Case Problems:
1. Company X is facing a lot of problems these days. It manufactures white goods like
washing machines, microwave ovens, refrigerators and air conditioners. The company’s
margins are under pressure and the profits and market share are declining. The
production department blames marketing for not meeting sales targets and marketing
blames production department for producing goods, which are not of good quality
meeting customers’ expectations. The finance department blames both production and
marketing for declining return on investment and bad marketing.
What quality of management do you think the company is lacking? Explain briefly. What steps
should the company management take to bring the company back on track?
2. A company wants to modify its existing product in the market due to decreasing sales. You
can imagine any product about which you are familiar. What decisions/steps should each
level of management take to give effect to this decision?
3. A firm plans in advance and has a sound organization structure with efficient supervisory
staff and control system. On several occasion it finds that plans are not being adhered to. It
leads to confusion and duplication of work. Advise remedy.
These activities are meant to reinforce concepts and to make the learning joyful. They also
aim to give pupils simulated experiences of the managerial activities relevant to their level of
understanding.
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‘F’ limited was engaged in the business of food processing and selling its products under a popular brand.
Lately the business was expanding due to good quality and reasonable prices. Also with more people
working the market for processed food was increasing. New players were also coming to cash in on the
new trend. In order to keep its market share in the short run the company directed its existing workforce
to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of
the workers declined. Sometimes the subordinates had to work for more than one superior resulting
in declining efficiency. The divisions that were previously working on one product were also made to
work on two or more products. This resulted in a lot of overlapping and wastage. The workers were
becoming undisciplined. The spirit of teamwork, which had characterized the company, previously was
beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products
was beginning to decline and market share was on the verge of decrease. Actually the company had
implemented changes without creating the required infrastructure.
Questions:
1. Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by
the company.
2. Explain these principles in brief.
3. What steps should the company management take in relation to the above principles to restore the
company to its past glory?
Problem 2 (Related to case problem –1)
The management of company ‘F’ Limited now realized its folly. In order to rectify the situation it
appointed management consultant ‘M’ consultants to recommend a restructure plan to bring the company
back on the rails. ‘M’ consultants undertook a study of the production process at the plant of the company
‘F’ limited and recommended the following changes —
1. The company should introduce scientific management with regard to production.
2. Production Planning including routing, scheduling, dispatching and feedback should be implemented.
3. In order to separate planning from operational management ’Functional foremanship’ should be
introduced.
4. ‘Work study’ should be undertaken to optimize the use of resources.
5. ‘Standardization’ of all activities should be implemented to increase efficiency and accountability.
6. To motivate the workers ‘Differential Piece Rate System’ should be implemented.
7. The above changes should be introduced apart from the steps recommended in case problem-1 (as an answer to
question no 3 of that case problem). It was expected that the changes will bring about a radical transformation in the
working of the company and it will regain its pristine glory.
Questions:
1. Do you think that introduction of scientific management as recommended by M consultants will result in intended
Outcome?
2. What precautions should the company undertake to implement the changes?
Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.
