and
Reebok, besides in-house labels STOP and I. Brand selection is the same across the five locations,
though the product mix may be somewhat city-based to accommodate cuts and styles in women‟s
wear, as well as allowing for seasonal variations (winter in Delhi, for instance, is a case in point).
Stocking of brands is based on popular demand – recently, Provogue, MTV Style, and Benetton have
been added. In-house labels are available at competitive prices and target the value-for-money
customer and make up around 12 per cent of Shoppers‟ Stop‟s business. Sometimes in-house brands
plug the price gap in certain product categories. To cash in on this, the company has big plans for its
in-house brands: from re-branding to repositioning, to homing in on product categories where existing
brands are not strong. Competition between brands is not an issue, because being a trading house, all
brands get equal emphasis. The in-house brand shopper is one who places immense trust in the
company and the quality of its goods and returns for repeat buys. And the company reposed its faith
in regular customers by including them in a concept called the First Citizen‟s Club (FCC). With
60,000 odd members, FCC customers account for 10 per cent of entries and for 34 per cent of the
turnover. It was the sheer appeal of the experience that kept pulling these people back. Not one to let
such an opportunity pass, the company ran a successful ad campaign (that talks about just this factor)
in print for more than eight years. The theme is still the same. In 1999, a TV spot, which liked the
shopping experience to the slowing down of one‟s internal clock and the beauty of the whole
experience, was aired. More recently, ads that spell out the store‟s benefits (in a highly oblique
manner) are being aired.
The campaign is based on entries entered in the Visitors‟ Book. None of the ads has a visual or text –
or any heavy handedly direct reference to the store or the merchandise. The ads only show shoppers
having the time of their lives in calm and serene locales, or elements that make shopping at the store a
pleasure – quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to
the agency, Contract, ensured that brand recall came in terms of the shopping experience, not the
product. And it has worked wonders. Value-addition at each store also comes in the form of special
care with car parks, power backup, customer paging, alteration service and gift-wrapping. To top it
all, cafes and coffee bars make sure that the customer does not step out of the store. In Hyderabad, it
has even created a Food Court. Although the food counter was not planned, it came about as there
was extra space of 67,000 sq. ft. Carrying the perfect experience to the shop floor is an attempt to
stack goods in vast open spaces neatly. Every store has a generic structure, though regional customer
variances are accounted for. Each store is on lease, and this is clearly Shoppers‟ Stop‟s most
expensive resource proposition – renting huge spaces in prime properties across metros, so far
totaling 210,000 sq. ft of retail space. Getting that space was easy enough for Shoppers‟ Stop, since
its promoter is the Mumbai-based Raheja Group, which also owns 62 per cent of the share capital.
Examination Paper of Marketing Management
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IIBM Institute of Business Management
Questions:
1. What are the significant factors that have led to the success of Shoppers‟ Stop?
2. How should Shoppers‟ Stop develop its demand forecasts?
Caselet 2
The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a
crash in home Video game market. Interest in Video games was rekindled when a number of different
companies developed hardware consoles that provided graphics superior to the capabilities of
computer games. By 1990, the Nintendo Entertainment System dominated the product category. Sega
surpassed Nintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per
cent of Video game market and was one of the most recognized brand names among the children.
Sega‟s success was short lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit
system. The product was a miserable failure for a number of reasons. Sega was the primary software
developer for Saturn and it did not support efforts by outside game developers to design compatible
games. In addition, Sega‟s games were often delivered quite late to retailers. Finally, the price of the
Saturn system was greater than other comparable game consoles. This situation of Saturn‟s misstep
benefited Nintendo and Sony greatly. Sony‟s Play Station was unveiled in 1994 and was available in
70 million homes worldwide by the end of 1999. Its “Open design” encouraged the efforts of outside
developers, resulting in almost 3,000 different games that were compatible with the PlayStation. It too
featured 32-bit graphics that appealed to older audience. As a result, at one time, more than 30 per
cent of PlayStation owners were over 30 years old. Nintendo 64 was introduced in 1996 and had eyepopping
64-bit graphics and entered in more than 28 million homes by 1999. Its primary users were
between the age of 6 and 13 as a result of Nintendo‟s efforts to limit the amount of violent and adultoriented
material featured on games that can be played on its systems. Because the company
exercised considerable control over software development, Nintendo 64 had only one-tenth the
number of compatible games as Sony‟s PlayStation did. By 1999, Sony had captured 56 per cent of
the video game market, followed by Nintendo with 42 per cent. Sega‟s share had fallen to a low of
1%. Hence, Sega had two options, either to concede defeat or introduce an innovative video machine
that would bring in huge sales. And Sega had to do so before either Nintendo or Sony could bring
their next-generation console to market. The Sega Dreamcast arrived in stores in September 1999
with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial sales
were quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first four
months, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals,
and 40 different games were available within three months of Dream cast‟s introduction. By the end
of the year, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain its
momentum. Although its game capabilities were impressive, the system did not deliver all the
functionality Sega had promised. A 56K modem (which used a home phone line) and a Web browser
were meant to allow access to the Internet so that gamers could play each other online, surf the Web,
and visit the Dreamcast Network for product information and playing tips. Unfortunately, these
features either were not immediately available or were disappointing in their execution. Sega was not
the only one in having the strategy of adding functionality beyond games. Sony and Nintendo
followed the same approach for their machines introduced in 1999. Both Nintendo‟s Neptune and
Sony‟s PlayStation 2 (PS2) were built on a DVD platform and featured a 128-bit processor. Analysts
applauded the move to DVD because it is less expensive to produce and allows more storage than
CDs. It also gives buyers the ability to use the machine as CD music player and DVD movie player.
As Sony marketing director commented, “The full entertainment offering from Play Station 2
definitely appeals to a much broader audience. I have friends in their 30s who bought it not only
Examination Paper of Marketing Management
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IIBM Institute of Business Management
because it‟s a gaming system for their kids, but also a DVD for them.” In addition, PlayStation 2 is
able to play games developed for its earlier model that was CD-based. This gives the PS2 an
enormous advantage in the number of compatible game titles that were immediately available to
gamers. Further enhancing the PS2‟s appeal is its high-speed modem and allows the user‟s easy
access to the Internet through digital cable as well as over telephone lines. This gives Sony the ability
to distribute movies, music, and games directly to PS2 consoles. “We are positioning this as an allround
entertainment player,” commented Ken Kutaragi, the head of Sony Computer Entertainment.
However, some prospective customers were put off by the console‟s initial price of $360. Shortly
after the introduction of Neptune, Nintendo changed its strategies and announced the impending
release of its newest game console, The GameCube. However, unlike the Neptune, the GameCube
would not run on a DVD platform and also would not initially offer any online capabilities. It would
be more attractively priced at $199. A marketing vice president for Nintendo explained the
company‟s change in direction, “We are the only competitor whose business is video games. We want
to create the best gaming system.” Nintendo also made the GameCube friendly for outside developers
and started adding games that included sports titles to attract an older audience. Best known for its
extra ordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario
Bros, and Pokemon, Nintendo sought to attract older users, especially because the average video
game player is 28. Youthful Nintendo users were particularly pleased to hear that they could use their
handheld Game Boy Advance systems as controllers for the GameCube. Nintendo scrambled to
ensure there would be an adequate supply of Game Cubes on the date in November 2001, when they
were scheduled to be available to customers. It also budgeted $450 million to market its new product,
as it anticipated stiff competition during the holiday shopping season. With more than 20 million
PlayStation 2 sold worldwide, the GameCube as a new entry in the video game market would make
the battle for market share even more intense. For almost a decade, the video game industry had only
Sega, Nintendo, and Sony; just three players. Because of strong brand loyalty and high product
development costs, newcomers faced a daunting task in entering this race and being competitive. In
November 2001, Microsoft began selling its new Xbox, just three days before the GameCube made
its debut. Some observers felt the Xbox was aimed to rival PlayStation 2, which has similar functions
that rival Microsoft‟s Web TV system and even some lower level PCs. Like the Sony‟s PlayStation 2,
Xbox was also built using a DVD platform, but it used an Intel processor in its construction. This
open design allowed Microsoft to develop the Xbox in just two years, and gave developers the option
of using standard PC tool for creating compatible games. In addition, Microsoft also sought the
advice of successful game developers and even incorporated some of their feedback into the design of
the console and its controllers. As a result of developers‟ efforts, Microsoft had about 20 games ready
when the Xbox became available. By contrast, the GameCube had only eight games available.
Microsoft online strategy was another feature that differentiated of the Xbox from the GameCube.
Whereas Nintendo had no immediate plans for Web-based play, the Xbox came equipped with an
Ethernet port for broadband access to Internet. Microsoft also announced its own Web-based network
on which gamers can come together for online head-to head play and for organized online matches
and tournaments. Subscribers to this service were to pay a small monthly fee and must have highspeed
access to the Internet. This is a potential drawback considering that a very low percentage of
households world over currently have broadband connections. By contrast Sony promoted an open
network, which allows software developers to manage their own games, including associated fees
charged to users. However, interested players must purchase a network adapter for an additional
$39.99. Although game companies are not keen on the prospect of submitting to the control of a
Microsoft-controlled network, it would require a significant investment for them to manage their own
service on the Sony-based network. Initially the price of Microsoft‟s Xbox was $299. Prior to the
introduction of Xbox, in a competitive move Sony dropped the price of the PlayStation 2 to $299.
Nintendo‟s GameCube already enjoyed a significant price advantage, as it was selling for $100 less
than either Microsoft or Sony products. Gamers eagerly snapped up the new consoles and made 2001
Examination Paper of Marketing Management
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IIBM Institute of Business Management
the best year ever for video game sales. For the first time, consumers spent $9.4 billion on video
game equipment, which was more than they did at the box office. By the end of 2001 holiday season,
6.6 million PlayStation 2 consoles had been sold in North America alone, followed by 1.5 million
Xbox units and 1.2 million Game Cubes. What ensued was an all out price war. This started when
Sony decided to put even more pressure on the Microsoft‟s Xbox by cutting the PlayStation 2 price to
$199. Microsoft quickly matched that price.
Wanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its the
GameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million units
worldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony
had the benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven
years after the introduction of original PlayStation, it was being sold in retail outlets for a mere $49. It
had a significant lead in terms of numbers of units in homes around the world with a 43 per cent
share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent.
The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast
comprising the last and least market share of 4.7 per cent. Sega, once an industry leader, announced in
2001 that it had decided to stop producing the Dreamcast and other video game hardware
components. The company said it would develop games for its competitors‟ consoles. Thus Sega
slashed the price of the Dreamcast to just $99 in an effort to liquidate its piled up inventory of more
than 2 million units and immediately began developing 11 new games for the Xbox, four for
PlayStation 2, and three for Nintendo‟s Game Boy Advance. As the prices of video game consoles
have dropped, consoles and games have become the equivalent of razors and blades. This means the
consoles generate little if any profit, but the games are a highly profitable proposition. The profit
margins on games are highly attractive, affected to some degree by whether the content is developed
by the console maker (such as Sony) or by an independent game publisher (such as Electronic Arts).
Thus, the competition to develop appealing, or perhaps even addictive, games may be even more
intense than the battle among players to produce the best console. In particular, Nintendo, Sony, and
Microsoft want games that are exclusive to their own systems. With that in mind, they not only rely
on large in-house staffs that design games but they also pay added fees to independent publishers for
exclusive rights to new games. The sales of video games in 2001 rose to 43 per cent, compared to just
4 per cent increase for computer-based games. But computer game players are believed to be a loyal
bunch, as they see many advantages in playing games on their computers rather than consoles. For
one thing, they have a big advantage of having access to a mouse and a keyboard that allow them to
play far more sophisticated games. In addition, they have been utilizing the Internet for years to
receive game updates and modifications and to play each other over the Web. Sony and Microsoft are
intent on capturing a portion of the online gaming opportunity. Even Nintendo has decided to make
available a modem that will allow GameCube users to play online. As prices continue to fall and
technology becomes increasingly more sophisticated, it remains to be seen whether these three
companies can keep their names on the industry‟s list of “high scorers”.
Questions:
1. Considering the concept of product life cycle, where would you put video games in their life cycle?
2. Should video game companies continue to alter their products to include other functions, such as
email?

Caselet 1
M/s. ABC Ltd is a medium-sized engineering company producing a large-range of product lines
according to customer requirements. It has earned a good reputation as a quick and reliable supplier to
its customers because of which its volume of business kept on increasing. However, over the past one
year, the Managing Director of the company has been receiving customer complaints due to delays in
dispatch of products and at times the company has to pay substantial penalty for not meeting the
schedule in time. The Managing Director convened an urgent meeting of various functional managers
to discuss the issue. The marketing manager questioned the arbitrary manner of giving priority to
products in manufacturing line, causing delays in wanted products and over-stocking of products
which are not required immediately. Production Control Manager complained that he does not have
adequate staff to plan and control the production function; and whatever little planning he does, is
generally overlooked by shop floor manager. Shop floor managers complained of unrealistic
planning, excessive machine breakdowns, power failure, and shortage of materials for scheduled
products because of which it is impossible to stick to the schedule. Maintenance manager says that he
does not get important spares required for equipment maintenance because of which he cannot repair
machines at a faster rate. Inventory control manager says that on one hand the company often accuses
him of carrying too much stock and on other hand people are grumbling over shortages. Fed up by
mutual mud-slinging, the Managing Director decided to appoint you, a bright management consultant
with training in business management to suggest ways and means to put his “house in order”.
Questions:-
1. What would you suggest to avoid delays in dispatch of products?
2. What action should be taken by various functional managers to meet the scheduled dates?
Caselet 2
Rajender Kumar was a production worker at competent Motors Limited (CML) which made
components and accessories for the automotive industry. He had worked at CML for almost seven
years as a welder, along with fifteen other men in the plant. All had received training in welding both
on the job and through company sponsored external programmes. They had friendly relations and got
along very well with one another. They played Volleyball in the playground regularly before retiring
to the quarters allotted by the company. They work together in the company canteen, cutting Jokes on
each other and making fun of everyone who dared to step into their privacy during lunch hour. Most
of the fellows had been there for some length of time, except for two men who had joined the ranks
only two months back. Rajender was generally considered to be the leader of the group, so it was no
surprise that when the foreman of the new was transferred and his job was posted, Rajender applied
for the job and got it.
Examination Paper of Organizational Behaviour
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IIBM Institute of Business Management
There were only four other applicants for the job, two from mechanical section and two from outside,
when there was a formal announcement of the appointment on a Friday afternoon, everyone in the
group congratulated Rajender. They literally carried him on their shoulders, and bought him snacks
and celebrated. On Monday morning, Rajender joined duty as Foreman. It was company practice for
all foremen to wear blue jacket and a white shirt. Each man‟s coat had his name badge sewn onto the
left side pocket. The company had given two pairs to Rajender. He was proud to wear the coat to
work on Monday. People who saw him from a distance went up to him and admired the new blue
coat. There was a lot of kidding around calling Rajender as „Hero‟, „Raja Babu‟ and „Officer‟ etc.
One of the guys went back to his locker and returned with a long brush and acted as though he were
removing dust particles on the new coat. After about five minutes of horseplay, all the men went back
to work. Rajender went to his office to familiarize himself with the new job and environment. At
noon, all the men broke for Lunch and went to the canteen to eat and take a break as usual. Rajender
was busy when they left but followed after them a few minutes later. He bought the food coupon,
took the snacks and tea and turned to face the open canteen. On the left-side corner of the room was
his old work group; on the right-hand side of the canteen sat the other entire foreman in the plant—all
in their smart blue coats.
At that point of time, silence descended on the canteen. Both groups looked at Rajender anxiously,
waiting to see which group he would choose to eat with.
Questions:
1. Whom do you think Rajender will eat with? Why?
2. If you were one of the other foremen, what could you do to make Rajinder‟s transition easier?

Caselet 1
Mr. Vincent, the Manager of a large supermarket, was taking a management course in the evening
programme at the local college. The Professor had given an interesting but disturbing lecture the
previous night on the various approaches to management. Vincent had always thought that
management involved just planning, organizing and controlling. Now this Professor was saying that
management could also be thought of as quantitative models, systems theory and analysis, and even
something called contingency relationships. Vincent had always considered himself a good manager,
and his record with the supermarket chain had proved it. He thought of himself, “I have never used
operations research models, thought of my store as an open system, or developed or utilized any
contingency relationship. By doing a little planning ahead, organizing the store, and making some
things got done, I have been a successful manager. That other stuff just does not make sense. All the
professor was trying to do was complicate things. I guess I will have to know it for the test, but I am
sticking with my old plan, organize and control approach to managing my store.”
Questions:
1. Critically analyze Mr. Vincent‟s reasoning.
2. If you were the professor and you knew what was going through Vincent‟s mind, what would you say
to Vincent?
Caselet 2
The Regional Administration Office of a company was hastily set up. Victor D‟Cuhna a young
executive was directly recruited to take charge of Data Processing Cell of this office. The data
processing was to help the administrative office in planning and monitoring. The officer cadre of the
administrative office was a mix of directly recruited officers and promote officers (promotion from
within the organization).
Females dominated the junior clerical cadre. This cadre was not formally trained. The administrative
office had decided to give these fresh recruits on-the-job training because when results were not upto
the expectations blame was brought on the Data Processing Cell. Victor D‟Cuhna realized that the
administrative office was heading for trouble. He knew that his task would not be easy and that he had
been selected because of his experience, background and abilities. He also realized that certain
functional aspects of the administrative office were not clearly understood by various functionaries,
and systems and procedures were blindly and randomly followed. Feedback was random, scanty and
controversial, and Data Processing Cell had to verify every item of feedback. Delays were inevitable.
D‟Cuhna sought the permission of senior management to conduct a seminar on communication and
feedback of which he was an expert. The permission was grudgingly given by the senior management.
Everyone appreciated the seminar. Following the first seminar, D‟Cuhna conducted a one week
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150-200 words).
Principles and Practices of Management
IIBM Institute of Business Management 4
training course for the clerical cadre, especially for the junior, freshly recruited clerks. Amongst other
topics, D‟Cuhna laid emphasis on
Questions:
1. Diagnose the problem and enumerate the reasons for the failure of D‟Cuhna?
2. What could D‟Cuhna have done to avoid the situation in which he found himself?


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Brand Management
Maximum Marks: 80

Question No. 1 is compulsory and is for 16 Marks. Please attempt any 4 questions from question number 2 to 9.

1. Case Study : (Compulsory)
BURNOL

Burnol has been around for six decades as a yellow burns-relief ointment. It has almost become a generic brand. Its yellow colour reminds one of turmeric, the traditional burns-relief remedy.
The brand has been recently acquired by Dr. Morepen (a subsidiary of Morepen Laboratories Ltd.) from Reckit Piramal. The brand has high recall value. Morepen is the brand’s third owner (Boots is the first, Pirmal second).
Burnol’s position in the mind space of the consumer is that of the burns ointment. It is open to marketers to reposition the brand. But sometimes the brand does not budge from its original position. Burnol is a typical example. It is so strong as anti-burn ointment that it has become intractable.
Burnol introduced by Boots started domestic manufacturing in 1948. JWT handled the account. Formerly, it was sold on prescription. In 1960 it became over-the counter (OTC) product.
As Indian housewives depended upon kerosene or wood-fed stoves, Burnol became an integral part of the household. In 1967, Burnol’s application was far widened, to include antiseptic properties against cuts and other wounds. But it did not succeed and Boots reverted to its original anti-burns position. In 1972, Shield was launched by SKF as a competitive brand. It was followed by Medigard by J.L. Morison. But they could not affect Burnol.
In 1980, a commercial on DD showed a daughter entering kitchen and getting burns due to oil splash. The mother uses Burnol and the VO says “Haath jal gaya? Shukar hai ghar mein Burnol jo hai”.
Kitchen became safer in 85s after the switch-over to LPG-based cooking and the use of gas-lighter instead of the match boxes. Burnol started stagnating.
Though the product had high recall, the actual reality was that households did not keep the product handy. Plain water was being recommended to treat burns. Turmeric, as it causes stains, was becoming a liability. The product composition was changed by changing colour from deep yellow to non-staining light yellow. People were coaxed to keep the product within easy reach, Sales showed some improvement.
In 1995, again it was repositioned as antiseptic for multiple usages. The colour was made even lighter. It was given a new perfume. But the brand failed to compete with other antiseptic creams such as Boroline and Dettol. The brand could not be moved from its ‘burns’ spot in the consumer mind. It’s becoming generic as a burns remedy proved to be its cause for stagnation.
In 2000, Burnol was sold to Reckitt Pirmal for 12.5 crore. It became Burnol Plus. It was positioned as ‘first aid cream’. It registered a turnover of ` 6.2 crore in 2002. As Reckit Pirmal joint venture came apart, Burnol was sold to Dr. Morepen in 2003. It is being relaunched in April 2004.

Burns market including dressings stand as ` 39 crore. Antiseptic market stands at ` 210 crore. The old need is passing into history. The strategy should be to retain its original uniqueness, and still broad-base it. There are new dangers such as geysers, irons, ovens and so on. Burnol can become a cream that ensures safety if present. Burnol should be promoted as brand that cares.
Burnol is now marketed by Dr. Morepen Lab as protective cream which should be kept handy always.

Question:
As a Management consultant give your comments on Burnol as a brand.

2. What do you understand by the concept of a Brand? Describe the characteristics of Brands.

3. a. Define the Brand Image. Explain the dimensions of Brand Image.
b. What is meant by Brand Identity? Explain the different elements of Brand Identity.

4. Discuss in detail the different stages of brand building process.

5. a. What is Brand Audit? Explain its importance.
b. Describe the two steps in brand audit.

6. “Positioning is an outcome of our perceptions about the brand relative to the competing brands” – Discuss with examples.

7. How do consumers perceive and choose brands? Discuss.

8. What are the different phases of strategic brand management process?

9. Discuss the “TEN COMMANDMENTS” of Global Branding.

BUSINESS COMMUNICATION
N. B. : All cases are Compulsory.

CASE NO. 1
How to Proofread like a Pro :
Tips for creating the Perfect Document

You’ve carefully revised and polished your document, and it’s been sent off to the word-processing department or a designer to be put into final form. You can breathe a sigh of relief, but only for the moment : You’ll still be proofreading what comes out of the printer. To ensure that any document is error-free, always proofread the final version. Following are some hints to help make your proofreading more effective.
 Multiple passes – Go through the document several times, focusing on a different aspect each time. The first pass might be to look for omissions and errors in content; the second pass could be for layout, spacing, and other aesthetic features; a final pass might be to check for typographical, grammatical, and spelling errors.
 Perceptual tricks – Your brain has been trained to ignore transposed letters, improper capitalization, and misplaced punctuation. Try (1) reading each page from the bottom to the top (starting at the last word in each line,) (2) Placing your finger under each word and reading it silently, (3) making a slit in a sheet of paper that reveals only one line of type at a time, and (4) reading the document aloud and pronouncing each word carefully.
 Impartial reviews – Have a friend or colleague proofread the document for you. Others are likely to catch mistakes that you continually fail to notice. (All of us have blind spots when it comes to reviewing our own work)
 Typos – Look for the most common typographical errors (typos): transposition (such as teb), substitution (such as economic), and omission (such as productivity)
 Mechanics – When looking for errors in spelling, grammar, punctuation, and capitalization, if you’re unsure about something, look it up in a dictionary, a usage book, or another reference work.
 Accuracy – Double –check the spelling of names and the accuracy of dates, addresses, and all numbers (quantities ordered, prices, and so on). It would not do to order 500 staples when you want only 50.
 Distance – If you have time, set the document aside and proofread it the next day.
 Vigilance – Avoid reading large amounts of material in one sitting, and try not to proofread when you’re tired.
 Focus – Concentrate on what you’re doing. Try to block out distractions, and focus as completely as possible on your proofreading task.
 Caution – Take your time. Quick proofreading is not careful proofreading.
Proofreading may require patience, but it adds creditability to your document.
Career Applications :
1. What qualities does a person need to be a good proofreader ? Are such qualities inborn, or can they be learned ?
2. Proofread the following sentence :
application of these methods in stores in San Deigo nd Cinncinati have resulted in a 30 drop in robberies an a 50 percent decling in violence there, according at the developers if the security system, Hanover brothrs, Inc.

CASE NO. 2
ACTIONS SPEAK LOUDER THAN WORDS ALL AROUND
THE WORLD
“He wouldn’t look me in the eye. I found it disconcerting that he kept looking all over the room but rarely at me,” said Barbara Walters after her interview with Libya’s Colonel Muammar al-Qadhafi. Like many people in the United States, Walters was associating eye contact with trustworthiness, so when Qadhafi withheld eye contact, she felt uncomfortable. In fact Qadhafi was paying Walters a compliment. In Libya, not looking conveys respect, and looking straight at a woman is considered nearly as serious as physical assault.
Nonverbal communication varies widely between cultures, even between subcultures, and the differences strongly affect communication in the workplace. Whether you’re trying to communicate with your new Asian American assistant, the Swedish managers who recently bought out your company, the African American college student who won a summer internship with your firm, or representatives from the French company you hope will buy your firm’s new designs, your efforts will depend as much on physical cues as on verbal ones. Most Americans aren’t usually aware of their own nonverbal behavior, so they have trouble understanding the body language of people from other cultures. The list of differences is endless.
 In Thailand it’s rude to place your arm over the back of a chair in which another person is sitting.
 Finnish female students are horrified by Arab girls who want to walk hand in hand with them.
 Canadian listeners nod to signal agreement.
 Japanese listeners nod to indicate only that they have understood.
 British listeners stare at the speaker, blinking their eyes to indicate understanding.
 People in the United States are taught that it’s impolite to stare.
 Saudis accept foreigners in Western business attire but are offended by tight – fitting clothing and by short sleeves.
 Spaniards indicate a receptive friendly handshake by clasping the other person’s forearm to form a double handshake.
 Canadians consider touching any part of the arm above the hand intrusive, except in intimate relationships.
It may take years to adjust your nonverbal communication to other
cultures, but you can choose from many options to help you prepare. Books and seminars on cultural differences are readily available, as are motion pictures showing a wide range of cultures. You can always rent videos of films and TV shows from other countries. Examining the illustrations in news and business magazines can give you an idea of expected business dress and personal space. Finally, remaining flexible and interacting with people from other cultures who are visiting or living in your country will go a long way toward lowering the barriers presented by nonverbal communication.
Career Applications :
1. Explain how watching a movie from another country might help you prepare to interpret nonverbal behavior from that culture correctly.
2. One of your co-workers is originally from Saudi Arabia. You like him, and the two of you work well together. However, he stands so close when you speak with him that it makes you very uncomfortable. Do you tell him of your discomfort, or do you try to cover it up ?
CASE NO. 3
MASTERING THE ART OF CONSTRUCTIVE CRITICISM
To become better writers, people need to be evaluated, but taking criticism
from others is often difficult. The way you tell someone “ You did it wrong” can destroy goodwill and cooperation, or it can build the relationship and help the person learn from the mistake, improve performance, and retain self-esteem. To criticize more constructively, follow these suggestions :
 Get all the facts first : Don’t accept hearsay or rumors.
Find out specifically who did or said what, when, where, why, and how
 Don’t act in haste : Never act while you’re angry. Think things out before you write or speak, and then explain your criticism calmly, rationally, and objectively.
 Phrase your remarks impersonally : Criticize the mistake, not the person. Focus your remarks on the action only, and analyze it thoughtfully.
 Never criticize in an offhand manner : Treat the situation seriously. Take the time to state the problem in detail, explaining what was wrong and why.
 Avoid an abusive tone : Ridiculing someone, talking down to a person, or using sarcasm prevents people from accepting what you have to say.
 Make the offense clear : Don’t talk in generalities. Be specific about exactly what was done wrong.
 Preface the criticism with a kind word or a compliment : Start with a few words of praise or admiration, saying how much you value the person. First the good news, then the bad.
 Supply the answer : Explain how to do things right. Don’t dwell on the mistake, emphasize how to correct it and how to avoid repeating it.
 Ask for cooperation : Don’t demand cooperation. Asking makes the person feel like a team member and provides an incentive to improve.
 Limit yourself to one criticism for each offense : Don’t dredge up or rehash past mistakes. Focus on the current problem.
 End on a friendly note : Don’t conclude by leaving things up in the air, to be discussed again latter. Settle them now, and make the close friendly. Give the other person a pat on the back. Let the last memory of the matter be a good one.
 Forgive and forget : Once the criticism has been made, let the person start with a clean slate. Avoid looking for more mistakes, and give the person a chance to improve.
 Take steps to prevent a recurrence : Follow up to make sure the person is acting on your suggestions and doing things right.
If you follow these guidelines, constructive criticism can benefit you, your company, and – most important – the person you’re criticizing.
Career Applications :
1. Think back over the lessons you’ve learned in life. How did you benefit from some one telling you the truth about something you were doing wrong ?
2. With a partner, role-play a situation in which one of you is the boss and the other an employee. The boss is angry because the employee repeatedly arrives late for work, takes long lunches, and leaves 5 to 10 minutes early. However, the employee’s work is always excellent. After the role-play, analyze what the boss did right and what could be improved.
CASE NO. 4
WHAT YOU MAY LEGALLY SAY IN A SALES LETTER
As you prepare to write your sales letter, think carefully about your choice
of words. False or misleading statements could land you in court, so make sure your language complies with legal and ethical standards. To keep your sales letters within the limits of the law, review the legal considerations of these typical sales phrases :
 “Our product is the best on the market.” – This statement is acceptable for a sales letter because the law permits you to express an opinion about your product. In the process of merchandising a product, statements of opinion are known as “puffery,” which is perfectly legal as long as you make no deceptive or fraudulent claims.
 “Our product will serve you well for many years to come.” This statement from a sales brochure triggered a lawsuit by a disgruntled customer who claimed the manufacturer’s product lasted only a few years. The courts ruled that the statement was an acceptable form of puffery because the manufacturer did not promise that the product would last for a specific number of years.
 “We’re so confident you’ll enjoy our products that we’ve enclosed a sample of our most popular line. This sample can be yours for only $5.00! Please send your payment in the enclosed, prepaid envelope.” If you include a product sample with your sales letter, your readers may keep the merchandise without paying for it. Under the law, consumers may consider unordered goods as gifts. They are not obligated to return the items to you or submit payments for unsolicited merchandise
 “Thousands of high school students – just like you – are already enjoying this fantastic CD collection ! Order before March 1 and save !” If your sales letter appeals to minors, you are legally obligated to honour their contracts. At the same time, however, the law permits minors to cancel their contracts and return the merchandise to you. Sellers are legally obligated to accept contracts voided by minors and any goods returned by them. Legal adult status is defined differently from state to state, ranging from age 18 to age 21.
 “You’ll find hundreds of bargains at our annual scratch and dent’ sale! All sales are final on merchandise marked as is.” When you use the term as is in your sales letter, you are not misleading customers about the quality of your products. By warning consumers that the condition of sales items is less than perfect, you are not legally obligated to issue refunds to customers who complain about defects later on.
Career Applications :
1. Review two sales letters for content. List the “Puffery” statements in each letter.
2. Note any statements in these sales letters that appear questionable to you. Rewrite one of the statements, carefully choosing words that won’t be misleading to consumers.
CASE NO. 5
MINDING YOUR BUSINESS WITH ONLINE REPORTING
Mrs. Fields uses them. Mrs. Paul’s uses them. However, you don’t have to be in the cookie or fish business to work with electronic reports. More and more companies are adopting electronic reports over hard-copy reports to keep employees, managers, investors, and other stakeholders informed.
Computerized cash registers in Mrs. Fields cookie outlets are the heart of a sophisticated reporting system for monitoring and controlling operations. Rather than taking the time to write reports by hand, store managers enter data into the computer system by following report formats on their screen. Then they electronically transmit these reports to corporate headquarters in Park City, Utah. The computer system also serves as a two-way communication device, allowing store and corporate personnel to send messages back and forth in seconds. So Mrs. Fields corporate managers can quickly receive the information they need in order to track sales and productivity trends – and to spot potential problems – in more than 700 outlets around the world.
At Mrs. Paul’s a computerized reporting system allows production managers to continuously monitor and control the yield from the company’s fish – processing operation. The system calculates the production yield using the weight of the fish before it’s processed, the weight if abt scraosm and the weight of the finished fish meals. If the reports show that the actual yield drops below the expected yield, the managers can immediately adjust the equipment to improve the yield. The production managers have instant access to electronic reports at each stage of the operation, so they can find and fix problems more quickly than if they had to wait for printed reports.
FedEx, the well-known package-shipping firm, uses extensive satellite and computer technologies to track the location of every package in the company’s system. Customers can then access electronic reports to monitor the status of their shipments at any time. This tracking system not only helps the company serve its customers better, but it puts valuable information in the hands of customers with a click of the mouse. Like many companies, FedEx posts an electronic copy of its annual report and other corporate informational reports at its website.
As Mrs. Fields, Mrs. Pauls, FedEx, and other companies know, keeping customers, employees, investors, and other stakeholders informed with electronic reports is the only way to do business in the global workplace.

Career Applications
1. What advantages and disadvantages do you see in asking store managers at Mrs. Fields to file electronic troubleshooting reports immediately on the company’s intranet ?
2. What kinds of electronic reports might a company want to post on its website ?


Define business ethics

Define business ethics?

contact:
XAVIER INSTITUTE ONGOING EXAM ANSWER SHEETS PROVIDED. MBA EMBA BMS DMS ANSWERS PROVIDED. DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

BUSINESS ETHICS

Marks – 80
SECTON-A

ANSWER ALL QUESTIONS (5X3=15)

1. Define business ethics?
2. What is kick-back in business?
3. What is unfair discrimination?
4. What is acid rain?
5. Define the term social responsibility in business?

SECTION-B

ANSWER any 5 QUESTIONS (5X5=25)

6. Difference between transactional & transformational leadership?
7. Business & ethics are contradictory?
8. Explain the term ‘stealing trade secrets’
9. Explain whistle blowing
10. Mention 3 unethical practices in marketing?
11. What are the primary reasons for resources depletion?
12. Explain the objectives of social audit?

SECTION-C

ANSWER any 4 questions (10 X 4=40)

13.discuss the role & import of ethics in business
14.explain the types of ethical issues in business
15.discuss about the qualities & features of CEO in business
16.analyses the various causes of pollution in developing countries
explain the principle obligations of a business firm
17.discuss in detail about unfair trade discrimination?

Xaviers Institute of Business Management Studies

MARKS: 80
COURSE: MBA
SUB: CORPORATE LAW

N.B.: 1 Attempt any Twelve Questions
2) Last two Questions are compulsory
Q.1. In the following statements only one is correct statement. Explain Briefly? (5 Marks)
i) An invitation to negotiate is a good offer.
ii) A quasi-contract is not a contract at all.
iii) An agreement to agree is a valid contract.

Q.2. A ship-owner agreed to carry to cargo of sugar belonging to A from Constanza to Busrah. He knew that there was a sugar market in Busrah and that A was a sugar merchant, but did not know that he intended to sell the cargo, immediately on its arrival. Owning to Shipment’s default, the voyage was delayed and sugar fetched a lower price than it would have done had it arrived on time. A claimed compensation for the full loss suffered by him because of the delay. Give your decision. Explain Briefly? (5 Marks)

Q.3. The proprietors of a medical preparation called the “Carbolic Smoke Ball” published in several newspapers the following advertisement:-
“£ 1000 reward will be paid by the Carbolic Smoke Ball Co. to any person who contracts the increasing epidemic influenza after having used the Smoke Ball three times daily for two weeks according to printed directions supplied with each ball. £ 1000 is deposited with the Alliance Bank showing our sincerity in the matter.
On the faith in this advertisement, the plaintiff bought a Smoke Ball and used it as directed. She was attacked by influenza. She sued the company for the reward. Will she succeed? Explain Briefly (5 Marks)
Q.4. Fazal consigned four cases of Chinese crackers at Kanpur to be carried to Allahabad on the 30th May, 1987. He intended to sell them at the Shabarat festival of 5th June 1987. The railway discovered that the consignment could not be sent by passenger train and asked Fazal either to remove them or authorize their dispatch by goods train. He took no action and the goods arrived at Allahabad a month after they were booked.
Fazal filed a suit against Railways for damages due to late delivery of the goods which deprived him of the special profits at the festival sale. Decide & explain briefly ? (5 Marks)

Q.5. ‘Lifeoy’ Soap company advertised that it would give a reward of Rs. 2000 who contracted skin disease after using the ‘Lifeoy’ soap of the company for a certain period according to the printed directions. Mrs. Jacob purchased the advertised ‘Lifeboy’ and contracted skin disease inspite of using this soap according to the printed instructions. She claimed reward of Rs. 2000. The claim is resisted by the company on the ground that offer was not made to her and that in any case she had not communicated her acceptance of the offer. Decide whether Mrs. Jacob can claim the reward or not. Give reasons. Explain briefly? (5 Marks)

Q.6. In each set of statements, only one is correct. State the correct statements & Explain briefly?
a) i) A bailee has a general lien on the goods bailed.
ii) The ownership of goods pawned passes to the pawnee.
iii) A gratuitous bailment can be terminated by the bailor even
before the stated time.
b) i) A substituted agent is as good an agent of the agent as a sub-
agent.
ii) An ostensible agency is as effective as an express agency.
iii) A principal can always revoke an agent’s authority. (5 Marks)
Q.7. A, an unpaid seller, sends goods to B by railway. B becomes insolvent
And A sends a telegram to Railway authorities not to deliver the goods to B. B. goes to the Parcel office of Railway Yard and by presenting R. R. (Railway Receipt) takes delivery of the goods and starts putting them in the cart. Meanwhile the Station Master comes running with the telegram in hand and takes possession of the goods from B. Discuss the rights of A and B to the goods in possession of Railway authorities. (5 Marks)

Q.8. X needs Rs. 10,000 but cannot raise this amount because his credit is not good enough. Y whose credit is good accommodates. X by giving him a pronote made out in favour of X, though Y owes no money to X. X endorses the pronote to Z for value received. Z who is holder in due course demands payment from Y. Can Y refuse and plead the arrangement between him and X Explain briefly? (5 Marks)

Q.9. Will C has the right of further negotiation in the following cases: (B signs the endorsements) Explain briefly? (5 Marks)
i) ‘Pay C for my use’
ii) ‘Pay C’)

iii) ‘Pay C or order for the account of B’

Q.10. A promissory note was made without mentioning any time for payment. The holder added the words’ on demand on the face of the instrument. State whether it amounted to material alteration and explain the effect of such alteration. Explain briefly? (5 Marks)
Q.11. State whether the following instruments are valid promissory notes:
i) I promise to pay Rs. 5000 to B on the dearth of ‘B’s uncle provided that D in his will gives me a legacy sufficient for the promise of payment of the said sum.
ii) I hereby acknowledge that I owe X Rs. 5,000 on account of rent due and I agree that the said sum will be paid be me in regular installments.
iii) I acknowledge myself indebted to B in Rs. 5000 to be paid on demand for value received. (5 Marks)

Q.12. A Payee holder of a bill of exchange. He endorses it in blank and delivers it to B. B endorses in full to C or order. C without endorsement transfers the bill to D. State giving reasons whether D as bearer of the bill of exchange is entitled to recover the payment from A or B or C. Explain briefly? (5 Marks)

Q.13. Write a short note on the Doctrine of Indoor Management? Explain briefly? (5 Marks)

Q.14. The shareholders at an annual general meeting passed a resolution for the payment of dividend at a rate higher than that recommended by the Board of Directors. Examine the validity of the resolution. Explain briefly? (5 Marks)

Q.15. In a prospectus issued by a company the Managing Director stated that the company had paid dividend every year during 1921 – 27, which was a fact. However, the company had sustained losses during the relevant period and had paid dividends out of secret reserves accumulated in the past. Examine the consequences of the observation made by the Managing Director. Explain briefly? (5 Marks)

Q.16. In a prospectus issued by a company the Managing Director stated that the company had paid dividend every year during 1921-27, which was a fact. However, the company had sustained losses during the relevant period and had dividends out of secret reserves accumulated in the past. Examine the consequences of the observation made by the Managing Director. Explain briefly? (5 Marks)

Q.17. A buys from B 400 shares in a company on the faith of a share certificate issued by the company. A tender to the company a transfer deed duly executed together with B’s share certificate. The company discovers that the certificate in the name of B has been fraudulently obtained and refuses to register the transfer. Advise A. Explain briefly? (5 Marks)

Q.18. A insured his house against fire. Later while insure, A killed his wife, severely injured his only son, set fire to the house and died in the fire. The son survived and sued the insurer for the fire loss, advice the insurer. Explain briefly? (5 Marks)

Q.19. a) Satrang Singh admitted his only infant son in a private nursing home. As a result of strong dose of medicine administered by the nursing attendant, the child has become mentally retarded. Satrang Singh wants to make a complaint to the District Forum under the Consumer Protection Act, 1986 seeking relief by way of compensation on the ground that there was deficiency in service by the nursing home. Does his complaint give rise to a consumer dispute? Who is the consumer in the instant case? Explain briefly?
b) Smart booked a motor vehicle through one of the dealers. He was informed subsequently that the procedure for purchasing the motor vehicle had changed and was called upon to make further payment to continue the booking before delivery. On being aggrieved, Smart filed a complaint with the State Commission under the Consumer Protection Act, 1986. Will he succeed? Explain briefly?
c) Brittle and Company, a small-scale industry, sought nursing and financing facilities from its bankers by means of grant of further advances and adequate margin money in anticipation of good demand for its products. In failing to obtain this and having become sick, it proceeds against its bankers under the Consumer Protection Act, 1986, Will it succeed? Explain briefly? (5 Marks)

Q.20. X who was working as a truck driver had taken a general insurance policy to cover the risk of injuries for a period from 1.11.1998 to 30.11.1999. He renewed the policy for a further period of one year on 10.11.1999. On the same day, he met with an accident and suffered multiple injuries including fractures. X submitted the claim along with documents to the insurance company. The insurance company repudiated the claim on the ground that the premium for the renewed policy was received in the office only at 2.30 p.m. on 10.11.1999, while the accident had taken place at 10.00 a.m. on that day and hence there was no policy at the time of accident. Will X succeed if he files a complaint against the insurance company for this claim? Explain briefly? (5 Marks)

Q.21. Avinash booked his goods with Superfast Freight Carriers at Delhi for being carried to Ferozabad. The goods receipt note mentioned that all the disputes would be subject to jurisdiction of the Mumbai Court. Avinash lodged a complaint for certain deficiency in service against the transporter in the District Forum at Delhi. Superfast Carriers contested that District Forum at Delhi had no jurisdiction to entertain the complaint as the head office of the transporter was at Mumbai and the jurisdiction has been clearly stated in the goods receipt not. Is the contention of the transporter tenable? Explain briefly? (5 Marks)

Q.22. With reference to the provisions of the Consumer Protection Act, 1986, decide the following giving reasons in support of your answer.
i) Sukh Dukh Ltd. dispatched certain consignments of goods by road through Fastrack Roadways Ltd. The goods were unloaded and stored in a godown enroute on the suggestion of consignee. A fire broke out in the neighbouring godown spread to the godown and goods were destroyed. The Fastrack Roadways Ltd. claimed that there was neither negligence nor deficiency in service on their part and goods were being carried at “Owner risk” and since no special premium was paid, they were not responsible for the loss caused by fire. Whether Fastrack Roadways Ltd. is liable to pay damages to consignor?
ii) Life Insurance Corporation (LIC) formulated a scheme called ‘salary saving scheme’ under which employees of an organisation could buy an insurance policy. Premium due on each policy was collected by the employer from the salary of the employees nor did it issue any premium notice. When the widow of the deceased employee made a claim to LIC on the death of her husband, the LIC repudiated the claim on the ground that four installments of premium had not been paid. The widow was approached the consumer forum for redressal. Is the LIC liable for deficiency in service? Explain?
iii) Raman booked a ticket from Delhi to New York by Lufthansa Airlines. The airport authorities in New Delhi did not find any fault in his visa and other documents. However, at Frankfurt airport authorities instituted proceedings of verification because of which Raman missed his flight to New York. After necessary verification, Raman was able to reach New York by the next flight. The airline authorities’ tendered apology to Raman for the inconvenience caused to him and also paid as goodwill gesture a sum of Rs. 5,000. Raman intends to institute proceedings under the Consumer Protection Act, 1986 against Lufthansa Airlines for deficiency in service. Will he succeed? (10 Marks )

Q.23. With reference to the provisions of the Consumer Protection Act, 1986, decide the following giving reasons in support of your answer.
i) Sohn sent all relevant documents in an envelope regarding consignment of goods to a buyer in the USA through Fast Service Couriers. The documents did not reach the buyer as a consequence of which the buyer could not take delivery of the goods. By the time the duplicate copies of the document had been received by the buyer, the season of the goods was over. He claimed that he had suffered a loss of US $ 5,000 as a result of the negligence of the courier. The State Commission ordered the payment to be made by the Fast Service Couriers, but the National Commission in appeal reversed the order and ordered payment of US $ 100 only as per the receipt issued by the Fast Service Courier to the consignor at the time of the dispatch of the latter. Advise Sohan.
ii) Mahesh purchased a machine from Astute Ltd. to operate it himself for earning his liverhood. He took the assistance of a person to assist him in operating the machine. The machine developed fault during the warranty period. He filed a claim in the consumer forum against the company for deficiency in service. Astute Ltd. alleged that Mahesh did not operate the machine himself but had appointed a person exclusively to operate the machine. Will Mahesh succeed?
iii) Pillai purchased a car by taking a loan from Kerala cooperative Bank Ltd. and gave post-dated cheques to the bank not only in respect of repayment of loan instalments but also of premium of insurance policy for two succeeding years. On the expiry of the policy. Pillai’s car met with an accident. Will Pillai succeed in getting a claim against the
Bank ? (10 Marks)


The exchange rate and forward rate of rupee against US dollar on 3 rd November

The exchange rate and forward rate of rupee against US dollar on 3 rd November

ANSWER SHEETS PROVIDED WHATSAPP OR MOBILE 91 9924764558 OR 91 9447965521

BANKING MANAGEMENT
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
Q.1) The exchange rate and forward rate of rupee against US dollar on 3
rd
November, 2008 is given below:
(20 marks)
Spot rate 1 US dollar Rs 45.36
One month forward 3.72%
Three months forward 3.27%
Six months forward 2.76%
Twelve months forward 2.26%
Calculate the forward rate, forward premium rate and swap rate from the given data.
Q.2) In May beginning you decide that shares in X Ltd. will rise over the next month or so. The current price
is Rs 100 and you hope that the shares will be at Rs. 150 by the end of July. Give your comments if the
Option is traded and if the option is not traded. Make assumptions.
(20 marks)
Q.3) (15 marks)
A) The unit price of TSS scheme of a mutual fund is Rs 10. The public offer price (POP) of the unit is Rs
10.204 and the redemption price is Rs 9.80.
Calculate
i) Front-end load and
ii) Back-end load.
B) Mr. A can earn a return of 16% by investing in equity shares on his own. Now he is considering a recently
announced equity based mutual fund scheme in which initial expenses are 5.5 percent and annual recurring
expenses are 1.5 percent. How much should the mutual fund earn to provide Mr. A a return of 16%
(5 Marks)
Q.4) The closing price of the stock of Veryfine Ltd. at the stock exchange for 20 successive days was as
follows: (20 Marks)
Day 1 2 3 4 5 6 7 8 9 10
Closing
25
26
25
24 26 26
28
26
25
27
Price(Rs.)
Day 11 12 13 14 15 16 17 18 19 20
Closing
27 25 26
28
26
26 24 25 26 25
price(Rs)
You are required to calculate a 7 day moving average of stock price of the company and comment on its short-term
trend


Describe the Delphi method of sales forecasting

Describe the Delphi method of sales forecasting

ANSWERS PROVIDED WHATSAPP OR MOB +91 9924764558 OR +91 9447965521

1. Discuss the objectives of Production Planning and Control.

2. What do you understand by Control phase? Explain the activities under this phase.

3. What are the different demand patterns on which the sales forecasting is based? Explain.

4. Describe the Delphi method of sales forecasting.

5. What is work study? Explain excess time.

6. Explain pre-production procedures with examples.

7. What is inventory management? Explain the systems of inventory management.

8. What is E.R.P. ? Describe different uses and benefits of E.R.P.

9. What are production control techniques? Explain in detail.

Psychology

Marks: 80 Marks

SECTION A — (4 × 5 = 20 marks)
Answer any Four of the following.
1. Discuss the merits and limitations of naturalistic observation.
2. Discuss the functions of endocrine system.
3. Discuss the role of constancy in perception.
4. Explain the types of memory.
5. Explain the role of reward and punishment in learning.
6. Define stress and its reaction to stress.
7. What are the factors influencing the severity of stress?
8. Explain proactive and retroactive interference.

SECTION B — (4 × 15 = 60 marks)
Answer any FOUR questions.
9. Discuss about the various schools of psychology.
10. Explain the principles of classical conditioning in detail.
11. Evaluate the various techniques of assessing personality.
12. Explain the trait that characterizes a creative person.
13. Explain Fechner’s law in detail.
14. Elucidate the historical development of intelligence testing.
15. Explain about meditative techniques.

Quantitative Techniques

Please attempt any one question out of section A and any 10 questions out of Section B. The section A is for 20 Marks and Section B is for 80 Marks (8 Marks X 10 Questions)
Total Marks – 100
Section A

1. Distinguish between decision making under certainty and decision making under uncertainty. Mention certain methods for solving decision problems under uncertainty. Discuss how these methods can be applied to solve decision problems.

2. Distinguish between probability and non-probability sampling. Elucidate the reasons for the use of non-probability sampling in many situations in spite of its theoretical weaknesses.

3. What are models? Discuss the role of models in decision-making. How can you classify models on the basis of behavior characteristics?

4. What are matrices? How are determinants different from matrices? Discuss few applications of matrices in business.

Section B
Write short notes on any ten of the following:
(a) Concept of Maxima and Minima
(b) Types of classification of data
(c) Pascal Distribution
(d) Multi-stage sampling & Multi-phase sampling
(e) Box-Jenkins Models for Time Series
(f) Determinant of a Square Matrix
(g) Primary and Secondary Data
(h) Bernoulli Process
(i) The Student’s t Distribution
(j) Use of Auto-correlations in identifying Time Series
(K) Absolute value function
(l) Quantiles
(m) Criteria of pessimism in decision theory
(n) Cluster vs. Stratum
(o) Moving average models

(p) Step function
(q) More than type ogive
(r) Subjectivist’s criterion in decision making
(s) Double sampling
(t) Auto regressive models


Communicating in a Crisis

Communicating in a Crisis

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As a manager how do you improve workers perception in the organization?

Organizational Behaviour

Max. Marks: 80

Answer any 8 questions. All questions carry equal marks

1. As a manager how do you improve workers perception in the organization?

2. Explain the factors affecting individual differences.

3. Write a short note on Hawthorne studies.

4. Discuss the need for studying OB.

5. Briefly explain defensive mechanisms.

6. Explain the factors influencing individuals’ personality development.

7. Explain two factor theory of motivation.

8. How do you create and sustain organizational culture.

9. Explain the Managerial grid leadership style of Blake and Mouton.

10. Explain the various sources of attitudes formation.

11. What is self concept? How you defend yourself from various environment problems.

•••

Principles and Practice of Management

Communicating in a Crisis

Overview Valley High School, situated in Kodaikanal, was established in 1980 and is owned by a well respected charitable trust. It overlooks a lake and is a modern building equipped with state-of-the-art facilities. The total student enrolment is 2000, out of which more than 50% are girls and the rest boys. The students are all from affluent, educated families. The school has established a good reputation for itself, thanks to the consistently good performance of students in the public examinations. The school is headed by a lady Principal and also has a couple of Supervisors and a team of 25 teachers. The teachers have had extensive experience, are well qualified and are known for their commitment to imparting quality education to students. Due to the recent heavy monsoons, the school was faced with the problem of flooding, with water entering the rooms on the ground floor and water seepage on the terrace. Since repair work had to be done, the school had to be closed for a couple of weeks. The work was carried out by reputed contractors, but the building still looks a little run down.
The crisis the school had just reopened after this two week break. The same morning, a fire suddenly broke out on the third floor and spread to other floors, blocking the stairways. There was widespread panic, as the children started jumping off the balconies, injuring themselves in the process. The Principal and staff had a tough time trying to calm down the children and take control of the situation. Fire engines were called and several of them arrived and began their fire fighting operations. In the meanwhile, many parents also arrived and tried to enter the building to speak to the Principal. The phones were ringing continuously. There was total chaos.

Question 1 :- How communication crises arise?
Question 2 :- What Principal should do to calm down the angry parents?
Question 3 :- How school will regain its reputation? What services school should provide in order to maintain its reputation?

Case Study 2

Case Study on The power of Non-Verbal Communication

The Power of Nonverbal Communication Soon after I graduated from engineering college, I accepted a position with the Sundaram Foundry, a medium-sized firm located in a small town in Tamil Nadu. It was a good position, since I was the assistant to Mr. Vishwanath, the General Manager and president of this family owned company, although there were many technical problems, the work was extremely interesting and I soon learnt all about the foundry business. The foundry workers were mostly older men and were a closely knit team. Many of them were related and had been in the foundry for several years. Therefore, they felt that they knew the business in and out and that a technical education had no value. In fact, Mr. Vishwanath had mentioned to me even at the time of my joining, that I was the only engineer ever to be employed in the foundry. He also let me know that the foundry workers, although a good group, were very clannish, since they had been working together for several years. Therefore, it would probably take them some time to accept me. I introduced myself to the group of foundry workers, a few days after my joining. As I went around in turn, I felt them eyeing me coldly. As I went down the main aisle of the foundry, I heard them talking to each other in low voices and laughing. I found their behavior to be very childish and felt that it was best to ignore these signs of hostility. I thought that if I ignored them, they would automatically stop these antics. A few weeks after this incident, I happened to visit the enamel shop. As I entered, I noticed a worker cleaning the floor with a hose, from which water flowed at high pressure. I was aware that it was the practice to clean the shop at least once a week. I turned my back on the worker and was busy near a dipping tank, when I suddenly felt the force of a stream of water hitting me. I was almost knocked down by the pressure and slipped on the wet floor. When I turned around, the worker looked away in the other direction, as if he had not noticed this happening. However, I was pretty sure that he had intentionally turned the hose on me.

Question 1 – What message did the foundry workers and the new engineer convey to each other through their non-verbal behavior?

Question 2 – Mr. Vishwanath, the General Manager and President, was not often present at the foundry. What could this non-verbal behavior mean to the workers and the new engineer?

Question 3. How could the engineer, the foundry workers and Mr. Vishwanath be more effective, both verbally and nonverbally?

Question 4. What do you suggest that the engineer should do, after the hosing incident?

Case Study 3

BS GETS A D-PLUS ON DIVERSITY FROM MULTIETHNIC COALITOIN

On February 3, 2000, President and CEO of CBS Leslie Moonves signed a pact with Kweisi Mfume, president and CEO of the national association for advancement of colored people (NAACP), who had joined forces with the Hispanic media coalition, and the American Indians in film and television to request the CBS help to increase Indians in film and television to request that CBS help to increase ethnic presence in the television industry. The agreement stipulated the CBS would increase minority participation both on and off screen by June 30.

In April 2000, CBS announced the appointment of Josie Thomas to the newly created position of senior vice president of Diversity at CBS Television. Her job was to improve outreach and recruitment, hiring, promotion, and monitoring practices in all divisions of CBS. That fall Moonves announced that 16 of the 21 CBS shows, including news magazines, would prominently feature minorities. “We think we are a leader in this area,” Moonves said “We think we are ahead of the curves”

Despite Mooves’s Statement that as “broadcasters, we believe strongly that it is our duty to reflect the public that makes up our viewing audience,” there were many who did not feel the company was sincere in its efforts to improve hiring practices. The national Hispanic Foundation for the Arts criticized CBS for not scheduling “American Family,” A pilot drama about middle – class Hispanic family. Moonves said “American Family” simply did not fit in CBS’s schedule, since there were already too many strong dramas planned. He said he took the unusual step of allowing the show’s producer to pitch the CBS-developed networks but no one picked it up. Meanwhile, the June 30 deadline had come and gone without much outward sign of change at CBS television.

Josie Thomas is committed to CBS’s new mandate for multicultural diversity. Twelve of CBS’ prime time series will have minorities in permanent roles and other series will have minority in recurring role. Fore of the network’s shows- C.S.I., the district, the fugitive and welcome to New York have minorities in leading roles.

Since signing the agreement, CBS has established a strong working relationship with national minority supplier council in order to help minority supplier council and women’s businesses. The company has bolstered its internship program to include paid internships on the west coast, pairing up interns with their areas of interest, Such as finance or entertainment. There are 10 minority interns in the program. Moreover, CBS has now made diversity a factor in employee job performance evaluation. “Each area of the network has developed a detailed plan for diversity,” said Thomas. “Manager will be reviewed with respect to their diversity efforts and that will be a factor in compensation decisions.” Ms. Thomas noted that Ghen Maynard, an Asian American Pacific Islander, had just been promoted form director to vice president of alternative programming for the entertainment division.

“Will all believe there is a long way to go,” Thomas said. “What I have found is there are some things that already exist that are positive, such as news magazines having minority anchors. We think ‘city of angels’ renewal was an important step. The ratings were mediocre to low, and we did feel the program was a risk. It says a lot about our commitment”

In June 2001, the coalition gave the Big 4 Broadcast Networks (all of whom had signed an agreement) a report card for their efforts to diversity shows on – air and behind the scenes. CBS got a D-plus.

Mr. Nogales, of the National Hispanic Media Coalition, said he was disappointed “We expect progress; we signed for progress” “The numbers in comparison to last year actually look better” Nogales says. “There have been gains for people of color. There was movement. But it has to be movement across the board, not just for one group.” He is referring to the fact that most of the gains have been made by black actors, writes and producers. Black actors appear as regular in at least 19 of the six major networks’30 new prime-time series. Hispanics shows up in only eight, Asians in five and Native Americans in one.

The pressure being put on the networks- including threats of “boycott” and legal action – is having results. At CBS the number of minority writers and producer has more than tripled, from four to fourteen, including six executive or co executive producer however, obstacles to a fully integrated future remain serious-particularly because of misconceptions about the nature of the television audience and about the way pop culture works. Network executive worry that “ghetto shows” might promote stereotypes. They wonder if shows like The cosby show are “black” enough. Then again, they think that casting too many minorities may drive white viewers away. Some network executives are afraid to cast minority actors in “negative” roles because they may be criticized for it minority writers, who have been getting more work lately, wonder if they are not just “tokens”; and despite some progress it is still almost impossible for Hispanic actor to get non- Hispanic roles.

Both the NAACP and the coalition have been battling discrimination for years. CBS is just finding out that a profound change toward pluralism can take place only with true insight on the part of management. CBS spokesperson Chris Ender says “We have made tremendous strides to increase diversity on screen, behind the camera and in the executive suites. However we certainly recognize that more can be done and more will be done.”

As far as Nogales is concerned. “It’s still a white guy’s world,” and the june 2001 statics for network television prove he is right.

Questions
Question 1:- What advantages would accrue to CBS if it becomes a more diverse workplace?

Question 2:- Where would you have placed CBS on the organizational diversity continuum and where would you place CBS now? Why?

Question 3:- Which approach (es) to pluralism best sums up the diversity policy that is being developed at CBS? Explain

Question 4:- How do the attitudes of management at CBS as depicted in your case study affect the company’s progress toward forming a more diverse workforce? Explain.

Case Study 4

McDonald’s Listening Campaign

At the end of 2002, the world’s largest quick service retailer made its first ever quarterly loss and faced a number of challenges. It responded by launching its Plan to Win program, part of a global strategy to modernize the business, followed by the Listening Campaign in the UK. Here, Ali Carruthers explains how the two initiatives were linked in the UK, and the impact The Listening Campaign has had on communication, culture, image and media perception.

In 2003, things were looking bleak for McDonald’s. Its share price was the lowest it had been in a decade and it faced a series of seemingly insurmountable problems: It was demonized by the UK media in the fierce debate raging over obesity; it faced huge competition on the high street; and it was suffering under a wave of Anti-Americanism in the wake of the wars in Afghanistan and Iraq.
Added to this was the fact that the restaurants themselves were beginning to look dated and UK health lobbyists were determined to push home the message that McDonald’s food was bad for people.
Speaking earlier this year to the BBC, the UK CEO Peter Beresford said: “We had taken our eye off the customer, we were not customer focused, we were not customer driven. And so we reorganized and regrouped. We decided we had to stop and take stock of where we were. We had to be better, but we had to change the way we were running this business.”
The Plan to Win
The senior management put their heads together and devised the Plan to Win program, which went public in the last quarter of 2003. A key part of its focus was a shift to more choice and variety foods, with salads appearing permanently on the menu for the first time in the organization’s history. Key restaurants began to receive make over and a supporting advertising campaign with international stars was planned, all of which were intended to turn the food chain’s image around.
But just as things were beginning to look up for the organization, trouble raised its head again in the shape of the documentary film “Supersize me,” which in turn re-ignited the obesity debate in the media. It was then discovered that one of the salads McDonald’s was marketing contained more calories than one of its hamburgers. The UK press reacted with predictable glee and once again McDonald’s was in the spotlight for all the wrong reasons.
The Listening Campaign. The company responded promptly. Working with agency Blue Rubicon, the in-house communication and media relations team devised the Listening Campaign. It made the most of the arrival of new UK CEO Peter Beresford in July 2004, building on his personal credibility and that of McDonald’s with the Listening Tour. Beresford spoke directly to customers in focus groups, met with franchise holders and with employees in 12 UK cities over the space of six weeks, starting at the end of October.
The key ingredient was listening to customers and staff and then showing the results of this. “Part of the reason [for doing it] was that we had to introduce Peter very quickly to employees, customers and stakeholders,” says head of internal communications AIi Carruthers. “It was also signaling that he’d continue to work to change our culture and lead the drive for a real transparency of approach. We’ve been building on that work ever since.”
Focus groups for stakeholders

The communication team made the most of Beresford’s time by booking ahead so that local franchisees could meet him when he travelled to regional centers for customer focus groups. Next, Listening Groups were created for the company’s regional offices with corporate rather than restaurant-based employees taking part. Initial meetings were centered around three classic focus group questions:
* What works?
* What would you change?
* How would you change it?
In each session, six to 10 employees took part and the sessions lasted around two hours. After the first session, an action plan was drawn up and fed back to the employees in a second round of focus groups. Then the agreed proposed changes were put in place by the organization.
Proposed changes put in place
A range of short, medium and long term actions have been instigated as a result of the focus groups. These include a firm commitment to hold monthly town-hall sessions to regularly address key issues within the organization. “We’ve agreed to use these sessions to feature various departmental heads,” says Carruthers.
“That’s so people can put names to faces, understand the organizational structure better and get an understanding of what goes on outside their own departments.” The company has also committed itself to involving a new group of employees every six months, and to being more transparent about its promotion process and how people are assessed for promotion. It now holds regular Plan to Win meetings, which are related to the global strategy. “We’re using the town-hall sessions to communicate the global strategy to thebroader office group rather than just senior management so there’s a wider understanding of what we’re doing,” says Carruthers.
The company has also committed to a peer-nominated quarterly recognition scheme for the regional and head offices. It’s planned that the town halls will also be used in the recognition scheme. “People need to say well done to each other and be acknowledged by the senior team,” says Carruthers.
A change in company culture
According to Carruthers, the strategy has been recognized globally – a drive for greater face-to-face communication, more transparency, a growth in leadership behavior and accountability. “Basically we’ve been trying to make people feel they’re able to ask questions,” she says. “There’s nothing wrong with challenging the status quo as long as it’s done in a constructive and respectful way. If we can use some of those ideas we can probably make it a more enjoyable place for everyone to work.”
There’s no doubt that the Listening Campaign has had an impact on the senior team and general employees alike. Carruthers has had feedback from both groups and believes the exercise has been an eye-opener for the senior team: “They frequently mention experiences they’ve had in those groups. There’s nothing quite like hearing issues for yourself; the good ones and the more awkward ones.”
The feedback from focus-group participants has been very good; employees say they feel listened to and think their feedback is being taken on board. “They feel confident to ask questions or send e-mails directly to people they thought wouldn’t have listened to their suggestions previously. It’s changing the culture. Anything that builds trust and transparency is good. Now it’s about delivering on the changes that we said we’d make.”
A hotline to the CEO
A hotline to the CEO has made the company’s drive for transparency and commitment to employees even more credible. The “Ask Peter” e-mail address was established when Beresford took up his post and has seen a fair amount of traffic. “It’s word of mouth – people see that it’s well responded to,” says Carruthers. She sees it as important to be straight with employees about how e-mails are dealt with and who sees them. “We’re very up-front about the fact that I see all e-mails as well as Peter, but if we forward them to other departments, they’ll be anonymous.”
A combination of high and low technology adds to the feeling of personal contact: Beresford will often answer e-mails with a hand-written reply. In one famous instance he replied to nearly 100 in one week. “It doesn’t always happen that way, but it’s these things that make a difference. People see it’s coming from him and it’s quite a personal touch.”
Committing to communication, A new round of Listening focus groups with fresh employees is due to kick off in October. The whole cycle of questions, action-planning and feedback will be replayed. “We’re working with a new group of employees because we want to keep changing and avoid having a formalized council of volunteers,” says Carruthers. “They’ll look at what they think has happened so far, whether anything could have been done differently and then we’ll hold a review of the proposals.”
It’s a genuine commitment to keep the focus groups running on an ongoing basis. Carruthers is also expecting that the flexibility and fresh new faces will ensure that new topics arise: “They’re things that inevitably come up along the way and get added to the agenda for change. We just need to follow them through and then tell people the results.”
The results
Since Beresford’s Listening Tour there’s been a turnaround in the media coverage of McDonald’s, which has been much more positive. The Listening Campaign is changing the internal culture of the company and its focus group cycles are becoming permanent two-way communication channels.
Results back in August this year from the last employee survey showed that internal communication is now ranked by employees as number four out of 25 departments. “The communications strategy has helped people become aware of who we are and what we do,” says Carruthers. The Listening Campaign has also helped McDonald’s raise its profile externally, as it was nominated in this year’s UK Chartered Institute of Public Relations Excellence Awards and short-listed for Best Use of Media Relations in the PR Week Awards.

Questions

Question1. Based on this case, develop guidelines for improving communication with each of different stakeholders, through better listening.

Question 2:- What are the essentials for the effective communication?

Question 3:- Write about McDonald marketing plan which they have implemented for the success?

Question 4:- Do the SWOT analysis of following:-

• McDonald
• Food Industry


What are the needs for demand forecasting?

What are the needs for demand forecasting?

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Managerial Economics
Total Marks – 80
Answer any FIVE Questions. All Questions carry equal marks

1. Managerial Economics is the application of Economic Theory to business management. Discuss. [16]

2. What are the needs for demand forecasting? Explain the various steps involved in demand forecasting. [16]

3. Define production function. How is it helpful while taking output decisions? [16]

4. (a) ‘ The monopolist represents one man industry’? Comment and discuss how equilibrium position can be attained by the monopolist.
(b) Use appropriate diagrams to supplement your answer. [10+6]

5. (a) Define partnership and explain its salient features and limitations.
(b) What are the qualities of a good partner? [8+8]

6. What are the components of working capital? Explain each of them. [16]

7. Give a brief account on the important records of Accounting under Double entry system and discuss briefly the scope of each. [16]

8. (a) From the information (given with attachments), calculate [16]
i. Debt Equity ratio
ii. Current ratio
(b) Calculate Interest Coverage ratio from the information (given with attachments) .
A.

Marketing Management

Max. Marks : 80

Instructions :
(1) Attempt any five questions.
(2) All questions carry equal marks.

Q.1) Define Marketing Management. Discuss its importance and scope in today’s
dynamic Competitive Environment.

Q.2) What is ‘Product Life Cycle’ ? How Marketing Mix Decisions have to
be adjusted at different stages of PLC (Product Life Cycle) ?

Q.3) Explain various pricing strategies a firm can adopt.

Q.4) What is Product Mix ? Explain various Product Mix Strategies with suitable
examples.

Q.5) Discuss various cultural issues involved in International Marketing.

Q.6)
(A) What is Consumer Buying Behaviour ?
(B) Explain various steps involved in Buying Consumer Goods.

Q.7) Write short notes : (Any Two)
(a) Promotion through International Exhibitions and Trade Fares
(b) Use of Internet as a Marketing Tool
(c) Channel Conflicts

OPERATIONS MANAGEMENT

Maximum Marks: 100

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

1. (a) Draw a systems view diagram of any service organization of your choice. Identify its various components. Explain its interdisciplinary nature. 10
(b) What are the major characteristics of a Production system? Discuss some of its upcoming issues that provide economies in production and efficiency in the performance of the system. 10

2. (a) Explain with examples, how the TQM concept can integrate design engineering, manufacturing and service. 10
(b) What are process capability studies ? Explain the process capability index with applications to a real life example. 10

3. (a) Compare traditional process planning with Computer Aided Process Planning (CAPP). Also explain a generative CAPP system. 10
(b) Explain the objectives of Total Productive maintenance. Give its importance. Also comment on the concept of TPM promotion. 10

4. (a) Why is forecasting required in operations management ? Discuss the concept of forecast error as applied to different conditions. 10
(b) How are quantitative models of forecasting different from qualitative models ? Discuss in detail time-series model as used for forecasting. 10

5. (a) What is facility planning ? Explain with examples different types of layouts as used in manufacturing organisations. 10
(b) Discuss work measurement as a process to establish task time. Explain the various techniques for developing time standards. 10

6. (a) Explain just in time manufacturing with the help of examples. Discuss its advantages and disadvantages. 10
(b) For an independent demand inventory model, derive the equation for Economic Order Quantity. List all assumptions. 10

7. Write short notes on any four of the following: 4×5=20
(a) OPT
(b) Break even analysis
(c) Lean manufacturing
(d) Kanban system
(e) Line of Balance for Production Control
(f) Purpose of aggregate plans.


FINANCIAL ACCOUNTANCY CASE STUDY ANSWER PROVIDED

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FINANCIAL ACCOUNTANCY
Total Marks: 80
CASE 1
M/S EXCEL-TECH ELECTRONICS
M/s. Excel – tech Electronics, a consumer electronics outlet, was opened two years ago in Delhi. Hard work and personal attention shown by the proprietor, Mr. Sam, has brought success. However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank credit cards. Mr. Sam is now considering a new policy of offering installment sales on terms of 25 per cent down payment and 25 per cent per month for three months as well as continuing to accept cash and bank credit cards.
Mr. Sam feels this policy will boost sales by 50 percent. All the increases in sales will be credit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales projections for this year without the new policy are given in Exhibit 1.
Exhibit 1 Sales Projections and Fixed costs
Month
Projected sales without installment option
Projected sales with installment option
January
Rs. 8,00,000
Rs. 10,00,000
February
4,00,000
6,00,000
March
3,00,000
4,50,000
April
2,00,000
3,00,000
May
2,00,000
3,00,000
June
1,50,000
2,25,000
July
1,50,000
2,25,000
August
2,00,000
3,00,000
September
3,00,000
4,50,000
October
5,00,000
7,50,000
November
5,00,000
15,00,000
December
8,00,000
12,00,000
AN ISO 9001 : 2008 CERTIFIED INSTITUTE
Total Sales
48,00,000
72,00,000
Fixed cost
2,40,000
2,40,000
He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2 per cent fee is paid, and 33.33 per cent on installment sales. Also, for short term seasonal requirements, the film takes loan from chit fund to which Mr. Sam subscribes @ 1.8 per cent per month.
Their success has been due to their policy of selling at discount price. The purchase per unit is 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes that the new policy will increase miscellaneous cost by Rs. 25,000.
The business being cyclical in nature, the working capital finance is done on trade – off basis. The proprietor feels that the new policy will lead to bad debts of 1 per cent.
Questions
(1) As a financial consultant, advise the proprietor whether he should go for the extension of credit facilities.
(2) Also prepare cash budget for one year of operation of the firm, ignoring interest. The minimum desired cash balance & Rs. 30,000, which is also the amount the firm, has on January 1. Borrowings are possible which are made at the beginning of a month and repaid at the end when cash is available.
(3) Give your views about M/s. Excel’s situations.
(4) If you were Mr. Sam, what will you do?
CASE 2
SAFEDRIVE TYRE LTD
SAFEDRIVE Tyre Ltd manufacturer’s tyres under the brand name “Super Tread‟ for the domestic car market. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakhs each having a useful life of 7 years, with no salvage value.
After extensive research and development, SAFEDRIVE Tyre Ltd has recently developed a new tyre, the „Hyper Tread‟ and must decide whether to make the investments necessary to produce and market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount of wet weather and off road driving in addition to normal highway usage. The research and development costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the market beginning this year and SAFEDRIVE Tyres expects it to stay on the market for a total of three years. Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread type tyre.
As a financial analyst at SAFEDRIVE Tyre, Mr. Mani asked by the Chief Financial Officer (CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation or whether or not to proceed with the investment. He has been informed that all previous investments in the Hyper Tread project are sunk costs are only future cash flows should be considered. Except for the initial investments, which occur immediately, assume all cash flows occur at the year-end.
Smoothedrive Tyre must initially invest Rs. 72,00,00,000 in production equipments to make the Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value (WDV) method for tax purposes. The new production equipments will allow the company to follow flexible manufacturing technique, that is both the brands of tyres can be produced using the same equipments. The equipments is expected to have a 7-year useful life and can be sold for Rs. 10,00,000 during the fourth year. The company does not have any other machines in the block of 25 per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with an estimated removal cost of one machine for Rs. 50,000.
Operating Requirements
The operating requirements of the existing machines and the new equipment are detailed in Exhibits 11.1 and 11.2 respectively.
Exhibit 11.1 Existing Machines
 Labour costs (expected to increase 10 per cent annually to account for inflation) :
(a) 20 unskilled labour @ Rs. 4,000 per month
(b) 20 skilled personnel @ Rs. 6,000 per month.
(c) 2 supervising executives @ Rs. 7,000 per month.
(d) 2 maintenance personnel @ Rs. 5,000 per month.
 Maintenance cost :
Years 1-5 : Rs. 25 lakh
Years 6-7 : Rs. 65 lakh
 Operating expenses : Rs. 50 lakh expected to increase at 5 per cent annually.
 Insurance cost / premium :
Year 1 : 2 per cent of the original cost of machine
After year 1 : Discounted by 10 per cent.
Exhibit 11.2 New production Equipment
 Savings in cost of utilities : Rs. 2.5 lakh
 Maintenance costs :
Year 1 – 2 : Rs. 8 lakh
Year 3 – 4 : Rs. 30 lakh
 Labour costs :
9 skilled personnel @ Rs. 7,000 per month
1 maintenance personnel @ Rs. 7,000 per month.
 Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1 maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary.
 Insurance premium
Year 1 : 2 per cent of the purchase cost of machine
After year 1 : Discounted by 10 per cent.
The opening expenses do not change to any considerable extent for the new equipment and the difference is negligible compared to the scale of operations.
SAFEDRIVE Tyre intends to sell Hyper Tread of two distinct markets:
1. The original equipment manufacturer (OEM) market: The OEM market consists primarily of the large automobile companies who buy tyres for new cars. In the OEM market, the Hyper Tread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each Hyper Tread is Rs. 600.
2. The replacement market: The replacement market consists of all tyres purchased after the automobile has left the factory. This markets allows higher margins and SAFEDRIVE Tyre expects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as in the OEM market.
SAFEDRIVE Tyre expects to raise prices by 1 percent above the inflation rate.
The variable costs will also increase by 1 per cent above the inflation rate. In addition, the Hyper Tread project will incur Rs. 2,50,000 in marketing and general administration cost in the first year which are expected to increase at the inflation rate in subsequent years.
SAFEDRIVE Tyre‟s corporate tax rate is 35 per cent. Annual inflation is expected to remain constant at 3.25 per cent. SAFEDRIVE Tyre uses a 15 per cent discount rate to evaluate new product decisions.
The Tyre Market
Automotive industry analysts expect automobile manufacturers to have a production of 4,00,000 new cars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres (the spare tyres are undersized and fall in a different category) SAFEDRIVE Tyre expects the Hyper Tread to capture an 11 per cent share of the OEM market.
The industry analysts estimate that the replacement tyre market size will be one crore this year and that it would grow at 2 per cent annually. SAFEDRIVE Tyre expects the Hyper Tread to capture an 8 per cent market share.
You also decide to consider net working capital (NWC) requirements in this scenario. The net working capital requirement will be 15 per cent of sales. Assume that the level of working capital is adjusted at the beginning of the year in relation to the expected sales for the year. The working capital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt. The bad debt will be tax-deductible expenses.
Questions
1) As a finance analyst, prepare a report for submission to the CFO and the Board of Directors, explaining to them the feasibility of the new investment.
2) If you are the CFO of this tyre company, what decision will you take?
3) What is your opinion about purchasing new production equipment?
4) Give your views about the situation of Safedrive Tyre Company.
CASE 3
COMPUTATION OF COST OF CAPITAL OF HALCO LTD
In October 2003, Sneha Kapoor, a recent MBA graduate and newly appointed assistant to the Financial Controller of HALCO Ltd, was given a list of six new investment projects proposed for the following year. It was her job to analyse these projects and to present her findings before the Board of Directors at its annual meeting to be held in 10 days. The new project would require an investment of Rs. 2.4 crore.
HALCO Ltd was founded in 1965 by Late Shri. A. V. Singh. It gained recognition as a leading producer of high quality aluminum, with the majority of its sales being made to Japan. During the rapid economic expansion of Japan in the 1970s, demand for aluminum boomed, and HALCO‟s sales grew rapidly. As a result of this rapid growth and recognition of new opportunities in the energy market, HALCO began to diversify its products line. While retaining its emphasis on aluminum production, it expanded operations to include uranium mining and the production of electric generators, and finally, it went into all phases of energy production. By 2003, HALCO‟s sales had reached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.
As HALCO expanded its products line in the early 1990s, it also formalized its caital budgeting procedure. Until 1992, capital investment projects were selected primarily on the basis of the average return on investment calculations, with individual departments submitting these calculations for projects falling within their division. In 1996, this procedure was replaced by one using present value as the decision making criterion. This change was made to incorporate cash flows rather than accounting profits into the decision making analysis, in addition to adjusting these flows for the time value of money. At the time, the cost of capital for HALCO was determined to be 12 per cent, which has been used as the discount rate for the past 5 years. This rate was determined by taking a weighted average cost HALCO had incurred in raising funds from the capital market over the previous 10 years.
It had originally been Sneha‟s assignment to update this rate over the most recent 10-year period and determine the net present value of all the proposed investment opportunities using this newly calculated figure. However, she objected to this procedure, stating that while this calculation gave a good estimate of “the past cost” of capital, changing interest rates and stock prices made this calculation of little value in the present. Sneha suggested that current cost of raising funds in the capital market be weighted by their percentage mark-up of the capital structure. This proposal was received enthusiastically by the Financial Controller of the HALCO, and Sneha was given the assignment of recalculating HALCO‟s cost of capital and providing a written report for the Board of Directors explaining and justifying this calculation.
To determine a weighted average cost of capital for HALCO, it was necessary for Sneha to examine the cost associated with each source of funding used. In the past, the largest sources of funding had been the issuance of new equity shares and internally generated funds. Through conversations with Financial Controller and other members of the Board of Directors, Sneha learnt that the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1.
Exhibit 1 HALCO Ltd Balance Sheet for Year Ending March 31, 2003
Assets
Liabilities and Equity
Cash
Accounts receivable
Inventories
Total current assets
Net fixed assets
Goodwill
Total assets
Rs. 90,00,000
3,10,00,000
1,20,00,000
5,20,00,000
19,30,00,000
70,00,000
25,20,00,000
Accounts payable
Short-term debt
Accrued taxes
Total current liabilities
Long-term debt
Preference shares
Retained earnings
Equity shares
Total liabilities and equity shareholders fund
Rs. 8,50,000
1,00,000
11,50,000
1,20,00,000
7,20,00,000
4,80,00,000
1,00,00,000
11,00,000
25,20,00,000
She further determined that the strong growth patterns that HALCO had exhibited over the last ten years were expected to continue indefinitely because of the dwindling supply of US and Japanese domestic oil and the growing importance of other alternative energy resources. Through further investigations, Sneha learnt that HALCO could issue additional equity share, which had a par value of Rs. 25 pre share and were selling at a current market price of Rs. 45. The expected dividend for the next period would be Rs. 4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future. The flotation cost is expected to be on an average Rs. 2 per share.
Preference shares at 11 per cent with 10 years maturity could also be issued with the help of an investment banker with an investment banker with a per value of Rs. 100 per share to be redeemed at par. This issue would involve flotation cost of 5 per cent.
Finally, Sneha learnt that it would be possible for HALCO to raise an additional Rs. 20 lakh through a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20 lakh would cost 14 per cent. Short-term debt has always been used by HALCO to meet working capital requirements and as HALCO grows, it is expected to maintain its proportion in the capital structure to support capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 years maturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds via long-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-year bonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional funds raised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent coupon yield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs. 100 to be redeemed at par.
In the past, HALCO had calculated a weighted average of these sources of funds to determine its cost of capital. In discussion with the current Financial Controller, the point was raised that while this served as an appropriate calculation for external funds, it did not take into account the cost of internally generated funds. The Financial Controller agreed that there should be some cost associated with retained earnings and need to be incorporated in the calculations but didn‟t have any clue as to what should be the cost.
HALCO Ltd is subjected to the corporate tax rate of 40 per cent.
Questions
1. From the facts outlined above, what report would Sneha submit to the Board of Directors of HALCO Ltd.?
2. Give your views as the financial controller of HALCO Ltd.
3. Write about the balance sheet of HALCO Ltd.
4. If you were Sneha, what suggestion you will present in front of the management.
CASE 4
ABC LTD
ABC Ltd is an Indian company based in Greater Noida, which manufactures packaging materials for food items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars for its chairman, general manager and five senior managers. The book value of the seven cars is Rs. 20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same block of depreciation @ 25 per cent.
A German multinational company (MNC) BYR Ltd, has acquired ABC Ltd in all cash deal. The merged company called BYR India Ltd is proposing to expand the manufacturing capacity by four folds and the organization structure is reorganized from top to bottom. The German MNC has the policy of providing transport facility to all senior executives (22) of the company because the manufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of the executives were staying.
Prices of the cars to be provided to the Executives have been as follows :
Manager (10)
Santro King
Rs. 3,75,000
DGM and GM (5)
Honda City
6,75,000
Director (5)
Toyota Corolla
9,25,000
Managing Director (1)
Sonata Gold
13,50,000
Chairman (1)
Mercedes benz
23,50,000
The company is evaluating two options for providing these cars to executives
Option 1: The company will buy the cars and pay the executives fuel expenses, maintenance expenses, driver allowance and insurance (at the year – end). In such case, the ownership of the car will lie with the company. The details of the proposed allowances and expenditures to be paid are as follows:
a) Fuel expense and maintenance Allowances per month
Particulars
Fuel expenses
Maintenance allowance
Manager
DGM and GM
Director
Managing Director
Chairman
Rs. 2,500
5,000
7,500
12,000
18,000
Rs. 1,000
1,200
1,800
3,000
4,000
b) Driver Allowance: Rs. 4,000 per month (Only Chairman, Managing Director and Directors are eligible for driver allowance.)
c) Insurance cost: 1 per cent of the cost of the car.
The useful life for the cars is assumed to be five years after which they can be sold at 20 per cent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using written down method of depreciation. The company will have to borrow to finance the purchase from a bank with interest at 14 per cent repayable in five annual equal installments payable at the end of the year.
Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at lease for the period of five years. The monthly lease rentals for the cars are as follows (assuming that the total of monthly lease rentals for the whole year are paid at the end of each year.
Santro Xing Rs. 9,125
Honda City 16,325
Toyota Corolla 27,175
Sonata Gold 39,250
Mercedes Benz 61,250
Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee will claim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltime supervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease. The company will have to bear additional miscellaneous expense of Rs. 5,000 per month for providing him the PC, mobile phone and so on.
The company‟s effective tax rate is 40 per cent and its cost of capital is 15 per cent.
Questions
1. Analyse the financial viability of the two options. Which option would you recommend? Why?
2. Give your views about this situation
3. Which option is better as per current situation?
4. Write the advantage and disadvantage of Option 1 and Option 2.
CASE 5
SPIC LPG LTD
Introduction
SPIC LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 2013. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.
The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor.
Statement of the Problem:
Mr. I. M. Smart, DGM (Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.
He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him.
Profile of SPIC LPG Ltd.
1) Purchases: The company purchases LPG in bulk from various importers ex-Mumbai and Kandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.
2) Storage and Bottling: The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days per month on an average. The desired level of inventory at various stages is as under.
 LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales.
 Filled Cylinders – 2 days average sales.
 Work-in Process inventory – zero.
3) Marketing: The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on company‟s expense at the distributor‟s godown, in exchange of equal number of empty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250 cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of the draft, the cylinders are normally dispatched on the same day. However, for every truck purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one truck-load.
4) Salaries and Wages: The following payments are made:
 Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month.
 Security agency – Rs. 30,000 per month paid on 10th of subsequent month.
 Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last working day.
5) Overheads:
 Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10th of subsequent month.
 Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month.
 Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at the beginning of the year.
 Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year.
 Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month.
 Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the vendors. This includes expenditure on account of lubricants, spares and other stores.
 Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly basis on the 15th of the subsequent month.
 All transportation charges as per contracts – paid on the 10th subsequent month.
 Sales tax as per applicable rates is deposited on the 7th of the subsequent month.
6) Sales: Average sales are 2,500 cylinders per day during the year. However, during the winter months (December to February), there is an incremental demand of 20 per cent.
7) Average Inventories : The average stocks maintained by the company as per its policy guidelines :
 Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days consumption.
 Maintenance spares – Rs. 1 lakh
 Lubricants – Rs. 20,000
 Diesel (for DG sets and fire engines) – Rs. 15,000
 Other stores (stationary, safety items) – Rs. 20,000
8) Minimum cash balance including bank balance required is Rs. 5 lakh.
9) Additional Information for Calculating Incremental Working Capital During Winter.
 No increase in any inventories take place except in the inventory of bulk LPG, which increases in the same proportion as the increase of the demand. The actual requirements of LPG for additional supplies are procured under the same terms and conditions from the suppliers.
 The labour cost for additional production is paid at double the rate during wintes.
 No changes in other administrative overheads.
 The expenditure on power consumption during winter increased by 10 per cent. However, during other months the power consumption remains the same as the decrease owing to reduced production is offset by increased consumption on account of compressors /Acs.
 Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter.
 No change in time schedules for any payables / receivables.
 The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to statutory requirements.
Question:
1. Determine working capital of SPIC LPG Ltd.
2. Give your views about the working capital of SPIC LPG Ltd.
3. Write the real problem of this case.
4. Brief the profile of SPIC LPG Ltd.
CASE 6
GREAVES LIMITED
Started as trading firm in 2002, Greaves Limited has diversified into manufacturing and marketing of high technology engineering products and systems. The company‟s mission is “manufacture and market a wide range of high quality products, services and systems of world class technology to the total satisfaction of customers in domestic and overseas market.”
Over the years Greaves has brought to India state of the art technologies in various engineering fields by setting up manufacturing units and subsidiary and associate companies. The sales of Greaves Limited has increased from Rs 214 crore in 2006 to Rs 801 crore in 2013. The sales of Greaves Limited has increased from Rs 214 crore in to Rs 801 crore in 2013. Profits before interest and tax (PBIT) of the company increased from Rs 15 crore to Rs 83 crore in 2013. The market price of the company‟s share has shown ups and downs during 2006 to 2013. How has the company performed? The following question need answer to fully understand the performance of the company:
Exhibit 1
GREAVES LTD.
Profit and Loss Account ending on 31 March (Rupees in crore)
2006
2007
2008
2009
2010
2011
2012
2013
Sales
Raw Material and Stores
Wages and Salaries
Power and fuel
Other Mfg. Expenses
Other Expenses
Depreciation
Marketing and Distribution
Change in stock
214.38
170.67
13.54
0.52
0.61
11.85
1.85
4.86
1.18
253.10
202.84
15.60
0.70
0.49
15.48
1.72
5.67
3.10
287.81
230.81
18.03
1.11
0.88
16.35
1.52
5.14
4.93
311.14
213.79
37.04
3.80
2.37
25.54
4.62
5.17
0.48
354.25
245.63
37.96
4.43
2.36
31.60
5.99
9.67
– 1.13
521.56
379.83
48.24
6.66
3.57
41.40
8.53
10.81
5.63
728.15
543.56
60.48
7.70
4.84
45.74
9.30
12.44
11.86
801.11
564.35
69.66
9.23
5.49
48.64
11.53
16.98
– 5.87
Total Op Expenses
202.72
239.40
268.91
291.85
338.77
493.41
672.20
731.75
Operating Profit
Other Income
Non-recurring Income
11.61
2.14
1.30
13.70
3.69
2.28
18.90
4.97
0.10
19.29
4.24
10.98
15.48
7.72
16.44
28.15
14.35
0.46
55.95
11.35
0.52
69.36
13.08
1.75
PBIT
15.10
19.67
23.97
34.51
39.64
42.98
65.67
82.64
Interest
5.56
6.77
11.92
19.62
17.17
21.48
28.25
27.54
PBT
9.54
12.90
12.05
14.89
22.47
21.50
37.42
55.10
Tax
PAT
3.00
6.54
3.60
9.30
4.90
7.15
0.00
14.89
4.00
18.47
7.00
14.50
8.60
28.82
15.80
39.30
Dividend
Retained Earnings
1.80
4.74
2.00
7.30
2.30
4.85
4.06
10.83
7.29
11.18
8.58
5.92
12.85
15.97
14.18
25.12
Exhibit 2
GREAVES LTD.
Balance Sheet (Rupees in crore)
2006
2007
2008
2009
2010
2011
2012
2013
ASSETS
Land and Building
Plant and Machinery
Other Fixed Assets
Capital WIP
Gross Fixed Assets
Less: Accu. Depreciation
Net Tangible Fixed Assets
Intangible Fixed Assets
3.88
11.98
3.64
0.09
19.59
12.91
6.68
0.21
4.22
12.68
4.14
0.26
21.30
14.56
6.74
0.19
4.96
12.98
4.38
10.25
23.57
15.79
7.78
0.05
21.70
33.49
5.18
11.27
71.64
19.84
51.80
4.40
30.82
50.78
6.95
34.84
123.39
25.74
97.65
22.03
39.71
75.34
8.53
14.37
137.95
33.90
104.05
22.45
42.34
92.49
8.87
13.92
157.62
42.56
115.06
20.04
43.07
104.45
10.35
14.36
172.23
53.87
118.86
21.11
Net Fixed Assets
6.89
6.93
7.83
56.20
119.68
126.50
135.10
139.97
Raw Materials
Finished Goods
Inventory
Accounts Receivable
Other Receivable
Investments
Cash and Bank Balance
Current Assets
Total Assets
LIABILITIES AND CAPITAL
Equity Capital
Preference Capital
Reserves and Surplus
5.26
29.37
34.63
38.16
32.62
3.55
8.36
117.32
124.21
9.86
0.20
27.60
6.91
33.72
40.63
53.24
40.47
14.95
8.91
158.20
165.13
9.86
0.20
32.57
7.26
38.65
45.91
67.97
49.19
15.15
12.71
190.93
198.76
9.86
0.20
37.42
21.05
53.39
74.44
93.30
24.54
27.58
13.29
233.15
289.35
18.84
0.20
100.35
28.13
52.26
80.39
122.20
59.12
73.50
18.38
353.59
473.27
29.37
0.20
171.03
44.03
58.09
102.12
133.45
64.32
75.01
30.08
404.98
531.48
29.44
0.20
176.88
53.62
69.97
123.59
141.82
76.57
75.07
33.46
450.51
585.61
44.20
0.20
175.41
50.94
64.09
115.03
179.92
107.31
76.45
48.18
526.89
666.86
44.20
0.20
198.79
Net Worth
37.66
42.63
47.48
119.39
200.60
206.52
219.81
243.19
Bank Borrowings
Institutional Borrowings
Debentures
Fixed Deposits
Commercial Paper
Other Borrowings
Current Portion of LT Debt
14.81
4.13
4.77
12.31
0.00
2.33
0.00
19.45
3.43
16.57
14.45
0.00
3.22
0.00
26.51
9.17
19.99
15.03
0.00
3.10
0.08
24.82
38.09
4.56
14.08
0.00
3.18
0.12
55.12
38.76
4.37
15.57
15.00
17.08
15.08
64.97
69.69
4.37
17.75
0.00
1.97
0.02
70.08
89.26
2.92
20.81
0.00
2.36
1.49
118.28
63.60
1.49
19.29
0.00
2.57
1.57
Borrowings
38.35
57.12
73.72
84.61
130.82
158.73
183.94
203.66
Sundry Creditors
Other Liabilities
Provision for tax, etc.
Proposed Dividends
Current Portion of LT Dept
37.52
5.70
3.18
1.80
0.00
49.40
10.16
3.82
2.00
0.00
59.34
10.70
5.14
2.30
0.08
77.27
3.59
0.31
4.06
0.12
113.66
1.42
4.40
7.29
15.08
148.13
1.99
7.70
8.58
0.02
153.63
1.70
12.19
12.85
1.49
179.79
3.04
21.43
14.18
1.57
Current Liabilities
48.20
65.38
77.56
85.35
141.85
166.42
181.86
220.01
TOTAL LIABILITIES
Additional information:
Share premium reserve
Revaluation reserve
Bonus equity capital
124.21
8.51
165.13
8.51
198.76
8.51
289.35
47.69
8.91
8.51
473.27
107.40
8.70
8.51
531.67
107.91
8.50
8.51
585.61
93.35
8.31
23.25
666.86
93.35
8.15
23.25
Exhibit 3
GREAVES LTD.
Share Price Data
2006
2007
2008
2009
2010
2011
2012
2013
Closing share price (Rs)
Yearly high share price (Rs)
Yearly low share price (Rs)
Market capitalization (Rs crore
EPS (Rs)
Book value (Rs)
27.19
29.25
26.78
65.06
4.79
35.64
34.74
45.28
21.61
67.77
6.82
37.22
121.27
121.27
34.36
236.56
9.73
42.54
66.67
126.33
48.34
274.84
1.93
57.75
78.34
90.00
42.67
346.35
2.66
40.61
71.67
100.01
68.34
316.87
7.16
64.98
47.5
90.00
45.00
210.02
5.03
45.35
48.25
85.00
43.75
213.34
9.01
50.73
Questions
1. How profitable are its operations? What are the trends in it? How has growth affected the profitability of the company?
2. What factors have contributed to the operating performance of Greaves Limited? What is the role of profitability margin, asset utilization, and non-operating income?
3. How has Greaves performed in terms of return on equity? What is the contribution of return on investment, the way of the business has been financed over the period?
4. Give your view about the situation of Greaves Limited.

FINANCIAL ACCOUNTANCY CASE STUDY ANSWER PROVIDED


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Case 1: Zip Zap Zoom Car Company

Zip Zap Zoom Company Ltd is into manufacturing cars in the small car (800 cc) segment. It was set up 15 years back and since its establishment it has seen a phenomenal growth in both its market and profitability. Its financial statements are shown in Exhibits 1 and 2 respectively.
The company enjoys the confidence of its shareholders who have been rewarded with growing dividends year after year. Last year, the company had announced 20 per cent dividend, which was the highest in the automobile sector. The company has never defaulted on its loan payments and enjoys a favorable face with its lenders, which include financial institutions, commercial banks and debenture holders.
The competition in the car industry has increased in the past few years and the company foresees further intensification of competition with the entry of several foreign car manufactures many of them being market leaders in their respective countries. The small car segment especially, will witness entry of foreign majors in the near future, with latest technology being offered to the Indian customer. The Zip Zap Zoom’s senior management realizes the need for large scale investment in up gradation of technology and improvement of manufacturing facilities to pre-empt competition.
Whereas on the one hand, the competition in the car industry has been intensifying, on the other hand, there has been a slowdown in the Indian economy, which has not only reduced the demand for cars, but has also led to adoption of price cutting strategies by various car manufactures. The industry indicators predict that the economy is gradually slipping into recession.

Exhibit 1 Balance sheet as at March 31,200 x
(Amount in Rs. Crore)

Source of Funds
Share capital 350
Reserves and surplus 250 600
Loans :
Debentures (@ 14%) 50
Institutional borrowing (@ 10%) 100
Commercial loans (@ 12%) 250
Total debt 400
Current liabilities 200
1,200

Application of Funds
Fixed Assets
Gross block 1,000
Less : Depreciation 250
Net block 750
Capital WIP 190
Total Fixed Assets 940
Current assets :
Inventory 200
Sundry debtors 40
Cash and bank balance 10
Other current assets 10
Total current assets 260
-1200

Exhibit 2 Profit and Loss Account for the year ended March 31, 200x
(Amount in Rs. Crore)
Sales revenue (80,000 units x Rs. 2,50,000) 2,000.0
Operating expenditure :
Variable cost :
Raw material and manufacturing expenses 1,300.0
Variable overheads 100.0
Total 1,400.0
Fixed cost :
R & D 20.0
Marketing and advertising 25.0
Depreciation 250.0

Personnel 70.0
Total 365.0

Total operating expenditure 1,765.0
Operating profits (EBIT) 235.0
Financial expense :
Interest on debentures 7.7
Interest on institutional borrowings 11.0
Interest on commercial loan 33.0 51.7
Earnings before tax (EBT) 183.3
Tax (@ 35%) 64.2
Earnings after tax (EAT) 119.1
Dividends 70.0
Debt redemption (sinking fund obligation)** 40.0
Contribution to reserves and surplus 9.1
* Includes the cost of inventory and work in process (W.P) which is dependent on demand (sales).
** The loans have to be retired in the next ten years and the firm redeems Rs. 40 crore every year.
The company is faced with the problem of deciding how much to invest in up
gradation of its plans and technology. Capital investment up to a maximum of Rs. 100
crore is required. The problem areas are three-fold.
• The company cannot forgo the capital investment as that could lead to reduction in its market share as technological competence in this industry is a must and customers would shift to manufactures providing latest in car technology.
• The company does not want to issue new equity shares and its retained earning are not enough for such a large investment. Thus, the only option is raising debt.
• The company wants to limit its additional debt to a level that it can service without taking undue risks. With the looming recession and uncertain market conditions, the company perceives that additional fixed obligations could become a cause of financial distress, and thus, wants to determine its additional debt capacity to meet the investment requirements.
Mr. Shortsighted, the company’s Finance Manager, is given the task of determining the additional debt that the firm can raise. He thinks that the firm can raise Rs. 100 crore worth debt and service it even in years of recession. The company can raise debt at 15 per cent from a financial institution. While working out the debt capacity. Mr. Shortsighted takes the following assumptions for the recession years.
a) A maximum of 10 percent reduction in sales volume will take place.
b) A maximum of 6 percent reduction in sales price of cars will take place.
Mr. Shorsighted prepares a projected income statement which is representative of the recession years. While doing so, he determines what he thinks are the “irreducible minimum” expenditures under

recessionary conditions. For him, risk of insolvency is the main concern while designing the capital structure. To support his view, he presents the income statement as shown in Exhibit 3.

Exhibit 3 projected Profit and Loss account
(Amount in Rs. Crore)
Sales revenue (72,000 units x Rs. 2,35,000) 1,692.0
Operating expenditure
Variable cost :
Raw material and manufacturing expenses 1,170.0
Variable overheads 90.0
Total 1,260.0
Fixed cost :
R & D —
Marketing and advertising 15.0
Depreciation 187.5
Personnel 70.0
Total 272.5
Total operating expenditure 1,532.5
EBIT 159.5
Financial expenses :
Interest on existing Debentures 7.0
Interest on existing institutional borrowings 10.0
Interest on commercial loan 30.0
Interest on additional debt 15.0 62.0
EBT 97.5
Tax (@ 35%) 34.1
EAT 63.4
Dividends —
Debt redemption (sinking fund obligation) 50.0*
Contribution to reserves and surplus 13.4

* Rs. 40 crore (existing debt) + Rs. 10 crore (additional debt)
Assumptions of Mr. Shorsighted
• R & D expenditure can be done away with till the economy picks up.
• Marketing and advertising expenditure can be reduced by 40 per cent.
• Keeping in mind the investor confidence that the company enjoys, he feels that the company can forgo paying dividends in the recession period.

He goes with his worked out statement to the Director Finance, Mr. Arthashatra, and advocates raising Rs. 100 crore of debt to finance the intended capital investment. Mr. Arthashatra does not feel comfortable with the statements and calls for the company’s financial analyst, Mr. Longsighted.
Mr. Longsighted carefully analyses Mr. Shortsighted’s assumptions and points out that insolvency should not be the sole criterion while determining the debt capacity of the firm. He points out the following :
• Apart from debt servicing, there are certain expenditures like those on R & D and marketing that need to be continued to ensure the long-term health of the firm.
• Certain management policies like those relating to dividend payout, send out important signals to the investors. The Zip Zap Zoom’s management has been paying regular dividends and discontinuing this practice (even though just for the recession phase) could raise serious doubts in the investor’s mind about the health of the firm. The firm should pay at least 10 per cent dividend in the recession years.
• Mr. Shortsighted has used the accounting profits to determine the amount available each year for servicing the debt obligations. This does not give the true picture. Net cash inflows should be used to determine the amount available for servicing the debt.
• Net Cash inflows are determined by an interplay of many variables and such a simplistic view should not be taken while determining the cash flows in recession. It is not possible to accurately predict the fall in any of the factors such as sales volume, sales price, marketing expenditure and so on. Probability distribution of variation of each of the factors that affect net cash inflow should be analyzed. From this analysis, the probability distribution of variation in net cash inflow should be analysed (the net cash inflows follow a normal probability distribution). This will give a true picture of how the company’s cash flows will behave in recession conditions.

The management recognizes that the alternative suggested by Mr. Longsighted rests on data, which are complex and require expenditure of time and effort to obtain and interpret. Considering the importance of capital structure design, the Finance Director asks Mr. Longsighted to carry out his analysis. Information on the behaviour of cash flows during the recession periods is taken into account.
The methodology undertaken is as follows :
(a) Important factors that affect cash flows (especially contraction of cash flows), like sales volume, sales price, raw materials expenditure, and so on, are identified and the analysis is carried out in terms of cash receipts and cash expenditures.

(b) Each factor’s behaviour (variation behaviour) in adverse conditions in the past is studied and future expectations are combined with past data, to describe limits (maximum favourable), most probable and maximum adverse) for all the factors.
(c) Once this information is generated for all the factors affecting the cash flows, Mr. Longsighted comes up with a range of estimates of the cash flow in future recession periods based on all possible combinations of the several factors. He also estimates the probability of occurrence of each estimate of cash flow.

Assuming a normal distribution of the expected behaviour, the mean expected
value of net cash inflow in adverse conditions came out to be Rs. 220.27 crore with standard deviation of Rs. 110 crore.
Keeping in mind the looming recession and the uncertainty of the recession behaviour, Mr. Arthashastra feels that the firm should factor a risk of cash inadequacy of around 5 per cent even in the most adverse industry conditions. Thus, the firm should take up only that amount of additional debt that it can service 95 per cent of the times, while maintaining cash adequacy.
To maintain an annual dividend of 10 per cent, an additional Rs. 35 crore has to be kept aside. Hence, the expected available net cash inflow is Rs. 185.27 crore (i.e. Rs. 220.27 – Rs. 35 crore)
Question:
Analyse the debt capacity of the company.

CASE – 2 GREAVES LIMITED

Started as trading firm in 1922, Greaves Limited has diversified into manufacturing and marketing of high technology engineering products and systems. The company’s mission is “manufacture and market a wide range of high quality products, services and systems of world class technology to the total satisfaction of customers in domestic and overseas market.”
Over the years Greaves has brought to India state of the art technologies in various engineering fields by setting up manufacturing units and subsidiary and associate companies. The sales of Greaves Limited has increased from Rs 214 crore in 1990 to Rs 801 crore in 1997. The sales of Greaves Limited has increased from Rs 214 crore in 1990 to Rs 801 crore in 1997. Profits before interest and tax (PBIT) of the company increased from Rs 15 crore to Rs 83 crore in 1997. The market price of the company’s share has shown ups and downs during 1990 to 1997. How has the company performed? The following question need answer to fully understand the performance of the company:

Exhibit 1

GREAVES LTD.
Profit and Loss Account ending on 31 March (Rupees in crore)
1990 1991 1992 1993 1994 1995 1996 1997
Sales
Raw Material and Stores
Wages and Salaries
Power and fuel
Other Mfg. Expenses
Other Expenses
Depreciation
Marketing and Distribution
Change in stock 214.38
170.67
13.54
0.52
0.61
11.85
1.85
4.86
1.18 253.10
202.84
15.60
0.70
0.49
15.48
1.72
5.67
3.10 287.81
230.81
18.03
1.11
0.88
16.35
1.52
5.14
4.93 311.14
213.79
37.04
3.80
2.37
25.54
4.62
5.17
0.48 354.25
245.63
37.96
4.43
2.36
31.60
5.99
9.67
– 1.13 521.56
379.83
48.24
6.66
3.57
41.40
8.53
10.81
5.63 728.15
543.56
60.48
7.70
4.84
45.74
9.30
12.44
11.86 801.11
564.35
69.66
9.23
5.49
48.64
11.53
16.98
– 5.87
Total Op Expenses 202.72 239.40 268.91 291.85 338.77 493.41 672.20 731.75

Operating Profit
Other Income
Non-recurring Income
11.61
2.14
1.30
13.70
3.69
2.28
18.90
4.97
0.10
19.29
4.24
10.98
15.48
7.72
16.44
28.15
14.35
0.46
55.95
11.35
0.52
69.36
13.08
1.75
PBIT 15.10 19.67 23.97 34.51 39.64 42.98 65.67 82.64
Interest 5.56 6.77 11.92 19.62 17.17 21.48 28.25 27.54
PBT 9.54 12.90 12.05 14.89 22.47 21.50 37.42 55.10
Tax
PAT
Dividend
Retained Earnings 3.00
6.54
1.80
4.74 3.60
9.30
2.00
7.30 4.90
7.15
2.30
4.85 0.00
14.89
4.06
10.83 4.00
18.47
7.29
11.18 7.00
14.50
8.58
5.92 8.60
28.82
12.85
15.97 15.80
39.30
14.18
25.12

Exhibit 2

GREAVES LTD.
Balance Sheet (Rupees in crore)
1990 1991 1992 1993 1994 1995 1996 1997
ASSETS
Land and Building
Plant and Machinery
Other Fixed Assets
Capital WIP
Gross Fixed Assets
Less: Accu. Depreciation
Net Tangible Fixed Assets
Intangible Fixed Assets
3.88
11.98
3.64
0.09
19.59
12.91
6.68
0.21
4.22
12.68
4.14
0.26
21.30
14.56
6.74
0.19
4.96
12.98
4.38
10.25
23.57
15.79
7.78
0.05
21.70
33.49
5.18
11.27
71.64
19.84
51.80
4.40
30.82
50.78
6.95
34.84
123.39
25.74
97.65
22.03
39.71
75.34
8.53
14.37
137.95
33.90
104.05
22.45
42.34
92.49
8.87
13.92
157.62
42.56
115.06
20.04
43.07
104.45
10.35
14.36
172.23
53.87
118.86
21.11
Net Fixed Assets 6.89 6.93 7.83 56.20 119.68 126.50 135.10 139.97

Raw Materials
Finished Goods
Inventory
Accounts Receivable
Other Receivable
Investments
Cash and Bank Balance
Current Assets
Total Assets
LIABILITIES AND CAPITAL
Equity Capital
Preference Capital
Reserves and Surplus
5.26
29.37
34.63
38.16
32.62
3.55
8.36
117.32
124.21

9.86
0.20
27.60
6.91
33.72
40.63
53.24
40.47
14.95
8.91
158.20
165.13

9.86
0.20
32.57
7.26
38.65
45.91
67.97
49.19
15.15
12.71
190.93
198.76

9.86
0.20
37.42
21.05
53.39
74.44
93.30
24.54
27.58
13.29
233.15
289.35

18.84
0.20
100.35
28.13
52.26
80.39
122.20
59.12
73.50
18.38
353.59
473.27

29.37
0.20
171.03
44.03
58.09
102.12
133.45
64.32
75.01
30.08
404.98
531.48

29.44
0.20
176.88
53.62
69.97
123.59
141.82
76.57
75.07
33.46
450.51
585.61

44.20
0.20
175.41
50.94
64.09
115.03
179.92
107.31
76.45
48.18
526.89
666.86

44.20
0.20
198.79
Net Worth 37.66 42.63 47.48 119.39 200.60 206.52 219.81 243.19
Bank Borrowings
Institutional Borrowings
Debentures
Fixed Deposits
Commercial Paper
Other Borrowings
Current Portion of LT Debt 14.81
4.13
4.77
12.31
0.00
2.33
0.00 19.45
3.43
16.57
14.45
0.00
3.22
0.00 26.51
9.17
19.99
15.03
0.00
3.10
0.08 24.82
38.09
4.56
14.08
0.00
3.18
0.12 55.12
38.76
4.37
15.57
15.00
17.08
15.08 64.97
69.69
4.37
17.75
0.00
1.97
0.02 70.08
89.26
2.92
20.81
0.00
2.36
1.49 118.28
63.60
1.49
19.29
0.00
2.57
1.57
Borrowings 38.35 57.12 73.72 84.61 130.82 158.73 183.94 203.66
Sundry Creditors
Other Liabilities
Provision for tax, etc.
Proposed Dividends
Current Portion of LT Dept 37.52
5.70
3.18
1.80
0.00 49.40
10.16
3.82
2.00
0.00 59.34
10.70
5.14
2.30
0.08 77.27
3.59
0.31
4.06
0.12 113.66
1.42
4.40
7.29
15.08 148.13
1.99
7.70
8.58
0.02 153.63
1.70
12.19
12.85
1.49 179.79
3.04
21.43
14.18
1.57
Current Liabilities 48.20 65.38 77.56 85.35 141.85 166.42 181.86 220.01
TOTAL LIABILITIES
Additional information:
Share premium reserve
Revaluation reserve
Bonus equity capital 124.21

8.51 165.13

8.51 198.76

8.51 289.35

47.69
8.91
8.51 473.27

107.40
8.70
8.51 531.67

107.91
8.50
8.51 585.61

93.35
8.31
23.25 666.86

93.35
8.15
23.25

Exhibit 3

GREAVES LTD.
Share Price Data
1990 1991 1992 1993 1994 1995 1996 1997
Closing share price (Rs)
Yearly high share price (Rs)
Yearly low share price (Rs)
Market capitalization (Rs crore
EPS (Rs)
Book value (Rs) 27.19
29.25
26.78
65.06
4.79
35.64 34.74
45.28
21.61
67.77
6.82
37.22 121.27
121.27
34.36
236.56
9.73
42.54 66.67
126.33
48.34
274.84
1.93
57.75 78.34
90.00
42.67
346.35
2.66
40.61 71.67
100.01
68.34
316.87
7.16
64.98 47.5
90.00
45.00
210.02
5.03
45.35 48.25
85.00
43.75
213.34
9.01
50.73

Questions

1. How profitable are its operations? What are the trends in it? How has growth affected the profitability of the company?
2. What factors have contributed to the operating performance of Greaves Limited? What is the role of profitability margin, asset utilisation, and non-operating income?
3. How has Greaves performed in terms of return on equity? What is the contribution of return on investment, the way of the business has been financed over the period?

CASE – 3 CHOOSING BETWEEN PROJECTS IN ABC COMPANY

ABC Company, has three projects to choose from. The Finance Manager, the operations manager are discussing and they are not able to come to a proper decision. Then they are meeting a consultant to get proper advice. As a consultant, what advice you will give?

The cash flows are as follows. All amounts are in lakhs of Rupees.

Project 1:
Duration 5 Years
Beginning cash outflow = Rs. 100
Cash inflows (at the end of the year)
Yr. 1 – Rs 30; Yr. 2 – Rs 30; Yr. 3 – Rs 30; Yr.4 – 10; Yr.5 – 10

Project 2:
Duration 5 Years
Beginning Cash outflow Rs. 3763
Cash inflows (at the end of the year)
Yr. 1 – 200; Yr. 2 – 600; Yr. 3 – 1000; Yr. 4 – 1000; Yr. 5 – 2000.

Project 3:
Duration 15 Years
Beginning Cash Outflow – Rs. 100
Cash Inflows (at the end of the year)
Yrs. 1 to 10 – Rs. 20 (for 10 continuous years)
Yrs. 11 to 15 – Rs. 10 (For the next 5 years)

Question:
If the cost of capital is 8%, which of the 3 projects should the ABC Company accept?

CASE – 4 STAR ENGINEERING COMPANY

Star Engineering Company (SEC) produces electrical accessories like meters, transformers, switchgears, and automobile accessories like taximeters and speedometers.
SEC buys the electrical components, but manufactures all mechanical parts within its factory which is divided into four production departments Machining, Fabrication, Assembly, and Painting—and three service departments—Stores, Maintenance, and Works Office.
Though the company prepared annual budgets and monthly financial statements, it had no formal cost accounting system. Prices were fixed on the basis of what the market can bear. Inventory of finished stocks was valued at 90 per cent of the market price assuming a profit margin of 10 per cent.
In March, the company received a trial order from a government department for a sample transformer on a cost-plus-fixed-fee basis. They took up the job (numbered by the company as Job No 879) in early April and completed all manufacturing operations before the end of the month.
Since Job No 879 was very different from the type of transformers they had manufactured in the past, the company did not have a comparable market price for the product. The purchasing officer of the government department asked SEC to submit a detailed cost sheet for the job giving as much details as possible regarding material, labour and overhead costs.
SEC, as part of its routine financial accounting system, had collected the actual expenses for the month of April, by 5th of May. Some of the relevant data are given in Exhibit A.
The company tried to assign directly, as many expenses as possible to the production departments. However, It was not possible in all cases. In many cases, an overhead cost, which was common to all departments had to be allocated to the various departments using some rational basis. Some of the possible bases were collected by SEC’s accountant. These are presented in Exhibit B.
He also designed a format to allocate the overhead to all the production and service departments. It was realized that the expenses of the service departments on some rational basis. The accountant thought of distributing the service departments’ costs on the following basis:
a. Works office costs on the basis of direct labour hours.
b. Maintenance costs on the basis of book value of plant and machinery.
c. Stores department costs on the basis of direct and indirect materials used.
The accountant who had to visit the company’s banker, passed on the papers to you for the required analysis and cost computations.

REQUIRED

Based on the data given in Exhibits A and B, you are required to:

1. Complete the attached “overhead cost distribution sheet” (Exhibit C).
Note: Wherever possible, identify the overhead costs chared directly to the production and service departments. If such direct identification is not possible, distribute the costs on some “rational basis.
2. Calculate the overhead cost (per direct labour hour) for each of the four producing departments. This should include share of the service departments’ costs.
3. Do you agree with:
a. The procedure adopted by the company for the distribution of overhead costs?
b. The choice of the base for overhead absorption, i.e. labour-hour rate?

Exhibit A

STAR ENGINEERING COMPANY
Actual Expenses(Manufacturing Overheads) for April
RS RS
Indirect Labour and Supervisions:
Machining
Fabrication
Assembly
Painting
Stores
Maintenance

Indirect Materials and Supplies
Machining
Fabrication
Assembly
Painting
Maintenance

Others
Factory Rent
Depreciation of Plant and Machinery
Building Rates and Taxes
Welfare Expenses
(At 2 per cent of direct labour wages and Indirect labour and supervision)
Power
(Maintenance—Rs 366; Works Office Rs 2,200, Balance to Producing Departments)
Works Office Salaries and Expenses
Miscellaneous Stores Department Expenses

33,000
22,000
11,000
7,000
44,000
32,700

2,200
1,100
3,300
3,400
2,800

1,68,000
44,000
2,400
19,400

68,586

1,30,260
1,190

1,49,700

12,800

4,33,930

5,96,930

Exhibit B
STAR ENGINEERING COMPANY
Projected Operation Data for the Year
Department Area
(sq.m) Original Book of Plant & Machinery
Rs Direct Materials
Budget

Rs Horse
Power
Rating Direct
Labour
Hours Direct
Labour
Budget

Rs
Machining
Fabrication
Assembly
Painting
Stores
Maintenance
Works Office
Total
13,000
11,000
8,800
6,400
4,400
2,200
2,200
48,000 26,40,000
13,20,000
6,60,000
2,64,000
1,32,000
1,98,000
68,000
52,80,000 62,40,000
21,60,000

10,80,000

94,80,000 20,000
10,000
1,000
2,000

33,000 14,40,000
5,28,000
7,20,000
3,30,000

30,18,000 52,80,000
25,40,000
13,20,000
6,60,000

99,00,000

Note

The estimates given in this exhibit are for the budgeted year January to December where as the actuals in Exhibit A are just one month—April of the budgeted year.

Exhibit C
STAR ENGINEERING COMPANY
Actual Overhead Distribution Sheet for April
Departments
Overhead Costs Production Departments Service Departments Total Amount Actuals for April (Rs) Basis for Distribution

A. Allocation of Overhead to all departments
A.1 Indirect Labour and Supervision

1,49,700
A.2 Indirect materials and supplies
12,800
A.3 Factory Rent 1,68,000
A.4 Depreciation of Plant and Machinery
44,000
A.5 Building Rates and Taxes

2,400

A.6 Welfare Expenses

19,494
A.7 Power 68,586
A.8 Works Office Salaries and Expenses
1,30,260

A.9 Miscellaneous Stores Expenses
1,190
A. Total (A.1 to A.9) 5,96,430
B. Reallocation of Service Departments Costs to Production Departments
B.1 Distribution of Works Office Costs
B.2 Distribution of Maintenance Department’s Costs
B.3 Distribution of Stores Department’s Costs
Total Charged to Producing
C. Departments (A+B)

5,96,430
D. Labour Hours Actuals for April
1,20,000
44,000
60,000
27,500
E. Overhead Rate/Per Hour (D)

Case 5: EASTERN MACHINES COMPANY

Raj, who was in charge production felt that there are many problems to be attended to. But Quality Control was the main problem, he thought, as he found there were more complaints and litigations as compared to last year. With the demand increasing, he does not want to take any chances.

So he went down to assembly line, but was greeted by an unfamiliar face. He introduced himself.

Raj: I am in charge of checking the components, which we use, when we assemble the machines for customers. For most of the components, suppliers are very reliable and we assume that there will not be any problem. When we generally test the end product, we don’t have failures.

Namdeo: I am Namdeo. I was in another dept. and has been transferred recently to this dept.

Raj: Recently we have been having problems, and there has been some complaint or other about the machines we have supplied. I am worried and would like to check the components used. I would like to avoid lot of expensive rework.

Namdeo: But it would be very expensive to test every one of them. It will take at least half an hour for each machine. I neither have the staff nor the time. It will be rather pointless as majority of them will pass the test.

Raj: There has been more demand than supply for these machines in last 2 years. We have been buying many components from many suppliers. We have been producing more with extra shifts. We are trying to capture the market and increase our market share.

Namdeo: We order for components from different places, and sometimes we do not have time to check all. There is a time lag between order and supply of components, and we cannot wait as production will stop. We use whatever comes soon as we want to complete our orders.

Raj: Oh! Obviously we need some kind of checking. Some sampling technique to check the quality of the components. We need to get a sample from each shipment from our component suppliers. But I do not know how many we should test.

Namdeo: We should ask somebody from our statistics dept. to attend to this problem.

As a Statistician, advice what kind of Sampling schemes can we consider, and what factors will influence choice of scheme. What are the questions we should ask Mr. Namdeo, who works in the assembly line?

CASE : 01
COOKING LPG LTD
DETERMINATION OF WORKING CAPTIAL
Introduction
Cooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 1995. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.
The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor.
Statement of the Problem :
Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.
He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him.
Profile of Cooking LPG Ltd.
1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai and Kandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.
2) Storage and Bottling : The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days per month on an average. The desired level of inventory at various stages is as under.
• LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales.
• Filled Cylinders – 2 days average sales.
• Work-in Process inventory – zero.
3) Marketing : The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on company’s expense at the distributor’s godown, in exchange of equal number of empty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250 cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of the draft, the cylinders are normally dispatched on the same day. However, for every truck purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one truck-load.
4) Salaries and Wages : The following payments are made :
• Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month.
• Security agency – Rs. 30,000 per month paid on 10th of subsequent month.
• Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last working day.
5) Overheads :
• Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10th of subsequent month.
• Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month.
• Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at the beginning of the year.
• Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year.
• Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month.
• Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the vendors. This includes expenditure on account of lubricants, spares and other stores.
• Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly basis on the 15th of the subsequent month.
• All transportation charges as per contracts – paid on the 10th subsequent month.
• Sales tax as per applicable rates is deposited on the 7th of the subsequent month.
6) Sales : Average sales are 2,500 cylinders per day during the year. However, during the winter months (December to February), there is an incremental demand of 20 per cent.
7) Average Inventories : The average stocks maintained by the company as per its policy guidelines :
• Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days consumption.
• Maintenance spares – Rs. 1 lakh
• Lubricants – Rs. 20,000
• Diesel (for DG sets and fire engines) – Rs. 15,000
• Other stores (stationary, safety items) – Rs. 20,000

8) Minimum cash balance including bank balance required is Rs. 5 lakh.
9) Additional Information for Calculating Incremental Working Capital During Winter.
• No increase in any inventories take place except in the inventory of bulk LPG, which increases in the same proportion as the increase of the demand. The actual requirements of LPG for additional supplies are procured under the same terms and conditions from the suppliers.
• The labour cost for additional production is paid at double the rate during wintes.
• No changes in other administrative overheads.
• The expenditure on power consumption during winter increased by 10 per cent. However, during other months the power consumption remains the same as the decrease owing to reduced production is offset by increased consumption on account of compressors /Acs.
• Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter.
• No change in time schedules for any payables / receivables.
• The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to statutory requirements.

Suppose you are Mr.Keen Kumar, the new manager. What steps will you take for the growth of Cooking LPG Ltd.?

CASE : 2
M/S HI-TECH ELECTRONICS

M/s. Hi – tech Electronics, a consumer electronics outlet, was opened two years ago in Dwarka, New Delhi. Hard work and personal attention shown by the proprietor, Mr. Sony, has brought success. However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank credit cards. Mr. Sony is now considering a new policy of offering installment sales on terms of 25 per cent down payment and 25 per cent per month for three months as well as continuing to accept cash and bank credit cards.
Mr. Sony feels this policy will boost sales by 50 percent. All the increases in sales will be credit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales projections for this year without the new policy are given in Exhibit 1.
Exhibit 1 Sales Projections and Fixed costs
Month Projected sales without instalment option Projected sales with instalment option
January Rs. 6,00,000 Rs. 9,00,000
February 4,00,000 6,00,000
March 3,00,000 4,50,000
April 2,00,000 3,00,000
May 2,00,000 3,00,000
June 1,50,000 2,25,000
July 1,50,000 2,25,000
August 2,00,000 3,00,000
September 3,00,000 4,50,000
October 5,00,000 7,50,000
November 5,00,000 15,00,000
December 8,00,000 12,00,000
Total Sales 48,00,000 72,00,000
Fixed cost 2,40,000 2,40,000

He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2 per cent fee is paid, and 33.33 per cent on instalment sales. Also, for short term seasonal requirements, the film takes loan from chit fund to which Mr. Sony subscribes @ 1.8 per cent per month.
Their success has been due to their policy of selling at discount price. The purchase per unit is 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes that the new policy will increase miscellaneous cost by Rs. 25,000.
The business being cyclical in nature, the working capital finance is done on trade – off basis. The proprietor feels that the new policy will lead to bad debts of 1 per cent.
(a) As a financial consultant, advise the proprietor whether he should go for the extension of credit facilities.
(b) Also prepare cash budget for one year of operation of the firm, ignoring interest. The minimum desired cash balance & Rs. 30,000, which is also the amount the firm has on January 1. Borrowings are possible which are made at the beginning of a month and repaid at the end when cash is available.

CASE : 3
SMOOTHDRIVE TYRE LTD

Smoothdrive Tyre Ltd manufacturers tyres under the brand name “Super Tread’ for the domestic car market. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakh each having a useful life of 7 years, with no salvage value.
After extensive research and development, Smoothdrive Tyre Ltd has recently developed a new tyre, the ‘Hyper Tread’ and must decide whether to make the investments necessary to produce and market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount of wet weather and off road driving in addition to normal highway usage. The research and development costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the market beginning this year and Smoothdrive Tyrs expects it to stay on the market for a total of three years. Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread type tyre.
As a financial analyst at Smoothdrive Tyre, Mr. Mani asked by the Chief Financial Officer (CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation or whether or not to proceed with the investment. He has been informed that all previous investments in the Hyper Tread project are sunk costs are only future cash flows should be considered. Except for the initial investments, which occur immediately, assume all cash flows occur at the year-end.
Smoothedrive Tyre must initially invest Rs. 72,00,00,000 in production equipments to make the Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value (WDV) method for tax purposes. The new production equipments will allow the company to follow flexible manufacturing technique, that is both the brands of tyres can be produced using the same equipments. The equipments is expected to have a 7-year useful life and can be sold for Rs. 10,00,000 during the fourth year. The company does not have any other machines in the block of 25 per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with an estimated removal cost of one machine for Rs. 50,000.
Operating Requirements
The operating requirements of the existing machines and the new equipment are detailed in Exhibits 11.1 and 11.2 respectively.
Exhibit 11.1 Existing Machines
• Labour costs (expected to increase 10 per cent annually to account for inflation) :
(a) 20 unskilled labour @ Rs. 4,000 per month
(b) 20 skilled personnel @ Rs. 6,000 per month.
(c) 2 supervising executives @ Rs. 7,000 per month.
(d) 2 maintenance personnel @ Rs. 5,000 per month.
• Maintenance cost :
Years 1-5 : Rs. 25 lakh
Years 6-7 : Rs. 65 lakh
• Operating expenses : Rs. 50 lakh expected to increase at 5 per cent annually.
• Insurance cost / premium :
Year 1 : 2 per cent of the original cost of machine
After year 1 : Discounted by 10 per cent.

Exhibit 11.2 New production Equipment
• Savings in cost of utilities : Rs. 2.5 lakh
• Maintenance costs :
Year 1 – 2 : Rs. 8 lakh
Year 3 – 4 : Rs. 30 lakh
• Labour costs :
9 skilled personnel @ Rs. 7,000 per month
1 maintenance personnel @ Rs. 7,000 per month.
• Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1 maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary.
• Insurance premium
Year 1 : 2 per cent of the purchase cost of machine
After year 1 : Discounted by 10 per cent.

The opening expenses do not change to any considerable extent for the new equipment and the difference is negligible compared to the scale of operations.
Smoothdrive Tyre intends to sell Hyper Tread of two distinct markets :
1. The original equipment manufacturer (OEM) market : The OEM market consists primarily of the large automobile companies who buy tyres for new cars. In the OEM market, the Hyper Tread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each Hyper Tread is Rs. 600.
2. The replacement market : The replacement market consists of all tyres purchased after the automobile has left the factory. This markets allows higher margins and Smoothdrive Tyre expects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as in the OEM market.
Smoothdrive Tyre expects to raise prices by 1 percent above the inflation rate.
The variable costs will also increase by 1 per cent above the inflation rate. In addition, the Hyper Tread project will incur Rs. 2,50,000 in marketing and general administration cost in the first year which are expected to increase at the inflation rate in subsequent years.
Smoothdrive Tyre’s corporate tax rate is 35 per cent. Annual inflation is expected to remain constant at 3.25 per cent. Smoothdrive Tyre uses a 15 per cent discount rate to evaluate new product decisions.
The Tyre Market
Automotive industry analysts expect automobile manufacturers to have a production of 4,00,000 new cars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres (the spare tyres are undersized and fall in a different category) Smoothdrive Tyre expects the Hyper Tread to capture an 11 per cent share of the OEM market.
The industry analysts estimate that the replacement tyre market size will be one crore this year and that it would grow at 2 per cent annually. Smoothdrive Tyre expects the Hyper Tread to capture an 8 per cent market share.
You also decide to consider net working capital (NWC) requirements in this scenario. The net working capital requirement will be 15 per cent of sales. Assume that the level of working capital is adjusted at the beginning of the year in relation to the expected sales for the year. The working capital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt. The bad debt will be a tax-deductible expenses.
As a finance analyst, prepare a report for submission to the CFO and the Board of Directors, explaining to them the feasibility of the new investment.

CASE : 4
COMPUTATION OF COST OF CAPITAL OF PALCO LTD

In October 2003, Neha Kapoor, a recent MBA graduate and newly appointed assistant to the Financial Controller of Palco Ltd, was given a list of six new investment projects proposed for the following year. It was her job to analyse these projects and to present her findings before the Board of Directors at its annual meeting to be held in 10 days. The new project would require an investment of Rs. 2.4 crore.
Palco Ltd was founded in 1965 by Late Shri A. V. Sinha. It gained recognition as a leading producer of high quality aluminum, with the majority of its sales being made to Japan. During the rapid economic expansion of Japan in the 1970s, demand for aluminum boomed, and palco’s sales grew rapidly. As a result of this rapid growth and recognition of new opportunities in the energy market, Palco began to diversify its products line. While retaining its emphasis on aluminum production, it expanded operations to include uranium mining and the production of electric generators, and finally, it went into all phases of energy production. By 2003, Palco’s sales had reached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.
As Palco expanded its products line in the early 1990s, it also formalized its caital budgeting procedure. Until 1992, capital investment projects were selected primarily on the basis of the average return on investment calculations, with individual departments submitting these calculations for projects falling within their division. In 1996, this procedure was replaced by one using present value as the decision making criterion. This change was made to incorporate cash flows rather than accounting profits into the decision making analysis, in addition to adjusting these flows for the time value of money. At the time, the cost of capital for Palco was determined to be 12 per cent, which has been used as the discount rate for the past 5 years. This rate was determined by taking a weighted average cost Palco had incurred in raising funds from the capital market over the previous 10 years.
It had originally been Neha’s assignment to update this rate over the most recent 10-year period and determine the net present value of all the proposed investment opportunities using this newly calculated figure. However, she objected to this procedure, stating that while this calculation gave a good estimate of “the past cost” of capital, changing interest rates and stock prices made this calculation of little value in the present. Neha suggested that current cost of raising funds in the capital market be weighted by their percentage mark-up of the capital structure. This proposal was received enthusiastically by the Financial Controller of the Palco, and Neha was given the assignment of recalculating Palco’s cost of capital and providing a written report for the Board of Directors explaining and justifying this calculation.
To determine a weighted average cost of capital for Palco, it was necessary for Neha to examine the cost associated with each source of funding used. In the past, the largest sources of funding had been the issuance of new equity shares and internally generated funds. Through conversations with Financial Controller and other members of the Board of Directors, Neha learnt that the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1.
Exhibit 1 Palco Ltd Balance Sheet for Year Ending March 31, 2003
Assets Liabilities and Equity
Cash
Accounts receivable
Inventories
Total current assets
Net fixed assets
Goodwill
Total assets Rs. 90,00,000
3,10,00,000
1,20,00,000
5,20,00,000
19,30,00,000
70,00,000
25,20,00,000
Accounts payable
Short-term debt
Accrued taxes
Total current liabilities
Long-term debt
Preference shares
Retained earnings
Equity shares
Total liabilities and equity shareholders fund
Rs. 8,50,000
1,00,000
11,50,000
1,20,00,000
7,20,00,000
4,80,00,000
1,00,00,000
11,00,000

25,20,00,000

She further determined that the strong growth patterns that Palco had exhibited over the last ten years were expected to continue indefinitely because of the dwindling supply of US and Japanese domestic oil and the growing importance of other alternative energy resources. Through further investigations, Neha learnt that Palco could issue additional equity share, which had a par value of Rs. 25 pre share and were selling at a current market price of Rs. 45. The expected dividend for the next period would be Rs. 4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future. The flotation cost is expected to be on an average Rs. 2 per share.

Preference shares at 11 per cent with 10 years maturity could also be issued with the help of an investment banker with an investment banker with a per value of Rs. 100 per share to be redeemed at par. This issue would involve flotation cost of 5 per cent.
Finally, Neha learnt that it would be possible for Palco to raise an additional Rs. 20 lakh through a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20 lakh would cost 14 per cent. Short-term debt has always been usesd by Palco to meet working capital requirements and as Palco grows, it is expected to maintain its proportion in the capital structure to support capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 years maturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds via long-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-year bonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional funds raised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent coupon yield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs. 100 to be redeemed at par.
In the past, Palco had calculated a weighted average of these sources of funds to determine its cost of capital. In discussion with the current Financial Controller, the point was raised that while this served as an appropriate calculation for external funds, it did not take into account the cost of internally generated funds. The Financial Controller agreed that there should be some cost associated with retained earnings and need to be incorporated in the calculations but didn’t have any clue as to what should be the cost.
Palco Ltd is subjected to the corporate tax rate of 40 per cent.
From the facts outlined above, what report would Neha submit to the Board of Directors of palco Ltd ?

CASE : 5
ARQ LTD

ARQ Ltd is an Indian company based in Greater Noida, which manufactures packaging materials for food items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars for its chairman, general manager and five senior managers. The book value of the seven cars is Rs. 20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same block of depreciation @ 25 per cent.
A German multinational company (MNC) BYR Ltd, has acquired ARQ Ltd in all cash deal. The merged company called BYR India Ltd is proposing to expand the manufacturing capacity by four folds and the organization structure is reorganized from top to bottom. The German MNC has the policy of providing transport facility to all senior executives (22) of the company because the manufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of the executives were staying.
Prices of the cars to be provided to the Executives have been as follows :
Manager (10) Santro King Rs. 3,75,000
DGM and GM (5) Honda City 6,75,000
Director (5) Toyota Corolla 9,25,000
Managing Director (1) Sonata Gold 13,50,000
Chairman (1) Mercedes benz 23,50,000
The company is evaluating two options for providing these cars to executives
Option 1 : The company will buy the cars and pay the executives fuel expenses, maintenance expenses, driver allowance and insurance (at the year – end). In such case, the ownership of the car will lie with the company. The details of the proposed allowances and expenditures to be paid are as follows :
a) Fuel expense and maintenance Allowances per month
Particulars Fuel expenses Maintenance allowance
Manager
DGM and GM
Director
Managing Director
Chairman Rs. 2,500
5,000
7,500
12,000
18,000 Rs. 1,000
1,200
1,800
3,000
4,000
b) Driver Allowance : Rs. 4,000 per month (Only Chairman, Managing Director and Directors are eligible for driver allowance.)
c) Insurance cost : 1 per cent of the cost of the car.

The useful life for the cars is assumed to be five years after which they can be sold at 20 per cent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using written down method of depreciation. The company will have to borrow to finance the purchase from a bank with interest at 14 per cent repayable in five annual equal instalments payable at the end of the year.
Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at lease for the period of five years. The monthly lease rentals for the cars are as follows (assuming that the total of monthly lease rentals for the whole year are paid at the end of each year.
Santro Xing Rs. 9,125
Honda City 16,325
Toyota Corolla 27,175
Sonata Gold 39,250
Mercedes Benz 61,250
Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee will claim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltime supervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease. The company will have to bear additional miscellaneous expense of Rs. 5,000 per month for providing him the PC, mobioe phone and so on.
The company’s effective tax rate is 40 per cent and its cost of capital is 15 per cent.
Analyse the financial viability of the two options. Which option would you recommend ? Why ?


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CASE : 01
COOKING LPG LTD
DETERMINATION OF WORKING CAPTIAL
Introduction
Cooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 1995. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.
The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor.
Statement of the Problem :
Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.
He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him.
Profile of Cooking LPG Ltd.
1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai and Kandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.
2) Storage and Bottling : The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days per month on an average. The desired level of inventory at various stages is as under.
• LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales.
• Filled Cylinders – 2 days average sales.
• Work-in Process inventory – zero.
3) Marketing : The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on company’s expense at the distributor’s godown, in exchange of equal number of empty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250 cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of the draft, the cylinders are normally dispatched on the same day. However, for every truck purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one truck-load.
4) Salaries and Wages : The following payments are made :
• Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month.
• Security agency – Rs. 30,000 per month paid on 10th of subsequent month.
• Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last working day.
5) Overheads :
• Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10th of subsequent month.
• Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month.
• Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at the beginning of the year.
• Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year.
• Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month.
• Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the vendors. This includes expenditure on account of lubricants, spares and other stores.
• Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly basis on the 15th of the subsequent month.
• All transportation charges as per contracts – paid on the 10th subsequent month.
• Sales tax as per applicable rates is deposited on the 7th of the subsequent month.
6) Sales : Average sales are 2,500 cylinders per day during the year. However, during the winter months (December to February), there is an incremental demand of 20 per cent.
7) Average Inventories : The average stocks maintained by the company as per its policy guidelines :
• Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days consumption.
• Maintenance spares – Rs. 1 lakh
• Lubricants – Rs. 20,000
• Diesel (for DG sets and fire engines) – Rs. 15,000
• Other stores (stationary, safety items) – Rs. 20,000

8) Minimum cash balance including bank balance required is Rs. 5 lakh.
9) Additional Information for Calculating Incremental Working Capital During Winter.
• No increase in any inventories take place except in the inventory of bulk LPG, which increases in the same proportion as the increase of the demand. The actual requirements of LPG for additional supplies are procured under the same terms and conditions from the suppliers.
• The labour cost for additional production is paid at double the rate during wintes.
• No changes in other administrative overheads.
• The expenditure on power consumption during winter increased by 10 per cent. However, during other months the power consumption remains the same as the decrease owing to reduced production is offset by increased consumption on account of compressors /Acs.
• Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter.
• No change in time schedules for any payables / receivables.
• The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to statutory requirements.

Suppose you are Mr.Keen Kumar, the new manager. What steps will you take for the growth of Cooking LPG Ltd.?

CASE : 2
M/S HI-TECH ELECTRONICS

M/s. Hi – tech Electronics, a consumer electronics outlet, was opened two years ago in Dwarka, New Delhi. Hard work and personal attention shown by the proprietor, Mr. Sony, has brought success. However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank credit cards. Mr. Sony is now considering a new policy of offering installment sales on terms of 25 per cent down payment and 25 per cent per month for three months as well as continuing to accept cash and bank credit cards.
Mr. Sony feels this policy will boost sales by 50 percent. All the increases in sales will be credit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales projections for this year without the new policy are given in Exhibit 1.
Exhibit 1 Sales Projections and Fixed costs
Month Projected sales without instalment option Projected sales with instalment option
January Rs. 6,00,000 Rs. 9,00,000
February 4,00,000 6,00,000
March 3,00,000 4,50,000
April 2,00,000 3,00,000
May 2,00,000 3,00,000
June 1,50,000 2,25,000
July 1,50,000 2,25,000
August 2,00,000 3,00,000
September 3,00,000 4,50,000
October 5,00,000 7,50,000
November 5,00,000 15,00,000
December 8,00,000 12,00,000
Total Sales 48,00,000 72,00,000
Fixed cost 2,40,000 2,40,000

He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2 per cent fee is paid, and 33.33 per cent on instalment sales. Also, for short term seasonal requirements, the film takes loan from chit fund to which Mr. Sony subscribes @ 1.8 per cent per month.
Their success has been due to their policy of selling at discount price. The purchase per unit is 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes that the new policy will increase miscellaneous cost by Rs. 25,000.
The business being cyclical in nature, the working capital finance is done on trade – off basis. The proprietor feels that the new policy will lead to bad debts of 1 per cent.
(a) As a financial consultant, advise the proprietor whether he should go for the extension of credit facilities.
(b) Also prepare cash budget for one year of operation of the firm, ignoring interest. The minimum desired cash balance & Rs. 30,000, which is also the amount the firm has on January 1. Borrowings are possible which are made at the beginning of a month and repaid at the end when cash is available.

CASE : 3
SMOOTHDRIVE TYRE LTD

Smoothdrive Tyre Ltd manufacturers tyres under the brand name “Super Tread’ for the domestic car market. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakh each having a useful life of 7 years, with no salvage value.
After extensive research and development, Smoothdrive Tyre Ltd has recently developed a new tyre, the ‘Hyper Tread’ and must decide whether to make the investments necessary to produce and market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount of wet weather and off road driving in addition to normal highway usage. The research and development costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the market beginning this year and Smoothdrive Tyrs expects it to stay on the market for a total of three years. Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread type tyre.
As a financial analyst at Smoothdrive Tyre, Mr. Mani asked by the Chief Financial Officer (CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation or whether or not to proceed with the investment. He has been informed that all previous investments in the Hyper Tread project are sunk costs are only future cash flows should be considered. Except for the initial investments, which occur immediately, assume all cash flows occur at the year-end.
Smoothedrive Tyre must initially invest Rs. 72,00,00,000 in production equipments to make the Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value (WDV) method for tax purposes. The new production equipments will allow the company to follow flexible manufacturing technique, that is both the brands of tyres can be produced using the same equipments. The equipments is expected to have a 7-year useful life and can be sold for Rs. 10,00,000 during the fourth year. The company does not have any other machines in the block of 25 per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with an estimated removal cost of one machine for Rs. 50,000.
Operating Requirements
The operating requirements of the existing machines and the new equipment are detailed in Exhibits 11.1 and 11.2 respectively.
Exhibit 11.1 Existing Machines
• Labour costs (expected to increase 10 per cent annually to account for inflation) :
(a) 20 unskilled labour @ Rs. 4,000 per month
(b) 20 skilled personnel @ Rs. 6,000 per month.
(c) 2 supervising executives @ Rs. 7,000 per month.
(d) 2 maintenance personnel @ Rs. 5,000 per month.
• Maintenance cost :
Years 1-5 : Rs. 25 lakh
Years 6-7 : Rs. 65 lakh
• Operating expenses : Rs. 50 lakh expected to increase at 5 per cent annually.
• Insurance cost / premium :
Year 1 : 2 per cent of the original cost of machine
After year 1 : Discounted by 10 per cent.

Exhibit 11.2 New production Equipment
• Savings in cost of utilities : Rs. 2.5 lakh
• Maintenance costs :
Year 1 – 2 : Rs. 8 lakh
Year 3 – 4 : Rs. 30 lakh
• Labour costs :
9 skilled personnel @ Rs. 7,000 per month
1 maintenance personnel @ Rs. 7,000 per month.
• Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1 maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary.
• Insurance premium
Year 1 : 2 per cent of the purchase cost of machine
After year 1 : Discounted by 10 per cent.

The opening expenses do not change to any considerable extent for the new equipment and the difference is negligible compared to the scale of operations.
Smoothdrive Tyre intends to sell Hyper Tread of two distinct markets :
1. The original equipment manufacturer (OEM) market : The OEM market consists primarily of the large automobile companies who buy tyres for new cars. In the OEM market, the Hyper Tread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each Hyper Tread is Rs. 600.
2. The replacement market : The replacement market consists of all tyres purchased after the automobile has left the factory. This markets allows higher margins and Smoothdrive Tyre expects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as in the OEM market.
Smoothdrive Tyre expects to raise prices by 1 percent above the inflation rate.
The variable costs will also increase by 1 per cent above the inflation rate. In addition, the Hyper Tread project will incur Rs. 2,50,000 in marketing and general administration cost in the first year which are expected to increase at the inflation rate in subsequent years.
Smoothdrive Tyre’s corporate tax rate is 35 per cent. Annual inflation is expected to remain constant at 3.25 per cent. Smoothdrive Tyre uses a 15 per cent discount rate to evaluate new product decisions.
The Tyre Market
Automotive industry analysts expect automobile manufacturers to have a production of 4,00,000 new cars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres (the spare tyres are undersized and fall in a different category) Smoothdrive Tyre expects the Hyper Tread to capture an 11 per cent share of the OEM market.
The industry analysts estimate that the replacement tyre market size will be one crore this year and that it would grow at 2 per cent annually. Smoothdrive Tyre expects the Hyper Tread to capture an 8 per cent market share.
You also decide to consider net working capital (NWC) requirements in this scenario. The net working capital requirement will be 15 per cent of sales. Assume that the level of working capital is adjusted at the beginning of the year in relation to the expected sales for the year. The working capital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt. The bad debt will be a tax-deductible expenses.
As a finance analyst, prepare a report for submission to the CFO and the Board of Directors, explaining to them the feasibility of the new investment.

CASE : 4
COMPUTATION OF COST OF CAPITAL OF PALCO LTD

In October 2003, Neha Kapoor, a recent MBA graduate and newly appointed assistant to the Financial Controller of Palco Ltd, was given a list of six new investment projects proposed for the following year. It was her job to analyse these projects and to present her findings before the Board of Directors at its annual meeting to be held in 10 days. The new project would require an investment of Rs. 2.4 crore.
Palco Ltd was founded in 1965 by Late Shri A. V. Sinha. It gained recognition as a leading producer of high quality aluminum, with the majority of its sales being made to Japan. During the rapid economic expansion of Japan in the 1970s, demand for aluminum boomed, and palco’s sales grew rapidly. As a result of this rapid growth and recognition of new opportunities in the energy market, Palco began to diversify its products line. While retaining its emphasis on aluminum production, it expanded operations to include uranium mining and the production of electric generators, and finally, it went into all phases of energy production. By 2003, Palco’s sales had reached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.
As Palco expanded its products line in the early 1990s, it also formalized its caital budgeting procedure. Until 1992, capital investment projects were selected primarily on the basis of the average return on investment calculations, with individual departments submitting these calculations for projects falling within their division. In 1996, this procedure was replaced by one using present value as the decision making criterion. This change was made to incorporate cash flows rather than accounting profits into the decision making analysis, in addition to adjusting these flows for the time value of money. At the time, the cost of capital for Palco was determined to be 12 per cent, which has been used as the discount rate for the past 5 years. This rate was determined by taking a weighted average cost Palco had incurred in raising funds from the capital market over the previous 10 years.
It had originally been Neha’s assignment to update this rate over the most recent 10-year period and determine the net present value of all the proposed investment opportunities using this newly calculated figure. However, she objected to this procedure, stating that while this calculation gave a good estimate of “the past cost” of capital, changing interest rates and stock prices made this calculation of little value in the present. Neha suggested that current cost of raising funds in the capital market be weighted by their percentage mark-up of the capital structure. This proposal was received enthusiastically by the Financial Controller of the Palco, and Neha was given the assignment of recalculating Palco’s cost of capital and providing a written report for the Board of Directors explaining and justifying this calculation.
To determine a weighted average cost of capital for Palco, it was necessary for Neha to examine the cost associated with each source of funding used. In the past, the largest sources of funding had been the issuance of new equity shares and internally generated funds. Through conversations with Financial Controller and other members of the Board of Directors, Neha learnt that the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1.
Exhibit 1 Palco Ltd Balance Sheet for Year Ending March 31, 2003
Assets Liabilities and Equity
Cash
Accounts receivable
Inventories
Total current assets
Net fixed assets
Goodwill
Total assets Rs. 90,00,000
3,10,00,000
1,20,00,000
5,20,00,000
19,30,00,000
70,00,000
25,20,00,000
Accounts payable
Short-term debt
Accrued taxes
Total current liabilities
Long-term debt
Preference shares
Retained earnings
Equity shares
Total liabilities and equity shareholders fund
Rs. 8,50,000
1,00,000
11,50,000
1,20,00,000
7,20,00,000
4,80,00,000
1,00,00,000
11,00,000

25,20,00,000

She further determined that the strong growth patterns that Palco had exhibited over the last ten years were expected to continue indefinitely because of the dwindling supply of US and Japanese domestic oil and the growing importance of other alternative energy resources. Through further investigations, Neha learnt that Palco could issue additional equity share, which had a par value of Rs. 25 pre share and were selling at a current market price of Rs. 45. The expected dividend for the next period would be Rs. 4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future. The flotation cost is expected to be on an average Rs. 2 per share.

Preference shares at 11 per cent with 10 years maturity could also be issued with the help of an investment banker with an investment banker with a per value of Rs. 100 per share to be redeemed at par. This issue would involve flotation cost of 5 per cent.
Finally, Neha learnt that it would be possible for Palco to raise an additional Rs. 20 lakh through a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20 lakh would cost 14 per cent. Short-term debt has always been usesd by Palco to meet working capital requirements and as Palco grows, it is expected to maintain its proportion in the capital structure to support capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 years maturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds via long-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-year bonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional funds raised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent coupon yield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs. 100 to be redeemed at par.
In the past, Palco had calculated a weighted average of these sources of funds to determine its cost of capital. In discussion with the current Financial Controller, the point was raised that while this served as an appropriate calculation for external funds, it did not take into account the cost of internally generated funds. The Financial Controller agreed that there should be some cost associated with retained earnings and need to be incorporated in the calculations but didn’t have any clue as to what should be the cost.
Palco Ltd is subjected to the corporate tax rate of 40 per cent.
From the facts outlined above, what report would Neha submit to the Board of Directors of palco Ltd ?

CASE : 5
ARQ LTD

ARQ Ltd is an Indian company based in Greater Noida, which manufactures packaging materials for food items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars for its chairman, general manager and five senior managers. The book value of the seven cars is Rs. 20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same block of depreciation @ 25 per cent.
A German multinational company (MNC) BYR Ltd, has acquired ARQ Ltd in all cash deal. The merged company called BYR India Ltd is proposing to expand the manufacturing capacity by four folds and the organization structure is reorganized from top to bottom. The German MNC has the policy of providing transport facility to all senior executives (22) of the company because the manufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of the executives were staying.
Prices of the cars to be provided to the Executives have been as follows :
Manager (10) Santro King Rs. 3,75,000
DGM and GM (5) Honda City 6,75,000
Director (5) Toyota Corolla 9,25,000
Managing Director (1) Sonata Gold 13,50,000
Chairman (1) Mercedes benz 23,50,000
The company is evaluating two options for providing these cars to executives
Option 1 : The company will buy the cars and pay the executives fuel expenses, maintenance expenses, driver allowance and insurance (at the year – end). In such case, the ownership of the car will lie with the company. The details of the proposed allowances and expenditures to be paid are as follows :
a) Fuel expense and maintenance Allowances per month
Particulars Fuel expenses Maintenance allowance
Manager
DGM and GM
Director
Managing Director
Chairman Rs. 2,500
5,000
7,500
12,000
18,000 Rs. 1,000
1,200
1,800
3,000
4,000
b) Driver Allowance : Rs. 4,000 per month (Only Chairman, Managing Director and Directors are eligible for driver allowance.)
c) Insurance cost : 1 per cent of the cost of the car.

The useful life for the cars is assumed to be five years after which they can be sold at 20 per cent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using written down method of depreciation. The company will have to borrow to finance the purchase from a bank with interest at 14 per cent repayable in five annual equal instalments payable at the end of the year.
Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at lease for the period of five years. The monthly lease rentals for the cars are as follows (assuming that the total of monthly lease rentals for the whole year are paid at the end of each year.
Santro Xing Rs. 9,125
Honda City 16,325
Toyota Corolla 27,175
Sonata Gold 39,250
Mercedes Benz 61,250
Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee will claim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltime supervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease. The company will have to bear additional miscellaneous expense of Rs. 5,000 per month for providing him the PC, mobioe phone and so on.
The company’s effective tax rate is 40 per cent and its cost of capital is 15 per cent.
Analyse the financial viability of the two options. Which option would you recommend ? Why ?


RETAIL MANAGEMENT IIBM ONGOING EXAM ANSWER SHEETS WHATSAPP 91 9924764558

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Retail Management
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carry 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The minimum value of Conversion ratio is:
a. 0
b. 0.5
c. 2
d. 1
2. The law of retail gravitation is also called:
a. Huff’s law.
b. Belly’s law.
c. Philip Kotler’s law.
d. Relly’s law.
3. In Huff’s probability model of retail store location, the exponential ‘alpha’ denotes:
a. The attractiveness of the store.
b. Power of the store in terms of potential customer located farthest.
c. It is simply a power over the attractiveness of the store.
d. None of the above
4. If the market has low level of retail saturation then the chances of success in the market is:
a. Higher.
b. Lower.
c. Unpredictable.
d. Extremely lower
5. If the original price be ‘a’ and the reduce price be ‘b’ then the mark down % in Pricing techniques
is given by:
a. (a – b)/a.
b. (a – b)/b.
c. (b – a)/a.
d. (b – a)/b.
Examination Paper: Retail Management
2
IIBM Institute of Business Management
Part Two:
1. What do mean by ‘Super market’?
2. What do you understand by Upper and Lower threshold in pricing methodologies?
3. What does the term ‘silent market’ say?
4. Explain ‘Gap theory’ related with service quality.
5. Explain barometric technique used for sales forecasting.
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Branded Jewellery Market in India: An Overview
Brands are built over decades, more so in high-value markets like gold jewellery .The total jewellery
market in India is around Rs.60, 000 crore, out of which the estimated size of the diamond jewellery
market is Rs.8,000 crore, and that of branded diamond jewellery is about Rs.600 crore. For a brand to
become firmly established it must deal with several tangible and intangible factors. It requires focused
advertising, customer confidence, name-recognition, display and astute salesmanship to compete with
traditional jewellers. Success hinges upon how a particular brand can differentiate itself from the clutter.
Most important, affordability and quality are the elements in sustaining a brand. The growth of a
jewellery brand depends on the confidence it can instill in buyers about the purity of the gold, be it 14, 18,
or 22-carat. It also depends on the mark-up in price. The cost includes making (labour) charges on top of
value of the material, gold content and stones including diamonds and precious stones, if used. Besides, a
system of hallmarking for the purity of metal and identification of the manufacturer and jewellery items is
a need if not an imperative. At present the branded jewellery business is in its infancy in India,
constituting hardly 10% of the market. With the market growing annually at the rate of 20-25%, its share
will expand. While domestic jewellery makers have the advantage of skills which still form a sizeable
component of value, the confidence factor (in traditional craftsmen) is, however, on the decline. This
gives branded jewellery an edge over the traditional variety. One handicap branded jewelers face is the
differing tastes of consumers. Thus, inventories will be high as also the carrying cost. On the other hand,
the convenience of readymade jewellery is an ace in the brand marketer’s hand. The consumer has no
time to waste on the whims of craftsmen. Earlier, there was not much of a choice available.
Consumer Perception of Gold Jewellery
India is the world’s largest consumer of gold. The precious metal is traditionally purchased either as an
investment or to make intricate ornamental heirloom jewellery. The liberal economic dispensation
ushered in at beginning of the 1990s and the emergence of an affluent professional class led to the
Examination Paper: Retail Management
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IIBM Institute of Business Management
creation of a burgeoning designer wear/cosmetics/fashion accessory market in India. This encouraged
some domestic jewellery manufacturers to carve out a niche in this market. The abolition of the Gold
Control Order and the subsequent easing of restrictions on the import of the precious metal, including a
substantial reduction in import duties, have encouraged the development of this new market.In the mid-
1990s the Indian consumer’s attitude towards gold jewellery changed. Gold jewellery, from being just an
investment avenue, was now seen as a way to make a lifestyle and personality statement. Globally, 90%
of the jewellery is sold as dress-wear – a part of the wardrobe and not the vault. Branded jewellery as a
fashion accessory constitutes around one per cent of the Rs. 60,000 crore per annum jewellery market in
India. However, it is growing fast and has become a part of every girl’s treasure trove. One can easily spot
branded jewellery counters at Shoppers’ Stop and Lifestyle. With exclusive designs, standardized pricing
and superior finish, branded jewellery is aptly termed as fashion accessories, suitable for both western as
well as traditional wear. It must be mentioned that purchasing gold is not necessarily an urban
phenomenon and market share gains are likely to be more rapid in smaller towns. Though designer
jewellery arrived in India in the late nineties, it was only in this millennium that the scenario changed.
With aggressive advertising campaigns, the big brands – Tanishq, Carbon, Gili, Sarkles and Oyzterbay,
to name a few – arrived, teaching the customers at the paying end to shop like his or her counterpart in the
West. The message read loud and clear: “Your wardrobe includes jewels too!” Stiff competition from
traditional jewellers forced the newcomers to introduce a series of exchange offers and guarantee
certificates to woo the adventurous consumer. Nevertheless, this gold-loving nation has been very
cautions in its appreciation of branded jewellery. Much of the gold jewellery in India is 22-carat unlike in
western countries where it is basically 14 carats. Fine jewellery by international standards goes up to 18
carats. For stone setting alloys up to 18 carats are preferred. Educated middle-income women, particularly
working women, tend to wear less gold jewellery these days. However, growing incomes – especially
among NRIs – have increased demand. Most jewellery consumers are women between 25-45 years and
men in the 40-55 year bracket. Men largely buy lower-value items, such as rings, chains or tie-pins,
frequently as gifts. While women are seen more often in jewellery showrooms, it is the men who are still
the effective decision-markets as far as buying goes in a majority of cases. The phenomenon, however, is
changing. People are now looking beyond traditional 22-carat jewellery. Changing lifestyle has made
buyers more product and quality-conscious. And branded jewellery as an off-the-counter product is
gaining greater acceptance. In the past five years or so since branded jewellery entered the market, it has
threatened the very survival of traditional jewellers and craftmen in the same way as traditional tailors,
who are being replaced by makers of branded readymades. Inroads are being made by branded jewellery
both in the domestic and international markets. This indicates that Indian women are definitely showing
signs of accepting branded jewellery.
Country-wise Gold usage in Carat Jewellery (1990 to 1999)
Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Italy 381 415 461 441 435 446 439 500 535 511
India 238.6 227 293.8 259 346 400.6 427.8 594 682.6 644
USA 126.6 121.2 132.1 140 146.7 148.3 152.4 159 170.2 178.2
Japan 109.5 106.7 104 88 85 78 74 55 39 37
Turkey 130.9 102.6 116.3 126.6 80.7 110.4 140.7 168.1 159 115
Germany 49.8 51 45.4 44.5 41.8 38.9 37.2 35.9 34.3 32.6
Other
Countries 1070.8 1163.7 1377.1 1250.1 1253.8 1345.6 1366 1580.4 1331.4 1416.2
China 0 134.7 203 179 208 204 189 224 173 166
Soviet
Union/CIS 0 36.9 29.2 26 20.2 20.2 25.3 29 27 28
Examination Paper: Retail Management
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IIBM Institute of Business Management
The Forward Path
The future of the branded category of jewellery seems to be bright in India with the consumer becoming
more conscious of fashion trends and also ready to bring gold ‘from the vault to the wardrobe!’ Fashion
jewellery has come to stay. With people willing to spend lavishly on their clothes, it won’t be long before
they start looking for matching ornaments.
Source: The Gems Jewellers Export Promotion Council.
Major Jewellery Brands:
Carbon
Carbon, a pioneer in the branded jewellery segment, has a range of 18 carat fashion accessories that
includes rings, necklaces, pendants, ear tops and bracelets. Established in October 1996, carbon is a
distinctive lifestyle jewellery brand for the sophisticated and contemporary woman. The Carbon range is
currently available in 40 outlets (in a shop-in-shop format only) across 16 cities, and will be in 23 cities
by 2005.The Company is also planning to have its own outlets, the first of which is likely to open before
the end of 2003. it also plans to expand its market by going in for products for specific occasions such as
festivals, birthdays and anniversaries. In addition, it’s looking at cross-promoting Carbon jewellery with
other branded lifestyle products such as perfumes, clothing and cosmetics. The price range of Carbon
products is modest (Rs.3,750 to Rs.20,000 per piece), and unlike traditional jewellery whose prices can be
brought down through bargaining, its items have a nationally uniform MRP. Through its marketing and
advertising campaigns, Carbon aims at creating a contemporary feel with more value for the wearer. Six
years since its inception, Carbon’s annual sales have reached a considerable Rs.16 crore (approx) in the
domestic market, with an average piece value of Rs. 5,000.Carbon recently launched the Persona
collection for women to mark its fifth anniversary. This collection of five pendants depicts five different
facets of a woman. Besides woman’s earrings and pendants, Carbon has something for men too: cufflinks,
tie-pins and bracelets. Carbon’s product strength is in its collections like Venus and Sun sign. The
company brings out a new range almost every month based on consumer response. Carbon is one of the
organized and more successful ventures in branded jewellery retailing from the house of Peakok
Jewellery Private Limited. It was incorporated in Bangalore in early 1991 and spearheaded by Mahesh
Rao, a young entrepreneur with extensive experience in the fashion accessories market. Mr. Rao felt in
the mid-1990s that the Indian consumer’s attitude towards gold jewellery would change from being an
investment avenue to one that made a lifestyle and personality statement. Seizing the opportunity, he
initiated within the Peacock fold, besides their exports, a new brand of 18-carat gold jewellery called
Carbon for the domestic market. Peacock has a state-of-the-art manufacturing facility in Koramangala,
Bangalore.
Tanishq
Titan Industries Limited is a joint venture of the Tata Group and The Tamil Nadu Industrial Development
Corporation (TIDCO). Its product range includes watches, clocks and jewellery. In a short span of time,
the company has built an enviable reputation for its corporate practices, products and services. After
entering the watch segment in 1987, Titan ventured into the precious jewellery segment in 1995 under the
brand name Tanishq. It is India’s only fine jewellery brand with a national presence and is an
acknowledgement business leader in the country’s jewellery market. In early 2000, Titan organized
itself into two business units: watches and clocks, and jewellery. According to Jacob Kurien, chief
operating officer of Tanishq, this helped the company redefine its business purpose and focus. Tanishq
has invested Rs.60 crore in its manufacturing unit in Hosur, Tamil Nadu. Tanishq worked tirelessly on a
two-pronged brand-building strategy: (i) Cultivate trust by educating customers on the unethical practices
in the business, and (ii) use innovative methods to change the perception of jewellery as a high-priced
purchase. Tanishq has leveraged the design skills that are part of the Titan heritage to refine its products,
and has invested a lot in R&D and consumer research on what the Indian woman is looking for and how
she is evolving. Tanishq jewellery is sold exclusively through a company-controlled retail chain which
now has 55 outlets – five owned by the company and the rest run by franchisees – spread over 40 cities
Total 2107.2 2358.8 2761.9 2554.2 2618.9 2792 2815.4 3345.4 3151.5 3128
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and is still expanding. The locations are chosen on the basis of geographical spread and the shopping
dynamics of a particular metro. The primary promotional medium for Tanishq is its boutiques, which
explains the emphasis on store design and layout. Its stores demonstrate design leadership and
differentiation and provide excitement around the collections in the outlets. Tanishq made its foray into
18-carat jewellery in the early 1990s; switched to 22-carat and again turned to 18-carat jewellery. To meet
the increasing demand, it plans to nearly double the number of its outlets and offer a range of ‘wearable’
products. The brand caters to customers looking for items in between costume jewellery and real gold
ornaments.
Major collections of Tanishq include:
Aria: Tanishq Aria is a spectacular collection of diamond jewellery. With over 80 exquisite designs of
earrings, finger-rings, bangles and neckwear, the prices in this collection began at as Rs.3, 200.
The collection targets the contemporary woman, with designs representing a seamless blend of the
traditional and the modern. Aria has been crafted by experts with a thorough understanding of the Indian
woman’s jewellery needs. The Aria collection is available at all Tanishq showrooms. Collection G: the
World Gold Council recently launched a range of 22-carat lightweight gold jewellery called Collection G.
This range is promoted by Tanishq and is an exclusive concept/brand of WGC. It includes pendants,
earrings, finger-rings and bracelets, and targets urban woman in the age group of 18-30 years. In 22-carat
gold, the designs are stylish and modern and go with all forms attire – casual and formal. Indian and
Western. It has multiple finishes on a single piece to convey a modern look. The jewellery is priced from
Rs.4, 995.
Gili
Gili, a distinctive brand established by the Gitanjali Group, is one of India’s largest exporters of fine
diamonds and a De Beers sight holder. It came into existence soon after the abolition of the Gold Control
Order by the Indian government. Gili offers a wide range of 18-carat plain gold and diamond-studded
jewellery, designed to appeal to the contemporary Indian woman. Indian and western styles and motifs
combine to produce truly unique ornaments that are finely crafted and extremely attractive. Gili’s
products are available through a mail-order catalogue and show-in-shop counters in fine stores all over
the country. In addition, it has special promotional offers during special events like Valentine’s Day,
Raksha Bandhan and Diwali, and beauty contents and shows. Gili jewellery comes with a guarantee
on the quality and weight of the diamond and gold. Gili’s Millennium Series diamonds are triple certified
and come in a special box. Ideal to give as a gift or keep as a souvenir of a one-in-a-lifetime occasion. In
1997, Gili launched a collection of 18-carat gold ethnic Indian ornaments with traditional forms and
motifs, created with the most modern technology available today. These pieces are well finished,
beautifully polished and available at extremely affordable prices. The Gili Gold range caters to the
modern individual, with locally manufactured designs in 24-carat gold that are elegant, simple. Timeless
rings, pendants, earrings, necklaces and bangles. Gili have captured the 18-carat diamond-studded
jewellery segment in the price range of Rs. 2,500 to 15,000.
Intergold
Intergold is the biggest exporter of diamond-studded jewellery in India. It started off more than a decade
ago as a diamond exporting company in Mumbai and has achieved unprecedented success in the diamond
industry in a short span. The export division has a 6,000 sft factory, which churns out 3,000 high-quality
pieces for export daily. The integrated store has a strong identify of its own: the place looks inviting and
is aesthetically appealing. The décor and design of the stores have been conceptualized to harmonies with
the actual product design. Thematic window displays attract customers and see-through glass windows
virtually compel them to walk in without being overawed, as they usually are at diamond jewellery
showrooms. The products in the store are divided into categories like pendants, necklaces and earrings for
the convenience of buyers. They are further divided according to price so a customer doesn’t need to
worry about affordability for each product. Showrooms personnel are knowledgeable about the products
and sales techniques, apart from being trained to use audio-visual aids for the benefit of consumers.
Intergold specializes in diamond, platinum and Italian jewellery and white gold. There’s something here
for buyers from all age groups with varying tastes. In the women’s range, Intergold offers pendants, rings,
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earrings, small sets and necklaces, whereas men can go in for classy tie tacks, tie pins, button covers,
sherwani buttons, belt buckles, cuff links, pendants and rings. Intergold sells only through exclusive retail
outlets and has branches in Mumbai, Goa, Surat and Bangalore. It plans to open stores in Delhi,
Hyderabad, and Calcutta soon. All Integrated stores are equipped with ultrasonic cleaners for cleaning
jewellery and diamond testers to check whether the gems are genuine.
Oyzterbay
In July 2000, six professional from Tanishq left the organization to float a new start-up – Oyzterbay.com
– for branded jewellery. Oyzerbay wants to be in e-tailing as well as brick-and-mortar retailing. The
initial plan is to have 50 exclusive outlets (both its own and franchisees) across the country. Oyzerbay
signature stores showcase and display precious metals, gemstones and crafted jewellery designs.
Oyzterbay is a young company at the forefront of change in the jewellery industry. In February 2001, it
launched its first internationally styled store at Bangalore, with a stunning range of precious jewellery in
carat gold and silver at affordable prices. The Oyzterbay network now covers all major Indian cities and
an overwhelming response has induced the company to expand to 50 outlets soon. Oyzterbay positions
itself as well-styled, high-quality jewellery for young women. Delicate and bold, traditional and modern,
the designs reflect the change in the attitude towards jewellery: from heavy overdressing to elegant daily
wear, and from ostentations display to understated panache. Prices start at a mere Rs.500 for sterling
silver jewellery, and all products – including solid gold jewellery – are priced below Rs. 10,000, a move
that also positions Oyzterbay as the only chain catering to the burgeoning gift market. The range is
continually refreshed based on market feedback and emerging design trends. Oyzterbay stores lead the
market in attitude, ambience and service. They sport a contemporary and inviting glass-front store design
in soft colors of wood with accents of steel, in stark contrast to the forbidding opulence of traditional
jewellery stores. Complemented by modern in-store graphics and merchandising, the house colors –
tangerine pink and metallic mauve – pervade all elements of the corporate identity. The Oyzterbay web
store replicates the store experience with state-of-the-art features that make buying and gifting Oyzterbay
jewellery quick, easy and secure. A multi-media advertising campaign rolling out from April 2001 has
created waves with its fresh approach to the jewellery market. Jewellery for the Living has rapidly
become a byline for jewellery for the young woman of today – that is, jewellery for the joy of wearing, not
destined for the safe-deposit locker. Oyzterbay products are also available in large department store
chains in a shop-in-shop format.
Sparkles
Sparkles are carrying on a family tradition in producing 9-carat, 14-carat and 18-carat jewellery. The
objective is not only to provide off-the-shelf diamond jewellery in a wide array of designs, but also to
offer customers an affordable range of choices. A trend-setting initiative in the Indian market, Sparkles
became a revolutionary success and grew to become one of the market leaders in the branded jewellery
segment. Sparkles sells through 28 outlets in seven major Indian cities. With a wide range of designs and
more coming out every month, it is only a matter of time before it covers more cities and outlets. Besides
these regular outlets, its web-site sparklesindia.com has been a pioneering effort that has taken branded
jewellery to the newest communication medium – the Internet. During the past few years Sparkles has
been tracking what its customers want, and is striving with every new design and product to meet their
expectations. Total satisfaction and loyalty vindicates their commitment to constantly strive for quality.
Sparkles – from Poddar Jewels, Mumbai – is the only company to have added an ethnic touch to the usual
collection with nose studs.
Questions:
1. Do you think that an exclusive brand retail store would work in India? Or a mix of formats for a
brand? Discuss.
2. Will the franchisee route to a faster roll-out of retail outlets work for these jewellery brands?
What are the pros and cons?
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Caselet 2
Bobcat India Limited revolutionized footwear selling in India. The company hit upon the idea of reaching
customers through exclusive retail stores way back in 1932 and set up its own outlets, which numbered
around 1,200. It was no mean task setting up such a large network of retail outlets, especially when 90%
of them were owned and operated by the company, the rest being dealer-owned and operated. This chain
store format identify has been a strong differentiating factor in the Indian retail sector, being the first of its
kind. Combined with the high quality of the footwear, the brand soon had top-of-the-mind recall and
stayed there for many years. Unit a few years ago, the name ‘Bobcat’ was synonymous with organized
retailing in India, the only one of its kind.
The Chain Store Format
The Bobcat chain store format had its own credo – a signature store design with exclusive signage and
windows in order to facilitate easy association in the minds of the Indian consumers.
At present there are only two major categories of stores in the Bobcat Chain Store format:
(a) Bobcat Family Stores
(b) Bobcat Bazaar
(a) Bobcat Family Stores
These are sub-dividend into two formats again, based on the size of the stores. They are:
(1)Super Stores, generally more than 5,000 sq.ft. Catering to customers in the footwear category.Highstreet
stores that are anywhere between 500 and 1,500 sq.ft. Found in busy shopping areas.
(b)Bobcat Bazaar
Bobcat Bazaar stores sell the company’s planned economy product lines and marked-down merchandise
round the year. Known as R-pair stores, their performance depends heavily upon the availability of
marked-down merchandise. Such markdowns are done on products that have suffered quality accidents,
are shop-soiled, lines that are closed-out etc.
Recent Format Developments
New retail formats have begun to supersede conventional ones. Independent big-box multi-brand
department stores have started selling footwear as a category, especially in metros and cities. Malls are
another new shopping format that is growing rapidly in the metros. Many upcoming footwear retailers are
obtaining space inside the malls as mall partners to take advantage of the ready footfalls available. For the
existing independent Bobcat stores it is expensive now to run campaigns and promotions to attain the
required footfalls and expected conversions.
Merchandising in Bobcat Family Stores
The exclusively of the ‘Bobcat’ brand to the Bobcat retail stores was the differentiating factor for
customers until recently. However, a few years ago the company decided to sell Bobcat branded goods
through its channel sales wing called Bobcat Wholesale. Hitherto, the wholesale channel had a different
brand for itself called BSC. This wholesale channel supplies merchandise to footwear retailers across
India through its authorized distributors. The brand Bobcat has now been extended to this wholesale
channel too, which means that Bobcat branded goods is available in every other local footwear store. The
exclusivity of the brand to its own outlets has come to an end. And, even as the sales of the wholesale
division remain stagnant, what compelling reasons can a customer have to
visit a Bobcat Store now? A peculiar feature of the Bobcat store was its odd price points: Rs 149.95,
199.95, etc.
Merchandise presentation and Visual Merchandising
Bobcat pioneered the concept of show window displays in India with a style that was unique to the
company. It was professionally managed, with an exclusive team handling the motif and the design.
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Every month the direction to decorate the show windows were given by a mailer prepared by special
decorators. Sales personnel in each store were trained to be window decorators too. Recently, these
windows had to be done away with because the company thought that they should follow the
contemporary practice of free-access retailing, where all merchandise pairs are displayed in open shelves
to enable customers to help themselves. Remember, in India footwear is always tried on a footstool and
bought after considerable service extended by the salesperson personally. Free-access retailing may work
when there is adequate space inside a store to move around. The effect of such ‘pigeon-hole’ free access
is that they give an impression that they are Bobcat’s R-Pair outlets. What can now entice the customer
into entering a Bobcat store?
Customer Service
Though Bobcat faces tough manpower challenges (the store sales personnel and managers have separate
labor unions), the sales personnel who are on its permanent rolls are trained in selling footwear. However,
there are a large proportion of untrained and temporary hands. Further, salespersons do not wear any
uniform and hence customers can hardly identify them. There is as yet no loyalty program to create
customer stickiness to any store or the brand, and most of the stores are not connected by a central
information system or ERP (enterprise-wide resource planning) as the organization has its limitations
when it comes to investing in such initiatives. Organized retail companies need to have non-negotiable
standards of customer service or they will lose customers to its competitors. The company is now losing
its market share despite its strong position in categories like men’s footwear, children’s uniform shoes,
etc. However, the number of stores it has around the country is around the same, at 1,200. The company
now needs to put together a plan for both its survival and growth on a war footing. The top management
is revisiting its strategies in every functional area to turn the company around.
Questions:
1. What store format mix would you recommend for the company?
2. Did the company do the right thing by extending the in-store brand to the wholesale channel?
What should it do now?
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. “The Indian Retail sectors are witnessing a transition phase where organized retailing is taking a
lead over unorganized retailing”. In the light of above statement, explain the current states of
Indian Retailing.
2. “The customer is fully satisfied when the perceived services meets or exceeds their
expectations”. Explain.
END OF SECTION C
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IIBM Institute of Business Management
Examination Paper MM.100
Consumer Behaviour
Section A: Objective Type (30 marks)
· This section consists of Multiple choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carries 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The Yellow color is related with personality links like:
a. Caution, warmth
b. Power, informality
c. Passion, excitement
d. Purity, innocence
2. Consumers having high ethnocentric value in CETSCALE for foreign made products are likely to
feel that:
a. It is worthy to purchase the foreign products.
b. It is wrong to purchase foreign made products.
c. Only foreign made products should be purchased.
d. They should remain neutral.
3. If the OSL(optimum stimulation level) score of a person is greater than the lifestyle he/she is
living then he/she likely to:
a. Take rest
b. Appear quite satisfied
c. Seem bored
d. Cannot be predicted.
4. The psychologists who disagree with the Freud’s theory of personality are usually referred as:
a. Non Freudians
b. Freudians
c. Neo Freudians
d. C-Freudians
5. According to Sigmund Freud, the human personality consists of 3 interacting systems viz the id,
the superego and the ego. What actually ‘id’ refers to
a. Its role is to see the individual’s needs in a socially acceptable fashion.
b. Its role is to drive impulsions for the needs to be satisfied immediately.
c. Its function is to control and balance the impulsive demands.
d. None of the above
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Part Two:
1. What is a ‘common man approach’?
2. Differentiate between ‘Enculturation’ and ‘Acculturation’.
3. Write a short note on ‘Rokeach Value Survey’, a widely used value instrument, in consumer
behavior studies.
4. Explain the ‘Sociometric method’ of measurement in ‘Opinion Leadership’.
5. What do you understand by the term ‘Viral marketing’?
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Indian refrigeration industry had apparently reached maturity in the eighties. The introduction stage
could be seen in 1962-66; growth, 1967-80; and maturity 1981-88.Between 1989-90 and 1990-91, the
market grew by 12 to 12.35 lakhs units; in 1992-93 it is estimated to have come down from 12 to 10.39
lakhs pieces. Thus, the decline seems to have begun. Presently, there are six main competitors in the
refrigerator market in India. The industry seems to have structure prevailing in monopolistic competition.
The products at present available in the market are under the brand names of Godrej, Kelvinator, Voltas,
Videocon, BPL and Allwyn. The new entrants to the market like BPL and Videocon with latest ultra
modern refrigeration technology have thrown down the gauntlet to the existing leaders like Godrej and
Kelvinator. A study has been conducted to find out what change have occurred in consumers behavior
due to the emergence of these new challenges, because, for all one knows; a very tough competition has
recently emerged among the industrial giants due to which consumer behavior has undergone drastic
change. The main purpose of study is to see how defectors are affecting consumer behavior. The specific
objectives of this study are positioning of products and brands, rating of different parameters and their
ranking, consumers’ degree of satisfaction, estimating ideal capacity and ideal prices. Consumer’s
perception of price and brand, awareness of different brands and various sources of information to the
consumer. This survey leads to the conclusion, that most of the people are aware of 165-liter capacity
with awareness of nearly 95%, others are less known to consumers. The most important parameters for
customers while buying a refrigerator are technology, cooling efficiency, durability, price, capacity and
after-sales service in that order. According to the dealers, the customers consider brand name, technology,
cooling efficiency, durability and after-sales service as very important. Other parameters like special
gift/price, guarantee/warranty are just important parameters. According to the customers, BPL, Voltas and
Videocon are high – priced refrigerator; Godrej and Kelvinator, comparatively low-priced; and Allwyn,
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medium-priced. From the dealers’ survey it has been found out that the ideal capacity is 165 liter; and the
ideal price Rs. 7,000-8,000.
Questions:
1. Due to the emergence of new industrial giants like BPL and Videocon, consumer
behavior has undergone a sea-change. In what ways?
2. Discuss which will be the most effective strategy according to you that will make
Consumer brand loyal in the refrigerator industry.
Caselet 2
Walking down the streets of Delhi’s Connaught place, capital’s business heart, Mike Steve, 50 years old
CEO of Macnine shoes (India), was looking at the feet of the busy office goers. The CEO purposely
walked to his office near Super Bazaar from the Palika car parking to have a firsthand feeling of the
market response to the Macnine shoes, and in general the foot-wear habit of urban Indians. Macnine shoes
brought an image of simple no fuss yet elegant office-going shoes. The shoes, known for its comfort and
reasonable prices shared a good market share in face of competition from Windsor, Red Tape, Lee
Cooper, Woodland, etc. but as the days passed Mike’s trained eyes could see the changing scenario.
Office goers no longer seemed to prefer “no fuss” shoes, there was a distinct preference for heavy looking
chunky shoes. People’s perception about office-going shoes was changing from regular 6-hole laced
shoes to these heavy looking shoes. As a result, Macnine shoes’ market share decreased by 10 per cent
between 1998 and 1999. Disturbed by the fact, Mr. Steve called a meeting of the departmental heads and
after five-hour long meeting it was accepted, Indian consumers had undergone a sea change in their
attitudes and perceptions about the products. Office was no long seen as a boring work-place where a “no
nonsense” rather “stiff upper lip” attitude has to be maintained. Office was seen as more a part of regular
life and a relaxed “as you want to be” (of course within limits) attitude. Keeping pace with the time,
Macnine shoes also should shed its “traditional” image. More importantly, consumers are going more and
more for branded shoes, rather than mass production shoes that will be available at the retail shops. The
departmental heads agreed that there is a definite price-quality perception in the mind of the consumers.
Consumers perceive high price as a certificate of high quality that will be associated with the branded
products. Based on the price-quality perception, Macnine shoes were decided to be positioned in the
market. Dramatically changing from the basic principle of quality and affordability targeting the growing
middle class, the company saw a better prospect in developing a high priced brand image as shoe was no
longer, especially in big cities seen as necessity but it was a part of life style marketing where shoes were
seen as fashion accessories.
Macnine shoes which for over two decades was known for making popular affordable shoes, took a one
eighty degree turn and developed dedicated showroom with premium shoes and other accessories like Tshirts,
bags, socks etc. but, the result were quite contrary to what was expected, the decrease in market
share continued despite these efforts. The reason seems quite simple, or decade’s consumer has known
the shoe to be in the affordable range. With this sudden change the loyal buyers felt betrayed and turned
away towards other local brands. The main selling point of the company was missing the consumers no
longer felt the urge to come to buy macnine shoes. The fact was the brands who started as selling
premium shoes were perceived to be in a category of catering the upper category of consumers with
extremely focused range of shoes which borne a premium price. Talk of red Tape, talk of Lee Copper, the
image that comes to the consumer’s mind is of premium shoes with all its associated characteristics.
While past experience brings in the minds of the consumer an “affordability” image of Macnine shoes.
When the company drastically wanted to change the image, they could not fit into consumer perception of
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IIBM Institute of Business Management
a premium shoe, while high price deterred people who wanted affordability foremost. Macnine lost on
both the grounds.
Questions:
1. Explain the “role and status” for Macnine shoes.
2. Suggest some ways of changing consumer perception of Macnine shoes.
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. A college student has just purchased a new personal computer. What factors might cause the
student to experience post purchase dissonance? How might the student try to overcome it?
How can the retailer who sold the computer help reduce the student’s dissonance? How can
the computer’s manufacturer help?
2. An Advertising on a known deodorant shows a young beautiful girl is upset to meet her
boyfriend, as friends point out at her “Bad body odour”. The advertisement is trying to arouse
which motive in the consumer? Discuss by giving one similar examples?
END OF SECTION C
S-2-210311


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CASE: I ARROW AND THE APPAREL INDUSTRY

Ten years ago, Arvind Clothing Ltd., a subsidiary of Arvind Brands Ltd., a member of the Ahmedabad based Lalbhai Group, signed up with the 150- year old Arrow Company, a division of Cluett Peabody & Co. Inc., US, for licensed manufacture of Arrow shirts in India. What this brought to India was not just another premium dress shirt brand but a new manufacturing philosophy to its garment industry which combined high productivity, stringent in-line quality control, and a conducive factory ambience.
Arrow’s first plant, with a 55,000 sq. ft. area and capacity to make 3,000 to 4,000 shirts a day, was established at Bangalore in 1993 with an investment of Rs 18 crore. The conditions inside—with good lighting on the workbenches, high ceilings, ample elbow room for each worker, and plenty of ventilation, were a decided contrast to the poky, crowded, and confined sweatshops characterising the usual Indian apparel factory in those days. It employed a computer system for translating the designed shirt’s dimensions to automatically mark the master pattern for initial cutting of the fabric layers. This was installed, not to save labour but to ensure cutting accuracy and low wastage of cloth.
The over two-dozen quality checkpoints during the conversion of fabric to finished shirt was unique to the industry. It is among the very few plants in the world that makes shirts with 2 ply 140s and 3 ply 100s cotton fabrics using 16 to 18 stitches per inch. In March 2003, the Bangalore plant could produce stain-repellant shirts based on nanotechnology.
The reputation of this plant has spread far and wide and now it is loaded mostly with export orders from renowned global brands such as GAP, Next, Espiri, and the like. Recently the plant was identified by Tommy Hilfiger to make its brand of shirts for the Indian market. As a result, Arvind Brands has had to take over four other factories in Bangalore on wet lease to make the Arrow brand of garments for the domestic market.
In fact, the demand pressure from global brands which want to outsource form Arvind Brands is so great that the company has had to set up another large factory for export jobs on the outskirts of Bangalore. The new unit of 75,000 sq. ft. has cost Rs 16 crore and can turn out 8,000 to 9,000 shirts per day. The technical collaborators are the renowned C&F Italia of Italy.
Among the cutting edge technologies deployed here are a Gerber make CNC fabric cutting machine, automatic collar and cuff stitching machines, pneumatic holding for tasks like shoulder joining, threat trimming and bottom hemming, a special machine to attach and edge stitch the back yoke, foam finishers which use air and steam to remove creases in the finished garment, and many others. The stitching machines in this plant can deliver up to 25 stitches per inch. A continuous monitoring of the production process in the entire factory is done through a computerised apparel production management system, which is hooked to every machine. Because of the use of such technology, this plant will need only 800 persons for a capacity which is three times that of the first plant which employs 580 persons.
Exports of garments made for global brands fetched Arvind Brands over Rs 60 crore in 2002, and this can double in the next few years, when the new factory goes on full stream. In fact, with the lifting of the country-wise quota regime in 2005, there will be surge in demand for high quality garments from India and Arvind is already considering setting up two more such high tech export-oriented factories.
It is not just in the area of manufacture but also retailing that the Arrow brand brought a wind of change on the Indian scene. Prior to its coming, the usual Indian shirt shop used to be a clutter of racks with little by way of display. What Arvind Brands did was to set up exclusive showrooms for Arrow shirts in which the functional was combined with aesthetic. Stuffed racks and clutter eschewed. The product were displayed in such a manner the customer could spot their qualities from a distance. Of course, today this has become standard practice with many other brands in the country, but Arrow showed the way. Arrow today has the largest network of 64 exclusive outlets across India. It is also present in 30 retail chains. It branched into multi-brand outlets in 2001, and is present in over 200 select outlets.
From just formal dress shirts in the beginning, the product range of Arvind Brands has expanded in the last ten years to include casual shirts, T-shirts, and trousers. In the pipeline are light jackets and jeans engineered for the middle-aged paunch. Arrow also tied up with the renowned Italian designer, Renato Grande, who has worked with names like Versace and Marlboro, to design its Spring / Summer Collection 2003. The company has also announced its intention to license the Arrow brand for other lifestyle accessories like footwear, watches, undergarments, fragrances, and leather goods. According to Darshan Mehta, President, Arvind Brands Ltd., the current turnover at retail prices of the Arrow brand in India is about Rs 85 crore. He expects the turnover to cross Rs 100 crore in the next few years, of which about 15 per cent will be from the licensed non-clothing products.
In 2005, Arvind Brands launched a major retail initiative for all its brands. Arvind Brands licensed brands (Arrow, Lee and Wrangler) had grown at a healthy 35 per cent rate in 2004 and the company planned to sustain the growth by increasing their retail presence. Arvind Brands also widened the geographical presence of its home-grown brands, such as Newport and Ruf-n Tuf, targeting small towns across India. The company planned to increase the number of outlets where its domestic brands would be available, and draw in new customers for readymades. To improve its presence in the high-end market, the firm started negotiating with an international brand and is likely to launch the brand.
The company has plans to expand its retail presence of Newport Jeans, from 1200 outlets across 480 towns to 3000 outlets covering 800 towns.
For a company ranked as one of the world’s largest manufactures of denim cloth and owners of world famous brands, the future looks bright and certain for Arvind Brands Ltd.

Company profile

Name of the Company : Arvind Mills
Year of Establishment : 1931
Promoters : Three brothers–Katurbhai, Narottam Bhai, and Chimnabhai
Divisions : Arvind Mills was split in 1993 into
Units—textiles, telecom and garments. Arvind Ltd. (textile unit) is 100 per cent subsidiary of Arvind Mills.
Growth Strategy : Arvind Mills has grown through buying-up of sick units, going global and acquisition of German and US brand names.

Questions

1. Why did Arvind Mills choose globalization as the major route to achieve growth when the domestic market was huge?

2. How does lifting of ‘Country-wise quota regime’ help Arvind Mills?

3. What lessons can other Indian businesses learn form the experience of Arvind Mills?

Case 1
HOW GENERAL MOTORS IS COLLABORATING ONLINE

The Problem
Designing a car is a complex and lengthy task. Take, for example, General Motors (GM). Each model created needs to go through a frontal crash test. So the company builds prototypes that cost about one million dollars for each car and tests how they react to frontal crash. GM crashes these cars, makes improvements, then makes new prototypes and crashes them again. There are other tests and more crashes. Even as late as the 1990s, GM crashed as many as 70 cars for each new model.

The information regarding a new design and its various tests, collected in these crashes and other tests, has to be shared among close to 20,000 designers and engineers in hundreds of divisions and departments at 14 GM design labs, some of which are located in different countries. In addition, communication and collaboration is needed with design engineers of the more than 1,000 key suppliers. All of these necessary communications slowed the design process and increased its cost. It took over four years to get a new model to the market.

The Solution
GM, like its competitors, has been transforming itself into an e-business. This gradual transformation has been going on since the mid-1990s, when Internet band width increased sufficiently to allow Web collaboration. The first task was to examine over 7,000 existing legacy IT systems, reducing them to about 3,000, and making them Web-enabled. The EC system is centered on a computer-aided design (CAD) program from EDS (a large IT company, subsidiary of GM). This system, known as Unigraphics, allows 3-D design documents to be shared online by both the internal and external designers and engineers, all of whom are hooked up with the EDS software. In addition. Collaborative and Web-conferencing software tools, including Microsoft’s NetMeeting and EDS’s eVis, were added to enhance teamwork. These tools have radically changed the vehicle-review process.
To see how GM now collaborates with a supplier, take as an example a needed cost reduction of a new seat frame made by Johnson Control GM electronically sends its specifications for the seat to the vendor’s product data system. Johnson Control’s collaboration systems (eMatrix) is integrated with EDS’s In graphics. This integration allows joint searching, designing. Tooling, and testing of the seat frame in real time, expediting the process and cutting costs by more than 10 percent.
Another area of collaboration is that of crashing cars. Here designers need close collaboration with the test engineers. Using simulation, mathematical modeling, and a Web-based review process. GM is able now to electronically “Crash” cars rather than to do it physically.

The Results
Now it takes less than 18 months to bring a new car to market, compared to 4 or more years before, and at a much lower design cost. For example, 60 cars are now “Crashed” electronically, and only 10 are crashed physically. The shorter cycle time enables more new car models, providing GM with a competitive edge. All this has translated into profit. Despite the economic show down. GM’s revenues increased more than 6 percent in 2002. while its earnings in the second quarter of 2002 doubled that of 2001.

Questions:

1. Why did it take GM over four years to design a new car?
2. Who collaborated with whom to reduce the time-to-market?
3. How has IT helped to cut the time-to-market?

CASE – 1 Dabur India Limited: Growing Big and Global

Dabur is among the top five FMCG companies in India and is positioned successfully on the specialist herbal platform. Dabur has proven its expertise in the fields of health care, personal care, homecare and foods.
The company was founded by Dr. S. K. Burman in 1884 as small pharmacy in Calcutta (now Kolkata), India. And is now led by his great grandson Vivek C. Burman, who is the Chairman of Dabur India Limited and the senior most representative of the Burman family in the company. The company headquarters are in Ghaziabad, India, near the Indian capital New Delhi, where it is registered. The company has over 12 manufacturing units in India and abroad. The international facilities are located in Nepal, Dubai, Bangladesh, Egypt and Nigeria.
S.K. Burman, the founder of Dabur, was trained as a physician. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. Soon, he started preparing natural remedies based on Ayurved for diseases such as Cholera, Plague and Malaria. Due to his cheap and effective remedies, he became to be known as ‘Daktar’ (Indianised version of ‘doctor’). And that is how his venture Dabur got its name—derived from Daktar Burman.
The company faces stiff competition from many multi national and domestic companies. In the Branded and Packaged Food and Beverages segment major companies that are active include Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic medicines and products, the major competitors are Baidyanath, Vicco, Jhandu, Himani and other pharmaceutical companies.

Vision, Mission and Objectives

Vision statement of Dabur says that the company is “dedicated to the health and well being of every household”. The objective is to “significantly accelerate profitable growth by providing comfort to others”. For achieving this objective Dabur aims to:
• Focus on growing core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology.
• Be the preferred company to meet the health and personal grooming needs of target consumers with safe, efficacious, natural solutions by synthesising deep knowledge of ayurveda and herbs with modern science.
• Be a professionally managed employer of choice, attracting, developing and retaining quality personnel.
• Be responsible citizens with a commitment to environmental protection.
• Provide superior returns, relative to our peer group, to our shareholders.

Chairman of the company

Vivek C. Burman joined Dabur in 1954 after completing his graduation in Business Administration from the USA. In 1986 he was appointed Managing Director of Dabur and in 1998 he took over as Chairman of the Company.
Under Vivek Burman’s leadership, Dabur has grown and evolved as a multi-crore business house with a diverse product portfolio and a marketing network that traverses the whole of India and more than 50 countries across the world. As a strong and positive leader, Vivek C. Burman has motivated employees of Dabur to “do better than their best”—a credo that gives Dabur its status as India’s most trusted nature-based products company.

Leading brands

More than 300 diverse products in the FMCG, Healthcare and Ayurveda segments are in the product line of Dabur. List of products of the company include very successful brands like Vatika, Anmol, Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant Manjan with turnover of Rs.100 crores each.
Strategic positioning of Dabur Honey as food product, lead to market leadership with over 40% market share in branded honey market; Dabur Chyawanprash is the largest selling Ayurvedic medicine with over 65% market share. Dabur is a leader in herbal digestives with 90% market share. Hajmola tablets are in command with 75% market share of digestive tablets category. Dabur Lal Tail tops baby massage oil market with 35% of total share.
CHD (Consumer Health Division), dealing with classical Ayurvedic medicines has more than 250 products sold through prescription as well as over the counter. Proprietary Ayurvedic medicines developed by Dabur include Nature Care Isabgol, Madhuvaani and Trifgol.
However, some of the subsidiary units of Dabur have proved to be low margin business; like Dabur Finance Limited. The international units are also operating on low profit margin. The company also produces several “me – too” products. At the same time the company is very popular in the rural segment.

Questions

1. What is the objective of Dabur? Is it profit maximisation or growth maximisation? Discuss.
2. Do you think the growth of Dabur from a small pharmacy to a large multinational company is an indicator of the advantages of joint stock company against proprietorship form? Elaborate.

Note: Solve any 4 Cases Study’s

CASE: I Playing to a new beat: marketing in the music industry

Good old fashioned rock ‘n’ roll could be dead. If a mobile phone ringtone in the shape of the vocalizations of the animated Crazy Frog dominates the billboard charts for months on end, then it could well signal the death knell for the industry, and how it operates. If this ubiquitous amphibian’s aurally annoying song, converted from a mobile phone ringtone, outsold even mainstay acts such as Oasis and Coldplay, why should music companies invest millions in cultivating fresh musical talent, hoping for them to be the next big thing, when their efforts can be beaten by basic synthesizer music? The industry is facing a number of challenges that it has to address, such as strong competition, piracy, changing delivery formats, increasing cost pressures, demanding pri-madonnas and changing customer needs. Gone are the days when music moguls were reliant on sales from albums alone, now the industry trawls for revenue from a variety of sources, such as ringtones, merchandising, concerts, and music DVDs, leveraging extensive back catalogues, and music rights from advertising, movies and TV programming.

The music industry is in a state of flux at the moment. The cornerstone of the industry—the singles chart—has been facing terminal decline since the mid-1990s. Some retailers are now not even stocking singles due to this marked freefall. Some industry commentators blame the Internet as the sole cause, while others point to value differences between the price of an album and the price of a single as too much. Likewise, some commentators criticize the heavy pre-release promotion of new songs, the targeting of ever-younger markets by pop acts, and the explosion of digital television music channels as root causes of the single’s demise. The day when the typical record buyer browses through rows of shelves for a much sought-after band or song on a Saturday afternoon may be thing of the past.

Long-term success stories for the music industry are increasingly difficult to develop. The old tradition of A&R (which stands for ‘Artists & Repertoire’) was to sign, nurture and develop musical talent over a period of years. The industry relied on continually feeding the system with fresh talent that could prove to be the next big thing and capture the public imagination. Now corporate short-term thinking has enveloped business strategies. If an act fails to be an immediate hit, the record label drops them. The industry is now characterized by an endless succession of one-hit wonders and videogenic artist churning out classic cover songs, before vanishing off the celebrity radar. Four large music labels now dominate the industry (see Table 1), and have emerged through years of consolidation.

Table 1 The ‘big four’ music labels

Universal Music Sony BMG
The largest music label, with 26 per cent of global music market share; artists on its roster include U2, Limp Bizkit, Mariah Carey and No Doubt Merger consolidated its position; artists on its roster include Michael Jackson, Lauryn Hill, Westlife, Dido, Outkast and Christina Aguilera
Warner Music EMI
Third biggest music group; artists on its roster include Madonna, Red Hot Chili Peppers and REM Artists on its roster include the Rolling Stones, Coldplay, Norah Jones, Radiohead, and Robbie Williams

The ‘big four’ labels have the marketing clout and resources to invest heavily in their acts, providing them with expensive videos, publicity tours and PR coverage. This clout allows their acts to get vital airplay and video rotation on dedicated TV music channels. Major record labels have been accused of offering cash inducements of gifts to radio stations and DJs in an effort to get their songs on playlists. This activity is known in the industry as ‘radio payola’.

Consumer have flocked to the Internet, to download, to stream, to ‘rip and burn’ copyrighted music material. The digital music revolution has changed the way people listen, use and obtain their favourite music. The very business model that has worked for decades, buying a single or album from a high-street store, may not survive. Music executives are left questioning whether the Internet will kill the music business model has been fundamentally altered. According to the British Phonographic Industry (BPI), it estimated that 8 million people in the UK are downloading music from the Internet—92 per cent of them doing so illegally. In 2005 alone, sales of CD singles fell by a colossal 23 per cent. To put the change into context, the sales of digital singles increased by 746.6 per cent in 2005. Consumers are buying their music through different channels and also listening to their favourate songs through digital media rather than through standard CD, cassette or vinyl. The emergence of MP3 players, particularly the immensely popular Apple iPod, has transformed the music landscape even further. Consumers are now downloading songs electronically from the Internet, and storing them on these digital devices or burning them onto rewritable CDs.

Glossary of online music jargon

Streaming: Allows the user to listen to or watch a file as it is being simultaneously downloaded. Radio channels utilize this technology to transmit their programming on the Internet.

‘Rip n burn’: Means downloading a song or audio file from the Internet and then burning them onto rewritable CDs or DVD.

MP3 format: MP3 is a popular digital music file format. The sound quality is similar to that of a CD. The format reduces the size of a song to one-tenth of its original size allowing for it to be transmitted quickly over computer networks.

Apple iPod: The ‘digital jukebox’ that has transformed the fortunes of the pioneer PC maker. By the end of 2004 Apple is expected to have sold 5 million units of this ultra-hip gadget. It was the ‘must-have item’ for 2003. The standard 20 GB iPod player can hold around 5000 songs. Other hardware companies, such as Dell & Creative Labs, have launched competing devices. These competing brands can retail for less than £75.

Peer-to-peer networks (P2P): These networks allow users to share their music libraries with other net users. There is no central server, rather individual computers on the Internet communicating with one another. A P2P program allows users to search for material, such as music files, on other computers. The program lets users find their desired music files through the use of a central computer server. The system works lime this; a user sends in a request for a song; the system checks where on the Internet that song is located; that song is downloaded directly onto the computer of the user who made the request. The P2P server never actually holds the physical music files—it just facilitates the process.

The Internet offers a number of benefits to music shoppers, such as instant delivery, access to huge music catalogues and provision of other rich multi-media material like concerts or videos, access to samples of tracks, cheaper pricing (buying songs for 99p rather than an expensive single) and, above all, convenience. On the positive side, labels now have access to a wider global audience, possibilities of new revenue streams and leveraging their vast back catalogues. It has diminished the bargaining power of large retailers, it is a cheaper distribution medium than traditional forms and labels can now create value-laden multimedia material for consumers. However, the biggest problem is that of piracy and copyright theft. Millions of songs are being downloaded from the Internet illegally with no payment to the copyright holder. The Internet allows surfers to download songs using a format called ‘MP3’, which doesn’t have inbuilt copyright protection, thus allowing the user to copy and share with other surfers with ease. Peer to peer (P2P) networks such as Kazaa and Grokster have emerged and pose an even deadlier threat to the music industry—they are enemies that are even harder to track and contain. Consumers can easily source and download illegal copyrighted material with considerable ease using P2P networks (see accompanying box).

P2P Networks used for file sharing

Kazaa
Gnutella
Grokster
Morpheus
eDonkey
Imesh
Bearshare
WinMX

A large number of legal download sites have now been launched, where surfers can either stream their favourite music or download it for future use in their digital libraries. This has been due to the rapid success of small digital medial players such the Apple iPod. The legal downloading of songs has grown exponentially. A la carte download services and subscription-based services are the two main business models. Independent research reveals that the Apple’s iTunes service has over 70 per cent of the market. Highlighting this growing phenomenon of the Internet as an official channel of distribution, new music charts are now being created, such as the ‘Official Download Chart’. Industry sources suggest that out of a typical 99p download, the music label get 65p, while credit card companies get 4p, leaving the online music store with 30p per song download. These services may fundamentally eradicate the concept of an album, with customers selecting only a handful of their favourite songs rather than entire standard 12 tracks. These prices are having knock-on consequences for the pricing of physical formats. Consumers are now looking for a more value-laden music product rather than simply 12 songs with an album cover. Now they are expecting behind the scenes access to their favourite group, live concert footage and other content-rich material.

Big Noise Music is an example of one of the legitimate downloading sites running the OD2 system. The site is different in that for every £1 download, 10p of the revenue goes to the charity Oxfam.

The music industry is ferociously fighting back by issuing lawsuits for breach of copyright to people who are illegally downloading songs from the Internet using P2P software. The recording industry has started to sue thousands of people who illegally share music using P2P. They are issuing warnings to net surfers who are P2P software that their activities are being watched and monitored. Instant Internet messages are being sent to those who are suspected of offering songs illegally. In addition, they have been awarded court orders so that Internet providers must identify people who are heavily involved in such activity. The music industry is also involved heavily in issue advertising campaigns, by promoting anti-piracy websites such as www.pro-music.org to educate people on the industry and the impact of piracy on artists. These types of public awareness campaigns are designed to illustrate the implications of illegal downloading.

Small independent music labels view P2P networks differently, seeing them as vital in achieving publicity and distribution for their acts. These firms simply do not have the promotional resources or distribution clout of the ‘big four’ record labels. They see P2P networks as an excellent viral marketing tool, creating buzz about a song or artist that will ultimately lead to wider mainstream and commercial appeal. The Internet is used to create communities of fans who are interested in their music, providing them access to free videos and other material. It allows independent acts the opportunity to distribute their music to a wider audience, building up their fan base through word of mouth. Savvy unsigned bands have sophisticated websites showcasing their work, and offering free downloads as well as opportunities for audio-philes to purchase their tunes. Alternatively major labels still see that to gain success one has to get a video on rotation on MTV and that this in turn encourages greater airplay on radio stations, ultimately leading to increased purchases.

Table 2 The major legitimate online music provider
Name Details Pricing
Apple iTunes Huge catalogue of over 750,000 songs; compatible with Apple’s very hip iPod system; offers free single of the week and other exclusive material 79p per track, £7.99 per album
Napster The now-legitimate website offers over 1,000,000 songs; offers several streaming radio stations too Subscription based—subscribers pay £9.99 a month to stream any of the catalogue, plus another 99p to download on to a CD
Sony Connect over 300,000 songs from the major labels; excellent sound quality but compatible only with Sony products due to proprietary file formats From 80p- £1.20 per track, and £8- £10 per album
Bleep.com Small catalogue of 15,000 songs with a focus on independent music labels; high-quality downloads due to media files used 99p per track, £6.99 per album
Wippit UK-based service; 175,000 songs to download; gives a selection of free tracks every month From 30p to £1 to download; alternatively, users can subscribe to the service for £50 a year to gain access to 60,000 songs
OD2 System, used by:Mycokemusic.com HMV.com
MSN.com
TowerRecord.co.uk
Big Noise Music These online sites use the OD2 system for music downloads; they look after encryption, hosting, royalty management and the entire e-commerce system; provides access to nearly 350,000 tracks from 12,000 recording artists Varying product bundles, typically 99p for track download, and 1p for streaming
For traditional music retailers the retailing landscape is getting more competitive, with multiple channels of distribution emerging due to the Internet and large supermarket chains now selling music CDs. Supermarkets are becoming one of the main channels of distribution through which consumers buy music. These supermarkets are stocking only a limited number of the best-selling music titles, limiting the number of distribution outlets for new and independent music. Only charts hits and greatest hits collections will make it on to the shelves of such outlets.

Now consumers can buy albums from traditional Internet retailers such as Amazon.com, and also on websites that utilize access to grey markets such as cdwow.co.uk, as well as through legitimate download retailers. This has left traditional music retail operations with a severe conundrum: how can they entice more shoppers into their stores? The accompanying box highlights where typical shoppers source their music at present.

Where do people buy their music?

Music stores (like HMV, Virgin Megastore) 16 per cent
Chains (like Woolworth, WHSmith) 16 per cent
Supermarkets (like Tesco, Asda) 21.6 per cent
Mail order 3.9 per cent
Internet sales (like Amazon.com) 7 per cent
Downloads Not yet measured

The issue of online music retailers using parallel importing, such as CDWOW (www.cdwow.co.uk) is a concern. These retailers are taking advantage of worldwide price discrepancies for legitimate music CDs, sourcing them in low-cost countries like Hong Kong and exporting them into European countries. Prices for music in these markets are considerably lower than the market that they are exporting to, and they don’t even charge for international delivery. Yet technological improvements have led to revenue opportunities for the industry. Development such as online radio, digital rights management, Internet streaming, tethered downloads (locked to PC), downloads (burnable, portable), in-store kiosks, ring-tones, mobile message clips and games soundtracks are great potential revenue sources. In an effort to unlock this potential the major labels have digitized their entire back catalogues. In the wake of these dramatic environmental changes the industry has had to radically adapt. The ‘big four’ music labels are consolidating even further, developing a digital music strategy, and re-evaluating their entire traditional business model. Mobile phones are seen as the next primary channel of distribution for digital music. High penetration levels in the market for mobile phones and the inherent mobility advantages make this the next crucial battlefield for the music industry.

The Internet may emerge as the primary channel of distribution for music, and the music industry is going to have to adapt to these changes. The move towards the online distribution of entertainment is still in its infancy, with more investment into the telecommunications infrastructure, such as greater Internet access, increased access to broadband technology, 3G technology and changing the way people shop for music will undoubtedly take time. The digital revolution will fundamentally change the way people purchase and consume their musical preferences. In forthcoming years the digital format will become more mainstream, leading to a proliferation of channels of distribution for music. However, as with most new channels of technology, catalogue shopping, Internet shopping likewise, and ‘video never really killed the radio star’… but will the Internet kill the record store?

Questions:

1. Discuss the micro and macro forces that are affecting the music industry.

2. Based on this analysis, what strategic options would you recommend for both music publishers and music retailers in the current marketing environment?

3. Discuss the advantages and disadvantages associated with online distribution from a music label’s perspective.

Note: Solve any 4 Cases Study’s

CASE: I Managing the Guinness brand in the face of consumers’ changing tastes

1997 saw the US$19 billion merger of Guinness and GrandMet to form Diageo, the world’s largest drinks company. Guinness was the group’s top-selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$1.2 billion. More than 10 million glasses of the popular stout were sold every day, predominantly in Guinness’s top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon.

However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six months of 2001 and, more alarmingly, sales were also down 4 per cent in its home market, Ireland. How should Diageo address falling sales in the centuries-old brand shrouded in Irish mystique and tradition?

The changing face of the Irish beer market

The Irish were very fond of beer and even fonder of Guinness. With close to 200 litres per capita drunk each year—the equivalent of one pint per person per day—Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany.

Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in Dublin by Arthur Guinness, enjoyed legendary status in Ireland, a national symbol as respected as the green, white and gold flag. It was by far the most popular alcoholic drink in Ireland, accounting for nearly one of every two pints of beer sold. Its nearest competitors were Budweiser and Heineken, which held 13 per cent and 12 per cent of the market respectively.

However, the spectacular economic growth of the Irish economy since the mid-1990s had opened up the traditional drinking market to new cultures and influences, and encouraged the travel-friendly Irish to try other drinks. Beer and in particular stout were losing popularity compared with wine or the recently launched RTDs (ready-to-drinks) or FABs (flavoured alcoholic beverages), which the younger generation of drinkers considered trendier and ‘healthier’. As a Euromonitor report explained: Younger consumers consider dark beers and stout to be old fashioned drinks, with the perceived stout or ale drinker being an old, slightly overweight man and thus not in tune with image conscious youth culture.

Beer sales, which once accounted for 75 per cent of all alcohol bought in Ireland, were expected to drop to close to 50 per cent by 2006, while stout sales were forecast to decrease by 12 per cent between 2002 and 2006.

Giving Guinness a boost in its home market

With Guinness alone accounting for 37 per cent of Diageo’s volume in the market, Guinness/UDV Ireland was one of the first to feel the pain caused by the declining popularity of beer and in particular stout. A Euromonitor report in February 2002 explained how the profile of the Guinness drinker, typically men aged 21-plus, was affected: The average age of Guinness drinkers is rising and this is bringing about the worrying fact that the size of the Guinness target audience is falling. The rate of decline is likely to quicken as the number of less brand loyal, non-stout drinking younger consumers increases.
The report continued:
In Ireland, in particular, the consumer base for Guinness is shrinking as the majority of 18 to 24 year olds consistently reject stout as a product relevant to their generation, opting instead to consume lager or spirits.
Effectively, one-third of young Irish men and half of young Irish women had reportedly never tried Guinness. A Guinness employee provided another explanation. Guinness is similar to coffee in that when you’re young you drink it [coffee] with sugar, but when you’re older you drink it without. It’s got a similar acquired taste and once you’re over the initial hurdle, you’ll fall in love with it.
In an attempt to lure young drinkers to the somewhat ‘acquired’ Guinness taste (40 per cent of the Irish population was under the age of 24) Diageo had invested millions in developing product innovations and brand building in Ireland’s 10,000 pubs, clubs and supermarkets.

Product innovation

Until the mid-1990s most Guinness in Ireland was drunk in a pint glass in the local pub. The launch of product innovations in the form of a new cooling mechanism for draft Guinness and the ‘widget’ technology applied to cans and bottles attempted to modernize the brand’s image and respond to increasing competition from other local and imported stouts and lagers.

‘A perfect head’ for canned Guinness
In 1989, and at a cost of more than £10 million, Guinness developed an ingenious ‘widget’ device for its canned draft stout sold in ‘off-trade’ outlets such as supermarkets and off-licences. The widget, placed in the bottom of the can, released a gas that replicated the draft effect.
Although over 90 per cent of beer in Ireland was sold in ‘on-trade’ pubs and bars, sale of beer in the cheaper ‘off-trade’ channel were slowly gaining in importance. The Guinness brand manager at the time, John O’Keeffe, explained how home drinkers could now enjoy a smoother, creamier head similar to the one obtained in a pub thanks to the new widget technology:
When the can is opened, the pressure causes the nitrogen to be released as the widget moves through the beer, creating the classic draft Guinness surge.

Nearly 10 years later, in 1997, the ‘floating widget’ was introduced, which improved the effectiveness of the device.

A colder pint
In 1997 Guinness Draft Extra Cold was launched in Ireland. An additional chilled tap system could be added to the standard barrel in pubs, allowing the Guinness to be served at 4ºC rather than the normal 6ºC. By serving Guinness at a cooler temperature, Guinness/UDV hoped to mute the bitter taste of the stout and make it more palatable for younger adults, who were increasingly accustomed to drinking chilled lager, particularly in the summer

A cooler image for Guinness
In October 1999 the widget technology was applied to long-stemmed bottles of Guinness. The launch was supported by a US$2 million TV and outdoor board campaign. The packaging—with a clear, shiny plastic wrap, designed to look like a pint complete with creamy head—was quite a departure from the traditional Guinness look.

The objective was to reposition Guinness alongside certain similarly packaged lagers and RTDs and offer younger adults a more fashionable way to drink Guinness: straight from the bottle. It also gave Guinness easier access to the growing number of clubs and bars that were less likely to serve traditional draft Guinness easier access to the growing number of clubs and bars that were less likely to serve traditional draft Guinness, which could be kept for only six to eight weeks and took two minutes to pour. The RTDs, by contrast, had a shelf-life of more than a year and were drunk straight from the bottle.

However, financial analyst remained sceptical about the Guinness product innovations, which had no significant positive impact on sales or profitability:

The last news about the success of the recently introduced innovations suggests that they have not had a notably material impact on Guinness brand performance.

Brand building

Euromonitor estimates that, in 2000, Diageo invested between US$230 and US$250 million worldwide in Guinness advertising and promotions. However, with a cost-cutting objective, the company reduced marketing expenses in both Ireland and the UK up to 10 per cent in 2001 and the number of global Guinness agencies from six to two.

Nevertheless, Guinness remained one of the most advertised brands in Ireland. It was the leading cinema advertiser and, in terms of advertising, was second only to the national telecoms provider, Eircom. Guinness was also heavily promoted at leading sporting and music events, in particular those that were popular with the younger age groups.

The ultimate tribute to the brand was the opening of the new Guinness Storehouse in Dublin in late 2000, a sort of Mecca for all Guinness fans. The Storehouse was also a fashionable visitor centre with an art gallery and restaurants, and regularly hosted evening events. The company’s design brief highlighted another key objective:
To use an ultramodern facility to breathe life into an ageing brand, to reconnect an old company with young (sceptical) customers.
As the Storehouse’s design firm’s director, Ralph Ardill, explained:

Guinness Storehouse had become the top tourist destination in Ireland, attracting more than half a million people and hosting 45,000 people for special events and training.
The Storehouse also had training facilities for Guinness’s bartenders and 3000 Irish employees. The quality of the Guinness pint remained a high priority for the company, which not only developed pub-like classrooms at the Storehouse but also employed teams of draft technicians to teach barmen how to pour a proper pint. The process involved two steps—the pour and the top-up—and took a total of 119.5 seconds. Barmen also needed to learn how to check that the pressure gauges were properly set and that the proportion of nitrogen to carbon dioxide in the gas was correct.

The uncertain future of the Guinness brand in Ireland

Despite Guinness/DUV’s attempt to appeal to the younger generation of drinkers and boost its fading image, rumours persisted in Ireland about the brand future. The country’s leading and respected newspaper, the Irish times, reported in an article in July 2001:
The uncertainty over its future all adds to the air of crisis that is building around Guinness Ireland Group four months ago…The review is not complete and the assumption is that there is more bad news to come.
In the pubs across Ireland, the traditional Guinness drinkers looked on anxiously as the younger generation drank Bacardi Breezers, Smirnoff Ices or Californian wines. Could the goliath Guinness survive another two centuries? Was the preference for these new drinks just a fad or fashion, or did Diageo need to seriously reconsider how it marketed Guinness?

A quick solution?

In late February 2002, Diageo CEO Paul Walsh revealed that the company was testing technology to cut the waiting time for a pint of Guinness from 1 minute 59 seconds to 15-25 seconds. Ultrasound could release bubbles in the stout and form the head instantly, making a pint of Guinness that would be indistinguishable from one produced by the slower, traditional method.
‘A two-minute pour is not relevant to our customers today,’ Walsh said. A Guinness spokeswoman continued, ‘We have got to move with the times and the brand must evolve. We must take all the opportunities that we can. In outlets where it is really busy, if you walk in after nine o’clock in the evening there will be a cloth over the Guinness pump because it takes longer to pour than other drinks. Aware that some consumers might not be attracted by the innovation, she added ‘It wouldn’t be put everywhere—only where people want a quick pint with no effect on the quality.’

Although still being tested, the ‘quick-pour pint’ was a popular topic of conversation in Dublin pubs, among barmen and customers alike. There were rumours that it would be introduced in Britain only; others thought it would be released worldwide.

Some market commentators viewed the quick-pour pint as an innovative way to appeal to the younger, less patient segment in which Guinness had under-performed. Others feared that the young would be unconvinced by the introduction, and loyal customers would be turned off by what they characterized as a ‘marketing u-turn’.

Question:

1. From a marketing perspective, what has Guinness done to ensure its longevity?

2. How would you characterize the Guinness brand?

3. What could Guinness do to attract younger drinkers? And to retain its older loyal customer base? Can both be done at the same time?

Case 1:
Scripto, Inc. (B)1

At one time, Scripto, Inc., utilized the services of Audits and Surveys, a national marketing research firm, but, owing to budgetary restraints, Scripto eliminated marketing research and channeled its financial resources in other directions. As a result, the company had little of the data it required for important marketing decisions. For example, the company experienced great difficulty in securing comparative data for sales of its products and competitive products in retails outlets.
Determined not to let the void of data affect the 19¢er, Scripto management decided again to consider using marketing research. While management was in general agreement that marketing research was an essential ingredient in marketing orientation and sales strategy, there were two viewpoints as to the type of marketing research needed. One group believed that market studies and data were most crucial to the success of the ¢er; hence, they favored using the services of marketing-research companies, such as Audits and Surveys or A.C. Nielsen Company. Both Audits and Surveys and Nielsen prepared bimonthly reports measuring sales and movements of products through stores (the former was used by Papermate). The major differences between the two research companies were (1) cost and (2) type of retail outlet sampled. It would cost Scripto $20,000 to use Audits and Surveys and $25,000 to use Nielsen. Audits and Surveys recorded sales and products movement primarily of mass merchandisers (variety stores) and a relatively small sample of drugstores and grocery stores, while Nielsen sampled more drugstores and grocery stores than A and S but a smaller sample of variety stores.
Another group, however, preferred a different course of action – the use of a marketing research firm that specialized in consumer buying patterns rather than market studies per se. This group contended that consumer research was more instrumental in the future of the 19¢er. Such research was typified by the data generated by the National Consumer Panel of Market Research Corporation of America.
Decisions were required on (1) whether or not to again use marketing research; (2) if so, the type of marketing research most important for Scripto’s 19¢er, market studies and/or consumer buying patterns; and (3) the relationship between sales and marketing research. Management was especially concerned about the relationship between sales and marketing research.

Case 1 Questions:

What is your position on the three problems that had to be solved by Scripto? Defend your arguments.


SAMPLE CASE STUDY ANSWERS

SAMPLE CASE STUDY ANSWERS

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DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Human Resource Management
Case Studies
CASE STUDY (20
Marks)
This case discusses software design and development company Menlo Innovations’ (Menlo) approach towards project management
and innovation. Menlo’s founder and president, Richard Sheridan (Sheridan) established the company in association with his
colleagues based on Thomas Edison’s Invention Factory. Sheridan advocated the use of project management during software
implementation. Menlo adopted agile project management practices namely extreme programming that helped it simultaneously run
several projects successfully. This required employees to work in pairs encouraging knowledge sharing and learning from each other.
Similar to Edison’s Invention Factory, the culture at Menlo was characterized by an open, flexible, and a collaborative working
environment. The case is about Menlo’s flexible workplace practices that helped it in curbing attrition and employee retention while
its innovative approach to project management encouraged employee engagement and led to innovation. However, a few analysts
opined that it remained to be seen whether Menlo’s flexible workplace approach could also be applied in a corporate environment.
Answer the following question.
Q1. Explain how Sheridan and the other co-founders at Menlo fostered innovation at the company.
Q2. Discuss the significance of project management in the success of a company.
Q3. Discuss the challenges faced in implementing such a system in a corporate environment.
CASE STUDY (20
Marks)
Phones 4u is the UK’s leading independent mobile phone retailer for the youth and value segments, offering all networks and handset
brands, and is recognized for its success in engaging with these audiences through its unique standout marketing, social media
activity and through offering a market leading smartphone range. Leading the way in the mobile industry through its excellent
customer service, award-winning advertising and differentiated in-store experience, Phones 4u has over 500 stores and is still
growing. Phones 4u known for running the largest Ofsted accredited retail apprenticeship program in the UK. Significant investment
in the training and development along with a unique in store customer consultation process means Phones 4u delivers unrivalled
mobile expertise and advice tailored to individual customers’ needs. As a result, one in four new contract smartphones sold on the
high street are through Phones 4u. Due to a period of exceptional growth, the need arose to fill a number of vacancies in the South
HR team. It was imperative that the candidates recruited to these positions were an ideal fit in order to contribute to the continuing
success of the company. After briefing several agencies, Hudson HR stood out as the only consultancy able to deliver exactly what
was required. Essentially they needed a relationship that was built on trust and assurance of successful and sustainable delivery. Just
as crucial was a complete understanding of the client’s requirements on the recruitment consultancy’s part, not just of the company
and job roles, but also the team fit of both candidates into the current Phones 4u team. The initial contact with the Hudson HR
consultant proved fruitful – an instant rapport was created, which developed into a successful working relationship following faceto-
face meetings. Phones 4u felt from the start of the process that we really understood their needs which in turn helped us stand
apart from other agencies. The Hudson HR consultant took considerable care in ascertaining exactly what was required, whilst
finding out about the HR business partner herself, the team dynamic, team capability and how the team operates. Having all the
information and being diligent paid dividends; time was taken by Hudson HR to meet potential candidates and thoroughly establish
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culture and team fit, as well as the relevant work skills and experience. Hudson HR also impressed by being constantly accessible –
consultants ensured that they were always available on their mobiles and continually kept all parties informed. It was also felt that
Hudson HR struck the right note with regard to approach; having avoided the “too pushy” method. On top of that, it was clear to
Phones 4u that we truly had their interest at heart. The end of a successful and enjoyable recruitment process saw a number of people
placed at Phones 4u who are all still there today and are excelling in their roles.
Answer the following question.
Q1. Give an over view of the case.
Q2. How did he multiple vacancies for recruitment exist in Phone 4 u? Discuss the recruitment procedure adopted by
Phone4 u company.
CASE STUDY (20
Marks)
General Energy is start-up oil and gas company, the global HR Director, who is based in Turkey was keen to recruit an HR and
Reward Manager to be based in the London office. The role is fairly unique as the ideal candidate required a strong reward
background with some HR generalist experience. Given the uniqueness of the role, the Global HRD was not sure exactly what
background and career path the possible candidates might have taken. She initially pitched the role between £50-£100k. The client
was aware of Hudson as we are the preferred supplier with the previous organization she worked for – Thames Water. We agreed that
we would work on this role on an exclusive basis and dedicate the time fully to finding the right candidate. As this was a brand new
role within a start-up company we suggested to the client that we would send CVs of candidates at various levels to enable the hiring
manager to assess the level and experience required. Filtering through CVs, the hiring manager was able to identify the type of
individual from a technical and cultural perspective that would suit the organization. We agreed that a candidate at the more senior
end was required as this role would need a candidate who has experience of designing and implementing reward projects. We did
offer a candidate the role but unfortunately the candidate was not confident in moving to a start-up organization. We however did
find another candidate who had previous oil and gas and start-up experience who was a better fit for the role. The candidate accepted
the offer and has enjoyed joining General Energy.
Answer the following question.
Q1. Debate the difficulties being faced by the organization in recruiting a reward manager.
Q2. Explain the selection procedure used in the recruitment of HR and Reward Manager.
CASE STUDY (20
Marks)
On May 29, 2009, the Emeryville, California-based computer animation Production Company Pixar Animation Studios (Pixar)
released its tenth feature film, Up, which was billed to become a hit like all its earlier nine films. Experts felt that Pixar’s
unprecedented success was due to the culture of innovation developed and nurtured at the company. They felt that its internal
training and employee education program, Pixar University, was one of the devices that the company employed to take forward its
innovation agenda. Making the shift from an idea-centered business to a people-centered business was another.
Answer the following question.
Q1. How, according to you, does the Pixar University help foster creativity and innovation at Pixar?

Marketing Management
Case Studies
CASE STUDY (20
Marks)
In early 2001, Gujarat Cooperative Milk Marketing Federation (GCMMF) planned to leverage its brand equity and distribution
network to turn Amul2 into India’s biggest food brand. Verghese Kurien, Chairman of GCMMF, set a sales target of Rs.10 bn by
2006 as against sales of Rs 2.3 bn in 2001. In 2001, GCMMF entered the fast food market in India with the launch of vegetable
pizzas under the brand name SnowCap in Ahmedabad, Gujarat. GCMMF was also planning to launch its pizzas in other western
Indian cities like Mumbai, Surat, and Baroda. Depending on the response in these cities, GCMMF would decide to introduce its
pizzas in other cities in India. The pizzas were offered in four flavours: plain tomato-onion-capsicum, fruit pizza (pineapple-topped),
mushroom and ‘Jain pizzas’ (pizzas without onion or garlic). GCMMF launched the pizzas in the Rs.20-25 price range. The existing
players in the pizza market, like Domino’s, Pizza Hut and Nirula’s offered pizzas at nothing less than Rs.39. Analysts felt that
GCMMF’s move would force the existing players to reduce their prices in the long run. GCMMF planned to open 3,000 pizza retail
franchise outlets all over the country by 2005. The pizzas would be made at the retail outlets. The technical training and the recipe
for the pizza would be provided by GCMMF. It would also negotiate with bulk suppliers of vegetables to get these at wholesale
rates. These would be provided to the retailers. The main cost component of the pizza is the mozarella cheese. GCMMF would offer
the cheese at a bulk rate of Rs.140 per kg, compared to the market price of Rs 146 per kg, thus saving the retailers Rs.6 per kg.
GCMMF on its part would have a ready market for its cheese products.
Answer the following question.
Q1. Give an overview of the case.
Q2. Explain in detail the diversion strategy of Gujarat Cooperative Milk Marketing Federation (GCMMF), “Amul”.
CASE STUDY (20
Marks)
The very first major move which Paul S. Otellini took, after becoming the new CEO of Intel Corporation, was changing the
company’s 16-year old logo. The change was not only in the tag line but also in the famous Intel’s “dropped-e” corporate logo. The
company was the market leader in its microprocessor segment and the famous tag line, ‘Intel inside’, was closely associated with its
success. A sudden shift from its year-old and well known corporate logo to a new one, was quite unlikely Intel. Moreover, the
company was planning to diversify to other businesses, apart from its core PC segment, thus, decided to change from ‘Intel Inside’ to
‘Leap Ahead’. There were many instances where companies had changed their corporate logos and also succeeded in maintaining
their images in the market. This case allows room for discussing whether Intel has made the right move or not.
Answer the following question.
Q1. Discuss the new marketing initiatives taken by Intel.
Q2. Debate on whether this initiative would help Intel to succeed in future.
CASE STUDY (20
Marks)
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2/2
Mr. Harish Jain, CEO of Energetic Enterprises, has established the firm for the manufacture and marketing of an innovative product.
The firm earned a reputation of its product within two years of its inception and enjoyed monopoly position in the market for its
product. Now it has a turnover of about Rs.80 crores. Three years back, some firms entered the market and offered cheap substitutes
which were of better quality. This year, Mr. Harish Jain is worried because about 40% of the market share has already been taken
away by the new firms and he is not able to check this trend. Mr. Jain has been looking after both production and marketing
functions though finance is being looked after by a finance manager having a professional degree in chartered accountancy. Mr. Jain
has recently lowered the price of his product to fight competition, but even this has not helped. He has now approached you for
advice to stabilize his sales volume.
Answer the following question.
Q1. Analyze the case.
Q2. Identify the strong and weak points of this case.
Q3. What environmental factors have caused a worry to Mr.Jain?
Q4. As a consultant, what strategies would you suggest to check further fall in market share?
CASE STUDY (20
Marks)
M/s SKYLINE Airlines is a large scale diversified group, since 1980. Due to recent global economic challenges Company is facing
problems with customer orientation. The firm is having declining sales & very few new customers. You have been asked to do the
best in this situation as the Marketing manager for the company
Answer the following question.
Q1. How to coin marketing concept of this company to boost sales?
Q2. What will you do to increase the customer’s base and retain old customers?
Q3. Draft a procedure for grievances.
Q4. Redesign a customer service process.

SUBJECT: Marketing Management
N.B: 1} Attempt all questions
Number: maur-00613-2010750
_________________________________________________________________________
Case 1
1997 saw the US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition?
The changing face of the Irish beer market
The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany.
Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in Dublin by Arthur Guinness, enjoyed legendary Status in Ireland, a national symbol as respected as the green, white and gold flag. It was by far the most popular alcoholic drink in the Ireland, accounting for nearly one of every two points of beer sold. Its nearest competitors were Budweiser and Heineken, which held 13 per cent and 12 per cent of the market respectively.
However, the spectacular economic growth of the Irish economy since the mid-1990s had opened up the traditional drinking market to new cultures and influences, and encouraged the travel-friendly Irish to try other drinks. Beer and in particular stout were gradually losing popularity compared with wine or the recently launched RTDs (ready-to-drinks) or FABs (flavored alcoholic beverages), which the younger generation of drinkers considers trendier and ‘healthier. As a Euromonitor report explained:
Younger consumers consider dark beers and stout to be old fashioned drinks, with the perceived stout or ale drinker being an old, slightly overweight man and thus not in tune with image conscious youth culture.1 Beers sales, which once accounted for 75 per cent of all alcohol bought in Ireland, were expected to drop to close to 50 per cent by 2006, while stout sales were forecast to decrease by 12 per cent between 2002 and 2006.
Giving Guinness a boost in its home market
With Guinness alone accounting for 37 per cent of Diageo’s volume in the market, Guinness/UDV Ireland was one of the feel the pain caused by the declining popularity of beer and in particular stout. A Euromonitor report in February 2002 explained how the profit of the Guinness drinker, typically men aged 21-plus, was affected:
The average age of Guinness drinkers is rising and this is bringing about the worrying fact that the size of the Guinness target audience is falling. The rate of decline is likely to quicken as the number of less brand loyal, non-stout drinking younger consumer’s increases.2
The report continued:
In Ireland, in particular base for Guinness is shrinking as the majority of 18 to 24 year olds
consistently reject stout as a product relevant to their generation, opting instead to consume lager or spirits.
Effectively, one-third of young Irish men and half of young Irish woman had reportedly never tried Guinness.
3 A Guinness employee provided another explanation. Guinness is similar to coffee in that when you’re young you drink it [coffee] with sugar, but when
you’re older you drink it without. It’s got a similar acquired taste and once you’re over the initial hurdle, you’ll fall in love with it.
4 .n an attempt to lure young drinkers to the somewhat ‘acquired’ Guinness taste (40 per cent of the Irish population was under the age of 24) Diageo had invested million in developing product innovations and brand building in Ireland’s 10,000 pubs, clubs and supermarkets.
Product innovation
Until the mid-1990s most Guinness in Ireland was drunk in a paint glass in the local pub. The launch of product innovations in the form of a new cooling mechanism for draft Guinness and the ‘widget’ technology applied to cans and bottles attempted to modernize the brand’s image and respond to increasing competition from other local and imported stouts and lagers.
‘A perfect head canned Guinness
In 1989, and at a cost of more than 10 million, Guinness developed an ingenious ‘widget’ device for its canned draft stout sold in ‘off-trade’ outlets such as supermarkets and ‘off-licenses. The widget, placed in the bottom of the can, released a gas that replicated the draft effect.
Although over 90 per cent of beer in Ireland was sold in ‘on-trade’ pubs and bars, sales of beer in the cheaper ‘off-trade’ channel were slowly gaining in importance. The Guinness brand manger at the time, John O’Keeffe, explained how home drinkers could how enjoy a smoother, creamier head similar to the one obtained in the pub thanks to the new widget technology:
When the can is opened, the pressure causes the nitrogen to be released as the widget moves
through the beer, creating the classic draft Guinness surge . Nearly 10 years later, in 1997, the ‘floating widget’ was introduced, which improved the effectiveness of the device.
A colder pint
In 1997 Guinness draft Extra Cold was launched in Ireland. An additional chilled tap system could be added to the standard barrel in pubs, allowing the Guinness to be served at 4 C rather than the normal 6 C. By serving Guinness at a cooler temperature, Guinness/UDV hoped to mute the bitter taste of the stout and make it more palatable for younger adults, who were increasingly accustomed to drinking chilled lager, particularly in the summer.
A cooler image for Guinness
In October 1999 the widget technology was applied to long-steamed bottles of Guinness. The launch was supported by a US$2 million TV and outdoor board campaign. The packaging-with a clear, shiny plastic wrap, designed to look like a pint complete with creamy head –was quit a departure from the traditional Guinness look.
The objective was to reposition Guinness alongside certain similarly packaged lagers and RTD s and offer younger adults a more fashionable way to drink Guinness: straight from the bottle. It also gave Guinness easier access to the growing number of clubs and bars that were less likely to serve traditional drafts Guinness, which could be kept for only six to eight weeks and took two minutes to pure. The RTDs, by contrast, had a shelf-life of more than a year and were drunks straight from the bottle. However, financial analysts remained sceptical about the Guinness product innovation, which had no significant positive impact on sales or profitability:
The latest news about the success of the recently introduced innovations suggests that they have not had a notably material impact on Guinness brand performance.
Brand building
Euromonitor estimated that, in 2000, Diageo invested between US$230 and US$250 million worldwide in Guinness advertising and promotions. However, with a cost-cutting objective, the company reduced marketing expenses in both Ireland and the UK by up to 10 per cent in 2001 and the number of global Guinness agencies from six to two. Nevertheless, Guinness remained one of the most advertised brands in Ireland. It was the leading cinema advertiser and, in terms of outdoor advertising, was second only to the national telecoms provider;
Eircom.
7 Guinness was also heavily promoted at leading sporting and music events, in particular those that were popular with the younger age groups.
The ultimate tribute to the brand was the opening of the new Guinness storehouse in Dublin in late 2000, a sort of Mecca for all Guinness fans. The storehouse was also a fashionable visitor centre with an art gallery and restaurants, and regularly hosted evening events. The company’s design brief highlighted another key objective:
To use an ultramodern facility to breath life into an ageing brand, to reconnect an old company with young (skeptical) customers.
8 As the Storehouse’s design firm’s director, Ralph Ardill, explained:
Guinness Storehouse is a way to get in touch with a new generation to help young people reevaluate Guinness.
Within a year, the Storehouse had become the top tourist destination in Ireland, attracting more than half a million people and hosting 45,000 people for special events and training.
The storehouse also had training facilities for Guinness’s bartenders and 3000 Irish employees. The quality of the Guinness paint remained a high priority for the company, which not only developed pub-like classrooms at the Storehouse but also employed teams of draft technicians to teach barmen how to pure a proper pint. The process involved two-steps –the pour and the top up –and took a total of 199.5 seconds. Barmen also needed to learn how to check that the pressure gauges were properly set and that the proportion of nitrogen to carbon dioxide in the gas was correct. The Uncertain future of the Guinness brand in Ireland Despite Guinness/UDV’s attempt to appeal to the younger generation of drinkers and boost its fading image, rumors persisted in Ireland about the brand’s future. The country’s leading and respected newspapers, the Irish Times, reported in an article in July 2001:The uncertainty over is future all adds to the air of crisis that is building around Guinness. Sales of the famous stout in Ireland, still its single most important market, are falling … The decline in Irish sales triggered a review process at Guinness Ireland Group four month ago … The review is not complete and the assumption is that there is more bad news to come.
10 . in the pubs across Ireland, the traditional Guinness drinkers looked on anxiously as the younger generation drank Bacardi Breezers, Simirnoff Ices or Californian wines. Could the goliath Guinness survive another two centuries? Was the preference for these new to seriously reconsider how it marketed Guinness?
A quick solution?
In late February 2002, Diageo CEO Paul Walsh reverted that the company was testing technology to cut the waiting time for a pint of Guinness from 1 minute 59 seconds to 15-25 seconds. Ultrasound could release bubbles in the stout and from the head instantly, making a pint of Guinness that would be indistinguishable from one produced by the slower, traditional method.
‘A two- minute pour is not relevant to our customers today,’ Walsh said.11 A Guinness spokeswoman continued, ‘ We have got to move with the times and the brand must evolve. We must take all the opportunities that we can. In outlets where it is really busy, if you walk in after nine o’ clock in the evening there will be a cloth over the Guinness pump because it takes longer to pour than other drinks.’12 Aware that some consumers might not be attracted by the innovation, she added ‘It wouldn’t be put everywhere-only where people want a quick pint with no effect on the quality.’ Although still being tested, the ‘quick-pour pint’ was a popular topic of conversation in Dublin pubs, among barmen and customers alike. There were rumours that it would be introduced in Britain only; others thought it would be released worldwide.
Some market commentators viewed the quick-pour pint as an innovation way to appeal to the younger, less patient segment in which Guinness had under performed. Others feared that the young would be unconvinced by the introduction, and loyal customers would be turned off by what they characterized as a ‘marketing u-turn’.
Questions:-
1. From a marketing perspective, what has Guinness done to ensure its longevity?
2. How would you characterize the Guinness brand?
3. What could Guinness do to attract younger drinkers? And to retain its older loyal customer base?
Can both be done at the same time?
4. Is the quick- pour concept a good or bad idea? Why?

Case 2
Good old fashioned rock ‘n’ roll could be dead. If a mobile phone ringtone in the shape of the vocalizations of the animated Crazy Frog dominates the billboard charts for month on end, then it could well signal the death knell for the industry, and how it operates. If this ubiquitous amphibian’s aurally annoying song, converted from a mobile phone ringtone, outsold even mainstay acts such as Oasis and Coldplay, why should music companies invest millions in cultivating fresh musical talent, hoping for them to be the next big thing, when their efforts can be beaten by basic synthesizer music? The industry is facing a number of challenges that it has to address, such as strong competition, piracy, changing delivery formats, increasing cost pressures, demanding primadonnas and changing customer needs. Gone are the days when music moguls were reliant on sales from albums alone, now the industry trawls for revenue from a variety of sources, such as ringtones merchandising concerts, and music DVDs, levering extensive back catalogues and music rights from advertising, movies and TV programming. The music industry is in a state of flux at the moment. The cornerstone of the industry- the singles charthas been facing terminal decline since the mid-1990s. Some retailers are now not even stocking singles due to this marked freefall. Some industry commentators blame the Internet as the sole cause, while others point to value difference between the price of an album and the price of a single as too much. Likewise, some commentators criticize the heavy pre-release promotion of new songs, the targeting of ever younger markets by pop acts, and the explosion of digital television music channels as root causes of the single’s demise. The day when the typical record buyer browses through rows of shelves For a much sought-after band or song on a Saturday afternoon may be a thing of the past. Long term success stories for the music industry are increasingly difficult to develop. The old tradition of A&R (which stands for ‘Artists & Repertoire) was to sign, nurture and develop musical talent over a period of years. The industry relied on continually feeding the system with fresh talent that could prove to be the next big thing and capture the public imagination. Now corporate short-term thinking has enveloped business strategies. If an act fails to be an immediate hit, the record label drops them. The industry is now characterized by an endless succession of one-hit wonders and videogenic artists churning out classic cover songs, before vanishing off the celebrity radar. Four large music labels now dominate the industry (see Table C2.1), and have emerged through years of consolidation. The ‘big four’ major labels have the marketing clout and resources to invest heavily in their acts, providing them with expensive videos, publicity tours and PR coverage. This clout allows their acts to get vital radio airplay and video rotation on dedicated TV music channels. Major record labels have even been accused of offering cash inducements or gift to radio station and DJs in an effort to get their song on playlists. This activity is known in the industry as ‘radio payola’. Consumers have flocked to the Internet, to down load to stream, to ‘rip and burn’ copyrighted music material. The digital music revolution has changed the way people listen, use and obtain their favorite music. The very business model that has worked for decades, buying a single or album from a high-street store, may not survive. Music executives are left questioning whether the Internet will kill the music business altogether. The traditional music industry business model has been fundamentally altered. According to the British Phonographic Industry (BPI), it estimated that 8 million people in the UK are downloading music from the Internet-92 per cent of them doing so illegally. In 2005 alone, sales of CD singles fell by a colossal 23 per cent. To put the change into context, the sales of digital singles increased by 746.6 per cent in 2005. Consumers are The “big four’ labels Universal music The largest music label, with 26 per cent of global music market share; artists on its roster include U2, Limp Bizkit, Mariah Carey and No Doubt Warner music Third biggest music group; artists on its roster include Madonna, Red Hot Chili peppers and REM Song BMG Merger consolidates its position; artists on its roster include Michael Jackson, Lauryn Hill, West life, Dido, Osast and cristina Aguilera EMI Artists on its roster include the Rolling Stones, Coldplay, North Jones Radiohead and Robbie Williams Buying their music their through different channels and also listening to their favourite songs through digital media rather than through standard CD, cassette or vinyl. The emergence of MP3 players, particularly the immensely popular Apple iPod, has transformed the music landscape even further. Consumers are now downloading songs electronically from the Internet, and storing them on these digital devices or burning them onto rewritable CDs.

Glossary of online music jargon
Streaming: Allows the user to listen to or watch a file it is being simultaneously downloaded. Radio channels utilize this technology to transmit their programming on the Internet. ‘Rip n burn’: Means downloading a song or audio file from the Internet and then burning the song on to a rewritable CD or DVD. MP3 format: Mp3 is a popular digital music file format. The sound quality is similar to that of a CD. The format reduces the size of a song to one-tenth of its original size allowing for it to be transmitted quickly over computer networks. Apple iPod: The ‘digital jukebox’ that has transformed the fortunes of the pioneer PC maker. By the end of 2004 Apple is expected to have sold close on 5 million units of this ultra-hip gadget. It was the ‘must-have item’ for 2003. The standard 20GGB iPod player can hold around 5000 songs. Other hardware companies, such as Dell & Creative Labs, have launched competing devices these competing hardware brands can retail for less than 75
Peer –to peer networks (P2P): These networks allow users to share their music libraries with other net users. There is no central server, rather individual computers on the Internet communicating with one another. A P2P program allows users to search for material, such as music files, on other computers. The program lets users find their desire music files through the use of a central computer server. The system works like this: a user sends in a request for a song; the system checks where on the internet that song is located; that song is download directly onto the computer of the user who made the request. The P2P server never actually holds the physical music files-it just facilitates the process.
The Internet offers a number of benefits to music shoppers, such as instant delivery, access to huge music catalogues and provision of other rich multimedia material like concerts or videos, access to samples of tracks, cheaper pricing (buying song for 99p rather than an expensive single) and, above all, convenience. On the positive side, labels now have access to a wider global audience, possibilities of new revenue stream and leveraging their vast back catalogues. It has diminished the bargaining power of large retailers; it is a cheaper distribution medium than traditional forms and labels can now create value-laden multimedia material for consumers. However, the biggest problem is that of piracy and copyright theft. Million of songs are being down loaded from the Internet illegally with no payment to the copyright holder. The internet allows surfers to download songs using a format called ‘MP3’, which doesn’t have inbuilt copyright protection, thus allowing the user to copy and share with other surfers with ease. Peer to peer (P2P) networks such as Kazaa and Grokster have emerged and pose an even deadlier threat to the music industry-they are enemies that are even harder to track and contain. Consumers can easily source and download illegal copyright material with considerable ease using P2P networks (see accompanying box)
P2P Networks used for file sharing
Kazaa
Gnutella
Grokster
Morpheus
EDonkey
Imesh
Bearshare
Win MX
A large number of legal download sites have now been launched, where surfers, can either stream their favourite music or download it for future use in their digital music libraries. This has due to been to the rapid success of small digital media players such has the Apple iPod. The legal downloading of songs has grown exponentially. A la carte download services and subscription-based services are the two main business models independent research reveals that the Apple’s iTunes service has over 70 per cent of the market. Highlighting this growing phenomenon of the Internet as an official channel of distribution, new music charts are now being created, such as the ‘Official Download Chart’. Industry sources suggest that our of a typical 99 download, the music label gets 65p while credit card companies get 4p, leaving the online music store with 30p per song download. This service may fundamentally eradicate the concept of an album, with customers selecting only a handful of their favourite songs rather than entire standard 12
tracks. These prices are having knock-on consequence for the pricing of physical formats. Consumers are now looking for a more value-laden music product rather than simply 12 songs with an album cover. Now they are expecting behind the scenes access to their favourite group, live concert footage and other content-rich material. Big Noise Music is an example of one of the legitimate downloading sites running the OD2 system. The sites is different in that for every 1 download, 10p of the revenue goes to the charity Oxfam. The music industry is ferociously fighting back by issuing lawsuits for breach of copyright to people who are illegally downloading songs from the Internet using P2P software. The recording industry has started to sue thousands of people who illegally share music using P2P.
Name
Apple iTunes
Napster
Sony Connect
Bleep.com
Details
Huge catalogue of over
750,000 songs;
compatible
With Apple’s very hip iPod system; offers free single of the week and other exclusive material
The now legitimate website offers over 1,000,000 songs; offers several streaming radio stations too Over 300,000 songs from the major labels; excellent sound quality but compatible only with Sony product due to proprietary file formats Pricing 79 per track, 7.99per album Subscription asedsubscribers pay 9.99a month to stream any of the catalogue, plus another 99p to download
on to a CD From 80-1.20 per track, and 8-10per album Wippit OD2 System, used by:
Mycokemusic.com
HMV.com
MSN.com
Tower Record.co.uk
Big Noise Music
Small catalogue of 15,000 songs with a focus on independent music labels; high quality downloads due to media files used UK-based service; 175,000songs to download; gives a selection of free tracks every month These online sites use the OD2 system for music downloads; they look after encryption, hosting, royalty management and the entire e-commerce system; provides access to nearly 350,000 tracks from 12,000 recording artists 99 per track,6.99 per
Album From 30p to 1 to download alternatively, users can subscribe to the service for 50 a year to gain access to 60,000 songs Varying product bundles, typically 99p for track download , and 1p for streaming . They are issuing warnings to net surfers who are using P2P software that their activities are being watched and monitored. Instant Internet messages are being sent to those who are suspected of offering songs illegally. In addition, they have been awarded court orders so that Internet providers must identify people who are heavily involved in such activity. The music industry is also involved heavily in issue advertising companies, by promoting anti-piracy websites such as www.pro–music.org to educate people on the industry and the impact of piracy on artists. These types of public awareness campaign are designed to illustrate the implications of illegal downloading.
Small independent music labels view P2P networks differently, seeing them as vital in achieving publicity and distribution for their acts. These firms simply do not have the promotional resources or distribution clout of the ‘big four’ record labels. They see P2P networks as an excellent viral marketing tool, creating buzz about a song or artist that will ultimately lead to wider mainstream and commercial appeal. The Internet is used to create communities of fans who are interested in their music, providing them access to free videos and other material. It allows independent acts the opportunity to distribute their music to a wider audience, building up their fan base through word of mouth. Savvy unsigned bands have sophisticated downloads as well as opportunities for audio philes to purchase their tunes. Alternatively major labels still see that to gain success one has to get a video on rotation on MTV and that this in turn encourages greater airplay on radio stations, ultimately leading to increased purchases.
For traditional music retailers the retailing landscape is getting more competitive, with multiple channels of distribution emerging due to the Internet and large supermarket chains now selling music CDs supermarket are becoming one of the main channels of distribution through which consumers buy music. These supermarkets are stocking only a limited number of the best-selling music titles, limiting the number of distribution outlets for a new and independent music. Only charts hits and greatest hits collections will make it on to the shelves of such outlets. Now consumers can buy albums from traditional Internet retailers such as Amazon.com, and also on
websites that utilize access to gray markets such as cdwow.co.uk, as well as through legitimate download retailers. This has left traditional music retail operations with severe conundrum: how can they entice more shoppers into their stores? The accompanying box highlight where typical sources their music at present.
Where do people buy their music?
Music stores (like HMV, Virgin Megastore) 16 per cent
Chains (like Woolworth, WHS mith) 16 per cent
Supermarkets (like Tesco, Asda) 21.6 per cent
Mail order 3.9 per cent
Internet sales (like Amazon.com) 7 per cent
Downloads Not yet measured
Sources: British Phonographic Industry
The issue of online music retailers using parallel importing, such as CDWOW (www.cdwow.co.uk) is a concern. These retailers are taking advantages of worldwide price discrepancies for legitimate music CDs, sourcing them in low-cost countries like Hong Kong and exporting them in to European countries. Prices for music in these markets are considerably lower than the market that they are exporting to, and they don’t charge for international delivery. Yet technological improvements have led to revenue opportunities for the industry. Development such as online radio, digital right management, Internet streaming, tethered downloads (locked to PC), downloads (burnable, portable), in-store kiosks, ring tones, mobile message clips, video clips and games soundtracks are great potential revenue sources. In an effort to unlock this potential the major labels have digitized their entire back catalogues. In the wake of these dramatic environmental changes the industry has had to radically adapt. The ‘big four’ music labels are
consolidating even further, developing a digital music strategy, and re-evaluating their entire traditional
business model. Mobile phones are seen as the next primary channel of distribution for digital music. High
penetration levels in the market for mobile phones and the inherent mobility advantages make this the
next crucial battlefield for the music industry.
The Internet may emerge as the primary channel of distribution for music, and the music industry is going to have to adapt to these changes. The move towards the online distribution of entertainment is still in his infancy, with more investment into the telecommunications infrastructure, such as greater Internet access, increased access to broadband technology, 3G technology and changing the way people shop for music will undoubtedly take time. The digital revolution will fundamentally change the way people purchase and consume their musical preferences. In forthcoming years the digital format will become more mainstream, leading to a proliferation of channels of distribution for music. However, as with most new channels or technology, catalogue shopping never surpassed regular high-street shop-ping, Internet shopping likewise, and ‘video never really killed the radio star’ …but will the Internet kill the record store?
Questions:-
1. Discuss the micro and macro forces that are affecting the music industry.
2. Based on this analysis, what strategic options would you recommend for both music publishers and music retailers in the current marketing environment?
Discuss the advantages and disadvantages associated with online distribution from a music label’s perspective.

Section B
Questions 1 to 3 carry 16 marks each:-
1.} From a brand-building perspective, television advertising has two particularly important strengths. List and briefly explain these strengths.
2.} Prior research has shown that although consumers may have fairly good knowledge of the range of prices involved, surprisingly few can recall specific prices of products accurately. When examining products, consumers often employ reference prices. List the possible prices consumers use as their “reference.”
3.} Brands can be differentiated on the basis of many variables; however, four differentiation strategies are emphasized in the text. List and briefly characterize the three differentiation strategies.

____________________________________________________________________________
Case 1
Difficult Transitions
Tony Stark had just finished his first week at Reece Enterprises and decided to drive upstate to a small lakefront lodge for some fishing and relaxation. Tony had worked for the previous ten years for the O’Grady Company, but O’Grady had been through some hard times of late and had recently shut down several of its operating groups, including Tony’s, to cut costs. Fortunately, Tony’s experience and recommendations had made finding another position fairly easy. As he drove the interstate, he reflected on the past ten years and the apparent situation at Reece.
At O’Grady, things had been great. Tony had been part of the team from day one. The job had met his personal goals and expectations perfectly, and Tony believed he had grown greatly as a person. His work was appreciated and recognized; he had received three promotions and many more pay increases.
Tony had also liked the company itself. The firm was decentralized, allowing its managers considerable autonomy and freedom. The corporate Culture was easygoing. Communication was open. It seemed that everyone knew what was going on at all times, and if you didn’t know about something, it was easy to find out.
The people had been another plus. Tony and three other managers went to lunch often and played golf every Saturday. They got along well both personally and professionally and truly worked together as a team. Their boss had been very supportive, giving them the help they needed but also staying out of the way and letting them work.
When word about the shutdown came down, Tony was devastated. He was sure that nothing could replace O’Grady. After the final closing was announced, he spent only a few weeks looking around before he found a comparable position at Reece Enterprises.
As Tony drove, he reflected that “comparable” probably was the wrong word. Indeed, Reece and
O’Grady were about as different as you could get. Top managers at Reece apparently didn’t worry too much about who did a good job and who didn’t. They seemed to promote and reward people based on how long they had been there and how well they played the never-ending political games.
Maybe this stemmed from the organization itself, Tony pondered. Reece was a bigger organization than O’Grady and was structured much more bureaucratically. It seemed that no one was allowed to make any sort of decision without getting three signatures from higher up. Those signatures, though, were hard to get. All the top managers usually were too busy to see anyone, and interoffice memos apparently had very low priority.
Tony also had had some problems fitting in. His peers treated him with polite indifference. He sensed that a couple of them resented that he, an outsider, had been brought right in at their level after they had had to work themselves up the ladder. On Tuesday he had asked two colleagues about playing golf.
They had politely declined, saying that they did not play often. But later in the week, he had overheard them making arrangements to play that very Saturday.
It was at that point that Tony had decided to go fishing. As he steered his car off the interstate to get gas, he wondered if perhaps he had made a mistake in accepting the Reece offer without finding out more about what he was getting into.
Case Questions
1. Identify several concepts and characteristics from the field of organizational behavior that this case
illustrates?
2. What advice can you give Tony? How would this advice be supported or tempered by behavioral
concepts and processes?
3. Is it possible to find an “ideal” place to work? Explain.

Case 2
Humanized Robots?
Helen Bowers was stumped. Sitting in her office at the plant, she pondered the same questions she had been facing for months: how to get her company’s employees to work harder and produce more. No matter what she did, it didn’t seem to help much.
Helen had inherited the business three years ago when her father, Jake Bowers, passed away
unexpectedly. Bowers Machine Parts was founded four decades ago by Jake and had grown into a moderate-size corporation. Bowers makes replacement parts for large-scale manufacturing machines such as lathes and mills. The firm is headquartered in Kansas City and has three plants scattered throughout Missouri.
Although Helen grew up in the family business, she never understood her father’s approach. Jake had treated his employees like part of his family. In Helen’s view, however, he paid them more than he had to, asked their advice far more often than he should have, and spent too much time listening to their ideas and complaints. When Helen took over, she vowed to change how things were done. In particular, she resolved to stop handling employees with kid gloves and to treat them like what they were: the hired help.
In addition to changing the way employees were treated, Helen had another goal for Bowers. She wanted to meet the challenge of international competition. Japanese firms had moved aggressively into the market for heavy industrial equipment. She saw this as both a threat and an opportunity. On the one hand, if she could get a toehold as a parts supplier to these firms, Bowers could grow rapidly. On the other, the lucrative parts market was also sure to attract more Japanese competitors. Helen had to make sure that Bowers could compete effectively with highly productive and profitable Japanese firms.
From the day Helen took over, she practiced an altogether different philosophy to achieve her goals. For one thing, she increased production quotas by 20 percent. She instructed her first-line supervisors to crack down on employees and eliminate all idle time. She also decided to shut down the company softball field her father had built. She thought the employees really didn’t use it much, and she wanted the space for future expansion.
Helen also announced that future contributions to the firm’s profit-sharing plan would be phased out.
Employees were paid enough, she believed, and all profits were the rightful property of the owner—her.She also had private plans to cut future pay increases to bring average wages down to where she thought they belonged. Finally, Helen changed a number of operational procedures. In particular, she stopped asking other people for their advice. She reasoned that she was the boss and knew what was best. If she asked for advice and then didn’t take it, it would only stir up resentment.
All in all, Helen thought, things should be going much better. Output should be up and costs should be way down. Her strategy should be resulting in much higher levels of productivity and profits.
But that was not happening. Whenever Helen walked through one of the plants, she sensed that people weren’t doing their best. Performance reports indicated that output was only marginally higher than before but scrap rates had soared. Payroll costs were indeed lower, but other personnel costs were up. It
seemed that turnover had increased substantially and training costs had gone up as a result.
In desperation, Helen finally had hired a consultant. After carefully researching the history of the
organization and Helen’s recent changes, the consultant made some remarkable suggestions. The bottom line, Helen felt, was that the consultant thought she should go back to that “humanistic nonsense” her father had used. No matter how she turned it, though, she just couldn’t see the wisdom in this. People worked to make a buck and didn’t want all that participation stuff.Suddenly, Helen knew just what to do: She would announce that all employees who failed to increase their productivity by 10 percent would suffer an equal pay cut. She sighed in relief, feeling confident that she had finally figured out the answer.
Case Questions
1. How successful do you think Helen Bowers’s new plan will be?
2. What challenges does Helen confront?
3. If you were Helen’s consultant, what would you advise her to do?

Case 3
Teams at Evans RV Wholesale Supply and Distribution Company?
Evans RV Wholesale Supply and Distribution Company sells parts, equipment, and supplies for
recreational vehicles-motor homes, travel trailers, campers, and similar vehicles. In addition, Evans has a service department for the repair and service of RVs. The owner, Alex Evans, bought the company five years ago from its original owner, changed the name of the company, and has finally made it profitable, although it has been rough going. The organization is set up in three divisions: service, retail parts and supplies, and wholesale parts and supplies. Alex, the owner, CEO, and president, has a vice president for each operating division and a vice president of finance and operations. The organization chart shows these divisions and positions.
In the warehouse there are three groups: receiving (checking orders for completeness, returning
defective merchandise, stocking the shelves, filling orders), service parts, and order filling for outgoing shipments. The warehouse group is responsible for all activities related to parts and supplies receiving,storage, and shipping.
The retail sales division includes all functions related to selling of parts and supplies at the two stores and in the mobile sales trailer. Personnel in the retail division include salespeople and cashiers. The retail salespeople also work in the warehouse because the warehouse also serves as the showroom for walk-in customers.
In the service department the service manager supervises the service writers, one scheduler, and lead mechanics and technicians. The service department includes the collision repair group at the main store and the service department at the satellite store. The collision repair group has two service writers who have special expertise in collision repair and insurance regulations. Two drivers who move RVs around the “yard” also work in the service division.
The accounting and finance groups do everything related to the money side of the business, including accounts payable and receivable, cash management, and payroll. Also in this group is the one person who handles all of the traditional personnel functions.
Alex has run other small businesses and is known as a benevolent owner, always taking care of the loyal employees who work hard and are the backbone of any small business. He is also known as being real tough on anyone who loafs on the job or tries to take unfair advantage of Alex or the company. Most of the employees are either veterans of the RV industry at Evans or elsewhere, or are very young and still learning the business. Alex is working hard to develop a good work ethic among the younger employees and to keep the old-timers fully involved. Since he bought the business, Alex has instituted new, modern, employee-centered human resource policies. However, the company is still a traditional hierarchically structured organization.
The company is located in a major metropolitan area that has a lot of potential customers for the RV business. The region has many outdoor recreational activities and an active retirement community that either lives in RVs (motor homes, trailers, or mobile homes) or uses them for recreation. The former owner of the business specifically chose not to be in the RV sales business, figuring that parts and service was the better end of the business. Two stores are strategically located on opposite ends of the metropolitan area, and a mobile sales office is moved around the major camping and recreational areas during the peak months of the year.
When Alex bought the company, the parts and supplies business was only retail, relying on customers to walk in the door to buy something. After buying the business, Alex applied good management, marketing, and cash-management principles to get the company out of the red and into profitability.
Although his was not the only such business in town, it was the only one locally owned, and it had a good local following. About two years ago, Alex recognized that the nature of the business was changing. First, he saw the large nationwide retailers moving into town. These retailers were using discount pricing in large warehouse-type stores. These large retail stores could use volume purchasing to get lower prices from manufacturers, and they had the large stores necessary to store and shelve the large inventory. Alex, with only two stores, was unable to get such low prices from manufacturers. He also noted that retired people were notorious for shopping around for the lowest prices, but they also appreciated good, friendly customer service. People interested in recreational items also seemed to be following the national trend to shop via catalogs.
So for a variety of reasons Alex began to develop a wholesale business by becoming a wholesale
distributor to the many RV parts and supply businesses in the small towns located in the recreational areas around that state and in surrounding states. At the same time, he created the first catalog for RV parts and supplies, featuring all the brand-name parts and supplies by category and supplier. The catalog had a very attractive camping scene on the cover, a combination of attractively displayed items and many pages full of all the possible parts and supplies that the RV owner could think of. Of course, he made placing an order very easy, by phone, mail, or fax, and accepted many easy payment methods. He filled both distributor orders and catalog orders from his warehouse in the main store using standard mail and parcel delivery services, charging the full delivery costs to the customers. He credits the business’s survival so far to his diversification into the warehouse and catalog business through which he could directly compete with the national chains.
Although it is now barely profitable, Alex is concerned about the changes in the industry and the
competition and about making the monthly payments on the $5 million loan he got from the bank to buy the business in the first place. In addition, he reads about the latest management techniques and attends various professional conferences around the country. He has been hearing and reading about this team-based organization idea and thinks it might be just the thing to energize his company and take it to the next level of performance and profitability. At the annual strategic planning retreat in August, Alex announced to his top management team that starting on October 1 (the beginning of the next fiscal year), the company would be changing to a team-based arrangement.
Case Questions
1. What mistakes has Alex already made in developing a team-based organization?
2. If Alex were to call you in as a consultant, what would you tell him to do?
3. Using the organization chart of Evans RV Wholesale Supply and Distribution, describe how you
would put the employees together in teams.

Case 4 Stress Takes Its Toll
Larry Field had a lot of fun in high school. He was a fairly good student, especially in math, he worked harder than most of his friends, and somehow he ended up going steady with Alice Shiflette, class valedictorian. He worked summers for a local surveyor, William Loude, and when he graduated Mr. Loude offered him a job as number-three man on one of his survey crews. The pay wasn’t very high, but Larry already was good at the work, and he believed all he needed was a steady job to boost his confidence to ask Alice to marry him. Once he did, events unfolded rapidly. He started work in June, he and Alice were married in October, Alice took a job as a secretary in a local company that made business forms, and a year later they had their first child. The baby came as something of a shock to Larry. He had come to enjoy the independence his own paycheck gave him every week. Food and rent took up most of it, but he still enjoyed playing basketball a few nights a week with his high school buddies and spending Sunday afternoons on the softball field.
When the baby came, however, Larry’s brow began to furrow a bit. He was only 20 years old, and he still wasn’t making much money. He asked Mr. Loude for a raise and got it—his first.
Two months later, one of the crew chiefs quit just when Mr. Loude’s crews had more work than they could handle. Mr. Loude hated to turn down work, so he made Larry Field a crew chief, giving his crew some of the old instruments that weren’t good enough for the precision work of the top crews, and assigned him the easy title surveys in town. Because it meant a jump in salary, Larry had no choice but to accept the crew chief position. But it scared him. He had never been very ambitious or curious, so he’d paid little attention to the training of his former crew chief. He knew how to run the instruments— the basics, anyway—but every morning he woke up terrified that he would be sent on a job he couldn’t handle.
During his first few months as a crew chief, Larry began doing things that his wife thought he had outgrown. He frequently talked so fast that he would stumble over his own words, stammer, turn red in the face, and have to start all over again. He began smoking, too, something he had not done since they had started dating. He told his two crew members that smoking kept his hands from shaking when he was working on an instrument. Neither of them smoked, and when Larry began lighting up in the truck while they were waiting for the rain to stop, they would become resentful and complain that he had no right to ruin their lungs too.
Larry found it particularly hard to adjust to being “boss,” especially since one of his workers was getting an engineering degree at night school and both crew members were the same age as he. He felt sure that Alfonso Reyes, the scholar, would take over his position in no time. He kept feeling that Alfonso was looking over his shoulder and began snapping any time they worked close together.
Things were getting tense at home, too. Alice had to give up her full-time day job to take care of the baby, so she had started working nights. They hardly ever saw each other, and it seemed as though her only topic of conversation was how they should move to California or Alaska, where she had heard that surveyors were paid five times what Larry made. Larry knew his wife was dissatisfied with her work and believed her intelligence was being wasted, but he didn’t know what he could do about it. He was disconcerted when he realized that drinking and worrying about the next day at work while sitting at home with the baby at night had become a pattern.
Case Questions
1. What signs of stress was Larry Field exhibiting?
2. How was Larry Field trying to cope with his stress? Can you suggest more effective methods?


ANNAMALAI UNIVERSITY MBA HRM ASSIGNMENT ANSWER WHATSAPP 91 9924764558

ANNAMALAI UNIVERSITY MBA HRM ASSIGNMENT ANSWER

CONTACT: DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

ANNAMALAI
UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. HUMAN RESOURCE MANAGEMENT
FIRST YEAR
Academic Year 2017 – 2018
ASSIGNMENT TOPICS
This booklet contains assignment topics. Students are asked to write the
assignments for EIGHT papers as per instructions.
Last date for submission: 28-02-2018
Last date for submission with late fee ` 300/- : 15-03-2018
NOTE:
1. Assignments sent after 15-03-2018 will not be evaluated.
2. Assignments should be in the own hand writing of the student concerned and
not type-written or printed or photocopied.
3. Assignments should be written on foolscap paper on one side only.
4. All assignments (with Enrolment number marked on the Top right hand corner
on all pages) should be put in an envelop with superscription “MBA
Assignments” and sent to The Director, Directorate of Distance Education,
Annamalai University, Annamalainagar – 608 002 by Registered post.
5. No notice will be taken on assignments which are not properly filled in with
Enrolment Number and the Title of the papers.
6. Students should send full set of assignments for all papers. Partial
assignments will not be considered.
ASSIGNMENT INSTRUCTIONS
Write assignments on any TWO topics in each paper out of the FOUR. For each
topic the answer should not exceed 15–pages. Each assignment carries 25 marks
(2 topics).
DR. M. ARUL
DIRECTOR
2
1.1 PRINCIPLES OF MANAGEMENT
1. What do you see as the main difference between a successful and an
unsuccessful decision? How much does luck versus skill have to do with it? Give
a detail note on it.
2. Take any two Indian companies and examine how they have succeeded or failed
due to poor strategic planning.
3. Suggest a method of departmentation for a large multi-product Organisation
with a huge market spread over the whole country. Explain the reasons for your
suggestions.
4. ‘Motivation is the core of management’. Comment. What practical suggestions
would you offer to management to motivate its staff in an industrial
Organisation?
1.2 MARKETING MANAGEMENT
1. “Chinese computer and electronic products possess advantages in design,
innovation, rapid response and global market flexibility”- comment.
2. “Legal aspects protect competitors and consumers from many unethical pricing
strategies that unscrupulous marketers may wish to attempt”. Critically analyse
the statement.
3. “Advertising on the internet has changed significantly over the past decade and
some might argue that it is for the worse” Do you agree or disagree? Discuss
with practical illustrations.
4. Examine the challenges encountered by the pharmaceutical wholesale
distributor for surviving and thriving in this new and ever changing environment
1.3 FINANCIAL MANAGEMENT
1. “The consequences of over- capitalization are far more serious and fatal than
under-capitalization”. Discuss.
2. “An optimal combination of the decisions relating to investment, financing and
dividends will maximize the value of the firm to its shareholders”. Examine
3. “Efficiency inventory management is reflected in the liquidity and profitability of
the firm.” Explain.
4. “A low dividend payout Ratio promotes the welfare of stock holders because
long-term capital gains are treated more favourably than dividend income from
the tax point of view.”
3
1.4 OPERATIONS MANAGEMENT
1. Operations management is the area of creating competitive advantage. Do you
agree? Justify your answer.
2. A manufacturer requires 10,000 items per year. Price discount as follows:
Rs.4 up to 2000 items, Rs. 3.80 between 2000 and 4000 items. Rs.3.70 for
quantities above 4000. Ordering cost = Rs. 50.
Comparative inventory cost=25% per year of average inventory price. Determine
the optimum purchase policy under discount.
3. Explain JIT. Do you think it is practically feasible in India? What is your
suggestion for implementing JIT?
4. Operations personnel usually have a large volume and variety of resources at
their command. They should endeavor to make effective and efficient use of
these resources to achieve the largest outputs. Comment! What are the
approaches for enhancing the utilization of resources?
1.5 HUMAN RESOURCE MANAGEMENT
1. “The field of HRM changes so rapidly that had become necessary for one to
constantly review procedures and laws so that the practices will be effective and
legal”. Critically evaluate this statement.
2. “Majority of the testing techniques for selection do not accurately assess the
characteristics of the job. In fact most of the executives would divulge that the
testing had no impact on future job performance. Do you accept or not?
Discuss with justification.
3. “Identify the paramount barriers to effective training programme in IT field and
how to crush them”. Explain with real life examples.
4. Technological advancements and automation are causing high stress and burn
out among employees, which results negatively and unable to reap the benefit of
automation”. Do you agree or disagree? State your view.
1.6 STATISTICS FOR MANAGERS
1. A random sample of 1000 workers from south India show that their mean wages
are Rs. 47 per week with a standard deviation of Rs. 28. A random sample of
1500 workers from North India gives a mean wage of Rs. 49 per week with a
standard deviation of Rs. 40. Is there any significant difference between their
mean level of wages?
2. Calculate seasonal indices for the data given below by the link relative method
Quarter Years
2007 2008 2009 2010 2011
I 45 48 49 52 60
II 54 56 63 65 70
III 72 63 70 75 84
IV 60 56 65 72 66
4
3. The following is the summary of a survey on the color of pens purchased by
persons belonging to different age groups. use chi-square test at 5 % level of
significance to find whether the age of the person has any association with the
choice of color.
Color
Age Group Blue Black Red
Less than 20 8 12 20
20-50 10 15 10
Above 50 10 10 5
4. The following data represents rainfall (x) and yield of paddy per hectare (y) in a
particular area.
x 113 102 95 120 140 130 125
y 1.8 1.5 1.3 1.9 1.1 2.0 1.7
a) Fit the regression equation x on y
b) Estimate y when x = 145
c) Calculate karl pearson’s coefficient of correlation.
d) Calculate regression coefficient x on y and y on x
e) Check whether the regression line is a good fit.
1.7 MANAGERIAL COMMUNICATION
1. Communication has its own merits and demerits based on the types? Discuss the
above with an example of your own.
2. It is difficult to study the growth of a firm without proper recordings of the
proceedings – Discuss the essentials of maintaining such activities in detail.
3. Success of an individual is based on the way he communicates with the people
around him – Discuss the above statement in relation with a HR Department.
4. Noise is from both external and internal sources, what are they and how can it be
overcome – Discuss in detail.
1.8 ORGANISATIONAL BEHAVIOUR
1. Some changes in Organisations are unplanned, where as others are the result of
strategic plans. Give examples of each of their verities of change and explain
their implications for Organisational functioning.
2. Once you are established in your careers, what special challenges are you likely
to confront? What can you do to enhance your chance of having a fully satisfying
successful career?
3. Explain how the field of Organisation behaviour stands to benefit by taking a
global perspectives. What would you say are the major challenges associated
with such a perspectives.
4. Do you believe that Organisational politics is inevitable or that it can be
curtailed? Explain your answer with examples.

M.B.A. [HRM] – 1ST YEAR – Assignment / C – 2000
ANNAMALAI UNIVERSITY PRESS 2017 -2018

ANNAMALAI
UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. HUMAN RESOURCE MANAGEMENT
SECOND YEAR
Academic Year 2017 – 2018
ASSIGNMENT TOPICS
This booklet contains assignment topics. Students are asked to write the
assignments for SIX papers as per instructions, those who have opted Project and
Viva-Voce.
Students are asked to write the assignments for the EIGHT Papers as per
instruction those who have opted Two Theory Papers (2.7.1 & 2.7.2) as specialisation.
Last date for submission: 28-02-2018
Last date for submission with late fee ` 300/- : 15-03-2018
NOTE:
1. Assignments sent after 15-03-2018 will not be evaluated.
2. Assignments should be in the own hand writing of the student concerned and
not type-written or printed or photocopied.
3. Assignments should be written on foolscap paper on one side only.
4. All assignments (with Enrolment number marked on the Top right hand corner
on all pages) should be put in an envelop with superscription “MBA
Assignments” and sent to The Director, Directorate of Distance Education,
Annamalai University, Annamalainagar – 608 002 by Registered post.
5. No notice will be taken on assignments which are not properly filled in with
Enrolment Number and the Title of the papers.
6. Students should send full set of assignments for all papers. Partial
assignments will not be considered.
ASSIGNMENT INSTRUCTIONS
Write assignments on any TWO topics in each paper out of the FOUR. For each
topic the answer should not exceed 15–pages. Each assignment carries 25 marks
(2 topics).
DR. M. ARUL
DIRECTOR
2
2.1 ORGANISATIONAL DEVELOPMENT AND MANAGEMENT OF CHANGE
1. “OD is the prescription for the process of planned change in organisations”-
Discuss.
2. “A collection of suitable interventions, built on humanistic- democratic values,
that seeks to improve organisational effectiveness and employee well-being”-
Discuss.
3. “Change is easy to devise but difficult to implement and impossible to sustain”-
Examine this statement and offer your comments.
4. “Learning organisations attack fragmentation, competitiveness, and reactiveness”-
Elaborate this statement?
2.2 TRAINING AND DEVELOPMENT
1. A leading FMCG company in India decides to train its entire population of
employees and managers to provide “Legendary Customer Service.” Suggest
and explicate a design for evaluating the impact of such a massive training
effort.
2. Is training transfer an important issue in the automobile manufacturing
companies? How transfer is evaluated in those companies? Design an action
plan sheet that a manager and employee could use to facilitate transfer of
training. Justify each category included in the action plan.
3. In a financial services company where 100 employees are working in
information technology department had a high employee turnover rate. A survey
of employees revealed that the reason most left was dissatisfaction with the level
of training. The average turnover rate was 23 percent per year. The cost to
recruit and train one new employee was Rs. 56,625/-. To address the turnover
problem, the company developed a skills training program that averaged 80
hours per year per employee. The average employee wage was Rs. 35/- per
hour. Instructor, classroom, and other costs were Rs. 170,000/-.
a) What is the total cost of training? The total cost of turnover?
b) If the turnover rate dropped 8 percent (from 23 percent to 15 percent), what
was the financial benefit of the training program?
c) What was the ROI of the training program?
d) How much would the turnover rate have to be reduced (from 23 percent) for
the training program to show a benefit?
4. Assume you are a personnel manager in an service organisation, If you had an
opportunity to choose between adventure learning and action learning for
developing an effective team in your organisation, which would you prefer?
Defend your choice with precise justification.
3
2.3 LABOUR WELFARE
1. Elucidate the objectives scope and need of the voluntary welfare measures.
2. Discuss the various welfare measures available to protect the female labour and
the Agricultural labour mention the social assistance available to them.
3. Write the various statutes enacted by Indian Parliament from time to time and
various schemes implemented by government for the welfare of child, female
and contact labours in India.
4. Explain the psychological issues relating to the employment and measures to be
taken to prevent adverse impact on overall health of employees.
2.4 INDUSTRIAL RELATIONS
1. Describe the new perspectives of 1990s. Discuss the implications of post
modernism for employment relations. Explain the latest developments in HRM
for industrial relations issues with suitable examples.
2. Explain the historical perspective of Industrial relations in India. Discuss the
issues and challenges facing by the organisations related to industrial relations
in an organisation you are familiar with.
3. Explain the meaning, origin and growth of trade unions in India. Describe the
present trade union scenario of an industrial area with which you are familiar.
What are your suggestions for strengthing the trade unions in India.
4. Define grievance and discuss the role of Human Resource department in
grievance handling. Explain various approaches of grievance resolution, in your
opinion which approach is most effective and why?
2.5 WAGES AND SALARY ADMINISTRATION
1. ‘‘Indian managers are poorly paid compared to their counterparts abroad’’.
Examine this statement and offer your comments on it with suitable evidences.
2. ‘‘Hard workers get poor wage where as the workers hardly work get high wage.’’
Do you agree to this statement? Justify your stand with valid evidences.
3. Do you agree that the objectives of collective bargaining are to reduce the areas
of conflict and to crate work atmosphere geared to productivity? Elucidate.
4. “If selection and placement decisions are done effectively, an individual
performance should not vary a great a deal; therefore, an incentive system is not
necessary”. Dou you agree to this statement? Justify your view.
4
2.6 STRATEGIC MANAGEMENT
1. If strategic planning is essentially a program, can it display the degree of
adaptiveness that 21st century enterprises need? Would ‘strategic improvisation’
be a plausible alternative? Explore the practical consequences of strategic
improvisation for enterprise management.
2. Select an Automobile industry in India, and evaluate its competitive
business strategy using Porter’s five force model? What strategies can you
suggest to convert the unattractive forces in to attractive ones?
3. “Complementary mergers may result in each firm filling in the missing
pieces of their firm with pieces from other firm” – Examine the validity of the
statement in the Indian context with necessary examples.
4. ‘Formality is the enemy of creativity and innovation’. ‘Informality is the
enemy of disciplined and reliable performance’. Is it consequently impossible
for an enterprise to be both innovative and disciplined? Investigate how
these qualities can be combined.
2.7.1 E-COMMERCE
1. Describe the current e-commerce scenario in India and explain the future
prospect of e-commerce.
2. Explain the characteristics of large companies that involve B2G and B2C
transactions in their business, which require roboust, capable and scalable
electronic commerce system.
3. Visit the following sites:
www.olx.com / www.labour.tn.gov.in / www.clicks.co.za / www.digitalplanet.co.za
a. For each site determine whether it is in the exposure stage, interaction stage, ecommerce
stage or e-business stage. Provide reasons for your answer.
b. Determine whether each site is B2C, C2C, C2B or B2B and why.
c. Critically discuss the process of setting up a free-standing website and evaluate
the potential of e-commerce for small business development in India.
4. Consider the development of a portal for a Retailer shop. Discuss the various
technologies, tools and components involved in designing the same.
2.7.2 BUSINESS RESEARCH METHODS
1. Below is the gist of an article from Business Week. After reading it
(a) identify the broad problem area, (b) define the problem, and
(c) explain how you would proceed further.
“While Chrysler‘s minivans, pickups, and sport utility vehicles take a big share
of the truck market, its cars trail behind those of GM, Ford, Honda, and Toyota.
Quality problems include, among other things, water leaks and defective parts”.
2. It is advantageous to develop a directional hypothesis whenever we are sure of
the predicted direction. How will you justify this statement?
3. If a control group is a part of an experimental design, one need not worry about
controlling other exogenous variables. –Discuss this statement.
4. Whenever possible, it is advisable to use instruments that have already been
developed and repeatedly used in published studies, rather than develop our own
instruments for our studies. Do you agree? Discuss the reasons for your answer.
M.B.A.[H.R.M.] – 2ND YEAR – Assignment C- 1900
ANNAMALAI UNIVERSITY PRESS 2017 – 2018


MBA FM ANNAMALAI ASSIGNMENT ANSWER PROVIDED

MBA FM ANNAMALAI ASSIGNMENT ANSWER PROVIDED WHATSAPP 91 9924764558

ANNAMALAI UNIVERSITY ASSIGNMENT ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558 OR 91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

ANNAMALAI UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. FINANCIAL MANAGEMENT
SECOND YEAR
Academic Year 2017 – 2018
ASSIGNMENT TOPICS
This booklet contains assignment topics. Students are asked to write the
assignments for SIX papers as per instructions, those who have opted project and
Viva-Voce.
Students are asked to write the assignments for the EIGHT Papers as per
instruction those who have opted Two Theory Papers (2.7.1 & 2.7.2) as
specialisation.
Last date for submission : 28-02-2018
Last date for submission : with late fee `300/- 15-03-2018
NOTE:
1. Assignments sent after 15-03-2018 will not be evaluated.
2. Assignments should be in the own hand writing of the student concerned and
not type-written or printed or photocopied.
3. Assignments should be written on foolscap paper on one side only.
4. All assignments (with Enrolment number marked on the Top right hand corner
on all pages) should be put in an envelope with superscription “MBA
Assignments” and sent to The Director, Directorate of Distance Education,
Annamalai University, Annamalainagar – 608 002 by Registered post.
5. No notice will be taken on assignments which are not properly filled in with
Enrolment Number and the Title of the papers.
6. Students should send full set of assignments for all papers. Partial
assignments will not be considered.
ASSIGNMENT INSTRUCTIONS
Write assignments on any TWO topics in each paper out of the FOUR. For each
topic the answer should not exceed 15–pages. Each assignment carries 25 marks
(2 topics).
DR. M. ARUL
DIRECTOR
2
2.1 MANAGEMENT OF FINANCIAL SERVICES
1. Discuss the present state of the Insurance in India and outline causes for their
high growth.
2. Discuss elaborately the role and the progress of commercial banks in the
industrial financing of this country.
3. Explain the role of venture capital in the overall economy and how the venturecapital
industry actually works as a whole and also discuss some of the biggest
successes and failures of venture capital.
4. What do you understand by Credit Rating? Go to any financial institution , get
your credit rating and share your experience.
2.2 INTERNATIONAL FINANCE
1. The international financial environment has become very volatile.’ – Do you
agree? Discuss it by taking into account all relevant factors.
2. Do you know the foreign exchange rates fluctuate? How do these fluctuations
affect us? What can be done to minimize these fluctuations?
3. Discuss the international monetary system, why did the international monetary
system move from a fixed exchange rate system to floating exchange rate
system? What has been its impact?
4. The responsibilities of the foreign banks in the export finance area have today
increased tremendously as compared to earlier years of 20th Century comment.
2.3 DERIVATIVES MANAGEMENT
1. Cipla has a market price of Rs.890. The volatility on the share is 0.32; the riskfree
interest rate is 5 percent. What would be the price of the call with a strike
price of Rs.880, if the expiry date is 20 days ahead? Assume there has not been
any dividend announcement.
2. You are given three call options on a stock at exercise price (k) of Rs 40, Rs.45 and
Rs.50 with the expiration date in 3 month and the premium of Rs.4, Rs.2 and Rs.1
respectively. Show how the call options can be used to create a butterfly spread.
Construct a table with different market prices and show how profit changes with
stock price ranging from Rs 30 to Rs 60 for a butterfly spread.
3. You are a portfolio manager who has just been exposed to the possibilities of
stock index futures. Respond to the following situations.
(a) Assume that you have the resources to buy and hold the stocks in the
S&P 500. You are given the following data. (Assume that today is January 1)
i) Level of the S & P 500 index = 258.90
ii) June S&P 500 futures contract = 260.15
iii) Annualized Rate on T. Bill expiring June 26 (expiration date) = 6%
iv) Annualized Dividend yield on S&P 500 stocks = 3%
v) Assume that dividends are paid out continuously over the year. Is there
potential for arbitrage? How would you go about setting up the arbitrage?
3
(b) Assume now that you are known for your stock selection skills. You have
10,000 shares of Texaco in your portfolio (now selling for 38) and are
extremely worried about the direction of the market until June. You would
like to protect yourself against market risk by using the December S&P 500
futures contract (which is at 260.15). If Texaco’s beta is 0.8, how would you
go about creating this protection?
4. What are various types of derivative instruments traded at NSE? What are
various products available for trading in Futures and Options segment at NSE?
2.4 RISK MANAGEMENT AND INSURANCE
1. You are the newly appointed Risk Manager within an organisation and have
noted that there is no written risk management philosophy or statement in
place. Advise the Board of the advantages of adopting a risk document,
describing the elements that should be referenced within it.
2. You are the Internal Audit Manager within an organisation. At a recent Board
meeting, you were asked to prepare for an internal audit of the risk management
process.
(a) State the aim of an Internal Audit team as defined by the Institute of Internal
Auditors (IIA).
(b) Explain the role and assurances that the internal audit has to provide in
relation to risk management.
(c) Explain how the responsibilities of the internal audit function differ from
those of the risk management committee.
3. Discuss the need and growing importance of Liability insurance policies in India
quoting relevant examples with specific reference to Professional indemnity
liability policy in the backdrop of the recent corporate scams.
4. “Claims handling requires specialized skills.” Do you agree? What makes
insurance claims processing difficult and complicated and unpleasant especially
in general insurance. Refer to the relevant IRDA guidelines for speedy settlement
of claims.
2.5 INVESTMENT, SECURITY AND PORTFOLIO MANAGEMENT
1. Cite recent examples of political, social, or economic events (market risk) that
have excited (a) The stock market, and (b) Stocks in a specific industry, to surge
ahead or plummet sharply.
2. “Public issue of securities through prospectus is not only most popular but also
the best method of raising fresh capital.” – Critically evaluate.
3. ‘Stock market indices are the barometers of the stock market.’ – Discuss.
4. Technical analysts believe that one can use past price changes to predict future
price changes. How do you justify this belief?
2.6 STRATEGIC MANAGEMENT
1. If strategic planning is essentially a program, can it display the degree of
adaptiveness that 21st Century enterprises need? Would ‘strategic
improvisation’ be a plausible alternative? Explore the practical
consequences of strategic improvisation for enterprise management.
4
2. Select an Automobile industry in India, and evaluate its competitive
business strategy using Porter’s five force model? What strategies can you
suggest to convert the unattractive forces in to attractive ones?
3. “Complementary mergers may result in each firm filling in the missing
pieces of their firm with pieces from other firm” – Examine the validity of the
statement in the Indian context with necessary examples.
4. ‘Formality is the enemy of creativity and innovation’. ‘Informality is the
enemy of disciplined and reliable performance’. Is it consequently impossible
for an enterprise to be both innovative and disciplined? Investigate how
these qualities can be combined.
2.7.1 E-COMMERCE
1. Describe the current e-commerce scenario in India and explain the future
prospect of e-commerce.
2. Explain the characteristics of large companies that involve B2G and B2C
transactions in their business, which require roboust, capable and scalable
electgronic commerce system.
3. Visit the following sites:
www.olx.com /www.labour.tn.gov.in/www.clicks.co.za/www.digitalplanet.co.za
a. For each site determine whether it is in the exposure stage, interaction stage,
e-commerce stage or e-business stage. Provide reasons for your answer.
b. Determine whether each site is B2C, C2C, C2B or B2B and why.
c. Critically discuss the process of setting up a free-standing website and
evaluate the potential of e-commerce for small business development in
India.
4. Consider the development of a portal for a Retailer shop. Discuss the various
technologies, tools and components involved in designing the same..
2.7.2 BUSINESS RESEARCH METHODS
1. Below is the gist of an article from Business Week. After reading it
(a) identify the broad problem area,
(b) define the problem, and
(c) explain how you would proceed further.
While Chrysler‘s minivans, pickups, and sport utility vehicles take a big share of
the truck market, its cars trail behind those of GM, Ford, Honda, and Toyota.
Quality problems include, among other things, water leaks and defective parts.
2. It is advantageous to develop a directional hypothesis whenever we are sure of
the predicted direction. How will you justify this statement?
3. If a control group is a part of an experimental design, one need not worry about
controlling other exogenous variables. Discuss this statement
4. Whenever possible, it is advisable to use instruments that have already been
developed and repeatedly used in published studies, rather than develop our
own instruments for our studies. Do you agree? Discuss the reasons for your
answer.
M.B.A.[F.M.] – 2ND Year – Assignment C – 1200
ANNAMALAI UNIVERSITY PRESS 2017 -2018


MBA INFORMATION SYSTEMS ANNAMALAI ASSIGNMENT ANSWER WHATSAPP 91 9924764558

MBA INFORMATION SYSTEMS ANNAMALAI ASSIGNMENT
ANNAMALAI UNIVERSITY ASSIGNMENT ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558 OR 91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

ANNAMALAI UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. INFORMATION SYSTEMS
FIRST YEAR
Academic Year 2017 – 2018
ASSIGNMENT TOPICS
This booklet contains assignment topics. Students are asked to write the
assignments for SEVEN papers as per instructions.
Last date for submission : 28-02-2018
Last date for submission with late fee ` 300/- : 15-03-2018
NOTE:
1. Assignments sent after 15-03-2018 will not be evaluated.
2. Assignments should be in the own hand writing of the student concerned and
not type-written or printed or photocopied.
3. Assignments should be written on foolscap paper on one side only.
4. All assignments (with Enrolment number marked on the Top right hand corner
on all pages) should be put in an envelop with superscription “MBA
Assignments” and sent to The Director, Directorate of Distance Education,
Annamalai University, Annamalainagar – 608 002 by Registered post.
5. No notice will be taken on assignments which are not properly filled in with
Enrolment Number and the Title of the papers.
6. Students should send full set of assignments for all papers. Partial
assignments will not be considered.
ASSIGNMENT INSTRUCTIONS
Write assignments on any TWO topics in each paper out of the FOUR. For
each topic the answer should not exceed 15–pages. Each assignment carries
25 marks (2 topics).
DR. M. ARUL
DIRECTOR
2
1.1 PRINCIPLES OF MANAGEMENT
1. What do you see as the main difference between a successful and an
unsuccessful decision? How much does luck versus skill have to do with it?
Give a detail note on it.
2. Take any two Indian companies and examine how they have succeeded or failed
due to poor strategic planning.
3. Suggest a method of departmentation for a large multi-product organization
with a huge market spread over the whole country. Explain the reasons for your
suggestions.
4. ‘Motivation is the core of management’. Comment. What practical suggestions
would you offer to management to motivate its staff in an industrial
organization?
1.2 MANAGERIAL ECONOMICS
1. “The objective of Managerial Economics is to provide framework for analysing
business decisions. Instead of presenting detailed list of rules for specific
decision-making, managerial economics addresses the larger economic forces
that shape day-to-day decision-making”. Critically analyse the above statement.
2. “The quantity demanded of any good appears to depend upon utility, price and
income”. Elucidate the above statement with appropriate example.
3. “If the production function is homogeneous with constant returns to scale
everywhere, the returns to a single variable factor will be diminishing.”
– Comment.
4. “If there is active price competition and free entry, the equilibrium output under
monopolistic competition will be very close to the minimum cost-output.
However, if firms avoid price competition and instead enter into non-price
competition there will be excess capacity in each firm”. – Comment the above
statement.
1.3 ACCOUNTING AND FINANCE FOR MANAGERS
1. Arun the managing director is surprised that his profit every year is quite
different from what he wants or expects to achieve. Someone advised him to
install a formal system of budgeting. He employs a fresh accountant to do this.
For two years, the accountant faithfully makes all budgets based on previous
year accounts. The problem remains unsolved. Advise Arun the managing
director and the accountant on what steps they should take. Make assumptions
about what is lacking.
2. In a factory, actual fixed cost overheads were different from the standard fixed
overheads because the actual output, actual time consumed, actual rate per
hour and per unit of output differed. Compute the variances taking assumed
figures.
3
3. A company has to decide whether to Make or Buy. Through differential cost
analysis, how will you ascertain the net difference between the two alternatives
so as to assist the management in their decision making? Use hypothetical
figures to illustrate.
4. As a management accountant your are asked to introduce a system of capital
expenditure control for your organization. Explain the important feature you
want to incorporate in the system you propose to introduce with the suitable
example of a project involving capital expenditure.
1.4 MARKETING MANAGEMENT
1. “Chinese computer and electronic products possess advantages in design,
innovation, rapid response and global market flexibility.” – Comment.
2. “Legal aspects protect competitors and consumers from many unethical pricing
strategies that unscrupulous marketers may wish to attempt.” – Critically
analyse the statement.
3. “Advertising on the internet has changed significantly over the past decade and
some might argue that it is for the worse” Do you agree or disagree? Discuss
with practical illustrations.
4. Examine the challenges encountered by the pharmaceutical wholesale distributor for
surviving and thriving in this new and ever changing environment
1.5 HUMAN RESOURCE MANAGEMENT
1. “The field of HRM changes so rapidly that had become necessary for one to
constantly review procedures and laws So that the practices will be effective and
legal”. Critically evaluate this statement.
2. “Majority of the testing techniques for selection do not accurately assess the
characteristics of the job. In fact most of the executives would divulge that the
testing had no impact on future job performance. Do you accept or not?
Discuss with justification.
3. “Identify the paramount barriers to effective training programme in IT field and
how to crush them.” Explain with real life examples.
4. Technological advancements and automation are causing high stress and burn
out among employees, which results negatively and unable to reap the benefit of
automation”. Do you agree or disagree? State your view.
.
4
1.6 PRODUCTION AND MATERIALS MANAGEMENT
1. Production and materials management is the area of creating competitive
advantage. Do you agree? Justify your answer.
2. A manufacturer requires 10,000 items per year. Price discount as follows:
a) Rs.4 upto 2000 items, Rs. 3.80 between 2000 and 4000 items. Rs.3.70
for quantities above 4000. Ordering cost = Rs. 50.
b) Comparative inventory cost = 25% per year of average inventory price.
c) Determine the optimum purchase policy under discount.
3. Explain JIT. Do you think it is practically feasible in India? What is your
suggestion for implementing JIT?
4. Discuss the impact of new technologies on the role of an production Manager in
an organization? Give suitable examples.
1.7 RESEARCH METHODS FOR MANAGEMENT
1. “Human Lock” a leading human security force company has planned to know
the employee satisfaction level and the problems faced by employees in their job
at various levels. As a consultant you are requested to complete the task.
Design a suitable questionnaire for this purpose by considering different
dimensions related to human security force, and suggests a suitable sampling
design for the collection of data.
2. You are the R & D Manager of a research consultancy company. You have been
assigned to conduct a customer satisfaction study about cosmetic products of a
leading cosmetic company in India. You conducted the study and you are ready
to submit the report. How will you prepare the research report for your client?
(Use your own data and other relevant information)
3. Mr. Puneeth, the personnel manager of a Textile Mill is recruiting its graduate
trainees through two consultancy agencies. The performance index (0 – 10 scale) of
the trainees from each consultancy agency follows normal distribution. The
variance of the performance index of the trainees selected through a
Consultancy Agency X is 12 and that of the trainees selected through another
Consultancy Agency Y is 6. The manager feels that the mean performance index
of the trainees selected through the Consultancy Agency X is less than that of
the trainees selected through the Consultancy Agency Y. To test his intuition,
he has drawn a sample of 64 trainees selected through the Consultancy Agency
X and their mean performance index is found to be 8. Similarly, he has drawn a
sample of 81 trainees selected through the Consultancy Agency Y and their
mean performance index is found to be 6.5. Test the intuition of Mr. Puneeth at
a significant level of 0.01.
4. “The economy of a nation depends on the quantum of research and
development activities.” – Comment on the statement and substantiate your
views with real time examples.
M.B.A. [I.S.]- Assignment – 1ST YEAR C-150
ANNAMALAI UNIVERSITY PRESS 2017 -2018


MBA INTERNATIONAL BUSINESS ANNAMALAI ASSIGNMENT ANSWER WHATSAPP 91 9924764558

MBA INTERNATIONAL BUSINESS ANNAMALAI ASSIGNMENT ANSWER
ANNAMALAI UNIVERSITY ASSIGNMENT ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558 OR 91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

ANNAMALAI UNIVERSITY
DIRECTORATE OF DISTANCE EDUCATION
M.B.A. INTERNATIONAL BUSINESS
FIRST YEAR
Academic Year 2017 – 2018
ASSIGNMENT TOPICS
This booklet contains assignment topics. Students are asked to write the
assignments for EIGHT papers as per instructions.
Last date for submission : 28-02-2018
Last date for submission with late fee ` 300/- : 15-03-2018
NOTE:
1. Assignments sent after 15-03-2018 will not be evaluated.
2. Assignments should be in the own hand writing of the student concerned and
not type-written or printed or photocopied.
3. Assignments should be written on foolscap paper on one side only.
4. All assignments (with Enrolment number marked on the Top right hand corner
on all pages) should be put in an envelop with superscription “MBA
Assignments” and sent to The Director, Directorate of Distance Education,
Annamalai University, Annamalainagar – 608 002 by Registered post.
5. No notice will be taken on assignments which are not properly filled in with
Enrolment Number and the Title of the papers.
6. Students should send full set of assignments for all papers. Partial
assignments will not be considered.
ASSIGNMENT INSTRUCTIONS
Write assignments on any TWO topics in each paper out of the FOUR. For each
topic the answer should not exceed 15–pages. Each assignment carries 25 marks
(2 topics).
DR. M. ARUL
DIRECTOR
2
1.1 PRINCIPLES OF MANAGEMENT
1. What do you see as the main difference between a successful and an
unsuccessful decision? How much does luck versus skill have to do with it? Give
a detail note on it.
2. Take any two Indian companies and examine how they have succeeded or failed
due to poor strategic planning.
3. Suggest a method of departmentation for a large multi-product organisation with
a huge market spread over the whole country. Explain the reasons for your
suggestions.
4. ‘Motivation is the core of management’. Comment. What practical suggestions
would you offer to management to motivate its staff in an industrial
organisation?
1.2 INTERNATIONAL ACCOUNTING
1. Make out a trial balance with imaginary figures. Draw the Profit and Loss
Account and Balance Sheet from the trial balance which you have constituted.
2. “Price differences in different geographic segments make international
accounting a challenging Endeavour”. How experts overcome this challenge?
3. ‘’Some knowledge of International Accounting may be necessary for a company
even if it is not a multinational.” Do you agree with this statement? If so, explain
your position.
4. Why do companies need to prepare a Funds Flow Statement, when they are
already preparing many other financial statements to present their financial
position?
1.3 INTERNATIONAL ECONOMICS
1. “Liberalisaton and Globalisation of trade policies have an impact on the growth
of domestic trade”. Comment the above statement.
2. “IMF is a key to economic development of all countries in the world”. Do you
accept or not.
3. “The concept of foreign trade multiplier is one of the major thing in any
International Business Environment”. Briefly discuss the above with current
example.
4. Briefly comment on what way international trade is helpful to correct the
disequilibrium in the balance of payments position of a nation.
3
1.4 INTERNATIONAL BUSINESS ENVIRONMENT
1. Give an Overview of the international Business Environment in the developing
countries like India.
2. Give your opinion on Foreign direct Investment and State the present structure
of the foreign direct Investment in India
3. State the role of MNCs in India and the government of India policy towards
MNCs.
4. Take any company and discuss how its marketing strategy is different in its
home country and foreign country give the reason on it had to be different.
1.5 FOREIGN POLICY OF INDIA
1. Discuss in detail India’s international trade scenario and also discuss which
countries are India’s export and import partners and what are their shares in
India’s international trade.
2. Elucidate India’s institutional framework (trade promotion bodies) set up by the
Government of India for the promotion of India’s international trade.
3. Write a note on export promotion councils and commodity boards, their roles in
India’s trade development.
4. Discuss how EXIM Bank and ECGC facilitate exporters and importers in India
and abroad.
1.6 INFORMATION TECHNOLOGY AND E-COMMERCE
1. Explain the potential benefits of cloud computing in the e-commerce. What is
the infrastructure required for it to be adopted on large scale by the users?
2. What are virtual shopping malls? Explain with examples various portals which
are very popular for online business especially in India.
3. Enlist the emerging issues involved in marketing and pricing related issues in
online banking sectors in Indian market scenario. Suggest more appropriate
strategies to improve online services in banking industry. Justify your views
with suitable examples.
4. Explain the characteristics of large companies that involve B2G and B2C
transactions in their business, which require roboust, capable and scalable
electronic commerce system.
4
1.7 COMMUNICATION FOR GLOBAL MANAGERS
1. How will you design you presentation for a general body meeting – elucidate in
detail the procedure involved in it with the above context.
2. Submit a report on the drought situation in your district and send to the editor
of a news paper.
3. Choosing proper channel far your presentation is more important for written &
oral presentation – Brig out the importance & what set back you will confront in
choosing the above.
4. Noise that affects the process of communication can be overcome by proper
planning, how it can be done & what is the noise that hinders the process.
1.8 ORGANISATIONAL BEHAVIOUR
1. Same changes in organisations are unplanned, where as others are the result of
strategic plans. Give examples of each of their verities of change and explain
their implications for organisational functioning.
2. Once you are established in your careers, what special challenges are you likely
to confront? What can you do to enhance your chance of having a fully satisfying
successful career?
3. Explain how the field of organisation behaviour stands to benefit by taking a
global perspectives. What would you say are the major challenges associated
with such a perspectives.
4. Do you believe that organisational politics is inevitable or that it can be
curtailed? Explain you answer with examples.

M.B.A.[I.B.] – 1ST YEAR – Assignment C-250
ANNAMALAI UNIVERSITY PRESS 2017 -2018


Accounting for Managers – ANSWERS PROVIDED

Accounting for Managers – ANSWERS PROVIDED

(i) “Management accounting is accounting for
effective management”. Explain
(ii) What is meant by conventions of management
accounting.
(iii) Differentiate between cash flow and fund flow
statement.
(iv) When standard quantity is 50 unit and standard
price per units is Rs. 4.50/- actual quantity uses 40
units and actual price is Rs. 5. Calculate material
cost valiance and analyse it.
(v) Name the cost drives to the following cost pools :-

(a) material procurement (b) Maintenance
(c) Quality control (d) Machinery
(vi) Differentiate between ABC system and traditional
costing system.
(vii) What do you mean by profitability ratios.
(viii) List down the advantages of zero cost budgeting.
(ix) Explain the various methods of inventory valuation.
(x) Write short notes on –
(a) Kaizen costing (b) Throughput costing
(c) Block flush costing (d) Quality costing

Q.2 How the cost is classified into various element for
presenting the same in the form of a cost sheet.
Prepare a standard format of cost sheet for a
furniture making unit. Assume suitable data.
10
Q.3 You had asked you accountant to prepare fair
budgets based on different ergonomic forecasts.
After doing part A of the work, he fill sick.
10
Incomplete working done by him were as under :-
Economi
c
Forecast
Depresse
d
Average Good
Excellen
t
Valiable
Cost(Rs’
000)
40 60 90 140
There are fixed costs of Rs. 72,000 and P/V ratio is
60% calculate.
(a) Profit or loss at each of the 4 levels
(b) Break even point in sales value
(c) The sales value at which a profit of Rs. 15000
would be mode.
Q.4 Explain the concept of cost drivers. Discuss the
factors affecting the selection of cost drivers.
10
Q.5 “Management Accounting is the presentation of
accounting information in such a way as to assist
management in the creation of policy and day to
day operation of an undertaking. Elucidate this
statement giving suitable illustration.
10
Q.6 How will you calculate cash flows from operating
activities by direct and indirect method? Explain
with example.
10
Q.7 Define budget. Explain various types of budget and
how they help in cost control.
10
Q.8 Branda Ltd. manufacture two product A and B.
Activity data are as follows.
10
Product Annual output Total Machine house No. of purchase
order
Number of setups
A 20,000 80,000 600 80
B 40,000 1,00,000 360 40
The annual overheads are as under :
Volume Related activity cost 5,00,000
Setup Related costs 8,20,000
Purchase Related cost 6,00,000
Calculate per unit cost of each product
(i) Under Traditional costing system
(ii) Activity based costing system


Business Ethics IIBM EXAM ANSWER PROVIDED

Business Ethics
Section A: Objective Type (30 marks)
• This section consists of Multiple Choice questions & Short Answer type questions.
• Answer all the questions.
• Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Term used to denote the existence of information of an electronic network of linked computer
system
a. Information technology
b. Nanotechnology
c. Cyberspace
d. None of the above
2. Egalitarianism is
a. Equal distribution of all benefits & burdens on peoples
b. Equal distribution of all benefits on people
c. Equal distribution of all burdens on people
d. None of the above
3. Justice of blaming or punishing persons for doing wrong is
a. Libertarianism
b. Compensatory justice
c. Retributive justice
d. Socialism
4. Markets in which each individual is able to voluntarily exchange goods with others
a. Restricted Markets
b. Free Markets
c. Open Markets
d. None of the above
5. The Marxist view of history as determined by changes in the economic methods by which
humanity produces the materials on which it much live
a. Alienation
b. Immiseration
c. Social Darwinism
d. Historical materialism
Examination Paper of Business Ethics
IIBM Institute of Business Management 2
6. Market in which a single firm is the only seller in the market and which new sellers are barred
from entering is
a. Pure monopoly
b. Oligopoly
c. Bipoly
d. None of the above
7. Oligopoly markets that are dominated by a few large firms
a. Highly concentrated market
b. Concentrated market
c. Imperfectly competitive market
d. None of the above
8. Ozone depletion is caused by release of
a. Sulfurdioxide
b. Chlorofluorocarbons
c. Carbondioxide
d. None of the above
9. The private internal costs and the wider external costs of engaging in a particular economic
activity
a. Private cost
b. Market cost
c. Social cost
d. None of the above
10. Acid rain occurs due to
a. Sulfur oxides
b. Nitrogen oxides
c. Both (a) & (b)
d. None of the above
Part Two:
1. Write short note on “Depletion of Minerals”?
2. Explain Oligopolistic Competition?
3. Write short note on “Immiseration of workers”?
4. What is Retributive Justice?
END OF SECTION A
Examination Paper of Business Ethics
IIBM Institute of Business Management 3
Section B: Caselets (40 marks)
• This section consists of Caselets.
• Answer all the questions.
• Each caselet carries 20 marks.
• Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
The stakes were high for Gene Elliot, whose on-the-job injuries were estimated to be serious enough
to merit at least a $2.4 million settlement. But who should pay for his injuries: Turner Construction
or B&C Steel? Or should he be forced to pay for at least part of his injuries because of his own
carelessness?
Gene Elliot worked for Mabey Bridge and Shore, a small business that rented temporary steel
pedestrian foot bridges to other companies. The temporary bridges had to be put together by the
renter, and Gene Elliot’s job was to go to the site where the steel bridge was going to be installed,
show the renter how to bolt the bridge sections together and how to install the bridge over a river or
waterway, and inspect the bridge to make sure it was done properly and according to Mabey
Bridge’s high standards. Elliot was a devoted hard worker who strove to do everything possible to
ensure that a bridge installation was successful and according to Mabey’s standards.
Turner Construction was a general contractor hired to build Invesco Field at the Mile High
Stadium in Denver, Colorado. Part of the job involved installing a temporary pedestrian bridge over
the Platte River near the stadium. Turner Construction subcontracted (hired) B&C Steel to build and
install the bridge, which Turner Construction would pay for. B&C Steel was a small company that
specialized in putting together and installing steel structures like those Mabey Bridge rented out.
B&C Steel would pick up the bridge, put it together, and install it for Turner.
Turner Construction rented the long steel bridge from Mabey Bridge. Mabey Bridge agreed that
the rental included the services of Gene Elliot, who would be loaned to Turner to instruct and inspect
the bridge assembly and installation. B&C Steel’s workers picked up the bridge sections from
Mabey Bridge’s warehouse and drove them to the river but didn’t unload the bridge sections where
they had to be assembled. B&C then had to move the sections to the correct site but didn’t plan for
the fence, guardrails, and trolley tracks that were in the way and later had to work around these
obstructions. B&C Steel began bolting the bridge sections together. When Elliot inspected the job,
he found the bridge had been bolted together upside down. Elliot made B&C do the job over, while
he climbed up and down and over the bridge, continuously checking and making sure that all the
bolts were tight and all the pieces were in the right place so that the installation would be a success.
When the bridge was finished, B&C workers used a truck to move the long steel structure to the
edge of the river. Unfortunately, B&C had not adequately checked the route and their truck hit a low
hanging power line, which sparked and started a fire. The fire department arrived and put out the
fire. Afterwards, the installation job continued.
B&C workers set up a crane on the other side of the river near a retaining wall, and a strong nylon
strap was strung from the crane, over the water, and tied to one end of the bridge, which was set on
rollers. The B&C crane would lift and pull the bridge over the river to its side, while workers on the
other side of the river pushed on their end of the bridge. The work began, and as the pulling crane
held the bridge suspended in the air about a quarter of the way over the river, Elliot noticed that the
retaining wall which was supporting the crane on the other side of the river was beginning to
collapse, causing the crane to begin to tip sideways. The B&C crane operator on the other side began
to untie the strap holding the bridge, Concerned that once the strap was cut the bridge would fall into
the river and the installation would end in failure, Elliot ran up on the bridge and gave the standard
Examination Paper of Business Ethics
IIBM Institute of Business Management 4
emergency OSHA all-stop signal that all construction workers know means not to move anything.
But the bridge, still attached to the crane, somehow moved, and Elliot felt, sustaining numerous
pelvic injuries and a severed urethra (the tube that carries urine). The cause of the movement was
never established.
Elliot sued Turner Construction and B&C Steel for negligence resulting in economic losses of
$28,000, noneconomic injuries of $1,200,000, and permanent impairment of $1,200,000. These
figures were established by a qualified expert in the field of worker injuries and were not seriously
contested.
Turner Construction, however, denied its responsibility. It claimed that Turner was Elliot’s
temporary employer and workers’ compensation law required employees to pay only the economic
looses, here only $28,000, suffered by their employees. Turner Construction pointed to the law,
which stated: “Any company leasing or contracting out any part of the work to any lessee or
subcontractor, shall be constructed to be an employer and shall be liable to pay [only] compensation
for injury resulting therefrom to said lessees and subcontractors and their employees.” Turner
Construction claimed that Mabey was a subcontractor to Turner, so Turner should be construed to be
Elliot’s temporary employer. Moreover, Colorado’s worker’s compensation law, which was
designed to ensure that employers always paid for workers injuries “grants an injured employee
compensation from the employer without regard to negligence and, in return, the responsible
employer is granted immunity from common law negligence liability.”
B&C claimed that it, too, was not responsible, because according to the law a company is not
responsible for negligence when an injury is not “reasonably foreseeable” to the company. B&C
contended that a reasonable person could not have anticipated that placing the crane near to the
retaining wall and subsequently attempting to remove the nylon strap holding up the bridge might
end by prompting someone to get on the bridge in an attempt to save it from falling into the river. On
the other hand, B&C claimed, since “Elliot chose to remove himself from a secure and safe position
and placed himself in one that he understood was potentially unsafe,” Elliot was himself responsible
for his injuries.
Elliot claimed that he was not really Turner’s employee, since he was working for Mabey. He
also argued that B&C had shown a pattern of negligence from the time that the bridge was received
until the time that it was installed. B&C and its employees, he said, were unprepared for the project
and negligently failed to adequately plan for it, as shown by the sequence of events leading up to his
injury. B&C there fore did not exercise the degree of care that a reasonably careful person should
have exercised in similar circumstances and so was liable to him for his injuries. He himself was not
responsible, he said, because good, devoted employee would try his best to ensure that the bridge
installation did not end in failure, and he would have been perfectly safe if the standard OSHA allstop
signal had been followed by B&C employees, as he had a right to expect it to be.
1. In your judgement, and from an ethical point of view, should Turner Construction and/or B&C
Steel pay for all or part of the $2,428,000 (if part, indicate which part)? Explain your view?
2. In your judgement, is the Colorado worker’s compensation law to which Turner Construction
appealed fair? Explain your view?
Caselet 2
Although many people believe that the World Wide Web is anonymous and secure from censorship,
the reality is very different. Governments, law courts, and other officials who want to censor,
examine, or trace a file of materials on the Web need merely go to the server (the online computer)
where they think the file is stored. Using their subpoena power, they can comb through the server’s
drives to find the files they are looking for and the identity of the person who created the files.
Examination Paper of Business Ethics
IIBM Institute of Business Management 5
On Friday June 30, 2000, however, researchers at AT & T Labs announced the creation of
Publius, a software program that enables Web users to encrypt (translate into a secret code) their files
– text, pictures, or music – break them up like the pieces of a jigsaw puzzle, and store the encrypted
pieces on many different servers scattered all over the globe on the World Wide Web. As a result,
anyone wanting to examine or censor the files or wanting to trace the original transaction that
produced the file would find it impossible because they world have to examine the contents of dozens
of different servers all over the world, and the files in the servers would be encrypted and fragmented
in a way that would make the pieces impossible to identify without the help of the person who created
the file. A person authorized to retrieve the file, however, would look through a directory of his files
posted on a Publius-affiliated website, and the Publius network would reassemble the file upon
request. Researchers published a description of Publius at www.cs.nyu.edu/waldman/publius.
Although many people welcomed the way that the new software would enhance freedom of
speech on the Web, many others were dismayed. Bruce Taylor, an antipornography activist for the
National Law Center for Children and Families, stated: “Its nice to be anonymous, but who wants to
be more anonymous than criminals, terrorists, child molester, child pornographers, hackers, and email
virus punks?” Aviel Rubin and Lorrie Cranor, the creators of Publius hoped, however, that their
program would help people in countries where freedom of speech was repressed and individuals were
punished for speaking out. The ideal user of Publius, they stated, was “a person in China observing
abuses of human rights on a day-to-day basis.”
1. Analyze the ethics of marketing Publius using utilitarianism, rights, justice, and caring. In your
judgement, is it ethical to market Publius? Explain?
2. In your judgement, should the U.S. government allow the implementation of Publius? Why or
why not?
END OF SECTION B
Section C: Applied Theory (30 marks)
• This section consists of Long Questions.
• Answer all the questions.
• Each question carries 15 marks.
• Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. What is utilitarianism and what are its benefits in business?
2. How market approach to consumer protection benefits consumer?
END OF SECTION C
———————————————————– ***——————————————————


GENERAL MANAGEMENT – IIBMS ANSWER PROVIDED

GENERAL MANAGEMENT – IIBMS ANSWER PROVIDED MOB OR WHATSAPP 91 9924764558 OR 9447965521

IIBMS QUESTION PAPER
Subject – General Management
Marks – 100

Attempt Any Four Case Study

CASE – 1 Your Job and Your Passion—You Can Pursue Both!

The 21st century offers many challenges to every one of us. As more firms go global, as more economies interconnect, and as the Web blasts away boundaries to communication, we become more informed citizens. This interconnectedness means that the organizations you work for will require you to develop both general and specialized knowledge—such as speaking multiple languages, using various software applications, or understanding details of financial transactions. You will have to develop general management skills to foster your ability to be self-reliant and thrive in a changing market-place. And here’s the exciting part: As you build both types of knowledge, you may be able to integrate your growing expertise with the causes or activities you care most about. Or, your career adventure may lead you to a new passion.
Former presidents George H. W. Bush and Bill Clinton are well known for combining their management skills—running a country—with their passion for helping people around the world. Together they have raised funds to assist disaster victims, those with HIV/AIDS, and others in need. Jake Burton turned his love of snow sports into an entire industry when he founded Burton Snowboards. Annie Withey poured her business and marketing knowledge into her two famous business ventures: Smartfood and Annie’s Homegrown. Both products were the result of her passion for healthful foods made from organic ingredients.
As you enter the workforce, you may have no idea where your career path will lead. You may be asking yourself, “How will I fit in?” “Where will I live?” “How much will I earn?” “Where will my business and personal careers evolve as the world continuous to change at such a fast pace?” If you are feeling nervous because you don’t know the answers to these questions yet, relax. A career is a journey, not a single destination. You may have one type of career or several. It is likely you will work for several organisations, or you may run one or more businesses of your own.
As you ask yourself what you want to do and where you want to be, take a few minutes to review the chapter and its main topics. Think about your personality, what you like and dislike, what you know and what you want to learn, what you fear and what you dream. Then try the following exercise.

Questions

1. Create a three-column chart in which the first column lists nonmanagement skills you have. Are you good at travel? Do you know how to build furniture? Are you a whiz at sports statistics? Are you an innovative cook? Do you play video games for hours? In the second column, list the causes or activities about which you are passionate. These may dovetail with the first list, but they might not.

2. Once you have you two columns complete, draw lines between entries that seem compatible. If you are good at building furniture, you might have also listed a concern about families who are homeless. Remember that not all entries will find a match—the idea is to begin finding some connections.

3. In the third column, generate a list of firms or organizations you know about that reflect your interests. If you are good at building furniture, you might be interested working for the Habitat for Humanity organization, or you might find yourself gravitating towards a furniture retailer like Ikea or Ethan Allen. You can do further research on organizations via Internet or business publications.

CASE – 2 Biyani – Pioneering a Retailing Revolution in India

“I use people as hands and legs. I prefer to do thinking around here.”

─ Kishore Biyani, CEO & MD, Pantaloon Retail (India) Ltd.

Kishore Biyani (Biyani), CEO& MD of Pantaloon Retail (India) Ltd., planned to have 30 Food Bazaar outlets, 22 outlets in Big Bazaar, 21 Pantaloons outlets, and four seamless malls under the Central logo, by the end of 2005. He also planned to launch at least three businesses every year and had already selected music, footwear and car accessories as his next areas of investments. He was already the top retailer in India followed by Raghu Pillai of RPG. As of 2004, Biyani headed a company that had a turnover of Rs 6,500 million and operated 13 Pantaloon apparel stores, 9 Big Bazaars, 13 Food Bazaars, and 3 seamless malls (Central), one each located in Bangalore, Hyderabad, and Pune.
Biyani’s journey from a person who looked after his family business to India’s top retailer in 1987, when he launched Manz Wear Pvt. Ltd. The company launched one of the first readymade trousers brands – ‘Pantaloon’ – in the country. The company also launched its first jeans brand called ‘Bare’ in 1989. On September 20, 1991, Manz Wear Pvt. Ltd. went public and on September 25, 1992, it changed its name to Pantaloon Fashions (India) Limited (PFIL). ‘John Miller’ was the first formal shirt brand from PFIL.
The company opened its first apparel stores, called ‘Pantaloons’ at Kolkata in August 1997. The stores generated Rs 70 million. Biyani then realized the potential of the Indian market and started to aggressively tap it. Accordingly, Biyani decided to expand into other segments of retailing besides apparel. To reflect this change in focus, the company changed its name to Pantaloon Retail (India) Limited (PRIL) in July 1999 and set itself a target of achieving Rs 10 billion in sales by June 2005. In course of time he launched three other retail formats — Big Bazaar, Food Bazaar, and Central.
Biyani didn’t believe in copying ideas from western retailers. He was critical of his peers who felt just copied ideas form the west without making any effort to mold them to Indian conditions. He ensured that his store formats such as Big Bazaar, Food Bazaar, and Pantaloons were all suited to the purchasing style of Indian consumers.
Biyani was a huge risk taker and his planning was always different from the conventional way of doing business. This was also one of the factors that had prompted Biyani to move away from his father’s conventional way of doing business. During the initial stages of his success, his risk-taking attitude sometimes had the effect of turning away financiers. The biggest risk that Biyani took was in opening Big Bazaar in Mumbai in 2001. The company needed money to expand Big Bazaar’s operations. However, it had profits of only Rs 40 million with a low share price at eighteen rupees. Therefore, Biyani could not raise money through equity. In light of this situation, Biyani took a loan of Rs 1,200 million from ICICI for launching the operations of Big Bazaar, which increased his debt exposure. However, Big Bazaar proved to be a resounding success with 100,000 customer visits in its first week of operations. According to analysts, if Big Bazaar had failed, Biyani would have landed in a severe debt crisis. The success of Big Bazaar not only increased the company profits, it also changed the perception of investors.
Many people criticized Biyani for not delegating authority and Biyani himself accepted the criticism. He said, “I use people as hands and legs. I prefer to do the thinking around here.” He preferred taking individual decision on activities like strategic planning, ideas for other ventures, and other important issues. It was because of this that managers like Kush Medhora of Westside were initially apprehensive about joining Biyani’s business. However, Biyani changed his attitude gradually with the launch of Big Bazaar, Food Bazaar, and Central and appointed different people for managing different business units.
Biyani believed in leading a simple life and in being simply dressed. His vision came from his diverse reading connected to retailing and other areas. He made it a point to visit each of his stores across the country. He aimed to spend at least seven hours a week at the stores. In the stores, he would stand at a corner and observe people. He also walked on streets, met common people, and talked to local leaders to plan and put up new products in his stores. Each of his stores was set with a weekly target, which was reviewed every Monday. Whenever a new store was opened, the details of its operations during the first 45 days were to be sent to him. Sometimes, he suggested remedies to some problems. Biyani believed in extensive advertising to make more people know about the product. His decision making was quick and devoid of unnecessary delays. Biyani was also a good learner and learned quickly from his mistakes. He planned to improve inventory management through responding effectively to the demands of the customers rather than forecasting them, as he felt that forecasting would pile up the inventory in this dynamic market.

Questions

1. The tremendous success of the ‘Pantaloons’, ‘Big Bazaar’ and ‘Food Bazaar’ retailing formats, easily made PRIL the number one retailer in India by early 2004, in terms of turnover and retail area occupied by its outlets. Explain how Biyani is further planning to consolidate his businesses.

2. “Our striving toward looking at the Indian market differently and strategizing with the evolving customer helped us perform better.” What other qualities of Kishore Biyani do you think were instrumental in making him top retailer of India?

CASE – 3 The New Frontier for Fresh Foods Supermarkets

Fresh Foods Supermarket is a grocery store chain that was established in the Southeast 20 years ago. The company is now beginning to expand to other regions of the United States. First, the firm opened new stores along the eastern seaboard, gradually working its way up through Maryland and Washington, DC, then through New York and New jersey, and on into Connecticut and Massachusetts. It has yet to reach the northern New England states, but executives have decided to turn their attention to the Southwest, particularly because of the growth of population there.
Vivian Noble, the manager of one of the chain’s most successful stores in the Atlanta area, has been asked to relocate to Phoenix, Arizona, to open and run a new Fresh Foods Supermarket. She has decided to accept the job, but she knows it will be a challenge. As an African American woman, she has faced some prejudice during her career, but she refuses to be stopped by a glass ceiling or any other barrier. She understands that she will be living and working in an area where several cultures combine and collide, and she will be hiring and managing a diverse workforce. Noble has the support of top management at Fresh Foods, which wants the store to reflect the surrounding community—in both staff makeup and product selection. So she will be looking to hire employees with Hispanic and Native American roots, as well as older workers who can relate to the many retired residents in the area. And she will be seeking their inputs on the selection of certain food products, including ethnic brands, so that customers know they can buy what they need and want a Fresh Foods.
In addition, Noble wants to make sure that Fresh Foods provides services above and beyond those of a standard supermarket to attract local consumers. For instance, she wants the store to offer free delivery of groceries to home-bound customers who are either senior citizens or physically disabled. She wants to be sure that the store has enough bilingual employees to translate for and otherwise assist customers who speak little or no English. Noble believes that she is a pioneer of sorts, guiding Fresh Foods Supermarkets into a new frontier. “The sky is almost blue here,” she says of her new home state. “And there’s no glass ceiling between me and the sky.”

Questions

1. What steps can Vivian Noble take to recruit and develop her new workforce?

2. What other ways can Noble help her company reach out to the community?

3. How will Fresh Foods Supermarkets as whole benefit from successfully moving into this new region of the country?

CASE – 4 The Law Offices of Jeter, Jackson, Guidry, and Boyer

THE EVOLUTION OF THE FIRM

David Jeter and Nate Jackson started a small general law practice in 1992 near Sacramento, California. Prior to that, the two had spent five years in the district attorney’s office after completing their formal schooling. What began as a small partnership—just the two attorneys and a paralegal/assistant—had now grown into a practice that employed more than 27 people in three separated towns. The current staff included 18 attorneys (three of whom have become partners), three paralegals, and six secretaries.
For the first time in the firm’s existence, the partners felt that they were losing control of their overall operation. The firm’s current caseload, number of employees, number of clients, travel requirements, and facilities management needs had grown far beyond anything that the original partners had ever imagined.
Attorney Jeter called a meeting of the partners to discuss the matter. Before the meeting, opinions about the pressing problems of the day and proposed solutions were sought from the entire staff. The meeting resulted in a formal decision to create a new position, general manager of operations. The partners proceeded to compose a job description and job announcement for recruiting purposes.
Highlights and responsibilities of the job description include:
• Supervising day-to-day office personnel and operations (phones, meetings, word processing, mail, billings, payroll, general overhead, and maintenance).
• Improving customer relations (more expeditious processing of cases and clients).
• Expanding the customer base.
• Enhancing relations with the local communities.
• Managing the annual budget and related incentive programs.
• Maintaining annual growth in sales of 10 percent while maintaining or exceeding the current profit margin.

The general manager will provide an annual executive summary to the partners, along with specific action plans for improvement and change. A search committee was formed, and two months later the new position was offered to Brad Howser, a longtime administrator from the insurance industry seeking a final career change and a return to his California roots. Howser made it clear that he was willing to make a five-year commitment to the position and would then likely retire.
Things got off to a quiet and uneventful start as Howser spent few months just getting to know the staff, observing day-today operations; and reviewing and analyzing assorted client and attorney data and history, financial spreadsheets, and so on.
About six months into the position, Howser became more outspoken and assertive with the staff and established several new operational rules and procedures. He began by changing the regular working hours. The firm previously had a flex schedule in place that allowed employees to begin and end the workday at their choosing within given parameters. Howser did not care for such a “loose schedule” and now required that all office personnel work from 9:00 to 5:00 each day. A few staff member were unhappy about this and complained to Howser, who matter-of-factly informed them that “this is the new rule that everyone is expected to follow, and anyone who could or would not comply should probably look for another job.” Sylvia Bronson, an administrative assistant who had been with the firm for several years, was particularly unhappy about this change. She arranged for a private meeting with Howser to discuss her child care circumstances and the difficulty that the new schedule presented. Howser seemed to listen half-heartedly and at one point told Bronson that “assistance are essentially a-dime-a-dozen and are readily available.” Bronson was seen leaving the office in tears that day.
Howser was not happy with the average length of time that it took to receive payments for services rendered to the firm’s clients (accounts receivable). A closer look showed that 30 percent of the clients paid their bills in 30 days or less, 60 percent paid in 30 to 60 days, and the remaining 10 percent stretched it out to as many as 120 days. Howser composed a letter that was sent to all clients whose outstanding invoices exceeded 30 days. The strongly worded letter demanded immediate payment in full and went on to indicate that legal action might be taken against anyone who did not respond in timely fashion. While a small number of “late” payments were received soon after the mailing, the firm received an even larger number of letters and phone calls from angry clients, some of whom had been with the firm since its inception.
Howser was given an advertising and promotion budget for purposes of expanding the client base. One of the paralegals suggested that those expenditures should be carefully planned and that the firm had several attorneys who knew the local markets quite well and could probably offer some insights and ideas on the subject. Howser thought about this briefly and then decided to go it alone, reasoning that most attorneys know little or nothing about marketing.
In an attempt to “bring all of the people together to form a team,” Howser established weekly staff meetings. These mandatory, hour-long sessions were run by Howser, who presented a series of overhead slides, handouts, and lectures about “some of the proven management techniques that were successful in the insurance industry.” The meetings typically ran past the allotted time frame and rarely if ever covered all of the agenda items.
Howser spent some of his time “enhancing community relations.” He was very generous with many local groups such as the historical society, the garden clubs, the recreational sports programs, the middle-and high-school band programs, and others. In less than six months he had written checks and authorized donations totaling more than $25,000. He was delighted about all this and was certain that such gestures of goodwill would pay off handsomely in the future.
As for the budget, Howser carefully reviewed each line item in search of ways to increase revenues and cut expenses. He then proceeded to increase the expected base or quota for attorney’s monthly billable hours, thus directly affecting their profit sharing and bonus program. On the other side, he significantly reduced the attorneys’ annual budget for travel, meals, and entertainment. He considered these to be frivolous and unnecessary. Howser decided that one of the two full-time administrative assistant positions in each office should be reduced to part-time with no benefits. He saw no reason why the current workload could not be completed within this model. Howser wrapped up his initial financial review and action plan by posting notices throughout each office with new rules regarding the use of copy machines, phones, and supplies.
Howser completed the first year of his tenure with the required executive summary report to the partners that included his analysis of the current status of each department and his action plan. The partners were initially impressed with both Howser’s approach to the new job and with the changes that he made. They all seemed to make sense and were directly in line with the key components of his job description. At the same time, “the office rumor mill and grape vine” had “heated up” considerably. Company morale, which had been quite high, was now clearly waning. The water coolers and hallways became the frequent meeting places of disgruntled employees.
As for the marketplace, while the partner did not expect to see an immediate influx of new clients, they certainly did not expect to see shrinkage in their existing client base. A number of individual and corporate clients took their business elsewhere, still fuming over the letter they had received.
The partners met with Howser to discuss the situation. Howser urged them to “sit tight and ride out the storm.” He had seen this happen before and had no doubt that in the long run the firm would achieve all of its goals. Howser pointed out that people in general are resistant to change. The partners met for drinks later that day and looked at each other with a great sense of uncertainty. Should they ride out the storm as Howser suggested? Had they done the right thing in creating the position and hiring Howser? What had started as a seemingly, wise, logical, and smooth sequence of events had now become a crisis.

Questions

1. Do you agree with Howser’s suggestion to “sit tight and ride out the storm,” or should the partners take some action immediately? If so, what actions specifically?

2. Assume that the creation of the GM—Operation position was a good decision. What leadership style and type of individual would you try to place in this position?

3. Consider your own leadership style. What types of positions and situations should you seek? What types of positions and situation should you seek to avoid? Why?

CASE – 5 The Grizzly Bear Lodge

Diane and Rudy Conrad own a small lodge outside Yellowstone National Park. Their lodge has 15 rooms that can accommodate up to 40 guests, with some rooms set up for families. Diane and Rudy serve a continental breakfast on weekdays and a full breakfast on weekends, included in the room they charge. Their busy season runs from May through September, but they remain open until Thanksgiving and reopen in April for a short spring season. They currently employ one cook and two waitpersons for the breakfasts on weekends, handling the other breakfasts themselves. They also have several housekeeping staff members, a groundkeeper, and a front-desk employee. The Conrads take pride in the efficiency of their operation, including the loyalty of their employees, which they attribute to their own form of clan control. If a guest needs something—whether it’s a breakfast catered to a special diet or an extra set of towels—Grizzly Bear workers are empowered to supply it.
The Conrads are considering expanding their business. They have been offered the opportunity to buy the property next door, which would give them the space to build an annex containing an additional 20 rooms. Currently, their annual sales total $300,000. With expenses running $230,000—including mortgage, payroll, maintenance, and so forth—the Conrads’ annual income is $70,000. They want to expand and make improvements without cutting back on the personal service they offer to their guests. In fact, in addition to hiring more staff to handle the larger facility, they are considering collaborating with more local business to offer guided rafting, fishing, hiking, and horseback riding trips. They also want to expand their food service to include dinner during the high season, which means renovating the restaurant area of the lodge and hiring more kitchen and wait staff. Ultimately, the Conrads would like the lodge to open year-round, offering guests opportunities to cross-country ski, ride snow-mobiles, or hike in winter. They hope to offer holiday packages for Thanksgiving, Christmas, and New Year’s celebrations in the great outdoors. The Conrads report that their employees are enthusiastic about their plans and want to stay with them through the expansion process. “This is our dream business,” says Rudy. “We’re only at the beginning.”

Questions

1. Discuss how Rudy and Diane can use feedforward, concurrent, and feedback controls both now and in future at the Grizzly Bear Lodge to ensure their guests’ satisfaction.

2. What might be some of the fundamental budgetary considerations the Conrads would have as they plan the expansion of their logic?

3. Describe how the Conrads could use market controls plans and implement their expansion.

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M.B.A. SECOND YEAR

Academic Year : 2017 – 2018

ASSIGNMENT TOPICS

2.1 HUMAN RESOURCE MANAGEMENT

1. “The field of HRM changes so rapidly that had become necessary for one to

constantly review procedures and laws to that the practices will be effective and

legal”. Critically evaluate this statement.

2. “Majority of the testing techniques for selection do not accurately assess the

characteristics of the job. In fact most of the executives would divulge that the

testing had no impact on future job performance. Do you accept or not?

Discuss with justification.

3. “Identify the paramount barriers to effective training programme in IT field and

how to crush them”. Explain with real life examples.

4. Technological advancements and automation are causing high stress and burn

out among employees, which results negatively and unable to reap the benefit of

automation”. Do you agree or disagree? State your view.

2.2 MARKETING MANAGEMENT

1. “Chinese computer and electronic products possess advantages in design,

innovation, rapid response and global market flexibility”- comment.

2. “Legal aspects protect competitors and consumers from many unethical pricing

strategies that unscrupulous marketers may wish to attempt”. Critically analyse

the statement.

3. “Advertising on the internet has changed significantly over the past decade and

some might argue that it is for the worse” Do you agree or disagree? Discuss

with practical illustrations.

4. Examine the challenges encountered by the pharmaceutical wholesale distributor for

surviving and thriving in this new and ever changing environment

2.3 FINANCIAL MANAGEMENT

1. “The consequences of over- capitalisation are far more serious and fatal than

under-capitalisation.” – Discuss.

2. “An optimal combination of the decisions relating to investment, financing

and dividends will maximise the value of the firm to its shareholders”. –

Examine

3. “Efficiency inventory management is reflected in the liquidity and profitability

of the firm.” – Explain.

4. “A low dividend payout Ratio promotes the welfare of stock holders because

long-term capital gains are treated more favourably than dividend income

from the tax point of view.” – Justify

3

2.4 OPERATIONS MANAGEMENT

1. Operations management is the area of creating competitive advantage. Do you

agree? Justify your answer.

2. A manufacturer requires 10,000 items per year. Price discount as follows:

a) Rs.4 up to 2000 items, Rs. 3.80 between 2000 and 4000 items. Rs.3.70

for quantities above 4000. Ordering cost = Rs. 50.

b) Comparative inventory cost = 25% per year of average inventory price.

c) Determine the optimum purchase policy under discount.

3. Explain JIT. Do you think it is practically feasible in India? What is your

suggestion for implementing JIT?

4. Operations personnel usually have a large volume and variety of resources at

their command. They should endeavour to make effective and efficient use of

these resources to achieve the largest outputs. Comment! What are the

approaches for enhancing the utilization of resources?

2.5 PROJECT MANAGEMENT AND ENTREPRENEURSHIP

1. Describe two areas in a manufacturing project where there is a high level of

uncertainty. How do you tackle these uncertainties?

2. Explain how to break the total project works and some major parts of the works

into smaller and manageable item. Relate your answer to project phases, cost

account, work package, activities and project schedule.

3. Sensitivity to environmental factors is crucial for an entrepreneur. Explain with

your own experience relevant to the statement.

4. (a) Evaluate the support programmes undertaken by the Government for the

promotion of entrepreneurship in India.

(b) Explain how the women entrepreneurship plays major role in improving the

economy of India

2.6 STRATEGIC MANAGEMENT

1. If strategic planning is essentially a program, can it display the degree of

adaptiveness that 21st century enterprises need? Would ‘strategic

improvisation’ be a plausible alternative? Explore the practical

consequences of strategic improvisation for enterprise management.

2. Select an Automobile industry in India, and evaluate its competitive

business strategy using Porter’s five force model? What strategies can you

suggest to convert the unattractive forces in to attractive ones?

3. “Complementary mergers may result in each firm filling in the missing

pieces of their firm with pieces from other firm” – Examine the validity of the

statement in the Indian context with necessary examples.

4. ‘Formality is the enemy of creativity and innovation’. ‘Informality is the

enemy of disciplined and reliable performance’. Is it consequently impossible

for an enterprise to be both innovative and disciplined? Investigate how

these qualities can be combined.

4

2.7.1 HRM : (a) LABOUR WELFARE AND INDUSTRIAL RELATIONS

1. “Labour Union meant for the right of the employees”- Do you agree –

Substantiate your views.

2. “Ensuring Industrial Relations is the important task of Human Resource

Manager”. Do you agree or Disagree, Substantiate your views.

3. Elaborate Labour Welfare practice prevails currently in India and detail about

the impact of Labour Welfare practice on Indian Economy.

4. “Due importance are given to Working Conditions in Indian Industry”- Do you

agree or not, Give your reasons.

2.7.1 HRM : (b) TRAINING AND DEVELOPMENT

1. A leading FMCG company in India decides to train its entire population of

employees and managers to provide “Legendary Customer Service.” Suggest

and explicate a design for evaluating the impact of such a massive training

effort.

2. Is training transfer an important issue in the automobile manufacturing

companies? How transfer is evaluated in those companies? Design an action

plan sheet that a manager and employee could use to facilitate transfer of

training. Justify each category included in the action plan.

3. In a financial services company where 100 employees are working in

information technology department had a high employee turnover rate. A survey

of employees revealed that the reason most left was dissatisfaction with the level

of training. The average turnover rate was 23 percent per year. The cost to

recruit and train one new employee was Rs. 56,625/-. To address the turnover

problem, the company developed a skills training program that averaged 80

hours per year per employee. The average employee wage was Rs. 35/- per

hour. Instructor, classroom, and other costs were Rs. 170,000/-.

a) What is the total cost of training? The total cost of turnover?

b) If the turnover rate dropped 8 percent (from 23 percent to 15 percent), what

was the financial benefit of the training program?

c) What was the ROI of the training program?

d) How much would the turnover rate have to be reduced (from 23 percent) for

the training program to show a benefit?

4. Assume you are a personnel manager in an service organization, if you had an

opportunity to choose between adventure learning and action learning for

developing an effective team in your organisation, which would you prefer?

Defend your choice with precise justification.

5

2.7.2 MM : (a) SALES AND DISTRIBUTION MANAGEMENT

1. Write an essay on wholesaling? Explain the different marketing functions

performed by wholesaler-distributors for manufacturers with the help of

suitable examples.

2. What is the purpose of Sales Organization? What steps will you take for setting

up a Sales Organization? Explain with the help of suitable example.

3. What are the different sources of Sales Force Recruits? Illustrate with the help

of suitable examples.

4. What special distribution challenges exist in India? What is the best way for

foreign companies to deal with these challenges? – Explain.

2.7.2 MM : (b) MARKETING RESEARCH AND CONSUMER BEHAVIOUR

1. “Application of Marketing Research is helpful in promoting a product” –

Comment this statement with a proper research design.

2. Illustrate with suitable example various sampling techniques used in marketing

research. Suggest a suitable sampling plan to collect information from the

students of a university regarding the recreation facility available.

3. “Can the acceptance level of the product be determined through Market

Research Process?” – Discuss the above statement with an example of your

choice.

4. “In India, family, social class and caste play considerable role in shopping

consumer behaviour.” – Discuss this statement and highlight the role of other

sociological determents of consumer behaviour.

2.7.3 FM : (a) INVESTMENT, SECURITY AND PORTFOLIO MANAGEMENT

1. Cite recent examples of political, social, or economic events (market risk) that

have excited (a) The stock market, and (b) Stocks in a specific industry, to surge

ahead or plummet sharply.

2. “Public issue of securities through prospectus is not only most popular but also

the best method of raising fresh capital.” – Critically evaluate.

3. ‘Stock market indices are the barometers of the stock market’ – Discuss.

4. Technical analysts believe that one can use past price changes to predict future

price changes. How do you justify this belief?

2.7.3 FM : (b) MANAGEMENT OF FINANCIAL SERVICES

1. Discuss the present state of the Insurance in India and outline causes for their

high growth.

2. Discuss the statement in detail “Reserve Bank of India is Banker’s Bank. – Do

you agree?

3. If an entrepreneur approaches you for an advice regarding financing of a project

wherein he intends to expand his existing project. What sources you would

suggest him to raise his funds?

4. “Mutual funds provide stability to share prices, safety to investors and

resources to prospective entrepreneurs.” – Discuss.

6

2.7.4 PM : (a) PRODUCTION, PLANNING, CONTROL AND MAINTENANCE

1. Is lead time in inventory really important? How can mismanaging lead time

costs company?

2. Material handing not only adds value to the product instead, add to its cost. –

Elucidate.

3. Draw an arganization chart suitable to production and control department.

Which one do you recommend a centralized or decentralized one?

4. Preventive maintenance is often viewed as a long–term approach to reliability. Why?

2.7.4 PM : (b) QUALITY MANAGEMENT

1. Explain the steps followed in Total Quality Management (TQM) in

manufacturing industries in detail.

2. Chose an organization of your choice having a specific quality programme.

Discuss the quality programme followed by the organization and how it has

helped the organization to sustain in the competitive world.

3. List and explain the four major quality eras. Choose an organization of your

choice and evaluate its present status regarding the quality eras.

4. Suppose that you are working in an organization, which wants to develop an

effective implementation methodology for ISO 9000 Quality Management

System. How will you help your organization in developing an effective

implementation methodology?

2.7.5 SYSTEMS : (a) PERSONAL PRODUCTIVITY TOOLS

1. List and describe the other features available with spreadsheet software in

addition to its ability to calculate members.

2. Describe the procedure for managing electronic mail. What are the problems

relating to attaching files in an electronic mail?

3. What should you include in a formula, to ensure that the formula will operate

on a specific value, no matter where the formula might be moved on copied?

4. How can you generate a series of values in excel? Explain with an example.

2.7.5 (b) INFORMATION TECHNOLOGY

1. “E-Business and the reason for going online.” – Express your views;

2. As a manager of a company, bring out the phases of moving the company from

products to services.

3. How a computer is connected through network? Explain with diagram

4. Discuss your views about the knowledge discovery of internet data.


customer relationship management

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Customer Relationship Management

Note: Each Question carries 20 marks. Kindly answer any 5 questions.

1. Define customer relationship management & what are the different factors that influence buying behaviour?

2. Discuss consumer purchase decision process giving one real time example.

3. State the importance of customer relationship building. State the different levels of relationship marketing & tools used to develop strong customer bondage.

4. What do you mean by customer interaction management? Discuss the routes & factors influencing CIM.

5. What do you mean by a loyal customer & discuss loyal customer ladder?

6. Please write a short note on Customer Life Cycle.

7. Please write a short note on Disadvantages of CRM with Indian context.

8. Explain the two dimensions to CRM – Customer facing and Company facing.

Interior Management

Max: 80 Marks

Answer Any 5 Questions

1. Define and differentiate Interior design from Interior decoration.

2. What are the various functions of different Interior spaces?

3. Give a brief account of “Folks-Arts” applied in any Indian-traditional-interior.

4. Take any one particular Indian vernacular style of your choice and Explain your understanding and interpretation of its traditional interior.

5. Explain briefly as to how lighting and acoustics can be synchronized to bring out the desired effect of a “Music-concert” Hall.

6. Explain the “Design Process” – How will you approach any design, applying the “Principles” in practice.

7. Explain “Organic Interiors” – Combine this philosophy of bringing “Nature” into the interiors, e.g in the design of a “Shopping Mall”.

8. Function and Aesthetics play an important role in any interior design job. How will you explain your approach while designing a Textile show room for kids?

9. What are the enhancement efforts on “spaces and design values”, caused by lighting, accessories, landscaping, etc. – Explain with suitable sketches.

10. Explain with suitable diagram, your design approach for an Interior space of an “Architect’s office” within an outline of 10m x 7.5m Hall. Assume data not provided.

11. Explain with suitable diagram, your design approach for an Interior spaces of a “Jewllery and Diamond showroom” within a space of 9m x 6m Hall. Assume data not provided.

RETAIL MANAGEMENT

Maximum Marks: 100

Note : (i) Attempt any three questions from Section A.
(ii) Section B is compulsory.
(iii) All questions carry equal marks.
SECTION A
1. Define retailing. Discuss the scope and prospects of retail sector in the Indian context, describing the drivers of growth of retailing in the country.
2. (a) What are the stages of consumer decision making and their impact on retail strategies ? Explain with suitable examples.
(b) What makes location decisions in retailing strategic in nature? Discuss with suitable examples the factors necessary to consider before selecting a final site for any store.
3. (a) How important is the role of pricing in retail marketing mix ? Briefly discuss the various retail pricing approaches available to the retailer.
(b) What are loyalty programmes? What purpose do they serve in the overall retail business? Explain.
4. Briefly discuss the various types of non-store retailing currently in vogue. What are their limitations?
5. Write notes on any three of the following:
(a) Functions of Retailers
(b) Wheel of Retailing
(c) Responsibilities of Merchandising Manager
(d) CRM
(e) Ethical Responsibilities of Retailer
SECTION B
6. Read the case given below and answer the questions given at the end of the case.
Margin Free Market Private Ltd.
Subhiksha in Chennai, Margin free in Kerala, Bombay Bazaar in Mumbai, RPG’S Giant in Hyderabad, and Big Bazaar in Kolkata, Hyderabad, and Bangalore have one thing in common – they all price their products below MRP. Discount stores are slowly arriving in India and industry insiders feel they will spearhead a revolution in organized retailing. On the list of top retailers in the world, quite a few are discounters. Around 60% of the business abroad comes from this format. Incidentally, the largest retailer in the world, Wal-Mart, is a discount store.
Margin Free was registered as a co-operative society in 1993 in Kerala and entered the supermarket business in 1994. It is run by the Consumer Protection and Guidance Society, a charitable organization based in Thiruvananthapuram. Today, it has emerged as India’s number one supermarket chain with 150 stores and a turnover of Rs. 450 crores. Margin Free purchases directly from manufacturers at ex-factory price and sells at lower prices than the MRP, as it eliminates the margin accrued in the traditional manufacturer-stockist-wholesaler-retailer network.
Margin Free takes extreme care while pricing the products through its entire stores. It has employed software which evaluates the price by minimizing profits. Every store is computerized and utilizes the software to determine the pricing. This helps in ensuring that the products are rationally priced.
Margin Free has found exceptional success in its scalable franchised model. It is now looking to upgrade to a central warehouse concept. which will help it manage growth further. The success of Subhiksha and Margin Free indicate that the discount war will hot up in the coming months but it will be the customer who will emerge as the final winner.
Margin Free also gets an average credit of 20-22 days from suppliers, which it sells, on an average in 10 days, thereby even earning a notional interest on its sales also. Its strategy has made it flush with funds, which can finance further expansion. Margin Free uses its customer base as a bargaining power to strike discount deals. Any dealer who wants to set up a Margin Free store has to buy at least rupees one lakh worth of share of the main Margin Free holding company. Margin Free has a consumer base of 6 lakhs and it sells them consumer cards at Rs. 40 per year Customers who buy using this card get discounts on bulk purchases and also on government subsidized products like Rs. 2 per kg rice.
The stores are now opting for a major expansion drive. A key part of this is the introduction of private labeling, which is the season’s flavor in the retailing industry. For the purpose they have shortlisted 15 items – all generic labels like rice, sugar, etc. – and will add to the list in future.
Hence, they will be in a better position to provide quality stuff at considerably low prices within easy reach of an average middle-class family. For example, a packet of tea which sells for an MRP of Rs. 120 at one of the corporate retailers will be available for Rs. 90 at the Margin Free stores.
The chain is now planning to open huge Margin Free hyper markets, The first such hyper market, featuring an array of wares and spread over 50,000 square feet of well-laid out space, is planned to open at Ernakulum. The two other hyper markets would be opened in Thiruvananthapuram and Kozhikode.
If the success of retail activity is measured in the number of outlets, the existing 240-odd chain of franchisees must have already made Margin Free the largest ‘pure retail chain’ (as distinct from retailers who are manufacturers) in the private sector Even going by the number of footfalls, the Kerala-based retailer must have already beaten competition by a handsome margin.
The hyper markets will feature almost all conceivable retailing products under one roof – textiles, leather, cosmetics, provisions, electronic goods, consumer durables, grains; and grocery. As for ambience and class, they are most likely to resemble the Giant retailing chain operating out of Hyderabad and other cities.
The hyper market would not dabble in imported items – Chinese or otherwise – that are flooding the retail market right now. The cooperative society is in the process of mobilizing resources for the hyper market initiative. It plans to rope in outside investments over and above what the Consumer Protection and Guidance Society hopes to raise on its own.
The Society chose Ernakulum first because it happens to be the most commercialized city in the state Also, the comparable purchasing capacities are higher there. The nomenclature for the hyper market has a Margin Free prefix to it, seeking to build on the enormous trust that the discount chain has been able to build over a span of eight years of existence.
The management feels that the Margin Free retail chain has been able to earn the wholesale trust of consumers in a very short span. However, in its journey to success, the Margin Free stores have made life slightly uncomfortable for entrenched interests who have, on one hand, been fleecing consumers and on the other, resorting to indiscriminate under invoicing to avoid tax. The latter leads to loss of crores of rupees in realizable revenue for the state government.
Every month, Margin Free is opening up to 12 stores and the number has grown to 241 at last count. The chain has spread to literally all parts of Kerala. It has seven franchisees in neighboring Tamil Nadu already and two in Karnataka. The overall turnover has grown to Rs. 600 crore.
Questions :
(a) What has been the role of pricing strategy in the success of Margin Free Markets?
(b) What are the salient features of Margin Free Market pricing strategy ?
(c) Analyze the external and internal factors that have made it possible to sustain the present pricing strategy of Margin Free Market.
(d) Discuss the limitations of the existing pricing strategy of Margin Free Market. Suggest appropriate changes.

TEXTILES MANAGEMENT XAVIERS EXAM ANSWER SHEET PROVIDED

Maximum Marks: 100
Instruction to Candidates:
1) Attempt any five questions.
2) All questions carry equal marks.

Q1) What are the various methods of yarn formation? Discuss each method
Briefly and compare any two methods.

Q2) How are fibres classified? Discuss, with suitable examples.

Q3) Write a note on cotton, its properties and impurities present.

Q4) Discuss in detail the steps involved in making a woven fabric starting from the cotton fibre.

Q5) What is direction frictional effect and how does it affect properties of woollen goods? Why is felting done? Describe the felting process.

Q6) What is weighting of silk? Why is it done? What are the physical and chemical properties of acrylic? Or Write a note on carding, drawing and combing process.

Q7) Write a short note on various types of polyester yarns normally manufactured.

FINANCIAL & COST ACCOUNTING ISBM EXAM ANSWER SHEETS PROVIDED
Total Marks: 80
N.B. : 1) All questions are compulsory
2) All questions carry equal marks.
Q1) ABC Ltd. Produces room coolers. The company is considering whether it should continue to
manufacture air circulating fans itself or purchase them from outside. Its annual requirement is
25000 units. An outsider vendor is prepared to supply fans for Rs 285 each. In addition, ABC Ltd
will have to incur costs of Rs 1.50 per unit for freight and Rs 10,000 per year for quality inspection,
storing etc of the product.
In the most recent year ABC Ltd. Produced 25000 fans at the following total cost :
Material Rs. 50,00,000
Labour Rs. 20,00,000
Supervision & other indirect labour Rs. 2,00,000
Power and Light Rs. 50,000
Depreciation Rs. 20,000
Factory Rent Rs. 5,000
Supplies Rs. 75,000
Power and light includes Rs 20,000 for general heating and lighting, which is an allocation based on
the light points. Indirect labour is attributed mainly to the manufacturing of fans. About 75% of it
can be dispensed with along with direct labour if manufacturing is discontinued. However, the
supervisor who receives annual salary of Rs 75,000 will have to be retained. The machines used for
manufacturing fans which have a book value of Rs 3,00,000 can be sold for Rs 1,25,000 and the
amount realized can be invested at 15% return. Factory rent is allocated on the basis of area, and the
company is not able to see an alternative use for the space which would be released. Should ABC
Ltd. Manufacture the fans or buy them?
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
Page 1 Out of 1
Q2) Usha Company produces three consumer products : P, Q and R. The management of the
company wants to determine the most profitable mix. The cost accountant has supplied the following
data.
Usha Company : Sales and Cost Data
Description Product Total
P Q R
Material Cost per unit
Quantity (Kg) 1.0 1.2 1.4
Rate per Kg (Rs) 50 50 50
Cost per unit (Rs) 50 60 70
Labour Cost per unit 30 90 90
Variable Overheads per unit 15 10 25
Fixed Overheads (Rs .000) 9,175
Current Sales (Units ,000) 100 50 60 210
Projected Sales (Units ,000) 109 55 125 289
Selling Price per unit (Rs) 150 200 270
Raw material used by the firm is in short supply and the firm can expect a maximum supply of 350
lakh kg for next year. Is the company’s projected sales mix most profitable or can it be changed for
the better?
Q3) DSQ Company Ltd, a diversified company, has three divisions, cement, fertilizers and
textiles. The summary of the company’s profit is given below :
(Rs/Crore)
Cement Fertilizer Textiles Total
Sales 20.0 12.0 18.0 50.0
Less : Variable Cost 8.0 9.6 5.4 23.0
Contribution 12.0 2.4 12.6 27.0
Less : Fixed Cost (allocated to
divisions in proportion to
volumes of Sales)
8.0 4.8 7.2 20.0
Profit (Loss) 4.0 (2.4) 5.4 7.0
After allocating the company’s fixed overheads to products the Fertilizers, division incurs a loss of
Rs 2.4 crore. Should the company drop this division?

PRINCIPLES & PRATICE OF MANAGEMENT ISBM EXAM ANSWER SHEETS PROVIDED

Total Marks : 80
CASE-1 (20 Marks)
1. Please read the case and answer the questions given at the end.
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. Depsite these broadening
exeriences, 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 faily 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 woudld 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 reiected for lack of related
education and/or experi ence 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.
How ever, Renu’s job behaviour 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
AN ISO 9001 : 2000 CERTIFIED INTERNATIONAL B-SCHOOL
deteriorate. In addition, Khan began to suspect that Renu was drinking heavily, due to her apearance
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 fdoor 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 experi ence 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 behaviour 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?


MARKETING MANAGEMENT IIBM IIBMS ISMS KSBM XAVIERS EXAM ANSWER PROVIDED

IIBM ANSWER SHEETS, KSBM ANSWER SHEETS, IIBMS ANSWER SHEETS, XAVIER ANSWER SHEETS, ISBM ANSWER SHEETS, NIBM ANSWER SHEETS, ISMS ANSWER SHEETS, IICT, ALL UNIVERSITY CASE STUDY AND ASSIGNMENT ANSWER PROVIDED MOB +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Marketing Management IIBM EXAM ANSWER SHEETS PROVIDED

Section A: Objective Type & Short Questions (30 marks)

Part One Multiple Choices:
1. It is a concept where goods are produced without taking into consideration the choices or tastes of customers.
a. Marketing mix
b. Production concept
c. Marketing concept
d. Relationship marketing
2. It involves individuals who buys products or services for personal use and not for manufacture or resale.
a. Environment analysis
b. Macro environment
c. Micro environment
d. Consumer
3. It is the groups of people who interact formally or informally influencing each other‟s attitudes& behavior.
a. Consumer behavior
b. Culture
c. Reference groups
d. Primary groups
4. The concept of the product that passes through various changes in its total life known as: a. Product life cycle
b. Line stretching
c. Consumer adoption
d. Product
5. It refers to unique set of brand associations that brand strategist aspires to create or maintain:
a. Branding
b. Packaging
c. Brand identity
d. Brand image
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6. It involves a pricing strategy that charges customers different prices for the same product or service.
a. Promotional pricing
b. Price discrimination
c. Non price competition
d. None of the above
7. It refers to an arrangement where another company through its own marketing channel sells the products of one producers.
a. End customer
b. Wholesaler
c. Retailing
d. Strategic channel alliance
8. It involves facility consisting of the means & equipments necessary for the movement of passengers of goods.
a. Logistics
b. Warehousing
c. Transportation
d. None of the above
9. The advertising which is used to inform consumers about a new product or feature & to build primary demands is known as:
a. Advertising
b. Informative advertising
c. Persuasive advertising
d. Advertising strategy
10. An art that predicts the likelihood of economic activity on the basis of certain assumptions:
a. Compensation
b. Sales forecasting
c. Sales budgeting
d. Selling policy
Part Two:
1. Define Marketing Mix.
2. Discuss the concept of Benchmarking.
3. Write a short note on Target Marketing.
4. What do you understand by Pricing Strategy?
END OF SECTION A
Section B: Caselets (40 marks)
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• This section consists of Caselets. 

• Answer all the questions. 
• Each Caselet carries 20 marks. 
• Detailed information should form the part of your answer (Word limit 150 to 200 words). 
Caselet 1 Ask the company top brass what „almost there‟ means. The answer: a premier Indian retail company that has come to be known as a specialty chain of apparel and accessories. With 52 product categories under one roof, Shoppers‟ Stop has a line-up of 350 brands. Set up and headed by former Corona employee, B. S. Nagesh, Shoppers‟ Stop is India‟s answer to Selfridges and Printemps. As it proudly announces, „We don‟t sell, we help you buy.‟ Back in 1991, there was the question of what to retail. Should it be a supermarket or a departmental store? Even an electronics store was considered. Finally, common sense and understanding won out. The safest bet, for the all-male team was to retail men‟s wear. They knew the male psyche and felt that they had discerning taste in men‟s clothing. The concept would be that of a lifestyle store in a luxurious space, which would make for a great shopping experience. The first Shoppers‟ Stop store took shape in Andheri, Mumbai, in October 1991, with an investment of nearly Rs. 20 lakh. The original concept that formed the basis of a successful marketing campaign for seven years is here to stay. And the result is an annual turnover of Rs. 160 crores and five stores, nine years later. Everything went right from the beginning, except for one strange happening. More than 60 per cent of the customers who walked into Shoppers‟ Stop in Mumbai were women. This gave rise to ideas. Soon, the store set up its women‟s section. Later, it expanded to include children‟s wear and then, household accessories. The second store in Bangalore came in 1995. The store at Hyderabad followed in 1998 with the largest area of 60,000 sq. ft. The New Delhi and Jaipur stores were inaugurated in 1999. All this while, the product range kept increasing to suit customer needs. The most recent experiment was home furnishings. Secure in the knowledge that organized retailing in global brands was still in its infancy in India, Shoppers‟ Stop laid the ground rules which the competition followed. The biggest advantage for Shoppers‟ Stop is that it knows how the Indian consumer thinks and feels while shopping. Yes, feeling – for in India, shopping remains an outing. And how does it compare itself to foreign stores? While it is not modeled on any one foreign retailer, the „basic construct‟ is taken from the experience of a number of successfully managed retail companies. It has leveraged expertise for a critical component like technology from all over the world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERP models. Shoppers‟ Stop went a step further by even integrating its financial system with the ERP model.
Expertise was imported wherever it felt that expertise available in-house was inadequate. But the store felt there was one acute problem. A shortage of the most important resource of them all was trained humans. Since Indian business institutes did not have professional courses in retail management, people were hired from different walks of life and the training programme was internalized. By 1994, the senior executives at Shoppers‟ Stop were taking lectures at management institutes in Mumbai. The Narsee Monjee Institute of Management Studies (NMIMS) even restructured its course to include retail management as a subject. Getting the company access to the latest global retail trends and exchange of information with business greats was an exclusive membership to the Intercontinental Group of Department Stores (IGDS). It allows membership by invitation to one company from a country and Shoppers‟ Stop rubs shoulders with 29 of the hottest names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza from Dubai and the like. With logistics I in place, the accent moved to the customer. Shoppers‟ Stop conducted surveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-house wardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving and is very different from, say, a European customer, who knows exactly what he wants to purchase, walks up to a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch and feel the merchandise, and scout for options. Also, the majority of
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Indian shoppers still prefer to pay in cash. So, transactions must be in cash as against plastic money used the world over. Additionally, the Indian customer likes being served – whether it is food, or otherwise. The company‟s customer profile includes people who want the same salesperson each time they came to the store to walk them through the shop floors and assist in the purchase. Others came with families, kids and maids in tow and expected to be suitably attended to. Still others wanted someone to carry the bags. So, the shops have self-help counters, with an assistant at hand for queries or help. The in-house wardrobe audit also helped with another facet of the business. It enabled Shoppers‟ Stop to work out which brands to stock, based on customer preferences. In fact, the USP of Shoppers‟ Stop lies in judiciously selected global brands, displayed alongside an in-house range of affordable designer wear. The line-up includes Levi‟s, Louis Philippe, Allen Solly, Walt Disney, Ray Ban and Reebok, besides in-house labels STOP and I. Brand selection is the same across the five locations, though the product mix may be somewhat city-based to accommodate cuts and styles in women‟s wear, as well as allowing for seasonal variations (winter in Delhi, for instance, is a case in point). Stocking of brands is based on popular demand – recently, Provogue, MTV Style, and Benetton have been added. In-house labels are available at competitive prices and target the value-for-money customer and make up around 12 per cent of Shoppers‟ Stop‟s business. Sometimes in-house brands plug the price gap in certain product categories. To cash in on this, the company has big plans for its in-house brands: from re-branding to repositioning, to homing in on product categories where existing brands are not strong. Competition between brands is not an issue, because being a trading house, all brands get equal emphasis. The in-house brand shopper is one who places immense trust in the company and the quality of its goods and returns for repeat buys. And the company reposed its faith in regular customers by including them in a concept called the First Citizen‟s Club (FCC). With 60,000 odd members, FCC customers account for 10 per cent of entries and for 34 per cent of the turnover. It was the sheer appeal of the experience that kept pulling these people back. Not one to let such an opportunity pass, the company ran a successful ad campaign (that talks about just this factor) in print for more than eight years. The theme is still the same. In 1999, a TV spot, which liked the shopping experience to the slowing down of one‟s internal clock and the beauty of the whole experience, was aired. More recently, ads that spell out the store‟s benefits (in a highly oblique manner) are being aired. The campaign is based on entries entered in the Visitors‟ Book. None of the ads has a visual or text – or any heavy handedly direct reference to the store or the merchandise. The ads only show shoppers having the time of their lives in calm and serene locales, or elements that make shopping at the store a pleasure – quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to the agency, Contract, ensured that brand recall came in terms of the shopping experience, not the product. And it has worked wonders. Value-addition at each store also comes in the form of special care with car parks, power backup, customer paging, alteration service and gift-wrapping. To top it all, cafes and coffee bars make sure that the customer does not step out of the store. In Hyderabad, it has even created a Food Court. Although the food counter was not planned, it came about as there was extra space of 67,000 sq. ft. Carrying the perfect experience to the shop floor is an attempt to stack goods in vast open spaces neatly. Every store has a generic structure, though regional customer variances are accounted for. Each store is on lease, and this is clearly Shoppers‟ Stop‟s most expensive resource proposition – renting huge spaces in prime properties across metros, so far totaling 210,000 sq. ft of retail space. Getting that space was easy enough for Shoppers‟ Stop, since its promoter is the Mumbai-based Raheja Group, which also owns 62 per cent of the share capital. Questions:
1. What are the significant factors that have led to the success of Shoppers‟ Stop?
2. How should Shoppers‟ Stop develop its demand forecasts?
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Caselet 2 The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crash in home Video game market. Interest in Video games was rekindled when a number of different companies developed hardware consoles that provided graphics superior to the capabilities of computer games. By 1990, the Nintendo Entertainment System dominated the product category. Sega surpassed Nintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per cent of Video game market and was one of the most recognized brand names among the children. Sega‟s success was short lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit system. The product was a miserable failure for a number of reasons. Sega was the primary software developer for Saturn and it did not support efforts by outside game developers to design compatible games. In addition, Sega‟s games were often delivered quite late to retailers. Finally, the price of the Saturn system was greater than other comparable game consoles. This situation of Saturn‟s misstep benefited Nintendo and Sony greatly. Sony‟s Play Station was unveiled in 1994 and was available in 70 million homes worldwide by the end of 1999. Its “Open design” encouraged the efforts of outside developers, resulting in almost 3,000 different games that were compatible with the PlayStation. It too featured 32-bit graphics that appealed to older audience. As a result, at one time, more than 30 per cent of PlayStation owners were over 30 years old. Nintendo 64 was introduced in 1996 and had eye-popping 64-bit graphics and entered in more than 28 million homes by 1999. Its primary users were between the age of 6 and 13 as a result of Nintendo‟s efforts to limit the amount of violent and adult-oriented material featured on games that can be played on its systems. Because the company exercised considerable control over software development, Nintendo 64 had only one-tenth the number of compatible games as Sony‟s PlayStation did. By 1999, Sony had captured 56 per cent of the video game market, followed by Nintendo with 42 per cent. Sega‟s share had fallen to a low of 1%. Hence, Sega had two options, either to concede defeat or introduce an innovative video machine that would bring in huge sales. And Sega had to do so before either Nintendo or Sony could bring their next-generation console to market. The Sega Dreamcast arrived in stores in September 1999 with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial sales were quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first four months, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals, and 40 different games were available within three months of Dream cast‟s introduction. By the end of the year, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain its momentum. Although its game capabilities were impressive, the system did not deliver all the functionality Sega had promised. A 56K modem (which used a home phone line) and a Web browser were meant to allow access to the Internet so that gamers could play each other online, surf the Web, and visit the Dreamcast Network for product information and playing tips. Unfortunately, these features either were not immediately available or were disappointing in their execution. Sega was not the only one in having the strategy of adding functionality beyond games. Sony and Nintendo followed the same approach for their machines introduced in 1999. Both Nintendo‟s Neptune and Sony‟s PlayStation 2 (PS2) were built on a DVD platform and featured a 128-bit processor. Analysts applauded the move to DVD because it is less expensive to produce and allows more storage than CDs. It also gives buyers the ability to use the machine as CD music player and DVD movie player.
As Sony marketing director commented, “The full entertainment offering from Play Station 2 finitely appeals to a much broader audience. I have friends in their 30s who bought it not only because it‟s a gaming system for their kids, but also a DVD for them.” In addition, PlayStation 2 is able to play games developed for its earlier model that was CD-based. This gives the PS2 an enormous advantage in the number of compatible game titles that were immediately available to gamers. Further enhancing the PS2‟s appeal is its high-speed modem and allows the user‟s easy access to the Internet through digital cable as well as over telephone lines. This gives Sony the ability to distribute movies, music, and games directly to PS2 consoles. “We are positioning this as an all-round entertainment player,” commented Ken Kutaragi, the head of Sony Computer Entertainment. However, some prospective customers were put off by the console‟s initial price of $360. Shortly after the introduction of Neptune, Nintendo changed its strategies and announced the impending release of its newest game console, The GameCube. However, unlike the Neptune, the GameCube would not run
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on a DVD platform and also would not initially offer any online capabilities. It would be more attractively priced at $199. A marketing vice president for Nintendo explained the company‟s change in direction, “We are the only competitor whose business is video games. We want to create the best gaming system.” Nintendo also made the GameCube friendly for outside developers and started adding games that included sports titles to attract an older audience. Best known for its extra ordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario Bros, and Pokemon, Nintendo sought to attract older users, especially because the average video game player is 28. Youthful Nintendo users were particularly pleased to hear that they could use their handheld Game Boy Advance systems as controllers for the GameCube. Nintendo scrambled to ensure there would be an adequate supply of Game Cubes on the date in November 2001, when they were scheduled to be available to customers. It also budgeted $450 million to market its new product, as it anticipated stiff competition during the holiday shopping season. With more than 20 million PlayStation 2 sold worldwide, the GameCube as a new entry in the video game market would make the battle for market share even more intense. For almost a decade, the video game industry had only Sega, Nintendo, and Sony; just three players. Because of strong brand loyalty and high product development costs, newcomers faced a daunting task in entering this race and being competitive. In November 2001, Microsoft began selling its new Xbox, just three days before the GameCube made its debut. Some observers felt the Xbox was aimed to rival PlayStation 2, which has similar functions that rival Microsoft‟s Web TV system and even some lower level PCs. Like the Sony‟s PlayStation 2, Xbox was also built using a DVD platform, but it used an Intel processor in its construction. This open design allowed Microsoft to develop the Xbox in just two years, and gave developers the option of using standard PC tool for creating compatible games. In addition, Microsoft also sought the advice of successful game developers and even incorporated some of their feedback into the design of the console and its controllers. As a result of developers‟ efforts, Microsoft had about 20 games ready when the Xbox became available. By contrast, the GameCube had only eight games available. Microsoft online strategy was another feature that differentiated of the Xbox from the GameCube. Whereas Nintendo had no immediate plans for Web-based play, the Xbox came equipped with an Ethernet port for broadband access to Internet. Microsoft also announced its own Web-based network on which gamers can come together for online head-to head play and for organized online matches and tournaments. Subscribers to this service were to pay a small monthly fee and must have high-speed access to the Internet. This is a potential drawback considering that a very low percentage of households world over currently have broadband connections. By contrast Sony promoted an open network, which allows software developers to manage their own games, including associated fees charged to users. However, interested players must purchase a network adapter for an additional $39.99. Although game companies are not keen on the prospect of submitting to the control of a Microsoft-controlled network, it would require a significant investment for them to manage their own service on the Sony-based network. Initially the price of Microsoft‟s Xbox was $299. Prior to the introduction of Xbox, in a competitive move Sony dropped the price of the PlayStation 2 to $299. Nintendo‟s GameCube already enjoyed a significant price advantage, as it was selling for $100 less than either Microsoft or Sony products. Gamers eagerly snapped up the new consoles and made 2001 the best year ever for video game sales. For the first time, consumers spent $9.4 billion on video game equipment, which was more than they did at the box office. By the end of 2001 holiday season, 6.6 million PlayStation 2 consoles had been sold in North America alone, followed by 1.5 million Xbox units and 1.2 million Game Cubes. What ensued was an all out price war. This started when Sony decided to put even more pressure on the Microsoft‟s Xbox by cutting the PlayStation 2 price to $199. Microsoft quickly matched that price.
Wanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its the GameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million units worldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony had the benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven years after the introduction of original PlayStation, it was being sold in retail outlets for a mere $49. It had a significant lead in terms of numbers of units in homes around the world with a 43 per cent share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent. The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast comprising the last and least market share of 4.7 per cent. Sega, once an industry leader, announced in 2001 that it had decided to stop producing the Dreamcast and other video game hardware components. The company said it would develop games for its competitors‟ consoles. Thus Sega
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slashed the price of the Dreamcast to just $99 in an effort to liquidate its piled up inventory of more than 2 million units and immediately began developing 11 new games for the Xbox, four for PlayStation 2, and three for Nintendo‟s Game Boy Advance. As the prices of video game consoles have dropped, consoles and games have become the equivalent of razors and blades. This means the consoles generate little if any profit, but the games are a highly profitable proposition. The profit margins on games are highly attractive, affected to some degree by whether the content is developed by the console maker (such as Sony) or by an independent game publisher (such as Electronic Arts). Thus, the competition to develop appealing, or perhaps even addictive, games may be even more intense than the battle among players to produce the best console. In particular, Nintendo, Sony, and Microsoft want games that are exclusive to their own systems. With that in mind, they not only rely on large in-house staffs that design games but they also pay added fees to independent publishers for exclusive rights to new games. The sales of video games in 2001 rose to 43 per cent, compared to just 4 per cent increase for computer-based games. But computer game players are believed to be a loyal bunch, as they see many advantages in playing games on their computers rather than consoles. For one thing, they have a big advantage of having access to a mouse and a keyboard that allow them to play far more sophisticated games. In addition, they have been utilizing the Internet for years to receive game updates and modifications and to play each other over the Web. Sony and Microsoft are intent on capturing a portion of the online gaming opportunity. Even Nintendo has decided to make available a modem that will allow GameCube users to play online. As prices continue to fall and technology becomes increasingly more sophisticated, it remains to be seen whether these three companies can keep their names on the industry‟s list of “high scorers”. Questions:
1. Considering the concept of product life cycle, where would you put video games in their life cycle?
2. Should video game companies continue to alter their products to include other functions, such as email?
END OF SECTION B
Section C: Applied Theory (30 marks)
• This section consists of Applied Theory Questions. 

• Answer all the questions. 
• Each question carries 15 marks. 
• Detailed information should form the part of your answer (Word limit 200-250 words). 

1. What do you understand by product life cycle? Discuss implications and limitations of product life cycle concept.
2. Describe role of marketing channels. List the different types of marketing channels.
END OF SECTION C
S-2-250613

IIBMS CASE STUDY:
No Minor Offence
Census data reveals high level of under – age marriages
Census statics are generally full of surprises. But this one is startling: 6.4 million Indians under the age of 18 are already married. That’s not all. As many as 1.3 lakh girls under 18 are widowed and another 56,000 are divorced or separated. The legal marriageable age for women is 18, for men 21. A century and a half after Ishwarchandra Vidyasagar’s crusade against child marriage, the practice persists. Obviously, the Child Marriage Restraint Act, 1929, exists only on paper and has not been able to deter parents from marrying off under –aged sons and daughters. The incidence is understandably higher in rural areas, but not low as expected in the cities. It’s more common in the BIMARU states, with Rajasthan leading the way ironically, the Act renders all under-age marriages illegal but not void, which means that an illegally married couple can stay married. It is, therefore, violated with impunity and hardly anyone is ever hauled up. Despite the fact that child marriage is a criminal offence, action is rarely taken by the police. Even civil society remains a passive spectator. There’s not enough penalty-a fine of Rs.1, 000 and imprisonment up to three shows that the state does not view the crime seriously.
The practice is linked to the curse of dowry. “Chhota Chhora dhhej kam mangta” (the younger the groom, the smaller the dowry demand) justifies many such alliances. The grimmest part of the scenario is the physical havoc that early marriage wreaks upon girls who are too young to bear the burden of maternal and child mortality. There is also the belief that a daughters’ marriage is a scared obligation that parents must fulfill at the earliest. A new legislation, Prevention of Child marriages Bill, 2004, to replace the loophole-ridden 1929 Act is awaiting parliament’s approval. But legislation alone is not enough. Compulsory registration of marriages is one way of tackling the problem. Creating awareness about the ill-effects of such marriages and mobilizing committed social workers to intervence are others. However, social workers have to often function in hostile conditions. The 1992 case of Bhanwari Devi, the Rajasthan saathin who was raped for preventing a child marriage, is chilling. In the end only education, economic security and increasing empowerment of women can eliminate the problem.
Questions
1. Discuss ethically the drawbacks you find in the under-age marriages?
2. How does the increasing empowerment of women help eliminate problems if this type?

CASE – 1: Where Do We Go from Here?

As one of the many seminars held to discuss the corporate response of family-owned business to liberalisation and globalisation, the keynote Mr Gurcharan Das concluded his speech by saying, “In the end, I would say that the success of Indian economy would depend on how the Indian industry and business respond to the reform process.”
As the proceedings of the seminar progressed it became clear that there was a difference of opinion in the perception of participants. Those who were supporting the case for letting the family-owned businesses face competition opined that such businesses in India have exhibited financial acumen; its members have generally adopted an austere life style; they have demonstrated an ability to take calculated risks, and an ability to accumulate and manage capital. They have devised unique managerial style and led the creation of the equity cult among Indians. Several of them are low-cost producers.
The participants critical of the role of family business had this is to say: “There has been a tendency to mix up family’s intent with that of businesses managed by them. There is a lack of focus and business strategy. Family businesses have generally adopted a short-term approach to business causing less purposeful investments in specially critical areas such as employee development and product development. Customers and development of marketing skills have been neglected.”
The valedictory session of the Seminar attempted to bring out the issues clearly. It culminated in an agenda for reform by the family businesses. The points highlighted in the agenda are:
1. Indian family-owned business organisations need to professionalise management,
2. they need to curtail the diversified of their business groups and impart a sharper focus to their business activities, and
3. they need to pay greater attention to the development of human capital.

Question
Suppose you were an observer at the seminar. During tea and lunch breaks you had an occasion to meet several people who were skeptical and felt that the reform process was having only a superficial impact on the corporates. Express your opinion that you form about the issues at the seminar.

Business Communication ISBM EXAM ANSWER PROVIDED
Answer the following question.
Q1. Which are the Qualities apart from leadership looked for GD (10 marks)
Q2. Explain a short note on Role of Chairperson (10 marks)
Q3. Explain the process of Conduct of meeting (10 marks)
Q4. Explain 7 phases of negotiating tactics (10 marks)
Q5. Write about the listening process (10 marks)
Q6. Explain the 10 Commandments of Communication (10 marks)
Q7. Differentiate between oral & Written Communication (10 marks)
Q8. Classify Communication on the basis of Dimensions. (10 marks)

Business Environment
Answer the following question.
Q1. What are the benefits of deemed exports? (10 marks)
Q2. Why is the energy conservation management important? (10 marks)
Q3. State causes of inflationary trends in India. (10 marks)
Q4. what are the major shortcomings of Indian commercial banking. (10 marks)
Q5. Give reasons for slow growth under the plan . (10 marks)
Q6. Discuss external trade . (10 marks)
Q7. Discuss self reliance as assessment of performance. (10 marks)
Q8. Throw light on decision making and the impact of micro-environment. (10 marks)

Business Ethics
Answer the following question.
Q1. Current ‘state of the art’ is different and therefor employees have to be motivated in a different manner. Support the
statement with the help of contemporary theories of motivation.
(10
marks)
Q2. Give 7 points of New World order by M. K. Gandhi. (10
marks)
Q3. What are some ethical problems in business. (10
marks)
Q4. Write a note on consumerism. (10
marks)
Q5. Write a note on consumerism. (10
marks)
Q6. Write a note on human culture and civilization. (10
marks)
Q7. Write note on electrification of villages. (10
marks)
Q8. What is imperative need? (10
marks)

Case NO. 2

COOKING LPG LTD
DETERMINATION OF WORKING CAPTIAL

Introduction :-

Cooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 1995. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.

The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor.

Statement of the Problem :

Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.

He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him.
Profile of Cooking LPG Ltd.

1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai and Kandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.

DETERMINE OF WORKING CAPTIAL OF THE COMPANY ?

Case II

HE WHO RIDES A TIGER

In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector. While the latter was started a decade later than the former, it had achieved greater expansion. Both were located in the same state.

After we obtained necessary permission to conduct our study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a matter of principle, we wanted to meet the General Secretary of the workers’ union. The Personnel Department was not willing for this. On our insistence they called the union official. We talked to him for about half an hour but Personnel Department people were all the time hovering around.

So we fixed a time in the evening to meet him in the union office in the town. We visited the union office in the evening. The union was having problem regarding wage deduction of some workers who did not show up for overtime. The overtime notice was short and they had not consented either, even then the management was threatening wage deduction for one week.

The union could hardly do a thing’ as they in the past had burnt their hands when they had to unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide. They were scared to the extent that they had productivity linked bonus agreement for even 12% bonus. Moreover, a new minuscue union was recently started in the company.

We visited the new union’s office next evening and held a long discussion. They asked for’ our suggestions. The union believed in legal battles more than agitations. After a visit to the industry the author visited the state headquarters of the new union. There every office bearer was surprisingly a lawyer. In the HQ we learnt that after we left, their union took out a procession and held a meeting in the temple. Perhaps this was the result of our discussion. While the older union was a prisoner of its past, the new union was free to write its own history. Workers’ interests were being served perhaps by both.

QUESTIONS FOR DISCUSSION
1. Discuss merits/demerits of the role of strike, agitation and legal approach in union¬management relations.
2. What role does mutual trust play in building union-management relations?

Inventory Management

Total Marks – 100
1. The section A consists of 20 marks
2. The section B consists of 60 Marks
3. The section C consists of 20 marks

Section A Marks 2 each

1.
(a) What is ABC analysis?
(b) Give four examples of MRP.
(c) What is meant by lead time?
(d) Define standardization.
(e) What are the various inventory models?
(f) What are the functions of inventory?
(g) Explain briefly the various types of inventories.
(h) Define traffic management.
(i) What is the need for feedback inventory information system?
(j) Give two factors considered for choosing equipments for material handling.

PART – B
Answer any Six questions from the followings: –
2. Explain the following terms:
Lead time, Re-order point, Stock out cost and Set-up cost.

3. What is the purpose of safety stock? How will the use of safety stock affect the EOQ? How will the safety stock affect the total annual carrying cost of the material?

4. Describe the relation between Material requirement planning and Master productions schedule. What are the advantages and limitations of MRP?

5. What are the objectives of stores management? How do you decide about the location and layout of an effective store in an organization?

6. What is the purpose of JIT? Why are flexible resources essential for JIT? Wow are suppliers affected by JIT?

Q.7 A) What is Raw Material? What are its two important factors? Describe.
B) Describe bought out components. What factors influence the decisions for bought out components?

Q.8 A) What are (KU) and (KO). Describe them in brief.
B) What are elements of ordering costs? How will you workout-ordering cost per order when you release 5000 orders a year with total ordering cost of Rs. 400000.

Q.9 A) What is Safety Stock? List out the various factors influencing the safety stock.
B) Define Service Level? How does it help in determining the Safety Stock? Explain with example.

Q.10 A) What is forecast? List out different types of forecasts.
Why is forecast needed?
B) Describe in brief dependent demands and independent Demands.

Q.11 Write Short notes on any 4 out of the followings: –
A) Inventory with Supplier
B) Inventory carrying cost.
C) FSN Classification
D) Other uses of EOQ.
E) Inventory Control through Stock – Levels.
F) Scrap / Surplus and its disposal.
G) Overhauling Spares
H) Role of computers in Inventory Management.

PART – C
CASE STUDY (COMPULSORY) WITH 05 Sub – question

M/s ABC is a car manufacturing company. They have a distribution system for marketing of finished goods as follows:-
A. Finished goods are sent to Central warehouse near the factory.
B. From here, the finished goods (cars) are sent by road to seven Regional warehouses located at important centers in the country.
C. Besides above two types of warehouses, there were 27 depots from where the cars are sent to different stockiest for sale.

Due to severe market competition and restrictions on bank credit, the Top Management of M/s ABC appointed an expert committee to streamline the distribution system, The committee found followings :-

1. Central warehouse, 7 Regional warehouse and 27 Depots together have finished stock (cars) equal to 105 days all India sales.
2. The Marketing Manager has no time to check the Finished Goods Stock as he is busy with marketing functions.
3. There are several cars which are lying for more than 2 years due to availability of new better models.
4. There was lack of controlling and supervising norms for monitoring the stock positions and taking corrective actions. Indents for new cars were sent without checking of stocks.

Apart from other things, the committee advised to put the finished Goods warehousing under Materials Management deptt. and advised a finished goods stock (Cars) equal to 48 days all India sales stock as ideal stock level in all the warehouses and depots together.
M/s ABC Management has appointed you as Materials Manager to complete the above tasks. How will you proceed? The questions are:-

1. Will you review the existing numbers of warehouses and depots for reduction? If so, why?
2. How will you find slow moving and non-moving stock of cars? What methodology will you suggest to dispose off such cars?
3. What shall be your methods for monitoring and controlling of finished Goods (car) to avoid accumulation of unsold stocks in future?
4. Will you retain Central warehouse and why?
5. What will be your distribution pattern for keeping stocks in central warehouse/Regional warehouse and Depots equal to the norms of 48 days All India Sales stock level?


HUMAN RESOURCE MANAGEMENT

IIBM ANSWER SHEETS, KSBM ANSWER SHEETS, IIBMS ANSWER SHEETS, XAVIER ANSWER SHEETS, ISBM ANSWER SHEETS, NIBM ANSWER SHEETS, ISMS ANSWER SHEETS, IICT, ALL UNIVERSITY CASE STUDY AND ASSIGNMENT ANSWER PROVIDED MOB +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Human Resource Management
Subject Code-B102
Section A: Objective Type & Short Questions (30 marks)
• This section consists of Multiple Choice and Short Answer type questions.
• Answer all the questions.
• Objective Question carries 1 mark each &Short Question carries 5 marks each.
Part One
Multiple Choices:
1. It is a cultural attitude marked by the tendency to regard one’s own culture as superior to others
a. Geocentrism
b. Polycentrism
c. Ethnocentrism
d. Egocentrism
2. It is the systemic study of job requirements & those factors that influence the performance of
those job requirements
a. Job analysis
b. Job rotation
c. Job circulation
d. Job description
3. This Act provides an assistance for minimum statutory wages for scheduled employment
a. Payment of Wages Act, 1936
b. Minimum Wages Act, 1948
c. Factories Act, 1948
d. Payment of Gratuity act, 1972
4. __________ is the actual posting of an employee to a specific job
a. Induction
b. Placement
c. Attrition
d. None
5. Broadening an individual’s knowledge, skills & abilities for future responsibilities is known as
a. Training
b. Development
c. Education
d. Mentoring
Examination Paper of Human Resource Management
2
IIBM Institute of Business Management
6. Change that is designed and implemented in an orderly and timely fashion in anticipation of
future events
a. Planned change
b. Technology change
c. Structural change
d. None
7. It is a process for setting goals and monitoring progress towards achieving those goals
a. Performance appraisal
b. Performance gap
c. Performance factor
d. Performance management system
8. A method which requires the rates to provide a subjective performance evaluation along a scale
from low to high
a. Assessment centre
b. Checklist
c. Rating scale
d. Monitoring
9. It is the sum of knowledge, skills, attitudes, commitment, values and the liking of the people in an
organization
a. Human resources
b. Personal management
c. Human resource management
d. Productivity
10. A learning exercise representing a real-life situation where trainees compete with each other to
achieve specific objectives
a. Executive development
b. Management game
c. Programmed learning
d. Understudy
Part Two:
1. What is the importance of Career Planning in industry?
2. List the various features of HRM.
3. How can you explain the concept of Performance Appraisal?
4. Differentiate between on- the- job and off- the- job training.
END OF SECTION A
Examination Paper of Human Resource Management
3
IIBM Institute of Business Management
Section B: Caselets (40 marks)
• This section consists of Caselets.
• Answer all the questions.
• Each Caselet carries 20 marks.
• Detailed information should form the part of your answer (Word limit 150-200 words).
Caselet 1
Uptron Electronics Limited, is a pioneering and internationally reputed firm in the electronics
industry. It is one of the largest firm in the country. It attracted employees from internationallyreputed
institute and industries by offering high salaries, perks, etc. It has advertized for the position
of an electronic engineer recently. Nearly 150 candidates applied for the jobMr. Sashidhar, an
electronics Engineering Graduate from the Indian Institute Of Technology with 5 years working
experience in a medium sized electronics firm, was selected from among the 130 candidates who took
tests and interview. The interview board recommended an enhancement in his salary by Rs 5,000
more than his present salary at his request. Mr Sashidhar was very happy to achieve this and he was
congratulated by a number of people including his previous employer for his brilliant interview
performance, and wished him good luck.
Mr Sashidhar joined Uptyron Electronics Ltd., on 21st January, 2002, with greater enthusiasm. He
also found his job to be quite comfortable and a challenging one and he felt it was prestigious to work
with this company during the formative years of his career. He found his superiors as well as
subordinates to be friendly and cooperative. But this climate did not live long. After one year of his
service, he slowly learnt about a number of unpleasant stories about the company, management, the
superior subordinate relations, rate of employee turnover, especially at higher level But he decided to
stay on as he has promised several things to the management in the interview. He wanted to please
and change the attitude of management through his diligent performance, firm commitment and
dedication. He started maximizing his contributions and the management got the impression that Mr.
Sashidhar had settled down and will remain in the company.
After some time, the superiors started riding rough- shod over Mr Sashidhar. He was overloaded with
multifarious jobs. His freedom in deciding and executing was cut down. He was ill treated on a
number of occasions before his subordinates. His colleagues also started assigning their
responsibilities to Mr Sashidhar. Consequently there were imbalances in his family life and
organizational life. But he seemed to be calm and contented. Management felt that Mr Sashidhar had
the potential to bear with many more organizational responsibilities.
So the general manager was quite surprised to see the resignation letter of Mr Sashidhar along with a
cheque equivalent to a month’s salary one fine morning on 18th January, 2004. The General Manager
failed to convince Mr Sashidhar to withdraw his resignation. The General Manager relieved him on
25th January, 2004. The General Manager wanted to appoint a committee to go into the matter
immediately, but dropped the idea later.
Questions:
1. What is wrong with the recruitment policy of the company?
2. Why did Mr. Sashidhar’s resignation surprise the General Manager?
Examination Paper of Human Resource Management
4
IIBM Institute of Business Management
Caselet 2
The contexts in which human resources are managed in today’s organizations are constantly,
changing. No longer do firms utilize one set of manufacturing processes, employ a homogeneous
group of loyal employees for long periods of time or develop one set way of structuring how work is
done and supervisory responsibility is assigned. Continuous changes in who organizations employ
and what these employees do require HR practices and systems that are well conceived and
effectively implemented to ensure high performance and continued success.
1. Automated technologies nowadays require more technically trained employees possessing
multifarious skills to repair, adjust or improve existing processes. The firms can’t expect these
employees (Gen X employees, possessing superior technical knowledge and skills, whose attitudes
and perceptions toward work are significantly different from those of their predecessor organizations:
like greater self control, less interest in job security; no expectations of long term employment;
greater participation urge in work activities, demanding opportunities for personal growth and
creativity) to stay on without attractive compensation packages and novel reward schemes.
2. Technology driven companies are led by project teams, possessing diverse skills, experience and
expertise. Flexible and dynamic organizational structures are needed to take care of the expectations
of managers, technicians and analysts who combine their skills, expertise and experience to meet
changing customer needs and competitive pressures.
3. Cost cutting efforts have led to the decimation of unwanted layers in organizational hierarchy in
recent times. This, in turn, has brought in the problem of managing plateau employees whose careers
seem to have been hit by the delivering process. Organizations are, therefore, made to find alternative
career paths for such employees’
4. Both young and old workers, these days, have values and attitudes that stress less loyalty to the
company and more loyalty to oneself and one’s career than those shown by employees in the past,
Organizations, therefore, have to devise appropriate HR policies and strategies so as to prevent the
flight of talented employees
Question:-
1. Discuss that technological breakthrough has brought radical changes in HRM.
END OF SECTION B
Section C: Applied Theory (30 marks)
• This section consists of applied theory Questions.
• Answer all the questions.
• Each question carries 15 marks
• Detailed information should form the part of your answer (Word limit 150-200 words).
1. Several types of interviews are commonly used depending on the nature & importance of the
position to be filled within an organization. Explain the different types of Interviews.
2. How would you explain Organizational Change and Development?
END OF SECTION C

CASE: I ARROW AND THE APPAREL INDUSTRY

Ten years ago, Arvind Clothing Ltd., a subsidiary of Arvind Brands Ltd., a member of the Ahmedabad based Lalbhai Group, signed up with the 150- year old Arrow Company, a division of Cluett Peabody & Co. Inc., US, for licensed manufacture of Arrow shirts in India. What this brought to India was not just another premium dress shirt brand but a new manufacturing philosophy to its garment industry which combined high productivity, stringent in-line quality control, and a conducive factory ambience.
Arrow’s first plant, with a 55,000 sq. ft. area and capacity to make 3,000 to 4,000 shirts a day, was established at Bangalore in 1993 with an investment of Rs 18 crore. The conditions inside—with good lighting on the workbenches, high ceilings, ample elbow room for each worker, and plenty of ventilation, were a decided contrast to the poky, crowded, and confined sweatshops characterising the usual Indian apparel factory in those days. It employed a computer system for translating the designed shirt’s dimensions to automatically mark the master pattern for initial cutting of the fabric layers. This was installed, not to save labour but to ensure cutting accuracy and low wastage of cloth.
The over two-dozen quality checkpoints during the conversion of fabric to finished shirt was unique to the industry. It is among the very few plants in the world that makes shirts with 2 ply 140s and 3 ply 100s cotton fabrics using 16 to 18 stitches per inch. In March 2003, the Bangalore plant could produce stain-repellant shirts based on nanotechnology.
The reputation of this plant has spread far and wide and now it is loaded mostly with export orders from renowned global brands such as GAP, Next, Espiri, and the like. Recently the plant was identified by Tommy Hilfiger to make its brand of shirts for the Indian market. As a result, Arvind Brands has had to take over four other factories in Bangalore on wet lease to make the Arrow brand of garments for the domestic market.
In fact, the demand pressure from global brands which want to outsource form Arvind Brands is so great that the company has had to set up another large factory for export jobs on the outskirts of Bangalore. The new unit of 75,000 sq. ft. has cost Rs 16 crore and can turn out 8,000 to 9,000 shirts per day. The technical collaborators are the renowned C&F Italia of Italy.
Among the cutting edge technologies deployed here are a Gerber make CNC fabric cutting machine, automatic collar and cuff stitching machines, pneumatic holding for tasks like shoulder joining, threat trimming and bottom hemming, a special machine to attach and edge stitch the back yoke, foam finishers which use air and steam to remove creases in the finished garment, and many others. The stitching machines in this plant can deliver up to 25 stitches per inch. A continuous monitoring of the production process in the entire factory is done through a computerised apparel production management system, which is hooked to every machine. Because of the use of such technology, this plant will need only 800 persons for a capacity which is three times that of the first plant which employs 580 persons.
Exports of garments made for global brands fetched Arvind Brands over Rs 60 crore in 2002, and this can double in the next few years, when the new factory goes on full stream. In fact, with the lifting of the country-wise quota regime in 2005, there will be surge in demand for high quality garments from India and Arvind is already considering setting up two more such high tech export-oriented factories.
It is not just in the area of manufacture but also retailing that the Arrow brand brought a wind of change on the Indian scene. Prior to its coming, the usual Indian shirt shop used to be a clutter of racks with little by way of display. What Arvind Brands did was to set up exclusive showrooms for Arrow shirts in which the functional was combined with aesthetic. Stuffed racks and clutter eschewed. The product were displayed in such a manner the customer could spot their qualities from a distance. Of course, today this has become standard practice with many other brands in the country, but Arrow showed the way. Arrow today has the largest network of 64 exclusive outlets across India. It is also present in 30 retail chains. It branched into multi-brand outlets in 2001, and is present in over 200 select outlets.
From just formal dress shirts in the beginning, the product range of Arvind Brands has expanded in the last ten years to include casual shirts, T-shirts, and trousers. In the pipeline are light jackets and jeans engineered for the middle-aged paunch. Arrow also tied up with the renowned Italian designer, Renato Grande, who has worked with names like Versace and Marlboro, to design its Spring / Summer Collection 2003. The company has also announced its intention to license the Arrow brand for other lifestyle accessories like footwear, watches, undergarments, fragrances, and leather goods. According to Darshan Mehta, President, Arvind Brands Ltd., the current turnover at retail prices of the Arrow brand in India is about Rs 85 crore. He expects the turnover to cross Rs 100 crore in the next few years, of which about 15 per cent will be from the licensed non-clothing products.
In 2005, Arvind Brands launched a major retail initiative for all its brands. Arvind Brands licensed brands (Arrow, Lee and Wrangler) had grown at a healthy 35 per cent rate in 2004 and the company planned to sustain the growth by increasing their retail presence. Arvind Brands also widened the geographical presence of its home-grown brands, such as Newport and Ruf-n Tuf, targeting small towns across India. The company planned to increase the number of outlets where its domestic brands would be available, and draw in new customers for readymades. To improve its presence in the high-end market, the firm started negotiating with an international brand and is likely to launch the brand.
The company has plans to expand its retail presence of Newport Jeans, from 1200 outlets across 480 towns to 3000 outlets covering 800 towns.
For a company ranked as one of the world’s largest manufactures of denim cloth and owners of world famous brands, the future looks bright and certain for Arvind Brands Ltd.

Company profile

Name of the Company : Arvind Mills
Year of Establishment : 1931
Promoters : Three brothers–Katurbhai, Narottam Bhai, and Chimnabhai
Divisions : Arvind Mills was split in 1993 into
Units—textiles, telecom and garments. Arvind Ltd. (textile unit) is 100 per cent subsidiary of Arvind Mills.
Growth Strategy : Arvind Mills has grown through buying-up of sick units, going global and acquisition of German and US brand names.

Questions

1. Why did Arvind Mills choose globalization as the major route to achieve growth when the domestic market was huge?

2. How does lifting of ‘Country-wise quota regime’ help Arvind Mills?

3. What lessons can other Indian businesses learn form the experience of Arvind Mills?

CASE – 1 (15 Marks)
Tony the Tiger goes Global
Kellogg Company has distribution in more than 150 countries and yet is still “unknown to half the world’s
population.” according to Arnold Langbo, Kellogg’s CEO. Langbo plans to change that.
Kellogg recently built a company—owned cereal plant in Latvia and currently has sales in Poland, Hungary
and Czechoslovakia. It has also started construction on a plant in India and is entering China. However
international expansion and the development of global brands will not be easy.
To become more international, the firm recently reorganized into four divisions :North America,Latin
America, Europe and Australasia. According to Langbo:
The way we used to be organized, we were a US-based Multinational-a company with a big domestic business
and, by the way,some international business. That was the way we were thinking; that’s the way the
organization was structured.
Today, if you talk to customers in the UK, Canada, or Australia, they think of Kellogg’s as being based in the
U.K or Canada or Australia. We’re global in organizational structure and business but also multidomestic.
We now have a number of truly global brands (Frosted Flakes and Corn Flakes, with Froot Loopa and Rice
Krispies close, and Frosted Mini-Wheats and Honey Nut loops moving rapidly).There used to be slight
variations in our food around the world, but now you’ll recognize the product wherever you go.
Expanding into many markets will involve more than trying to gain share from other cereal marketers. It
will require altering long—held traditions:
In Eastern Europe it’s going to he pretty slow because we’re going to have to go in there and literally create
the habit—much as we did in Germany 25 years ago or France 20 years ago. Cereal is a whole new breakfast
concept for these people. However, they do eat breakfast in those countries, and they eat fairly substantial
breakfasts.
In Asia, consumers are used to eating something warm, soft, and savory for breakfast—and we’re going to sell
them something that’s cold, crisp, and sweet or bran tasting. That’s quite a difference.
The challenge is made greater by the presence of aggressive competition in many developed or develop-ing
markets. Competition is particularly intense in Europe where Nestle and General Mills formed a joint venture
called Cereal Partners Worldwide. Langbo characterizes the new competitor this way:
They are a very formidable competitor with Nestle’s distribution strength and knowledge of the European
market and General Mills’ technology and cereal marketing expertise.
The result of the entry of the new competitor, which spent an estimated $35 to $50 million in advertising in the
top six European markets, and the response of existing firms such as Kellogg was an increase in the growth
rate of total cereal sales as well as share erosion among the weaker brands.
Competition is strong even in some countries where consumption is low. For example, in Japan, with
consumption at four bowls per year per person, compared to 10 pounds in the United States, there are more
than 100 products fighting for shelf space.
According to Langbo, a global brand requires a core position strategy or product benefit that will work in
multiple countries and local execution of that idea to reflect local attitudes. The key ideas for three of
Kellogg’s global or near-global brands are described by Langbo in the following paragraphs.
Page 1 Out of 1
Frosted Flakes
Frosted Flakes is based on the concept of vitality. This idea originated in the United States but is a universal
idea that both translates and travels well. Because the product has a special appeal to children, the cultural
differences are not so pronounced. Tony the Tiger illustrates the vitality theme in a universally understandable
manner. Tony is loved throughout the world symborizing appeals that are truly global. We use Tony and he
vitality message everywhere from the United States to Taiwan in Argentina.
Corn Flakes
The basic positioning concept for Corn Flakes is simple, unadulterated food that tastes surprisingly good. This
concept also has universal appeal. It is typically the first product we introduce in a new market, It is the
foundation of our line, and it is the world’s most popular cereal.
All-Bran
The value proposition for All-Bran is the health benefits of fiber in the diet. This proposition does not have
universal appeal without development. The concept of the value of fiber in the diet is new to many countries
and is often resisted.
In 1984, we began a massive campaign to countries where the benefits of fiber were not widely accepted.
campaign varied across countries due to differences in the attitudes of local medical and nutritional
professionals, specific diseases that were most on the minds of the local population, and local restrictions on
health claims. However, the basic approach was to educate and support the medical and nutritional community
in each country. We would sponsor symposia on dietary fiber. As a country’s experts became convinced of the
value of fiber, they told their story in their academic press, the general press, and in public service
announcements. Today, despite competition from many other high-fiber cereals., All-Bran is one of the top 15
cereals worldwide.
Questions
1. What type of innovation would cold cereal be to a country not accustomed to this type of food?
2. Conduct an innovation analysis based for cold cereal in China.
3. What values are involved in the consumption of product such as breakfast cereal?
4. What values would support and what values would harm the chances of Kellogg succeeding the cold cereal
in
the following countries? What other factors would be important?

CASE II
Key to Buyers’ Minds

Consumer buying research has turned a new leaf in India. The era of demographics seems to be on the backbench. Now, Marketing Research people are less likely to first ask you about your age, income, and education etc. Instead, there is a distinct shift towards inquiries about attitudes, interests, lifestyles, and behaviour – in short towards a study of consumers’ minds called psychographics.

Pathfinders, the marketing research wing of Lintas, occasionally came out with its highly respected “Study on Nation’s Attitudes and Psychographics (P:SNAP). The first in this series was released in 1987 with an objective to develop a database of lifestyles and psychographics information on the modem Indian women. The second was in 1993, and the third in 1998. Pathfinders choose woman for the study because of the belief that more often than not, in urban areas, it is the woman who makes buying decision.

The Pathfinders’ study involves interviewing over 10,000 women over the entire country and segmenting them in clusters according to their beliefs, attitudes, lifestyles, and lastly their demographics profile. The idea is to identify groups of consumers with similar lifestyles who are likely to behave towards products or services.

For advertisers and advertising agencies, this profile helps enormously. For example, an advertiser may want to give a westernised touch to a commercial. The profile of the target customer, as revealed by this study, tells the advertising people the perimeter within which she/he must stay, otherwise the ad may become an exaggerated version of westernised India.

For the purpose of this study, Pathfinders divided the Indian women in 8 distinct cluster of varying values and lifestyles. Figures from two studies are available publicly and are given below:

Cluster 1987 (%) 1993 (%)
Troubled homebody 15.9 18.3
Tight-fisted traditionalist 14.8 10.0
Contended conservative 7.0 9.3
Archetypal provider 13.0 8.8
Anxious rebel 14.1 15.8
Contemporary housewife 19.2 22.1
Gregarious hedonist 8.7 6.6
Affluent sophisticate 7.3 9.1

The studies seek to track the macro level changes and movements within these 8 clusters in a period of time.

We note from the table that in 1987, 8.7% of the women could be classified as “gregarious hedonist” – those who consider their own pleasure to be supreme in life. ‘In 1993, this figure fell to 6.6%. The “troubled homebody” segment – those with large families and low-income, increased from 15.9% in 1987 to 18.3% in 1993.

Information, such as this, is obviously useful to assess the collective mood. That’s why Pathfinders have an impressive list of clients fort heir P:SNAP, which includes Hindustan Lever, Cadbury, Johnson and Johnson, and Gillette.

SOME PSYCHOGRAPHICS PROFILES OF INDIAN WOMEN

Rama Devi, the Contended Conservative
The lady lives a ‘good’ life – she is a devoted wife, a dotting mother of two school-going sons, and a God fearing housewife. She has been living her life by the traditional values she cherishes – getting up at the crack of dawn, getting the house cleaned up, having the breakfast of ‘Aloo Parathas’ ready in time before the children’s school-bus honks its horn, laying down the dress her ‘government servant’ husband will put on after his bath, and doing her daily one-hour Puja. She fasts every Monday for the welfare of her family, looks at the ‘freely mixing’ and ‘sexually liberal’ youngsters with deep disdain and cannot understand the modem young woman’ s 19reed’ for money, jewellery, and jobs.

Her one abiding interest outside the household is the Ganesh Mandir that she has visited every Wednesday, ever since she got married. She lacks higher education and hence has little appreciation for the arts, the literature, and the sciences. Her ample spare time is spent watching the TV, which is her prime source of entertainment and information.

Shobha, the Troubled Homebody
Shobha married young to the first person she fell in love with, Prakash. Four children came quickly before she was quite ready to raise a family. Now, she is unhappy. She

is having trouble in making ends meet on her husband’s salary who is employed as clerk in a private business and is often required to work up to late hours. She is frustrated, as her desire for an idyllic life has turned sour. She could not get education beyond high school and hence there are hardly any job opportunities for her. Her husband also keeps on complaining of the long hours of backbreaking work he has to put in. He consumes country-made liquor routinely.

Shobha finds escape in Black and White TV soap operas and films that transport her into the world of her dreams. She watches TV almost all through the day and her children roam around in the locality streets and cannot expect any help from their’ ever-grumbling’ mother. Purchases are mostly limited to ‘essentials’ and any discretionary purchases are postponed till it becomes possible.

Neeru, the Archetypal Provider
Neeru epitomises simplicity. Her life is untangled. It runs on a set timetable with almost clockwork precision. She works as a primary school teacher in a rural government school about 50 kilometers from her district town residence. She is married to a social worker in an NGO whose income is erratic. Her three children, two teenaged sons and l0-year old daughter are getting school education.

The day begins with the lady getting up before anybody else and finishing the household chores as fast as she can. There is no room for delay as the State government ‘Express’ bus, on which she ravels to her school will be at the bus stop across the road precisely at 8.00 A.M. If she misses that, the next ordinary bus comes at 11.15 A.M, quite useless as it will reach her school only at 1.00 P.M. The school closes at 2.00 P.M. There are private Jeeps running sporadically, but the fare is high and Neeru does not believe in wasting hard earned money. Besides, she travels on husband’s ‘free pass’. Neeru prides herself on her monthly savings ofRs.1000 for the last many years. The money will go toward the wedding of her daughter.

Vandana, the tight-fisted traditionalist
For Vandana, saving money is ‘in-born’ discipline. When she was young and unmarried, she remembers her mother was extremely tight-fisted and ran the household in under Rs.800 per month. It was the necessity of those times as her father retired at a princely salary of Rs.1800 per month. All through her childhood, she saw deprivation and hardship. She would not join the annual class picnic in her school days as it meant’ avoidable expenditure’.

Now she is married and mother of two school going children. The husband works in a bank as a clerk. He has taken all the loans that he could from the bank and invested the money in real estate. As a result of monthly deductions toward repayment of loans, his take home salary is now very little. But Vandana can manage. The school dresses are sewn by her at home, the stationary required comes from a wholesale market, and the books are second-hand from ‘friends’, cultivated for the purpose. On birthdays, Vandana prepares a sweet dish at home and they spend on a film. There is a cow and calf at home, being kept as a source of revenue and milk. She sells half the milk to a neighbour and the family consumes the rest. Life in general is hard and frugal. There is a colour TV at home, but they disconnected the cable connection ever since the rates went up. Now they watch Doordarshan only.

Aditi, the Anxious Rebel
Daughter of a Freedom Fighter, Aditi has always fought her values and principles.
People still remember when she walked out of the exam half in a huff as a mark of protest against mass cheating’ sanctioned’ by the centre superintendent in a tough paper. While every body else passed with high marks, Aditi failed.

Even though she repeated the paper, Aditi never learned to swim along the flow. She always swam against the current. She joined the Communist Party in her college and gave rousing speeches against the teachers and authorities. This resulted in her getting very poor marks and left her jobless.

Later, Aditi joined an NGO and now works on social issues. She says she is a creature of the mind, not materialism. Her favourite dress is a long flowing Kurta, and slacks. She wears loosened hair and chappals. She reads voraciously. Financially, she is independent and lives with her parents. Her disdain for the institution of marriage and contempt for the modern Indian male keep her single and unattached. She will continue-to be so as she prefers this status, but may adopt a baby later in life.

Reema, the Gregarious Hedonist
Just 19, and Reema is already divorced. Her father is a wealthy businessman. During Reema’s childhood, her father was mostly away in Dubai and Africa, trying to amass a fortune. That he did but he lost on his chance to be a good father. Both his children started feeling like’ orphans’ after their mother got involved with another man.

Reema was ever longing for her family when alone came Harsh, her private high school tuition teacher. Harsh was all of 22 and very caring. He was tall, handsome, and very popular in school and many girls had a crush on him. Reema was sixteen then and a great fan of Harsh. For her, Harsh was a prize catch as he combined the loving qualities of a father with a mix of being a good teacher. She was soon dazzled and surrendered in a physical relationship.

Marriage followed. She never understood how Harsh changed overnight from a caring father figure to a demanding husband. And she could never cope with the six hours she had to spend in the kitchen everyday. Why should she do the cooking, she asked Harsh, as it was something that the ‘Ayas’ did? The reality of a humdrum middle-class existence hit her hard and she soon walked out of ‘the hell’.

Her father understood her need to recover and made her allowance rather generous. He bought her a Red Sports Car and got her an admission in a private college.

College is entertainment for her. She attends college only on days when there is some function like a cultural evening or the sports meet. Now, Reema spends on alcohol, dresses, parties, and holidays. She consumes a mood elevating drug every evening and keeps sending SMS messages on her mobile to her friends all through the night. For her, life means ‘buying pleasure endlessly’.

Shruti, the Contemporary Housewife
Shruti is an urbane woman. She is well educated and genteel. She is an officer in a national bank, and active in her club affairs and community activities. Socialising is an important part of her life. She is a doer, interested in watching cricket, politics, and current affairs. Her life is hectic as she has a lot to do for home and office everyday. Still she often enjoys viewing movies on TV every week.

Shruti shops for Sarees, jewellery, and cosmetics for herself on a regular basis. However, family needs come before her own needs. Her home is a double income household and she has one kid. All the modern gadgets are present and the standard of living is upper middle-class.

Momeeta, the Affluent Sophisticate
Momeeta was born Mamta, but elevated herself to Momeeta after marriage to a business tycoon. Momeeta is an elegant woman with style. She lives in Mumbai because that is where she wants to be. She likes the economic and social aspects of big city living and takes advantage of her’ contacts’. She has built up friendship and cultivated the city bigwigs by inviting them to the numerous parties she throws in her luxurious penthouse.

Momeeta is a self-confident, on-the-go woman, and not a homebody. She is fashion conscious and clothes herself in the latest designer dresses. Even at 40, she can carry off a mini with aplomb. She is financial very secure and hence does not shop with care. She shops for quality, exclusivity, and the brand name, not the price. She frequently travels abroad, buys expensive gifts for friends, and has an international understanding on what is “chic” at the moment.

Three psychographics profiles of Indian women and their food shopping habits:

Type I Type II Type III
Money conscious Careful shopper Gourmet/satisfaction
Food shopping is done on necessity and is postponed as long as possible.
Makes out shopping lists and makes weekly/ monthly purchases. General liking for food shopping and food related activities.
Minimum amount of money spent. This is enabled through comparative evaluation of many shops, even if it takes more time. Can purchase larger quantities if there is an incentive like lower prices or a gift scheme. Food budget is flexible. Collects and files food recipes. Experiments with new food products and methods of cooking. Likes to exhibit her culinary skills to her friends and family.

Operates within the food budget. Does not buy larger quantities to save money.
Checks labelling for price, nutrition and expiry date information Spends a lot of time in kitchen as preparing food is an enjoyable activity.
Price and immediate outflow of cash is the dominant purchase concern. Goes for tried and trusted brands even if they cost a little more. This is an important purchase concern. Food items are bought either based on the past satisfaction from them or for their novelty value. Unknown food items are purchased if they excite the senses. This is the dominant purchase concern.
Who fits in where?
Shobha, Neeru, and Vandana,
Shruti, Aditi, and
Rama Devi
Momeeta (she is a food lover).

(Prof Deepak Khanna, colleague, has developed these profiles based on his perceptions of certain personality types).

QUESTIONS
1. Explain how the above-mentioned information is likely to benefit a marketer?
2. Which of the above mentioned types are likely to respond to sales promotion? Explain.
3. A manufacturer of personal care products in the premium segment starts frequent sales promotions. What is likely to be the impact on the above-mentioned types?

Case Study 1 – Documentary Credit (Marks -16)
M/S Auto India
Introduction
M/S Auto India is a public limited company; they manufacture SUVs (sports utility Vehicle), in technical
collaboration with General Motors of USA. The company has established their manufacturing base at
Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at
Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the
Indian market, within a period of two years.
Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial
institutions, international banks and Indian banks. The working capital is financed by a consortium of
banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car
engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing
import letters of credit through its main bankers, Global Bank, Pune Branch.
M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600
for USD 100,000, on sight basis, in favour of General Motors, Detroit.
Type of credit – Irrevocable negotiable
Application – UCP ICC 600
Applicant – M/S Auto India, Pune, India
Beneficiary – M/S General Motors, Detroit, USA.
Issuing Bank – Global Bank, Pune, India
Advising Bank – The American Bank, New York
Negotiating Bank – The American Bank, New York
Reimbursing Bank – International Bank, New York
Availability – Negotiable at sight
Expiry – At the counters of The American Bank, New York
Amount – USD 100,000
Merchandise – Car engine parts
Quantity and price – 50 units @ USD 2000 per unit
Circumstances
Issuing Bank
Global Bank, Pune issued its irrevocable negotiable credit through its head office in Pune
since Global Bank co-ordinated all its accounting and communication functions at its head office. The
Bank’s head office transmitted the credit through Swift network as
instructed by its Pune branch to General Motors, Detroit, through The American Bank, New
York.
Advising Bank
The American Bank, New York advised the credit to General Motors, Detroit on receipt
of the swift transmission.
Credit
Along with other conditions, the credit clearly stated that the negotiating bank was to
forward the documents directly to Global Bank’s head office at Pune.
Beneficiary
After export of the consignment, General Motors, Detroit presented the documents under
the credit to The American bank, New York.
Negotiating Bank
The American Bank, New York, examined the documents presented by General Motors
and determined that they were in compliance with the terms and conditions of the credit. The
American bank negotiated the documents and forwarded the documents, as per the credit
terms, to the HO of Global Bank in Pune and claimed reimbursement from International
bank, New York.
Reimbursing Bank
International Bank, New York honoured the reimbursement claim by crediting the current
account of the American Bank, New York and debiting the account of Global Bank, Pune, in its
books.
Issuing Bank Head Office
Global Bank’s Head Office, at Pune, received the documents and after internal
registration of the documents, forwarded the documents to its Pune Branch by inter-office
mail.
Issuing Bank Branch
On receipt of the documents by the Pune branch of Global Bank, they examined the
documents and determined that they were discrepant. They were (a) 60 units were
shipped instead of 50 units, thereby overdrawing the credit value by USD 2000 (b)
Inspection certificate by Auto Inspection Council, USA is not submitted, as per credit
terms. Global Bank contacted Auto India for waiver of the discrepancies.
Applicant
Auto India requested for copies of the documents to be forwarded by fax and after
reviewing the same, they refused to waive the discrepancies.
Issuing Bank Branch
Global Bank, Pune Branch instructed its HO to transmit an authenticated swift to The
American Bank, New York stating that Global Bank had rejected the documents for the noted
discrepancies, requesting the American Bank’s instructions as to disposal of the documents,
and demanding a refund of the funds reimbursed.
Issuing Bank Head Office
The HO of the Global Bank sent the authenticated swift message to the American Bank,
New York, as instructed by its Pune Branch.
Negotiating Bank
On receipt of the swift notification advising that Global Bank had rejected the documents
for the stated discrepancies, the American Bank informed Global Bank that it did not accept
the rejection of the drawing since the Global Bank did not comply with UCP 600 sub-article 14
for standard examination of documents. Therefore, Global Bank was said to be stopped from
dishonouring its irrevocable obligation.
Issuing Bank
Global Bank, Pune Branch responded by stating that they acted in accordance with UCP
article 14, since their action did not exceed five banking days following the day of receipt of the
documents at their branch counters after which they scrutinised the documents and
determined to refuse them. They maintained that as per article 14 of UCP 600, they notified
about the rejection of the documents, by swift, not later than the close of the fifth banking day
following the day of receipt of the documents. They had pointed out all the discrepancies and
had informed American Bank, New York that they were holding the documents at the latter’s
disposal.
Negotiating Bank
The American Bank, New York replied as follows:-
We disagree with your position that you acted in accordance with UCP 600 article 14.
Documents were delivered by courier to your HO as per the terms of the credit, on Monday,
January 7, 2008. Your swift notifying rejection of the documents was not sent until
Wednesday, Jan 16, 2008 that is, on the eighth banking day after receipt of the documents
by your bank.
Issuing Bank
Global Bank, Pune Branch, responded by stating that even though its HO received the
documents on January 7,2008; the Global Bank’s Pune Branch did not receive the documents
until the following Thursday, January 10, 2008, and the swift advice rejecting the documents
was sent within the time period permitted in UCP article 14.
Negotiating Bank
The American Bank, New York, replied that it was not their concern how Global Bank’s
operational policy impacted on their inability to comply with UCP. The American Bank, New
York stated that in accordance with the credit terms and conditions, documents were
negotiated by them and forwarded to Global Bank’s HO by courier. The documents were
received by Global Bank on Jan 7, 2008, and any notice of rejection of the documents should have been
given within the close of the fifth banking day following receipt of the documents. Global Bank’s Pune
Branch failed to do so. Therefore, the American Bank, New York’s position was firm relative to UCP 600
article 14 and they would not refund the funds reimbursed.
Questions
1) Was Global Bank, Pune Branch correct in its argument, as the credit issuing bank?
2) Was the stand taken by The American Bank, New York correct, as the negotiating bank?

Business Ethics

Max. Marks: 80

SECTION – A

1. Answer any ten of the following in about 3-4 lines each: (2×10-20)

a) Define Business Ethics.
b) What is morality?
c) How religion and ethics are related?
d) What is ethical dilemma?
e) Define Corporate Governance.
f) Whar are attitudes?
g) What is the psychological egoism?
h) State the two unethical practices in Software Company?
i) What are tax ratios?
j) List four features of utilitarianism?
k) What is whistle blowing?
l) What is software privacy?

SECTION – B

Answer any three of the following. Each question carries 5 marks. (3×5=15)

2. Explain the significance of ethics in business planning and decision making.
3. What are corporate crimes? What are their effects on society?
4. What are the implications of unethical practices on human resource management?
5. What do you mean by classical utilitarianism? Explain its principles.
6. Explain the benefits of good corporate governance.

SECTION – C

Answer any three of the following. Each question carries fifteen marks. (3×15=45)

7. Explain the ethical issues involved in managing finance with an objective
of maximizing shareholders wealth rather than shareholders interests.

8. Describe congnitivism and non-congnitivism ethical theories.

9. Explain the impact of corporate governance of Narayana Murthy Committee.

10. Explain the factors influencing ethical environment a service organization.

11. Explain the corporate social responsibility towards the educational institutions.


MBA CASE STUDY SOLUTIONS

ANSWERS PROVIDED CONTACT: DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

CASE: I

Starbucks

In 2003, Starbucks accomplished something that few companies ever do: It became a Fortune 500
company—a phenomenal achievement for a company that went public only 12 years earlier. The company
had over 6,000 stores worldwide—all company owned, as Starbucks does not franchise its outlets—and
planned to expand rapidly to over 10,000 stores.
Starbucks created not only a successful business but a thriving industry. When the company started
its massive expansion in the early 1990s, the United States had about 200 coffeehouses. In 2003 there were
over 14000 coffeehouses, the majority of them not Starbucks but mom-and –pops that bloomed after the
dawn of the $3 cup of coffee. According to a Starbucks executive, “We changed the way people live their
lives, what they do when they get up in the morning, how they reward themselves, and where they meet.
That’s more important to me than just building a company.”
More than 10 million coffee lovers spend an average of $3.60 at Starbucks weekly, and 10 percent of
them come in twice a day. Starbucks has 7 percent of the U.S. coffee-drinking market and less than 1
percent abroad, suggesting ample room for growth. The coffee market is huge; coffee is the second
most consumed drink in the world (water is first).
Starbucks’ iced beverages, which offer larger profit margins than regular drip coffee, are big sellers
in the South and Southwest. After making some adjustments, such as adding outdoor seating and couches
to stores to better serve the needs of its customers, Atlanta locations have shown double-digit sales growth.
Atlanta boasts 33 successful Starbucks, and plans for expansion are in the works. Plans for further
expansion in cities with even more Starbucks stores, such as New York City and San Francisco, are also on
the drawing board. Although 70 stores operate in New York City alone, it is estimated that growth there will
continue until 200 stores are operating in the city! As for fears of market saturation, Starbucks has none. In
fact, the java giant has two highly profitable outlets that face each other on Robson Street in Vancouver,
British Columbia. Each store has more than $1 million in annual sales. International expansion is also taking
place. In fact, the number one Starbucks in the world is located in Tokyo, and a total of 500 stores are
slated to be operational in Asia in the next three years.
What is the secret of Starbucks’ phenomenal success? According to Howard Schultz, chairman and
CEO of Starbucks Corporation, the company’s success is due to the experience created within the stores
as well as the unsurpassed quality of the coffee. A steaming café au lait must be perfectly replicated,
whether the store is in Seattle or New York City. In a world filled with people leading busy, stressful lives,
Schultz believes he has created a “third place” between home and work where people can go to get their
own personal time out or to relax with friends.
Schultz also attributes his company’s success to the 40,000 employees working worldwide.
Starbucks’ employee training program churns out “baristas” by educating 300 to 400 new hires per month in
classes such as “Brewing the Perfect Cup at Home” and “Coffee Knowledge.” Here they are taught to remind
customers to purchase new beans weekly and that tap water might not be sufficient when brewing the
perfect cup of coffee. They are also encouraged to share their feelings about coffee, selling, and working for
Starbucks. Employees are also given guidelines to maintain and enhance self-esteem, to learn how to listen
and acknowledge, and to know when to ask for help. E-mail, suggestion cards, and regular forms allow
unsatisfied workers to communicate with headquarters. If the annual barista turnover of 60 percent,
compared with 140 percent for hourly workers in the fast-food industry, is any indication of quality of its
training programs, Starbucks seems to have a handle on how to gain and maintain employee loyalty. What
about the demographic makeup of the work force? About 80 percent of the employees are white, 85 percent
have some education beyond high school, and the average is 26.
The Starbucks success story is continuing into the 21st century as the company is quickly expanding
into Europe and Asia. However, one question remains regarding the success of the company in countries
already known for their coffee-making expertise: Will such Romans and Parisians care for Starbucks?
Continued expansion and visibility has been created domestically as Starbucks has formed partnerships with
companies such as United Airlines and Barnes & Noble Booksellers, both of which draw form the same type
of knowledgeable customer.
More recently, Starbucks has opened several full-service dining establishments (Café Starbucks) in
response to customers who want more at lunch and dinner. The menu offers full meals, breads, pastries,
alcohol, and of course coffee. The company has also launched an Internet site that sells not only expensive
coffee but also pricy kitchenware, home furnishings, and gourmet food. After some skepticism by analysts
and a subsequent drop in share price, Schultz emphasized that “Every company must stick to its knitting,
The Indian Institute of Business Management & Studies
SUBJECT: Consumer Behavior Marks: 100
2
understand its core competency, know what the value proposition is for the customer, and do everything
possible to get close to the customer. So you won’t see us getting far afield from what we do now” As for the
present, Starbucks is not likely to fall victim to a fad-driven society any time soon. The company seems to
be doing fine.
You can learn more about Starbucks at http://www.starbucks.com.
Question:
1. Based on the case information and your personal experiences, list at least five things you know
about Starbucks. This list offers you some idea about your cognitions concerning the coffee shop
chain.
2. List at least things you like or dislike about Starbucks. This list gives you some idea of your affect for
the coffee shops.
3. List at least five behaviors involved in buying a gourmet coffee drink from Starbucks. This list gives
you an idea of the behaviors involved in a coffee purchase.

CASE 1: Spirituality in the workplace
Traditionally, the workplace and spirituality did not mix in America. But things are changing. Andre
Delbecq, a Professor in Santa Clara University, a Jesuit institution, said: “There were two things I
thought I’d never see in my life, the fall of the Russian empire and God being spoken about in a
business school.” Now management books and conferences (including the annual meeting of the
Academy of Management) deal with the various aspects of how God can be brought into the
organizational environment. To be sure, people who want to integrate spiritual dimensions into the
workplace are still considered rebels. But ServiceMaster, a Fortune 500 company with some 75,000
employees, created a spiritual organization culture many years ago. Indeed, Peter Drucker, one of the
most prolific writers on management, had high regards for the company that is known for its products
such as Terminix (pest control), TruGreen, Merry Maids, and others.
When people in the US were asked if they believe in God, some 95 per cent said yes. It is in a
spiritual context that business people under the daily pressure can discuss their inner feelings. As the
baby boomers, now in their 50s, are reaching the top in the organizational life, they begin to wonder
what life is all about. They lived through the youth culture of the 1960s and the 1980s that was
dominated by greed. They are now questioning the real meaning of life and the ethical dimension of
work. Jose Zeilstra, an executive at Price WaterhouseCoopers worked around the world, practicing her
Christian principles in different cultures. During her assignment in China, she strongly argued against
the practice of giving “very expensive gifts.” As a result the business transaction did not work out. Yet,
in the long run, while integrating her personal beliefs with her work, resulted in a very successful
career. Academic institutions such a the University of St. Thomas, the University of Denver, and the
Harvard Divinity School are following and studying the movement of spirituality. Other schools such
as Antioch University in Los Angeles, the University of New Haven in Connecticut, the University of
Scranton in Pennsylvania, Santa Clara University in California as well as institutions abroad such as
the University of Bath in England and the Indian Centre for Encouraging Excellence in Bombay, India,
are conducting research, conferences, or lecture on spirituality.
The cover story of Business week (November 1, 1999) discussed how company outlets such as
Taco Bell, Pizza Hut, and McDonald’s as well as the Xerox Corporation pay attention to spiritual
needs of their employees. Some companies claim an increase in productivity, decrease in turnover, and
a reduction in fear. A research study by the consulting firm McKinsey & Co. in Australia showed that
firms with spiritual programmes showed reduced turnover and improved productivity. Professor Ian I
The Indian Institute of Business Management & Studies
SUBJECT: General Management Marks:100
2
Mitroff at the University of Southern California even stated, “Spirituality could be the ultimate
competitive advantage.” But there is also the concern that cult members and groups with a radical
perspective could use the workplace for their own aims. Still, employees in companies that integrate
spirituality in their work place count on the potential benefits of greater respect for individuals, a more
humane treatment of their fellow workers, and an environment that permeates their organization with
greater trust.
Question:
1. What is spirituality?
2. Is this topic appropriate for businesses?
3. What are the arguments for and against its inclusion in business?

EMPLOYEE MOTIVATION IN A GOVERNMENT ORGANIZATION”
Bhumika Services Ltd., one of the largest public sector companies of India, was serving
more than 31 million customers. Along with its vast customer base, BSNL’s financial and asset
bases too were vast and strong. Changing regulations, converging markets, competition and ever
demanding customers had generated challenges for BSNL. The Indore division of BSNL was the
first in the country, which faced competition in basic telecom services from 1998. In spite of being
a government department, Indore telephones had to face the competition, and relentless efforts
were put in to improve the services and provide worldclass telecom services to its customers.
Among the various services offered by Indore Telecom, 197 and 183 were two special services.
197 provided non-metered enquiry services to obtain telephone numbers by simply giving the
name of person/name of organization/ name and designation of person, or by giving address. 183
on the other hand, was a nonmetered enquiry service that provided similar services for distant
stations. There were a large number of complaints related to these services. Complaints were
either directly forwarded to the district office by customers or raised during Telephone Adalats or
pointed out by correspondents during press conferences, which were conducted quarterly.
Complaints ranged from non-response, long waiting time to rude responses.
S. Baheti took charge as Area Manager (North) on July 25, 2001 In the Indore Division.
Immediately after taking charge, he realized that special services like 197 and 183 required
urgent attention as they were directly affecting the image of the organization amongst customers.
Since most of the complaints during Telephone Adalats and press conferences were related to
these services, Baheti wanted to reach the root cause of the problem, to solve it forever. In this
process, he looked at the background of the employees involved in the special services and found
that most of the employees were office bearers of various unions that were active in the
organization. The problem was more complicated than it seemed to during interactions, the
employees indicated that they were not to be blamed for poor services since they were facing a
number of problems in providing services and senior officials were not paying enough attention to
alleviate their problems. Defective handsets, non-operating telephone lines, disturbance in lines,
jacks not making proper connections, fans and air conditioners not working properly and non
availability of typewriter/computer terminals were some of the problems brought to the notice of
Baheti by operators.
THE INDIAN INSTITUTE OF BUSINESS MANAGEMENT AND STUDIES
SUB: HUMAN RESOURCES MANAGEMENT MAX MARKS: 100
2
Further investigation revealed that in addition to these technical problems, there were
some Human Resource Management problems as well, such as frequent short leave, extended
breaks, uninformed leave and indifferent attitude of employees towards customers. Baheti
identified that despite technical problems, some operators were sincere towards their viork and
tried their best to provide better services. To improve these services, Baheti decided to use
multipronged strategies. Most of the technical problems were solved immediately, other problems
that could not be solved at his level were forwarded to higher authorities and pursued rigorously.
As the technical problems were taken care of, efficiency of sincere employees went up. Moreover,
Baheti also began regular interaction with the operators, appreciating their good work, listening to
their problems and explaining them the;-i. importance of their jobs. The employees were made
aware of the facts that B5NL did not enjoy a sole monopolistic position any more and had to
compete with private players. So the laidback attitude towards customer complaints was not only
detrimental to the image of the organization, but also could lead to a reduced market share.
After gaining the confidence of operators, the next step was to motivate them. Towards
this end, Baheti started announcing the best operator of the month and recognition was given to
the operator by displaying his name on the board of honor. The criteria for award were minimum
200 calls attended per day and 20 days’ attendance. In addition, based on last six months
performance, three best performers were identified. Appreciation letters from Area Manager and
General Manager were conferred upon these operators in a public function and prizes of their own
choice were given to them. These efforts had a desired result and the performance of all the
operators showed a marked improvement. The number of calls attended by some operators
increased from 200 to 700 calls per day. Further, quick and polite response had reduced customer
complaints. While reviewing the situation, Baheti was quite contended to see a remarkable
change in the behavior of operators just four months. He wondered whether this change was a
permanent phenomenon or he would have to strategize further.
QUESTIONS
1. Discuss the long-term relevance of motivational techniques used by Baheti in the
light of prevailing environment in the organization.
2. Had you been Baheti, what other techniques you would have used to improve the
special services provided by the organization?

Note: Solve any 4 Cases
CASE: I Diana’s Disappointment: The Promotion Stumbling Block
Diana Gillen had an uneasy feeling of apprehension as she arrived at the Cobb Street
Grille corporate offices. Today she was meeting with her supervisor, Julie Spencer, and
regional director, Tom Miner, to learn the outcome of her promotion interview for the
district manager position. Diana had been employed by this casual dining restaurant chain
for 12 years and had worked her way up from waitress to general manager. Based on her
track record, she was the obvious choice for the promotion; and her friends assured her
that her interview process was merely a formality. Diana was still anxious, though, and
feared that the news might not be positive. She knew she was more than qualified for the
job, but that didn’t guarantee anything these days.
Nine months ago, when Diana interviewed for the last district manager opening, she
thought her selection for the job was inevitable. She was shocked when that didn’t
happen. Diana was so upset about not getting promoted then that she initially decided not
to apply for the current opening. She eventually changed her mind—afterall, the company
had just named her “restaurant manager of the year” and trusted her with managing their
flagship location. Diana thought her chances had to be really good this time.
A multi-unit management position was desirable move up for any general manager
and was a goal to which Diana had aspired since she began working in the industry.
When she had not been promoted the last time, Julie, her supervisor, explained that her
people skills needed to improve. But Diana knew that explanation had little to do with
why she hadn’t gotten the job—the real reason was corporate politics. She heard that the
person they hired was some superstar from the outside—a district manager from another
restaurant company who supposedly had strong multi-unit management experience and a
proven track record of developing restaurant managers. Despite what she was told, she
was convinced that Tom, her regional manager, had been unduly pressured to hire this
person, who had been referred by the CEO.
The decision to hire the outsider may have impressed the CEO, but it enraged Diana.
With her successful track record as a store manager for the Cobb Street Grille, she was
much more capable, in her opinion, of overseeing multiple units than someone who was
new to the operation. Besides, district managers had always been promoted internally
from among the store managers, and she was unofficially designated as the next one to
move up to a district position. Tom had hired the outside candidate as a political
maneuver to put himself in a good light with management, even though it meant
overlooking a loyal employee lime her in the process. Diana had no patience with people
who made business decisions for the wrong reasons. She worked very hard to avoid
politics and it especially irritated her when the political actions of others negatively
impacted her.
Diana was ready to be a district manager nine months ago, and she thought she was
even more qualified today—provided the decision was based on performance. She ran a
tight ship, managing her restaurant completely by the book. She meticulously controlled
expenses. Her sales were growing, in spite of new competition in the market, and she
The Indian Institute of Business Management & Studies
SUBJECT: Organizational Behavior Marks: 100
received relatively few customer complaints. The only number that was a little out of line
was the higher turnover among her staff.
Diana was not too concerned about the increasing number of terminations, however;
there was a perfectly logical explanation for this. It was because she had high standards
for both herself and her employees. Any
Who delivered less than 110 percent at all times would be better off finding a job
somewhere else. Diana didn’t think she should bend the rules for anyone, for whatever
reason. A few months ago, for example, she had to fire three otherwise good employees
who decided to try a new customer service tactic-a so-called innovation they dreamed uprather
than complying with the established process. As the general manager, it was her
responsibility to make sure that the restaurant was managed strictly in accordance with
the operations manual, and she could not allow deviations. This by-the-book approach to
managing had served her well for many years. It got her promoted in the past, and she
was not about to jinx that now. Losing a few employees now and then—particularly those
who had difficulty following the rules—was simply the cost of doing business.
During a recent store visit Julie suggested that Diana might try creating a friendlier
work environment because she seemed aloof and interacted with employees somewhat
mechanically. Julie even told her that she overheard employees refer to Diana as the “ice
maiden” behind her back. Diana was surprised that Julie brought this up because her boss
rarely criticized her. They had an unspoken agreement: Because Diana was so technically
competent and always met her financial targets, Julie didn’t need to give her much input.
Diana was happy to be left alone to run her restaurant without needless advice.
At any rate, Diana rarely paid attention to what employees said about her. She wasn’t
about to let something as childish as a silly name cause her to modify a successful
management strategy. What’s more, even though she had recently lost more than the
average number of employees due to “personality differences” or “miscommunications”
over her directives, her superiors did not seem to mind when she consistently delivered
strong bottom-line results every month.
As she waited in the conference room for the others, Diana worried that she was not
going to get this promotion. Julie had sounded different in the voicemail message she left
to inform her about this meeting, but Diana couldn’t put her finger on exactly what it
was. She would be very angry if she was passed over again and wondered what excuse
they would have this time. Then her mind wandered to how her employees would
respond to her if she did not get the promotion. They all knew how much she wanted the
job, and she cringed at how embarrassed she would be if she didn’t get it. Her eyes began
to mist over at the sheer thought of having to face them if she was not promoted today.
Julie and Tom entered the room then, and the meeting started. They told Diana, as
kindly as they could, that she would not be promoted at this time; one of her colleagues
would become the new district manager. She was incredulous. The individual who got
promoted had been with the company only three years—and Diana had trained her! She
tried to comprehend how this happened, but it did not make sense. Before any further
explanation could be offered, she burst into tears and left the room. As she tried in vain to
regain her composure, Diana was overcome with crushing disappointment.
The Indian Institute of Business Management & Studies
SUBJECT: Organizational Behavior Marks: 100
Question:
1. Within the framework of the emotional intelligence domains of self-awareness, selfmanagement,
social awareness, and relationship management, discuss the various
factors that might have to led to Diana’s failure to be promoted.
2. What competencies does Diana need to develop to be promotable in the future?
What can the company do to support her developmental efforts?

Case I
THE STRATEGIC ASPIRATIONS OF THE RESERVE BANK OF INDIA
The Reserve Bank of India (RBI) is India’s central bank or ‘the bank of the bankers’. It was
established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Central Office of the RBI, initially set up at Kolkata, is at Mumbai. The RBI is fully owned by the
Government of India.
The history of the RBI is closely aligned with the economic and financial history of India. Most
central banks around the world were established around the beginning of the twentieth century. The
Bank was established on the basis of the Hilton Young Commission. It began its operations by taking
over from the Government the functions so far being performed by the Controller of Currency and from
the Imperial Bank of India, the management of Government accounts and public debt. After independence,
RBI gradually strengthened its institution-building capabilities and evolved in terms of
functions from central banking to that of development. There have been several attempts at reorganisation,
restructuring and creation of specialised institutions to cater to emerging needs.
The Preamble of the RBI describes its basic functions like this: ‘…to regulate the issue of Bank
Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate
the currency and credit system of the country to its advantage.’ The vision states that the RBI
‘…aims to be a leading central bank with credible, transparent, proactive and contemporaneous policies
and seeks to be a catalyst for the emergence of a globally competitive financial system that helps deliver
a high quality of life to the people in the country.’ The mission states that ‘RBI seeks to develop a sound
and efficient financial system with monetary stability conducive to balanced and sustained growth of the
Indian economy’. The corporate values underlining the mission statement include public interest,
integrity, excellence, independence of views and responsiveness and dynamism.
The three areas in which objectives of the RBI can be stated are as below.
1. Monetary policy objectives such as containing inflation and promoting economic growth,
management of foreign exchange reserves and making currency available.
2. Objectives set for managing financial sector developments such as supervision of systems and
information access and assisting banking and financial institutions to become competitive
globally.
3. Organisational development objectives such as development of economic research facilities,
creating information system for supporting economic decision-making, financial management and
human resource management.
Strategic actions taken to realise the objectives fall under four categories:
1. The thrust area of monetary policy formulation and managing financial sector;
2. Evolving the legal framework to support the thrust area;
THE INDIAN INSTITUTE OF BUSINESS MANAGEMENT AND STUDIES
SUB: Strategic Management MAX MARKS: 100
2
2. Customer services for providing support and creation of positive relationship; and
3. Organisational support such as structure, systems, human resource development and
adoption of modern technology.
The major functions performed by the RBI are:
• Acting as the monetary authority
• Acting as the regulator and supervisor of the financial system
• Discharging responsibilities as the manager of foreign exchange
• Issue currency
• Play a developmental role
• Related functions such as acting as the banker to the government and scheduled banks
The management of the RBI is the responsibility of the central board of directors headed by the governor
and consisting of deputy governors and other directors, all of whom are appointed by the government.
There are four local boards based at Chennai, Kolkata, Mumbai and New Delhi. The day-to-day
management of RBI is in the hands of the executive directors, managers at various levels and the
support staff. There are about 22000 employees at RBI, working in 25 departments and training
colleges.
The RBI identified its strengths and weaknesses as under.
• Strengths A large body of competent offers and staff; access to key data on the economy; wide
organisational network with 22 regional offices; established infrastructure; ability to attract
talent; and financial self sufficiency.
• Weaknesses Structural rigidity, lack of accountability and slow decision-making; eroded specialist
know-how; strong employee unions with rigid industrial relations stance; surplus staff; and
weak market intelligence.
Over the years, the RBI has evolved in terms of structure and functions, in response to the role as signed
to it. There have been sweeping changes in the economic, social and political environment. The RBI has
had to respond to it even in the absence of a systematic strategic plan. In 1992, the RBI, with the
assistance of a private consultancy firm, embarked on a massive strategic planning exercise. The
objective was to establish a roadmap to redefine RBI’s role and to review internal organisational and
managerial efficacy, address the changing expectations from external stakeholders and reposition the
bank in the global context. The strategic planning exercise was buttressed by departmental position
papers and documents on various subjects such as technology, human resources and environmental
trends. The strategic plan of the RBI emerged with four sections dealing with the statement of mission,
objectives and policy, a review of RBI’s strengths and weaknesses and strategic actions required with an
implementation plan. The strategic plan reiterates anticipation of evolving external environment in the
medium-term; revisiting strengths and weaknesses (evaluation of capabilities); and doing away with the
outdated mandates for enhancing efficiency in operations in furtherance of best public interests. The
results of these efforts are likely to manifest in attaining a visible focus, reinforced proficiency, realisation
of shared sense of purpose, optimising resource use and build-up of momentum to achieve goals.
THE INDIAN INSTITUTE OF BUSINESS MANAGEMENT AND STUDIES
SUB: Strategic Management MAX MARKS: 100
3
Historically, the RBI adopted the time-tested technique of responding to external environment in
a pragmatic manner and making piecemeal changes. The dilemma in adoption of a comprehensive
strategic plan was the risk of trading off the flexibility of the pragmatic approach to creating rigidity
imposed by a set model of planning.
Questions
1. Consider the vision and mission statements of the Reserve Bank of India. Comment
on the quality of both these statements.
2. Should the RBI go for a systematic and comprehensive strategic plan in place of its
earlier pragmatic approach of responding to environmental events as and when they
occur? Why?


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Business Communication
Section A: Objective Type & Short Questions (30 marks)
• This section consists of multiple choices and Short Notes type questions.
• Answer all the questions.
• Part one questions carry 1 mark each & Part Two questions carry 4 marks each.
Part one:
Multiple choice:
1. __________is an essential function of Business Organizations:
a. Information
b. Communication
c. Power
d. None of the above
2. Physiological Barriers of listening are:
a. Hearing impairment
b. Physical conditions
c. Prejudices
d. All of the above
3. Which presentation tend to make you speak more quickly than usual:
a. Electronic
b. Oral
c. Both „a‟ and „b‟
d. None of the above
4. What is the main function of Business Communication:
a. Sincerity
b. Positive language
c. Persuasion
d. Ethical standard
5. The responsibilities of the office manager in a firm that produces electronics spares is:
a. Everything in the office runs efficiently
b. Furniture and other equipment in the office is adequate
c. Processing all the incoming official mail and responding to some
d. All of the above
Examination Paper of Business Communication
2
IIBM Institute of Business Management
6. Labov‟s Storytelling Model based on:
a. Communication through speech
b. Language learning
c. Group Discussions
d. None of the above
7. Diagonal Communication is basically the:
a. Communication across boundaries
b. Communication between the CEO and the managers
c. Communication through body language
d. Communication within a department
8. How to make Oral Communication Effective?
a. By Clarity
b. By Brevity
c. By Right words
d. All of the above
9. Direct Eye contact of more than 10 seconds can create:
a. Discomfort & Anxiety
b. Emotional relationship between listeners and speakers
c. Excitement
d. None of the above
10. Encoding means:
a. Transmission
b. Perception
c. Ideation
d. None of the above
Part Two:
1. Define 7C‟s of effective communication.
2. Explain „Space Language‟.
3. Differentiate between good listeners and bad listeners.
4. List the different types of business report.
5. Define „Kinesics‟.
END OF SECTION A
Examination Paper of Business Communication
3
IIBM Institute of Business Management
Section B: Caselets (40 marks)
• This section consists of Caselets.
• Answer all the questions.
• Each Caselet carries 20 marks.
• Detailed information should form the part of your answer (Word limit 150 to 200
words).
Caselet 1
Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the
price tag on the piece selected by him. At the counter, while making the payment he asked for
the price. Rs. 950 was the answer.
Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She was
glad that he had selected a nice black shirt for himself. She pointed out that there was a 25%
discount on that item. The counter person nodded in agreement.
Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That‟s
fantastic”, said Mr. Sharma.
He decided to buy one more shirt in blue color.
In no time, he returned with the second shirt and asked them to be packed. When he received the
cash memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs. 1,424.
Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted the
discounted price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.
Questions
1. What should Mr. Sharma have done to avoid the misunderstanding?
2. Discuss the main features involved in this case.
Caselet 2
I don‟t want to speak to you. Connect me to your boss in the US,” hissed the American on the
phone. The young girl at a Bangalore call centre tried to be as polite as she could. At another call
centre, another day, another young girl had a Londoner unleashing himself on her, “Young lady,
do you know that because of you Indians we are losing jobs?”
The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young
men and women taking calls at these outsourced job centres. Supervisors tell them to be „cool‟.
Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm says,
“Companies involved in outsourcing both in the US and India are already getting a lot of hate
mail against outsourcing and it is hardly surprising that some people should behave like this on
the telephone.” Vashistha says Indian call centre‟s should train their operators how to handle
such calls. Indeed, the furor raised by the Western media over job losses because of outsourcing

CORPORATE FINANCE IIBMS EXAM ANSWER SHEETS PROVIDED
Attempt any Ten Questions:
1. Discuss the role of SEBI in regulating Indian Capital Market.

2. Discuss the basic problems of Industrial finance in India

3. Write short notes on the following (Any Three)
i) Corporate disasters
ii) Corporate ethics
iii) Managers and professionalism
iv) Role played by SEBI in avoiding, corporate disasters, ethics ,and also describe CSR initiatives of corporate world.

4. Explain Principles of Corporate Governance .

5. Explain the Guidelines issued by SEBI towards Corporate Governance.

6. Explain the underlying assumptions of the Black and Scholes option pricing model and why are they needed? Explain in detail Black Scholes option pricing model .

7. Discuss the relationship between the financing decision and investment decision in a firm

8. Discuss RAD and CE approach

9. Explain the advantages of Decision tree approach in investment decisions

10. .Discuss the factors which exercise influence on the demand for working capital in a manufacturing concern

11. Discuss the role of Commercial bank as financial intermediaries

12. What do you mean by share capital? Explain the different forms of share can a company issue?

13. Explain the role of EXIM Bank Financing of exports

14. Explain the relevance which is associated with the financing decision and investment in the organization.

Business Ethics ISBM EXAM ANSWER SHEETS PROVIDED
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks 10 Marks
1. Write short note on value education & consumerism
2. Give SWOT analysis in Indian scenario.
3. Explain need for a check on quackery.
4. Give measures to control pollution
5. Discuss unethical practices vis-à-vis cheating.
6. Give benefits of ISO 9000 quality systems & Give importance and
use of ISO 9000 standard.
7. Discuss seven points of mahatma Gandhi & Discuss social justice
according to gandhiji.
8. Give characteristic of quality leadership.
8.Discuss consumerism & Write a note on consumerism

CONSUMER BEHAVIOUR ISMS ANSWER SHEETS PROVIDED

Master Program in Business Administration (MBA)

Note :- Solve any 4 Case Study
All Case Carry equal Marks.
CASE I

Sunder Singh
Sunder Singh had studied only up to high school. He was 32-years of age, lived alone in a rented room, and worked eight-hour shift at one petrol pump, then went to the other one for another eight-hour shift. He had a girl friend and was planning to marry.

One day when he returned from work, he got a note from his girl friend that she was getting married to someone else and he need not bother her. This was a terrible shock to Sunder Singh and he fell apart. He stopped going to work, spent sleepless nights, and was very depressed. After a month, he was running Iowan his savings and approached his earlier employers to get back his job, but they would not give him a second chance. He had to quit his rented room, and sold few things that he had. He would do some odd jobs at the railway station or the bus terminal.

One day, nearly two years ago, he was very hungry and did not have any money and saw a young man selling newspapers. He asked him what he was selling and he told him about Guzara (an independent, non-profit, independent newspaper sold by the homeless, and economically disadvantaged men and women of this metro city). Sunder Singh approached the office and started selling the newspaper. He did not make a lot of money, but was good at saving it. He started saving money for a warm jacket for next winter.

He was reasonably happy; he had money to buy food, and no longer homeless and shared a room with two others. One day, with his savings he bought a pair of second-hand Nike shoes from flea market.

Sunder Singh is not unique among low-income consumers, especially in large cities, in wanting and buying Nike shoes. Some experts believe that low-income consumers too want the same products and service that other consumers want.

The working poor are forced to spend a disproportionate percent of their income on food, housing, utilities, and healthcare. They solely rely on public transportation, spend very little on entertainment of any kind, and have no security of any kind. Their fight is mainly day-to-day survival.

QUESTIONS
1. What does the purchase of a product like Nike mean to Sunder Singh?
2. What does the story say about our society and the impact of marketing on consumer behavior?

Business Ethics XAVIERS EXAM ANSWER SHEETS PROVIDED

Max. Marks: 80

SECTION – A

1. Answer any ten of the following in about 3-4 lines each: (2×10-20)

a) Define Business Ethics.
b) What is morality?
c) How religion and ethics are related?
d) What is ethical dilemma?
e) Define Corporate Governance.
f) Whar are attitudes?
g) What is the psychological egoism?
h) State the two unethical practices in Software Company?
i) What are tax ratios?
j) List four features of utilitarianism?
k) What is whistle blowing?
l) What is software privacy?

SECTION – B

Answer any three of the following. Each question carries 5 marks. (3×5=15)

2. Explain the significance of ethics in business planning and decision making.
3. What are corporate crimes? What are their effects on society?
4. What are the implications of unethical practices on human resource management?
5. What do you mean by classical utilitarianism? Explain its principles.
6. Explain the benefits of good corporate governance.

SECTION – C

Answer any three of the following. Each question carries fifteen marks. (3×15=45)

7. Explain the ethical issues involved in managing finance with an objective
of maximizing shareholders wealth rather than shareholders interests.

8. Describe congnitivism and non-congnitivism ethical theories.

9. Explain the impact of corporate governance of Narayana Murthy Committee.

10. Explain the factors influencing ethical environment a service organization.

11. Explain the corporate social responsibility towards the educational institutions.


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Business Communication
Case Studies
CASE STUDY (20
Marks)
Shoppers ‘Delight’s large retail store, had above-average quality and competitive prices. It advertised its retail promotions in local
newspapers. Its TV advertising was mainly aimed at building store image and did not address retail promotions. The management
knew it well that they had to advertise their retail promotions more, but they did not feel comfortable with the effectiveness of
persent efforts and wanted to better understand the impact of their present promotions. To better understand the effectiveness of the
present efforts, a study of advertising exposure, interpretation, and purchases was undertaken. Researchers conducted 50 in-depth
interviews with customers of the store’s target market to determine the appropriate product mix, price, ad copy and media, In
addition, the store,s image and that of its two competitors were measured. Based on the research findings, different product lines that
would appeal to the target customer were selected. The retail promotion was run for a full week .Full-page advertisements were
released each day in the two local Hindi newspapers, and also in one English newapaper that devotes six pages to the coverage of the
state. Each evening, a sample of 100 target market customers were interviewed by telephone as follows:1 .Target customers were
asked if they had read the newspaper that day .This was done to determine their exposure to advertisement.2.After a general
description of the product lines, the respondents were asked to recall any related retail advertisements they had seen or read.3.if the
respondents were able to recall, they were asked to describe the ad, the promoted products, sale prices, and the name of the
sponsoring store.4.If the respondents were accurate in their ad interpretation ,they were asked to express their intentions to
purchase.5.Respondents were also asked for suggestions to be incorporated in future promotions targeted at this consumer segment
.Immediately after the close of promotion,500target market customers were surveyed to determine what percentage of the target
market actually purchased the promoted products. It also determined which sources of information influenced them in their decision
to purchase and the amount of their purchase. Results of the study showed that ad exposure was 75% and ad awareness level was
68% and was considered as high. Only 43% respondents exposed to and aware of the ad copay could accurately recall important
details, such as the name of the store promoting the retail sale. Just 43% correct interpretation was considered as low. Of those who
could accurately interpret the ad copay ,32% said they intended to respond by purchasing the advertised products and 68 per cent sad
they had no intention to buy. This yields an overall intention to buy of 7%.The largest area of lost opportunity was due to those who
did not accurately interpret the ad copay. The post-promotion survey indicated that only 4.2% of the target market customers made
purchases of the promoted products during the promotion period. In terms of how these buyers learned of the promotion,46%
mentioned newspaper A(Hindi) ,27% newspaper B (Hindi),8% newspaper c( English), and 15% learned about sale through word-ofmouth
communication. The retail promotion was judged as successful in many ways, besides yielding sales worth
Rs.900,000.However ,management was concerned about not achieving a higher level of ad comprehension, missing a significant
sales opportunity. It was believed that a better ad would have at least 75% correct comprehension among those aware of the ads. This
in turn would almost double sales without any additional cost.
Answer the following question.
Q1. Give an overview of the case
Q2. How do you think survey helps to determine the preferences and other needs of consumers?
Q3. Prepare a survey questionnaire of any company of your choice?
Q4. Surveys are suitable of certain types of products and brands. Comment.
7/20/2017 Aeren Foundation
2/3
CASE STUDY (20
Marks)
It is not enough to be an outstanding business expert only back at home. As a member of the European Union, Hungary is in great
need of business and communication professionals who are able to understand the challenges and key issues of international
economic relations in order to exploit any opportunities that may arise. If you are seeking to do that, you need secure knowledge of
economic and business matters, a fluent command of a second language for professional purposes and thorough practical and work
experience. The International Business Economics program of MET offers exactly that. Our graduate students, with professional
level ability in at least two foreign languages, leave school as well-trained business experts with the potential to achieve success and
immediate results in the international business scene. THE PROGRAM IS DESIGNED FOR INDIVIDUALS WHO are well
informed with a keen interest in the world of international business, politics and the media, who look to find their future career in an
international environment and who are open to exposure to foreign cultures. Future students should also be able to use two foreign
languages for most personal needs with a desire to improve their existing language skills so that they become an important asset both
in their future career and for their companies.
Answer the following question.
Q1. Why the knowledge of at least two foreign languages is necessary for international business? Discuss.
Q2. Give an overview of the case.
CASE STUDY (20
Marks)
Ability to swap content out quickly —Prior to rolling out the SnapComms solution, the insurance company were limited to what
they could put on staff screensavers. This was due to the fact that pushing out screensaver content to staff computers was only done
once per quarter, so the ability to change what was displayed was time consuming for the desktop team. With the SnapComms
Screensaver Messages solution, the Communications team have complete control of when screensavers are displayed, how many are
displayed at once, and they now have the additional benefit of being able to target specific screensavers to different parts of the
business. The assigned message administrators can deploy a screensaver whenever they need to, without engaging the Desktop
Support team to push it out manually, making the whole process a lot more efficient. SnapComms has addressed the issues that were
impacting staff communications at the insurance company. Important communications now get the cut through they need in order to
keep staff informed of potential issues at their location in real time. The Communications team now has the ability to run targeted
internal communications campaigns without having to rely on the desktop support team. And the Compliance manager has the
ability disseminate compliance communications across the business, with an eye to the future of being able to quiz staff on policies
and track results in real time.
Answer the following question.
Q1. Give an overview of the case
Q2. “SnapComms does more than just reduce email overload” Comment.
CASE STUDY (20
Marks)
When you do business internationally, you may assume that all businesspeople have the same basic understandings. Although you
will find a common appreciation for making profits and reducing costs, you may run across business approaches that surprise you.
Diverse cultures have different business values and practices. A little effort at gaining some cultural literacy can help you deal
successfully with people around the globe. It’s important that you demonstrate that you are a global citizen so international customers
are willing to do business with you. It’s not realistic to set a goal of gaining a deep understanding of all the cultures you may deal
with in the course of growing your international marketing. Instead, aim for a core competency. According to an article in “Profit”
magazine, you can look at six areas of knowledge you need: Familiarize yourself with cultural attitudes about dealing with strangers,
language barriers, how groups respond to sales pitches as either favors or cut-and-dried presentations, local channels you must use
for brand awareness, the technical proficiency and capacity of the country or region and how the culture views the importance of
doing things on time or relaxing about meeting times and deadline dates. You must understand how a culture views business dealings
so you know what style to use when approaching businesspeople in that culture. Some cultures look at a transaction as a favor
among friends, while others embrace the more American style of a straightforward discussion about making money. Still others may
allow business discussions only in certain settings and frown on them at other times. Look into this aspect of the culture before you
make any business proposals. You can evaluate your business transactions with a culture different from your own in light of that
culture’s contextual clues. This helps you avoid gaffes and create business communications that have a positive impact. The country’s
history and assumptions about Americans can affect how your message is received. Be sensitive to hot-button issues and avoid any
phrases or words that could suggest you look down on the culture or that you consider the person you’re dealing with to be a secondclass
citizen in his own culture. This kind of cultural literacy is of utmost importance when you communicate so you can avoid
unintentional negative cultural messages when conducting business. Using internationally accepted word choices and phrases
ensures your business dealings won’t be misunderstood. Some American phrases do not translate well. For example, “We shall see”
means “No” in China. Other phrases such as, “Flying by the seat of our pants” or “Ballpark figure” may not have any meaning at all
in other cultures. Scrutinize your written communications for figurative language that may not translate. In addition, cut your verbal
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communications to the basics. It’s important for a company doing global business to remember that the language at its home office
may not be universal.
Answer the following question.
Q1. How can you increase business by increasing awareness of cultures? Discuss.
Q2. Why International Business Communication is important? Debate.

Human Resource Management
Case Studies
CASE STUDY (20
Marks)
A manufacturing company was importing raw material for production. The company was incurring huge losses due to delay in
import clearance of raw material as Custom had introduced a new system of clearance of imported cargo through EDI. Mr. Rajan,
who was an old employee of the company, was the in charge of clearance team. He was very diligent, honest and an asset to the
company. But somehow, he was reluctant to switch over to the electronics clearance system of customs. He firmly believed in
custom clearances of stores through hard copies of Bill of entry. He was due for promotion. But his later performance was denying
him the promotion. Company wanted to help him.
Answer the following question.
Q1. What may be the reason for adopting the same old procedure by Mr. Rajan.
Q2. Debate as a HR Manager, how will you help Rajan so he does not loose promotion?
CASE STUDY (20
Marks)
This small organization was struggling to retain valuable employees as larger companies were luring people away with larger
salaries. However, the people who left the company were often asking to return as their salary was larger in the new firm but their
take-home pay was less as a result of higher benefit costs. As such, we implemented our Statements and met with employees
individually to review the Statements. The reaction to the Wage & Benefit Statements was overwhelmingly positive as most
employees didn’t fully understand the value of the “hidden benefits” provided by the company such as health insurance, life
insurance, matching 401(k) payments, etc.
Answer the following question.
Q1. Give an overview of the case.
Q2. Discuss why the take-home salary was less in larger new Give an overview of the case companies.
CASE STUDY (20
Marks)
In a pharmacy company manufacturing and marketing drugs and medicines, the research staff has developed a number of new
products and formulations which are effective. But at the same time it has to meet severe competition from stalwarts with foreign
collaboration. Mr. Shah, the Vice President Marketing, has a very successful Pharmacy Marketing background. He has been with the
company for the past 4 years. Mr. Shah had made ambitious plans for capturing a sizeable share of the market in Gujarat. The
company being medium sized, Mr. Shah had kept his marketing department and the marketing team lean and trim. The field sales
staff was given aggressive targets and was virtually pushed to reach the respective targets. The field staff worked to their best
abilities to complete their respective targets. Mr. Shah had himself been working almost 11-12 hours a day. There was no formal
appraisal and reward system in the company. During last 5 years more than 60 Medical Representatives and Area Supervisors had
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left the company due to unsatisfactory increments and promotions. Those who left the company were star workers. But Mr. Shah did
not care for this high turnover. He was over confident that he would be able to hire fresher’s and also select Candidates who were not
happy with their remuneration in their respective companies. Mr. Shah had never communicated to the field sales staff about their
performance or reasons for not recognizing their outstanding performance in a few cases. There was on the whole great
dissatisfaction and good performers were leaving the company.
Answer the following question.
Q1. Enumerate the steps you will take to correct the situation?
Q2. In the event of your suggesting a Performance Appraisal System, what type of appraisal system would be suitable
and why.
Q3. Discuss, if the appraisal system should also include merit, rewards and promotions.
CASE STUDY (20
Marks)
In 2007, Rolls Royce decided to close down one of its manufacturing units in Merseyside, UK. This led to a large-scale retrenchment
of its workforce. The decision was massively resented by the largest trade union body of the UK, Unite. They felt that Rolls Royce
was unjustly retrenching its highly skilled and loyal workforce. It doubted the company’s real intention behind the proposed closure.
The company totally nullified the allegations made by Union. It claimed that to circumvent the rising overhead expenses, it had been
forced by circumstances to take such a measure. This resulted in industrial disputes and mass agitations by the workers.
Answer the following question.
Q1. Discuss the factors that instigated the retrenchment of the skilled workforce of Rolls Royce.
Q2. Analyze the role of HR policies in shaping the image of a company.

Business Communication
Answer the following question.
Q1. What is the time honored conventions for conducting Interviews? (10 marks)
Q2. Write notes on Negotiation Climate (10 marks)
Q3. Mention the 4 P’s of negotiation (10 marks)
Q4. Write a short note on Planning &Drafting Speech (10 marks)
Q5. List the 10 Communication of Improving listening Skill (10 marks)
Q6. List the different Electronic modes of Communication & Explain the mode of Communication (10 marks)
Q7. Explain the 10 Commandments of Communication (10 marks)
Q8. List the measures to overcome Communication barriers. (10 marks)
Human Resource Management
Answer the following question.
Q1. What are the factors affecting Job Design? (10 marks)
Q2. Write short note on Manpower planning? Forecasting manpower requirements (10 marks)
Q3. What are the strategic challenges HRM facing? (10 marks)
Q4. What is compensation? And what are the main objectives of compensation? (10 marks)
Q5. What are the various categories of difficult employees? (10 marks)
Q6. Write short note on Ownership (10 marks)
Q7. Explain Job Description and Job Specification (10 marks)
Q8. What is Human Resource Planning? (10 marks)

International Business
Answer the following question.
Q1. What are the different forms of indirect distribution channel ? (10 marks)
Q2. What is product branding and how does it help ? (10 marks)
Q3. Describe International Product Life Cycle. (10 marks)
Q4. Write down the reasons for investing in foreign markets. (10 marks)
Q5. Describe the functions of financial market. (10 marks)
Q6. Describe principles of trading system. (10 marks)
Q7. What is DDU? (10 marks)
Q8. Explain theory of global competitiveness alignment (10 marks)

Organizational Behaviour
Answer the following question.
Q1. Write a short note on personnel effectiveness. (10
marks)
Q2. Compare and contrast the ‘planned’ and ‘emergent’ approaches to effecting organizational change. (10
marks)
Q3. Using relevant theory, discuss the potential interplay of personal, professional/occupational and organizational
identities in the contemporary workplace. Draw out the management implications.
(10
marks)
Q4. What are the key dimensions that underlie the concept of trust? (10
marks)
Q5. Describe the advantages and disadvantages of the selection interview (10
marks)
Q6. How can managers shape employee behavior? (10
marks)
Q7. List and explain the four ways employees can express job dissatisfaction. (10
marks)
Q8. What do you mean by learning? (10
marks)

Principles and Practice of Management
Case Studies
Case (20
Marks)
Mechano Engineering, a public company limited, with its registered office at Mumbai and plants at Mumbai, Nasik and Bangalore,
was established in 1946. The company manufactures engineering products, with wide range of applications and the customers are
public utilities, private clients, project authorities, etc. Due to recession, the company was stagnant for couple of years but, of late, it
is showing signs of progress. The workers were divided between two different unionsone
of them with a positive outlook towards
the management and the second with a conservative and somewhat hostile approach, which resulted in interunion
rivalry, violence,
work stoppage and, to some extent, risk to their lives. The workers also resorted to go slow, stoppage of work on minor issues rather
frequently. It was observed that the employee’s turnover was also high. Due to recessionary trend, the management decided to reduce
the work force and control the operations, the union and the officers were kept informed. When the final date of layoff and
retrenchment and announced, the workers resorted to strike, violence etc. The management has to protect them by calling in the
security staff. This affected the company’s performance and the news spread like wild fire in the market. The immediate impact of
this was cancellation of the major others by the clients, which further worsened the situation. The General Manager (works) and the
Personnel Manager submitted their resignations due to frustration and not falling in the line with management thinking. They felt the
management was thinking conservative approach and was not bothered about consequences. The marketing staff was demoralized
and many of the junior officers resigned. The management was not able to come out of this vicious circle and was really at a loss to
understand the behavior of the staff.
Answer the following question.
Q1. The management would now like you to study the above situation and give your recommendation to overcome the
present crisis.
Q2. Why the officers were resigning? Justify your answer.
Case (20
Marks)
This case is about the bullfighting sport Jallikattu, which was popular in the south Indian state of Tamil Nadu. Jallikattu was
traditionally played during the annual Pongal celebrations and had a lot of cultural significance. But activists alleged that the sport
caused a lot of deaths and injuries to both the bulls and the participants. In response to the protests against the bullfighting sport, the
Supreme Court of India banned Jallikattu in May 2014. However, the government of India had later lifted the ban on Jallikattu.
Some sections of society and most of the leading political parties supported Jallikattu and argued that it was part of south Indian
culture. But activist groups said that they were determined to continue their fight on bullfighting. In January 2016, India’s Ministry
of Environment and Forests (MEF) issued a notification allowing Jallikattu, a bullfighting sport popular in the south Indian state of
Tamil Nadu, to be held during the annual Pongal season. Jallikattu had earlier been banned by the country’s Supreme Court in
response to a petition by animal rights activists. The decision of the MEF was flayed by animal rights groups who alleged that there
were political motives behind the order. However, all the leading political parties in the state denied that there was any political
motive and said their support for the bullfighting sport was for pure cultural reasons. Despite the calls to ban the bullfighting sport,
Jallikattu received support from some sections of society which considered it as a symbol of south Indian culture and tradition
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Answer the following question.
Q1. Discuss the need to formulate public policy on issues with cultural significance.
Q2. Explain the need of a pragmatic approach to solve issues related to public policy.
Case (20
Marks)
A large dry cleaning operation had a central production facility that was fed by 7 regional dropoff/
pickup
locations. The busy
seasons (i.e., spring and fall) resulted in considerable customer dissatisfaction and loss of business as product turnaround went from
4 and 5 days to 8 and 9 days. This project involved the use of Job Analysis techniques to improve individual productivity, eliminate
bottlenecks in the flow of material, assign to specific people, and increase throughput. We worked in small groups with employees
and managers to brainstorm problems and methods for meeting customer expectations as we needed employees to fully buyin
to the
implementation. Along with cross training, quality checks at each station rather than at the final station, and proper maintenance
techniques that eliminated breakdowns on machines, we were able to implement a production program that guaranteed a 5day
turnaround time throughout the year or the cleaning was free. Most items were returned to the feeder stores in 3 days and the
company was considering an additional advertising program for selected times of the year as a result of this new competitive
advantage. We also created a series of flash reports for alerting managers to problems in the workflow.
Answer the following question.
Q1. Give an overview of the case.
Q2. Discuss how the flow of materials/ throughput was improved
Case (20
Marks)
Bill Corwin was employed by a large bank for several years. He started as a messenger, and then was assigned to a branch. He
progressed in this branch from a bookkeeping clerk to a platform assistant. In this position he had a variety of duties largely
centering on administrative assistance to the officers of the branch. The bank’s many branches were divided regionally, each region
having a group of officers responsible for the branches in that region. Bill was transferred from the branch in which he had worked
for 12 years to a branch in another region. At the time of his transfer he was told that the branch was completely “run down” as to
operational procedures and systems. The branch had a normal complement of 4 officers and 35 staff members. One month prior to
Bill’s transfer, one of the four officers had retired, and two weeks after this retirement the branch manager was hospitalized with a
serious illness. When Bill arrived at his new assignment, he found a rather demoralized situation. Complete lack of interest was
shown by the two remaining officers and the rest of the staff was not properly trained or disciplined. The two officers did not know
Bill, and they were informed by the regional office that he was being assigned to the branch as a platform replacement for only two
weeks. During his first week at the branch Bill discovered that the senior clerks were not qualified to train other staff members,
customer complaints were rampant, there was both a record of excessive absenteeism and excessive overtime, and the branch had
received very poor audit reports by the bank’s internal auditors with the same major exceptions reported on the previous four audits.
After two weeks Bill was called to the regional office and offered the job of operations officer. He was told that he would receive the
official title in two months,. He was also told that the present operations officer, who had held the job at this branch for seven years,
was to be relieved of all operational responsibilities and that he would be instructed to work with Bill until the branch was
functioning effectively. Bill returned to the branch and started on his assignment. He found the former operations officer cooperative
for about one week. Bill then decided to go ahead without the help of the former operations officer. Over the next three months he
worked almost every night until 8:00 or 9:00 p.m. He tried to correct the problems that had developed over several years. The
training of employees involved considerable time, and he found it necessary to release 12 clerks who were causing trouble in various
ways. The remaining staff and replacements started to function smoothly. He received his title as promised. Then the branch
manager returned to work after his prolonged illness. A week after his returned he called Bill to his office and questioned his efforts
in the branch. He told Bill that the former operations officer had mentioned that he was an upsetting influence in the branch, had
fired several good people, did not know his job, and that he left his job early several days a week.
Answer the following question.
Q1. If you were Bill, how would you answer the branch manager?
Q2. Did the regional office handle Bill’s transfer properly? Explain
Q3. What should be done by the regional office now?
Q4. Do you believe that Bill can function effectively as a manager in this branch? Justify.
Public Administration
Answer the following question.
Q1. Explain the Meaning, Scope and Significance of Public Administration, Public and Private Administration, Evolution
of the discipline and its present status
(10
marks)
Q2. Describe the following:Evolution of Indian Administration (10
marks)
Q3. Explain what you understand by Good Governance. Also briefly discuss on the concept and application eGovernance
(10
marks)
Q4. Under the Comparative Public Administration, discuss the Bureaucratic and Ecological models (10
marks)
Q5. Describe the following:Administration
of Medieval India (10
marks)
Q6. Describe the following:Administration
of Modern India(from British Period) (10
marks)
Q7. How Public Administration and Changing role of Bureaucracy play a crucial role as a tool for Development (10
marks)
Q8. In the context of liberalization how effective is Changing role of the Public Sector. (10
marks)
Marketing Management
Answer the following question.
Q1. Explain Test Marketing. (10
marks)
Q2. Explain Sales Promotion Techniques (10
marks)
Q3. Explain Forms of Direct Marketing. (10
marks)
Q4. Discuss the role & importance of physical distribution in the consumer products marketing. (10
marks)
Q5. Explain Significance of Branding. (10
marks)
Q6. Explain Channel conflicts (10
marks)
Q7. Give the steps in launching a new product. Also give various methods of test marketing a new Product. (10
marks)
Q8.
How will you alter the marketing mix –intensity & composition ,as a product is entering the maturity stage in the lifecycle?
How again the marketing mix will have to be modified ,when the same product ,later on, starts showing sales –
decline?
(10
marks)
Marketing Management
Answer the following question.
Q1. What is Inventory Management (10
marks)
Q2. Explain OnLine
marketing (10
marks)
Q3. Explain Warehousing and Inventory Decisions (10
marks)
Q4. Present the major. issues affecting “costs’ in the context of Inventory , management. Explain your views citing
examples
(10
marks)
Q5. A New brand of a ‘Tyre –thatNever
–punctures’ is to be launched in India by a multinational company with your
advice about concept – testing and test marketing
Justify your contention
(10
marks)
Q6. Explain Cobranding
(10
marks)
Q7. What do you mean by the term Physical Distribution? Explain briefly the nature & importation in the sphere of
physical distribution
(10
marks)
Q8. “Ware – housing decision are growingly becoming more critical” . Discuss quoting examples (10
marks)

Supply Chain Management
Answer the following question.
Q1. Give top seven strategies in effective inventory reduction (10 marks)
Q2. Write a difficulties with the traditional beer game (10 marks)
Q3. Describe the evolution of supply chain management (10 marks)
Q4. What are multiple order opportunities? (10 marks)
Q5. Write a short note on customer value measures (10 marks)
Q6. Discuss simulation models and optimization techniques (10 marks)
Q7. Write the impact of the internet on supply chain strategies? (10 marks)
Q8. Write a short note on customer value measures? (10 marks)
Supply Chain Management
Answer the following question.
Q1. Write the impact of the internet on supply chain strategies (10 marks)
Q2. States the issues in international supply chain management. (10 marks)
Q3. Write a note on Warehouse capacities (10 marks)
Q4. Write the impact on transportation & Fulfillment. (10 marks)
Q5. What is importance’s of business processes. (10 marks)
Q6. What do you mean by selecting an appropriate strategy (10 marks)
Q7. Give top seven strategies in effective inventory reduction? (10 marks)
Q8. Write a note on supply chain performance measures? (10 marks)

Business Ethics
Case Studies
Case (20
Marks)
General Motors, the world’s largest automobile manufacturer, accused Japan of currency manipulation giving its automakers a huge
competitive advantage in the US. market and causing significant harm to the US auto industry. The company charged that Japan’s
weak ‘yen policy’ gave its exporters an outright annual subsidy of up to 12,000 dollars per vehicle exported to the United States,
giving an expected windfall of two billion dollars to Japan’s automakers “This subsidy has both facilitated the expansion of Japanese
companies in the US and succeeded in keeping Americanbuilt
automobiles out of Japan,” GM’s chief economist Mustafa
Mohatarem told a congressional hearing. The impact of Japan’s sustained currency manipulation is a key reason for a plethora of
problems facing USowned
automakers, Mohatarem told a USJapan
trade hearing held by the House Representatives’ ways and
means committee “However, it is frustrating, really unbelievable, to many of us in this business and the American manufacturing
sector that the Japanese government’s extraordinary $420 billion currency manipulation program has gone unquestioned and
unchallenged, while China has become the sole focus of attention as the threat to American competitiveness,” he said. Lawmakers
criticized the government for not being tough with Japan on its currency policy and sought an explanation from David Loevinger,
deputy assistant secretary at the US treasury, among other government officials present at the hearing.
Answer the following question.
Q1. Give an overview of the case
Q2. Was the accusation of General Motors against Japan justifiable? Explain.
Case (20
Marks)
What is the biggest bane of the Indian system? Corruption. Statistics and action plan released to PT by the Excise Department (Pune
Zone) testifies to this. Tax evasion for excise duties for the year 20022003
has almost doubled from the previous year, this year it is
Rs. 174 crore. R.K Tewari, Chief Commissioner, Customs and Central Excise, Pune zone says, “We have launched a two year
program. In our first year, we have made an attempt to get the actual evasion figures. Figures till last year were highly understand.
This year we are going to crack the whip on defaulters and we have a toughened action plan for the same.” Another striking feature
is that the collection of arrears is remarkably low. For the year 20012002,
it stood at Rs. 22 crore. However, now with tax evasion
for this year pegged at Rs. 174 crore, the department has fixed a target of Rs. 42 crore for arrears collection. “Our action plan is
especially designed for the same”, says Tewari. Why is collection so lukewarm? “This is basically because of our legal system. Any
defaulter fights us till the apex court and that takes years to sort out,” he explains. As for the corruption in the department, Tewari
says “Some people in the department could be working handinglove
with the defaulters.” Tewari claims that the biggest defaulters
are not the big corporates, but the small and medium scale industries.
Answer the following question.
Q1. What are your view points on the above case?
Q2. What may be the reasons for the lower collection of the arrears of excise tax? Elaborate.
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Case 12 (20
Marks)
Dallas: For the last six months, many Roman Catholic priests have felt like the public face of scandal, in their communities, even
though most had no role in the sex abuse crisis engulfing the church. Now, they say, they face a new concern: whether the blameless
in their ranks will be hurt under the ambitious policy bishops have adopted to keep abusive clergy away from parishioners. Under the
“Charter for the Protection of Children and Young People,” clergymen who molest children will never again be active in church
work, and some will be formally removed from the priesthood. Many priests say they are concerned about the document’s board
definition of abuse, and they question whether the church leaders who approved it have taken enough responsibility for their own
roles in creating the moral emergency. “The policy is driven a lot more by public sentiment than the principle of compassion.” said
the Rev. Robert Silva, Head of the National Federation of priests’ Councils, which claims a membership of about half of the nation
46,000 priests. Since the scandal erupted in January with the conviction of a former Boston priest for molesting a boy, scores of
people have come forward with accusations of sexual abuse by priests and indifference from church leaders. At least 250 priests
have since resigned or been suspended. Silva said priests – already anxious about their interactions with children – we be even more
apprehensive because of the definition of abuse the bishops approved on Friday. Abuse will now be considered as any inappropriate
contact with a child, regardless of whether it involves force, physical contact or whether any harm is apparent. Silva called the
wording “very frightening.” Philadelphia cardinal, Anthony Bevilacqua, who is a canon lawyer, said he too was concerned by the
language and hoped it would be clarified when the document comes under review in two years. “It’s very difficult to come to a
definition,” he said. “It must be something of a serious nature and involve some kind of bodily interaction.” Silva also complained
that the plan contained severe punishments for the priests but no sanctions for bishops who mishandle abuse cases. The bishops have
informed a national governor Frank Keating, to annually review whether church leaders are complying with the policy. Some clergy
said that wasn’t enough. The bishops added a clause saying they “deeply regret that any of our decisions have obscured the good
work of our priests.” But Mondignor Kenneth Lasch, a parish priest and canon lawyer in Paterson, New Jersey, Diocese felt the
apology sounded stilted.
Answer the following question.
Q1. Give an overview of the above case.
Q2. Discuss the moral and ethical issues w.r.t the facts above.
Case (20
Marks)
Since the story broke that VW deliberately buried emissions results in its software, plenty has been written about this case of
corporate malfeasance, perhaps more than any since Enron. The Volkswagen brand crisis seems fairly straightforward to me. With
no mission or values, I contend there is no hope for achieving VW’s goals ethically and in a way to sustain the company. Some
confuse mission statements with other corporate communications that are really marketing taglines and slogans. Mission statements
are not typically external documents, used to convince others of the value the company creates. Rather the most effective mission
statements are largely internal documents, guiding people within an organization about its purpose and paired with a values
statement so that organizations have clarity about both their purpose and how they are going to achieve it. Volkswagen doesn’t have
a mission statement. There were values stated in the 2006 annual report, but they disappeared in future years. A vision statement
dated June 2011 pronounced: “By working in cooperation
with politicians and society, the world of business can play a key part
when it comes to combating serious environmental issues and social inequality. Volkswagen’s main contribution to the project is
related to sustainable mobility.” An analysis by Strategic Management Insight 2013 could find only this goal in lieu of a mission
statement: “The Group’s goal is to offer attractive, safe, and environmentally sound vehicles which can compete in an increasingly
tough market and set world standards in their respective class.” SMI found Volkswagen Group’s goal lacked any statement of values
or philosophy, did not mention customers, employees, or technology. It achieved a score of 1.6 out of a possible 4.5 in SMI’s
evaluation. By 2014, Volkswagen’s annual report talked about its strategy. Still no mission, no values: “Our Strategy 2018 focuses on
positioning the Volkswagen Group as a global economic and environmental leader among automobile manufacturers. We have
defined four goals that are intended to make Volkswagen the most successful, fascinating and sustainable automaker in the world by
2018.” These goals related to innovation, customer satisfaction, sales, profits and employee retention, but say nothing about core
values. In 2010, Volkswagen joined 21 other German automakers in 2010 in agreeing to a “mission statement for responsible actions
in business.” Yet it sill operated without a clear core set of defined beliefs or values to guide VW’s work, or a motivational or reward
system aligned with a mission. While the six principles seem wellintentioned
ecologically, without a welldesigned
system to
support this goal, Volkswagen missed achieving it, and in fact, behaved in a way counter to its stated aspiration. Employees
everywhere roll their eyes through discussions of mission, purpose, and values. For many, uninterested in the larger system they
operate within professionally, they seem bored sitting in long meetings listening to what are for them buzzwords that get in the way
of the real work to be done in any company. Volkswagen was the largest automaker in the world in 2011, offering 13 brands from
Audi to Porsche. That was a few strategies and vision statements ago. Today Volkswagen’s share price is half what it was a year ago,
following a precipitous stock price drop when news of the scandal broke. It’s recently appointed CEO has been reported to take the
same misleading software design approach during his time at Porsche. No surprise, given that he was working in the same
purposeless company, without an articulated set of values to guide his work. Much more will likely be written about VW and, as it
not is its first corporate scandal; perhaps the company’s epitaph is in the works. Bottom line: no mission, no hope.
Answer the following question.
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Q1. Discuss why the effective mission statements should be paired with a values statement.
Q2. Give your views on the case and sustainability.

Human Resource Management
Case Studies
CASE STUDY (20
Marks)
In today’s rapidly changing business environment, organizations have to respond quickly to requirements for people. Hence, it is
important to have a welldefined
recruitment policy in place, which can be executed effectively to get the best fits for the vacant
positions. Selecting the wrong candidate or rejecting the right candidate could turn out to be costly mistakes for the organization.
Selection is one area where the interference of external factors is minimal. Hence the HR department can use its discretion in
framing its selection policy and using various selection tools for the best results. Most of the organizations now know the importance
of having an effective recruitment and selection policy. The importance of a good selection process that starts with gathering
complete information about the applicant from his application form and ends with inducting the candidate into the organization.
Answer the following question.
Q1. What is the importance of having an effective recruitment and selection policy in an organization?
Q2. Explain the recent trends that have influenced the process of recruitment and selection in an organization.
Q3. What are the various challenges faced by organizations in the process of recruiting and selecting employees
Q4. Give an overview off the case.
CASE STUDY (20
Marks)
The president of the Academy Employment Service has inaugurated a Management by Objectives program in order that more
accurate appraisals may be made of professional personnel. Frank Bank, an employment interviewer, has for the past year
established relations with Small Business College, a privately run school in the southern part of the state. It graduates about 25
people per month and Bank had agreed to place as many of those who wanted placement in trainingrelated
jobs. Between 15 and 20
people per month signed up for this service. When the president asked Bank to prepare objectives for his job, this seemed to be one
of the easy places to do it. Inasmuch as Bank was now placing about 35 percent of the applicants, the president asked if he thought
he could raise this to 50 percent. Bank assured him that he could. In reviewing Bank’s accomplishments at the end of the 6month
period, it was concluded by the personnel unit that Bank was placing only 5 to 7 percent of the graduates in trainingrelated
jobs.
Several lengthy and heated discussions took place regarding just what was meant by trainingrelated.
Bank considered any job to be
trainingrelated,
while the personnel unit contended that the job content had to bear some relationship to the training acquired in
school. Moreover, if the placed student quit before 90 days of work, the personnel unit would not classify this as a successful
placement. Continuous documentation of Bank’s 5 to 7 percent performance against the 50 percent objective led to Bank’s serious
consideration of early retirement.
Answer the following question.
Q1. Is this objective a wellstated
one? Why or why not?
Q2. If you were the president, how would you resolve the dispute between Bank and the personnel unit?
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CASE STUDY (20
Marks)
Many domestic and international IT and ITES companies are facing a talent crunch in India due to the lack of quality manpower.
Infosys, Wipro, IBM are some of the companies that are facing the problem of talent shortage. In October 2006, Ram Shriram, a
founding board member of Google Inc. said that the company faced a challenge of finding candidates with the right skill sets in
India, when compared to other parts of the world. He cited the shortage of web development skills, web design technology
professionals, and the need for more talented middlelevel
managers. Analysts pointed out that these remarks were a further
indication of the impending talent shortage in the Indian IT sector. NASSCOM had estimated that, by 2010, India could face a
shortfall of 500,000 IT professionals. It was believed that this could seriously threaten India’s position as a leading provider of IT
and ITES services. According to NASSCOM, every year over 3 million people (graduates and post graduates) are added to the
workforce in India. Of these, only 25 percent of technical graduates and 1015
percent of other graduates are considered employable
by the growing IT and ITES sectors.
Answer the following question.
Q1. Discuss why only about 25% technical and 10% other graduates are found employable in India.
Q2. Give details of the measures required to be taken by India to enhance the employability of fresh graduates.
CASE STUDY (20
Marks)
This project involved improving the customer service skills, interpersonal skills, and sales closing ratios of the plumbers. The
employees were paid minimum wage but received a commission on sales that resulted in the top 5 of the 20 plumbers making over
$100,000 per year, 10 plumbers earning between $50,000 and $70,000 per year and 5 plumbers earned significantly below $50,000
per year. Having extensively analyzed the sales tactics of the top 5 plumbers, we were able to isolate the best practices of their
closing techniques and incorporate those techniques into a training program. Before the training program, the top plumbers closed
about 7 out of 10 clients, while the middle group closed about 4 out of 10, and the bottom group closed an average of 2 out of 10
clients. After the program, there was relatively no change in the closing ratios of the top plumbers, as was expected. In fact, we used
the top plumbers as “instructors” during the program to provide evidence that the material presented was not just theory. However,
the Blevel
plumbers began closing an average of 6 out of 10 customers and the Clevel
producers, who were still closing around 2
out of 10 clients, were targeted for termination. We subsequently worked for a few months with the Sales Manager to provide regular
weekly phone coaching of the Blevel
plumbers to reinforce the skills from the training and to ensure that they didn’t slip back into
their old “sales comfort zones.”
Answer the following question.
Q1. Give the reasons for earning significantly low by the 5 out of 20 plumbers.
Q2. Discuss the likely qualities of the plumbers earning much more than others.
Q3. Why the training program was proposed by the project team?
Q4. Discuss the outcome of the training and using top plumbers as instructors.

International Business
Case Studies
CASE STUDY (20
Marks)
Mahindra & Mahindra (M & M) is a major player in the tractor and certain segments of the automobile market in India. After an
impressive growth for a few years, the tractor market in India has been stagnating during 19981999
to 20002001.
M & M has been
selling its tractors and utility vehicles in foreign markets including USA. Some of the components for its products have been sourced
from abroad. M & M has a 100 per cent subsidiary in USA, Mahindra USA, with a strong network of 100 dealers. Mahindra has a
five per cent market share in the US market in the 2030
horse power (HP) range. As a part of the strategy aimed at building a global
supply chain, Mahindra USA has signed a memorandum of understanding (MoU) with the Korean tractor major Tong Yang, a part of
the $ 2 billion Tong Yang Moolsam group, according to which Mahindra will source high horse power (mostly 2540
hp range) and
sell them around the world under the M & M brand name. To start with, the premium range of tractors will be sold in the US. M &
M’s current tractor range is more utilityoriented
and lacks the aesthetic appeal that Tong Yang’s tractors have a must for a strong
presence in the US market.
Answer the following question.
Q1. What are the advantages and disadvantages of global sourcing?
Q2. How will the foreign market expansion help M & M?
Q3. How does the strategic alliance with Tong Yang benefit M & M?
Q4. What are the possible risks of the alliance? How can they be overcome/ minimized?
CASE STUDY (20
Marks)
The case discusses UK based tobacco company British American Tobacco (BAT) business strategies in South Korea. One of the
largest tobacco companies in the world, BAT operated in more than 180 countries. South Korea was a tough market and several
multinational companies, which had found success in many countries across the world, were unsuccessful when it came to South
Korea. In such a scenario, BAT not only managed to enter the highly monopolized tobacco market in Korea, but also carved a niche
for itself and became the second largest player within few years. BAT entry into the market coincided with the macroeconomic
changes and liberalization in the country. By taking advantage of these changes, BAT was able to establish itself firmly in the
market. By gaining thorough understanding of the market, BAT introduced several new products with low tar content for the Korean
consumers. However, by early 2007, with changing attitudes towards smoking and increasing prices of tobacco, industry experts felt
that BAT could be in for some tough times ahead.
Answer the following question.
Q1. Analyze the entry and expansion strategies of BAT in South Korea.
Q2. Examine the localization strategies of BAT in South Korea.
Q3. Examine the challenges faced by BAT in South Korea.
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CASE STUDY (20
Marks)
The case focuses on how retailing giant WalMart
struggled in the Japanese market. It was the reason of WalMart’s
decision to go
global in the early 1990s. The case is about WalMart’s
entry strategy and describes its efforts to bring in its best practices in retailing
like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu. There were the
problems that WalMart
faced in Japan because of the differences between the operational and cultural environment in its home
market and the Japanese market. It finally ends with a discussion on the company’s future prospects in Japan.
Answer the following question.
Q1. Discuss the precautions to be taken for an entry strategy to an overseas market.
Q2. Explain the reasons for the success of a company in such markets
CASE STUDY (20
Marks)
The case examines the ‘China Strategy’ of Danfoss, the Danish heating, ventilation and air conditioning equipment manufacturer. It
describes the reasons why Danfoss entered the Chinese market and the initial hurdles faced by the company. Danfoss plans to make
China its ‘second home’ after Europe. The company had been making losses in the country until 2001, after which the company
broke even and started making profits. Danfoss had set a sales target of US$ 480 million in China by 2008. The company followed
the strategies to turn its operations profitable, whether the company will be able to achieve its 2008 revenue target or not.
Answer the following question.
Q1. Examine the advantages and disadvantages of doing business in China.

Marketing Management
Case Studies
CASE STUDY (20
Marks)
Ford Motors (Ford), one of the biggest manufacturers of automobiles in the US lost could not sustain its Lincoln brand due to
mismanagement. The company Concentrated more on its trucks division for profits and let its luxury car business slide. It faced
falling sales and profits due to a bloated product line, which was out of sync with the market. To get back to its former eminence,
Ford initiated the rebranding of its Lincoln luxurycar
brand.
Answer the following question.
Q1. Explain the concepts of brand, brand image and brand loyalty in the context of Ford.
CASE STUDY (20
Marks)
CocaCola
Company was universally recognized as a market leader in soft drinks with worldwide revenue of $23.1 billion and
presence in over 200 countries (2006). The Company manufactured beverage concentrates and syrups. The CocaCola
Company
owned four of the world’s top five softdrink
brands, which included CocaCola,
Diet Coke, Fanta and Sprite. In America, sales of
carbonated drinks declined a little in 2005 as government campaigns and media coverage raised concerns over obesity. Bottled teas
and nutritionenhancers
were big opportunities for CocaCola.
Sales of bottled teas were growing steadily and nutrient drinks had a
market of about $1 billion by 2006. According to a study conducted by the National Center for Health Statistics, Americans opted
for a healthy alternative to their daily dose of energy instead of carbonated drinks. The study prompted CocaCola
to go in for the
calorie burning Enviga. On 6th November, 2006, CocaCola
along with Nestlé launched Enviga, a Nestea carbonated canned greentea
drink. Enviga burnt 60 to 100 calories per three 12ounce
cans in healthy adults aged between 1835
years. For overweight
Americans, the release of Enviga was meant to bring good news. According to CocaCola,
Enviga helped in reducing obesity. But
according to doctors green tea was unlikely to make anyone shrink, so the Center for Science in the Public Interest, an organization
that focuses on health and nutrition issues in US sued CocaCola
and Nestle for their ad campaign of Enviga but the company had no
plans to change its claims. In the recent past CocaCola
had already faced two softdrink
flops out of their four releases in the form
of CocaCola
C2 and Vanilla Coke. What would CocaCola’s
strategy be with the new drink? Would it be able to make it a success
despite the initial controversy that surrounded it? Would consumers take to Enviga?
Answer the following question.
Q1. Discuss the trouble faced by CocaCola
in 2005.
Q2. Debate CocaCola’s
marketing strategies for Enviga and discuss whether ColcaCola
will succeed in its new
product.
CASE STUDY (20
Marks)
In 1975, HLL launched its first fairness cream under the F&L brand. With the launch of F&L, the market, which was dominated by
Ponds (Vanishing Cream and Cold Cream) and Lakme (Sunscreen Lotion), lost their dominant position. The dominance of HLL’s
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F&L continued till 1998, when CavinKare launched its Fairever cream in direct competition with F&L. In June 1999, the FMCG
major Hindustan Lever Ltd. (HLL) announced that it would offer 50% extra volume on its Fair & Lovely (F&L) fairness cream at
the same price to the consumers. This was seen by industry analysts as a combative initiative to prevent CavinKare’s Fairever from
gaining popularity in retail markets. HLL’s scheme led to increased sales of F&L and encouraged consumers to stay with F&L and
not shift to the rival brand. In December 1999, Godrej Soaps created a new product category fairness
soaps by
launching its Fair
Glow Fairness Soap. The product was successful and reported sales of more than Rs. 700 million in the first year of its launch.
Godrej extended the brand to fairness cream by launching FairGlow Fairness Cream in July 2000. By 2001, CavinKare’s Fairever
fairness cream, with the USP of ‘a fairness cream with saffron’ acquired a 15% share, and F&L’s share fell from 93% (in 1998) to
76%. Within a year of its launch, Godrej’s Fair Glow cream became the third largest fairness cream brand, with a 4% share in the Rs.
6 billion fairness cream market in India. he other players, including J.L. Morrison’s Nivea Visage fairness cream and Emami Group’s
Emami Naturally Fair cream, had the remaining 5% share. Clearly, the fairness cream and soaps market was witnessing a fierce
battle among the three major players HLL,
CavinKare, and Godrej each
trying to woo the consumer with their attractive schemes.
Answer the following question.
Q1. Give reasons for the loss of the dominant position of Ponds (Vanishing Cream and Cold Cream) and Lakme
(Sunscreen Lotion) in the market.
Q2. Who were the major players of fairness ream? Describe the marketing strategy adopted by by Hindustan Lever
Ltd. (HLL) to gain popularity in retail market.
CASE STUDY (20
Marks)
The Indian watch industry was in a state of flux and market leader ‘Titan’ had to gear up its marketing strategies to retain its brand
positioning. Titan as a brand had established itself for its style and choice of design. Titan’s clear segmentation strategy had served it
well and the challenge Titan faced was to combat the onslaught of popular international brands like Rado and Rolex. Would Titan be
able to match up by leveraging on its brand equity?
Answer the following question.
Q1. State the challenges faced by an Indian watch brand due to the entry of foreign players
Q2. Analyze the impact of brand equity for market sustenance.

Principles and Practice of Management
Case Studies
Case (20
Marks)
A manufacturing company was importing raw material for production. The company was incurring huge losses due to delay in
import clearance of raw material. Custom had introduced a new system of clearance through EDI. Mr. Rajan, who was an old
employee of the company, was the in charge of clearance team. He was very diligent, honest and an asset to the company. But
somehow, he was reluctant to switch over to electronics clearance system of customs. He firmly believed in custom clearances of
stores through hard copies of Bill of entry. He was due for promotion. But his later performance was denying him the promotion.
Company wanted to help him.
Answer the following question.
Q1. What may be the reason for adopting the same old procedure by Mr. Rajan? Discuss.
Q2. As a HR Manager, how will you help Rajan so he does not loose promotion? Explain.
Case (20
Marks)
You are the head of a large department and several supervisors report to you. Recently you were confronted with a knotty problem. It
seems that one of the supervisors had gotten into a loud and disagreeable argument with an employee. You called the supervisor to
your office to hear his story. The supervisor admitted losing his temper and shouting at the employee, but he believed it was justified.
He had been observing the employee over the year the man had been with the company. During this period the employee had been
frequently late, and his absentee rate was above average. In addition, the supervisor went on to say that the employee was a
socializer on the job, frequently leaving his work to talk to other employees and to use the telephone for personal calls. The
supervisor then said that the proverbial last straw caused his outburst. The employee had come in late, and after about an hour of
work he made a telephone call which the supervisor had timed as lasting 14 minutes. The supervisor then started his tirade. The
employee denied being on the telephone that long, the supervisor called him a liar, and they continued the vituperative exchange
which ended when you called the supervisor to your office. After listening to the supervisor, you asked him if he had disciplined the
employee before, since apparently he had a poor record. You also asked if the employee had been placed on probation or had been
warned. The supervisor looked at you sheepishly and seemed reluctant to answer. You pressed him, for an answer, and he finally
blurted out that he was afraid to discipline the employee because he was black. He stated that the impression he had from you and
higher management was that black employees should be given special treatment so that they would feel welcome and not
discriminated against. He felt the company wanted to impress the public with its forwardlooking
employment practices and didn’t
want any trouble with the black community. As a result, he was lax in discipline and had kept a handsoff
approach with all black
employees until his outburst. He said he couldn’t stand it anymore, and the 14mintue
telephone call caused him to lose his temper.
Answer the following question.
Q1. Why would a supervisor find it difficult to communicate with a black employee?
Q2. Could the company have done anything to offset the misunderstanding the supervisor apparently had about the
treatment of black employees?
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Q3. To what extent did the supervisor’s lack of communication encourage the employee to think his behavior was
satisfactory? Explain.
Q4. What would you now tell the supervisor?
Case (20
Marks)
National Printers LTD, is a nationwide company engaged in printing and packaging industry with a market share of around 20 per
cent. Its corporate office at Mumbai, is a buzz with the appointment of director, personnel, Mr.Shashikant and today he’s to present
his ideas in first meeting he has called. The meeting attended by three VicePresident,
heads of finance, marketing and around 45
managers, started and he was called upon to present his views. Mr.Shashikant started, “my division is responsible for developing
performance standards evaluation and personnel development of line managers. I want to specially focus on larger issue of
developing their abilities the company has relied upon evaluation by superiors and personnel department. But may I suggest, that the
performance of the manager should be evaluated by adding one more element, i.e., information obtained from their subordinates.”
He added, “I propose a procedure for obtaining information on key parameters as viewed by the subordinates. The procedure is
simple. Each manager and his subordinates will meet in presence of personnel trainer and discuss the concept. One trainer would
then complete a question which would indicate his/her expertise, people skills, functional skills, etc. the subordinates will judge the
manager on numerical scale and also provide base for such rating. The responses should be kept anonymous, if desired”. “Once all
the information is received, trainers will meet managers, brief them and discuss. The purpose is to develop a plan where provisions
of corrective actions, training programs and skill enhancement can be suggested”. Mr.Shashikant concluded by reaffirming that the
exercise will provide valuable information and feedback and also help managers to develop themselves. He said once the offer is
accepted, standards for performance shall be developed by the top management and then further steps would be taken.
Answer the following question.
Q1. As a manager with this company. What’s your reaction to this offer?
Q2. Give reasons, if you agree for training on skill development based on the performance report
Case (20
Marks)
The president of Simplex Mills sat at his desk in the hushed atmosphere, so typical of business offices, after the close of working
hours. He was thinking about Rehman, the manager incharge
of purchasing, and his ability to work with George, the production
manager, and Vipulabh, the marketing and sales manager in the firm. When the purchasing department was established two years
ago, both George and Vipulabh agreed with the need to centralize this function and place a specialist in charge. George was of the
view that this would free his supervisors from detailed ordering activities. Vipulabh opined that the flow of materials into the firm
was important enough to warrant a specialized management assignment. Yet since the purchasing department began operating it has
been precisely these two managers who have had a number of confrontations with the new purchase manager, and occasionally with
one another, in regard to the way the purchasing function in being carried out. From George’s point of view, instead of simplifying
his job as production manager by taking care of purchasing for him, the purchasing department has developed a formal set of
procedures that has resulted in as much time commitment on his part as he had previously spent in placing his orders directly with
vendors. Further, he is specially irritated by the fact that his need for particular items or particular specification is constantly being
questioned by the purchasing department. When the department was established, George assumed that the purchasing manager was
there to fill his needs, not to question them. As Vipulabh sees it, the purchasing function is an integral part of marketing function,
and the two therefore need to be jointly managed as a unified process. Purchasing function cannot be separated from a firm’s overall
marketing strategy. However, Rehman has attempted to carry out the purchasing function without regard for this obvious relationship
between his responsibilities and those of Vipulabh, thus making a unified marketing strategy impossible. In his previous position,
Rehman had worked in the purchasing department of a firm considerably larger than Simplex. Before being hired, he was
interviewed by all the top managers, including George and Vipulabh, but it was the president himself who negotiated the details of
the job offer. As Rehman sees it, he was hired as a professional to do a professional job. Both George and Vipulabh have been
distracting him from this goal by presuming that he is somehow subordinate to them, which he believes is not the case. The people in
the production department, who use the purchasing function most, have complained about the detail that he requires on their
requisitions. But he has documented proof that materials are now being purchased much more economically than they were under
the former decentralised system. He finds Vipulabh’s interests more difficult to understand, since he sees no particular relationship
between his responsibilities for efficient procurement, and Vipulabh’s responsibilities to market the firm’s products. The president
has been aware of the continuing conflict among three managers for some time, but on the theory that a little rivalry is healthy and
stimulating, he has felt that it was nothing to be unduly concerned about. But now that much of his time is being taken up by much
of what he considers to be petty bickering, the time has come to take some positive action.
Answer the following question.
Q1. Is George’s view of the situation realistic? Explain
Q2. How do you evaluate Vipulabh’s position? Elaborate.
Q3. How might this conflict be associated with factors in the formal organization?
Q4. What should the president of Simplex Mills do now? Explain


JAIPUR UNIVERSITY MBA EXAM ANSWERS PROVIDED

JAIPUR UNIVERSITY MBA EXAM ANSWERS PROVIDED. CONTACT: DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

ACCOUNTING FOR MANAGERS
SECTION-A
Q.1 Answer the following questions (Attempt
any six)
6×5=30
(i) Distinguish between cash basis of accounting
and Accrual basis of Accounting.
(ii) Write notes on.
(a) Kaizen Costing
(b) Activity based costing.
(iii) Write down the different uses and sources of
funds.
(iv) What are the different methods of calculating
depreciation.
(v) What are the advantages of responsibility
accounting?
(vi) Differentiate between cash flow and fund flow
analysis.
(vii) How does ratio analysis help management in
control?
MBA-201
(viii) What are ‘final accounts’ and their uses/ What
should be the period for their preparation.
(ix) What is Zero based budgeting and what are the
steps involved in it.
(x) What is a Balance sheet? How is it different
from a Trail Balance?
SECTION-B
Attempt any four questions(word limit 300) 10×4=40
Q.2 What is a fund flow statement why, how and
when is it prepared.
Q.3 What is the basic difference between Basic
Accounting Concepts & fundamental
convention of Accounting
Q.4 What are final accounts state the difference
between a trading and a manufacturing
account?
Q.5 What is a break-even analysis? Into what two
parts are semi-variable costs split and why?
Q.6 What is zero-base budgeting state the benefits
and criticisms of ZBB.
Q.7 Write notes on:-
(a) Human Resource Accounting.
(b) Activity Based Costing.
Q.8
Consider the following balance sheet from the
books of Jan as on 31st Dec. 2004 prepare a
work sheet for final Accounts.
Capital 20000 Office
salaries
6600
Debtors 8000 Rent 3900
Creditors 10000 Trade
expenses
2300
Purchases 60000 Furniture 10000
Sales 80000 Cash in
Hand
2400
Opening
Stock
12000 Drawings 4800
Adjustments.
1 Salaries outstanding for Dec 2004 is Rs 600.
2 Rent paid in Advance for Jan 2005 Rs 300
3 Depreciation on furniture @10% p.a.
4 Provide interest on capital for the year @5%
p.a.
5 Stock on 31st December 2004 Rs 14,000
Also prepare the final Accounts.

Roll No.:____________ Total Printed Pages:-2
MBA II YEAR
(COMMON PAPER FOR ALL SPECIALIZATIONS)
(QUANTITATIVE TECHNIQUES)
Tim: 3 Hours Max. Marks: 70
The Question paper is in two sections-A & B. Section-A consists of 10 short answer type
question of 5 marks each (word limit 100 words). Attempt any SIX questions form section-A.
Section-B consists of 7 descriptive type questions of 10 marks each (word limit 300 words).
Students are required to attempt any FOUR questions from Section-B. If necessary use graphs,
charts and diagrams to explain your answer.
——————————————————————————————————-
SECTION-A
Q.1 Answer the following question (word limit
80 to 100 words)
6×5=30
(i) What is the principle of duality?
(ii) What do you mean by probability distribution?
(iii) Distinguish between co-relation and
regression.
(iv) What are the uses of decision tree?
(v) State the advantages of assignment problem.
(vi) State the steps in the demand forecasting
process.
(vii) Explain the concept of perfect information.
(viii) What do you mean by random variables?
(ix) What are the applications of simulation?
(x) Distinguish between monopoly and
monopolistic competition.
MBA – 202
SECTION-B
Attempt any four questions (word limit 300
words)
Q.2 Discuss the assumptions of linear
Programming. What are its applications?
Q.3 Reduce the following game by dominance rule
and find the game value:
Player B
B1 B2 B3 B4
A1 3 2 4 0
A2 3 4 2 4
A3 4 2 4 0
A4 0 4 0 8
Q.4 Find the optimal assignment for the following
cost matrix:
Salesmen Territories
A1 A2 A3 A4
S1 35 27 28 37
S2 28 34 29 40
S3 35 24 32 33
S4 24 32 25 82
Q.5 What is meant by profit? Explain various types
of profits.
Q.6 What do you mean by ABC Analysis, explain
with example
Q.7 What do you mean by Perfect competition,
explain with example
Q.8 Define capital budgeting. Discuss the
significance of capital budgeting.

QUANTITATIVE TECHNIQUES

SECTION-A
Q.1 Answer the following question (word limit
80 to 100 words)
6×5=30
(i) What is the principle of duality?
(ii) What do you mean by probability distribution?
(iii) Distinguish between co-relation and
regression.
(iv) What are the uses of decision tree?
(v) State the advantages of assignment problem.
(vi) State the steps in the demand forecasting
process.
(vii) Explain the concept of perfect information.
(viii) What do you mean by random variables?
(ix) What are the applications of simulation?
(x) Distinguish between monopoly and
monopolistic competition.
MBA – 202
SECTION-B
Attempt any four questions (word limit 300
words)
Q.2 Discuss the assumptions of linear
Programming. What are its applications?
Q.3 Reduce the following game by dominance rule
and find the game value:
Player B
B1 B2 B3 B4
A1 3 2 4 0
A2 3 4 2 4
A3 4 2 4 0
A4 0 4 0 8
Q.4 Find the optimal assignment for the following
cost matrix:
Salesmen Territories
A1 A2 A3 A4
S1 35 27 28 37
S2 28 34 29 40
S3 35 24 32 33
S4 24 32 25 82
Q.5 What is meant by profit? Explain various types
of profits.
Q.6 What do you mean by ABC Analysis, explain
with example
Q.7 What do you mean by Perfect competition,
explain with example
Q.8 Define capital budgeting. Discuss the
significance of capital budgeting.


Quantitative Techniques Exam Answer sheet

QUANTITATIVE TECHNIQUES Answer Sheet provided

Q.1 Answer the following question (word limit
80 to 100 words)
6×5=30
(i) What is the principle of duality?
(ii) What do you mean by probability distribution?
(iii) Distinguish between co-relation and
regression.
(iv) What are the uses of decision tree?
(v) State the advantages of assignment problem.
(vi) State the steps in the demand forecasting
process.
(vii) Explain the concept of perfect information.
(viii) What do you mean by random variables?
(ix) What are the applications of simulation?
(x) Distinguish between monopoly and
monopolistic competition.
MBA – 202
SECTION-B
Attempt any four questions (word limit 300
words)
Q.2 Discuss the assumptions of linear
Programming. What are its applications?
Q.3 Reduce the following game by dominance rule
and find the game value:
Player B
B1 B2 B3 B4
A1 3 2 4 0
A2 3 4 2 4
A3 4 2 4 0
A4 0 4 0 8
Q.4 Find the optimal assignment for the following
cost matrix:
Salesmen Territories
A1 A2 A3 A4
S1 35 27 28 37
S2 28 34 29 40
S3 35 24 32 33
S4 24 32 25 82
Q.5 What is meant by profit? Explain various types
of profits.
Q.6 What do you mean by ABC Analysis, explain
with example
Q.7 What do you mean by Perfect competition,
explain with example
Q.8 Define capital budgeting. Discuss the
significance of capital budgeting.


ACCOUNTING FOR MANAGERS ANSWER

ACCOUNTING FOR MANAGERS ANSWERS PROVIDED

SECTION-A
Q.1 Answer the following questions (Attempt
any six)
6×5=30
(i) Distinguish between cash basis of accounting
and Accrual basis of Accounting.
(ii) Write notes on.
(a) Kaizen Costing
(b) Activity based costing.
(iii) Write down the different uses and sources of
funds.
(iv) What are the different methods of calculating
depreciation.
(v) What are the advantages of responsibility
accounting?
(vi) Differentiate between cash flow and fund flow
analysis.
(vii) How does ratio analysis help management in
control?
MBA-201
(viii) What are ‘final accounts’ and their uses/ What
should be the period for their preparation.
(ix) What is Zero based budgeting and what are the
steps involved in it.
(x) What is a Balance sheet? How is it different
from a Trail Balance?
SECTION-B
Attempt any four questions(word limit 300) 10×4=40
Q.2 What is a fund flow statement why, how and
when is it prepared.
Q.3 What is the basic difference between Basic
Accounting Concepts & fundamental
convention of Accounting
Q.4 What are final accounts state the difference
between a trading and a manufacturing
account?
Q.5 What is a break-even analysis? Into what two
parts are semi-variable costs split and why?
Q.6 What is zero-base budgeting state the benefits
and criticisms of ZBB.
Q.7 Write notes on:-
(a) Human Resource Accounting.
(b) Activity Based Costing.
Q.8
Consider the following balance sheet from the
books of Jan as on 31st Dec. 2004 prepare a
work sheet for final Accounts.
Capital 20000 Office
salaries
6600
Debtors 8000 Rent 3900
Creditors 10000 Trade
expenses
2300
Purchases 60000 Furniture 10000
Sales 80000 Cash in
Hand
2400
Opening
Stock
12000 Drawings 4800
Adjustments.
1 Salaries outstanding for Dec 2004 is Rs 600.
2 Rent paid in Advance for Jan 2005 Rs 300
3 Depreciation on furniture @10% p.a.
4 Provide interest on capital for the year @5%
p.a.
5 Stock on 31st December 2004 Rs 14,000
Also prepare the final Accounts.