Case Study – 16
Kiran Industries is a company dealing in office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important, many alternatives were generated for the purpose and were thoroughly discussed amongst the members of the organisation. After evaluating the various alternatives, Sukhvinder, the Managing Director of the company, decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.
Name the framework, which the diversified organisation should adopt, to enable it to cope with the emerging complexity?
Answer
Divisional structure
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Case Study – 17
Staffing
Alpha Enterprises is a company manufacturing water geyser. The company has a functional structure with four main functions - Production, Marketing, Finance and Human Resource. As the demand for the product grew, the company decided to hire more employees.
Identify the concept which will help the Human Resource Manager in deciding the actual number of persons required in each department.
Answer
Workload analysis.
Case Study – 18
Sahil, the director of a garments company, is planning to manufacture bags for the utilisation of waste materials from one of his garments units. He decided that his manufacturing unit will be set up in the rural area of Odisha where people have very less job opportunities and labour is available at a very low rate. He also thought of giving equal opportunities to men and women.
For this, he selected S. Chatterjee, Inderjeet Kaur, Aslam and Sarabjeet as heads of the Sales, Accounts, Purchase and Production Departments.
- Identify and state the next two steps that Sahil has to follow in the staffing process after selecting the above heads.
Answer:
- Placement and Orientation:
- Training and Development:
Case Study – 19
Directing
Mr. Shubhendu Bose is the owner of Bikmac Enterprises carrying on the business of manufacturing various kinds of biscuits. There was a lot of discontentment in the organisation and the targets were not being met. He asked his son, Naval, who had recently completed his MBA, to find out the reason.
Naval found that all the decision-making of the enterprise were in the hands of his father. His father didn’t believe in his employees. As a result, both the employer and the employees were not able to understand each other’s messages in the same sense. Thus, the employees were not happy, and targets were not met.
Identify any two communication barriers because of which Bikmac Enterprises was not able to achieve its target.
State one more barrier each of the types identified in (1) above.
Answer:
- Organisational barriers: Organisational Policy
- Psychological barriers: Distrust.
Organisational barriers: Status:
Psychological barriers: Premature evaluation:
Case Study – 20
Rajat, a sales manager, achieved his sales targets one month in advance. This achievement was displayed on the notice board and a certificate for the best performance was awarded to him by the CEO of the company.
- Name the incentive provided to Rajat.
- Identify the type of incentive.
- List two other incentives of the type identified in part (2).
Answer:
- Recognition.
- Non-financial incentive.
- Job security and Status.
Case Study – 21
Controlling
Hina Sweets is a renowned name for quality sweets since 1935. Harsh the owner of Hina Sweets was worried as the sales had declined during the last three months. When he enquired from the Sales Manager, the Sales Manager reported that there were some complaints about the quality of sweets. Therefore, Harsh ordered for sample checking of sweets.
Identify the step taken by Harsh that is related to one of the functions of management.
Answer:
Measurement of actual performance is the step in controlling process being described.
Case Study – 22
‘AS Ltd.’ is a large company engaged in assembling of air-conditioners. Recently the company had conducted the ‘Time’ and ‘Motion’ study and concluded that on an average, a worker can assemble ten air-conditioners in a day. The target volume of the company in a day is assembling of 1,000 units of air-conditioners. The company is providing attractive allowances to reduce labour turnover and absenteeism. All the workers are happy. Even then the assembling of air-conditioners per day is 800 units only. To find out the reason, the company compared actual performance of each worker and observed through CCTV that some of the workers were busy in gossiping.
Identify the function of management discussed above.
State the steps in the process of the function identified which are discussed in the above paragraph.
Answer:
Controlling.
The steps involved in the process of controlling:
- Setting standards of performance:
- Measurement of actual performance:
- Comparison of actual performance with the standards:
- Analysing deviations:
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Case Study – 23
Financial Management
“A business that doesn’t grow dies”, says Mr. Shah, the owner of Shah Marble Ltd. with glorious 36 months of its grand success having a capital base of RS.80 crores. Within a short span of time, the company could generate cash flow which not only covered fixed cash payment obligations but also create sufficient buffer. The company is on the growth path and a new breed of consumers is eager to buy the Italian marble sold by Shah Marble Ltd. To meet the increasing demand, Mr. Shah decided to expand his business by acquiring a mine. This required an investment of ₹120 crores. To seek advice in this matter, he called his financial advisor Mr. Seth who advised him about the judicious mix of equity (40%) and Debt (60%). Mr. Seth also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Seth, Mr. Shah decided to raise funds from a financial institution.
Identify and explain the concept of Financial Management as advised by Mr. Seth in the above situation. State the four factors affecting the concept as identified in part (1) above which have been discussed between Mr. Shah and Mr. Seth.
Answer:
Capital structure
The four factors affecting capital as discussed above:
- Cash flow position:
- Risk Consideration:
- Tax rate:
- Control:
Case Study – 24
Tata International Ltd. earned a net profit of ₹50 crores. Ankit, the finance manager of Tata International Ltd. wants to decide how to appropriate these profits. Discuss any five factors which will help him in taking this decision.
Answer:
Five factors affecting dividend decision are to be discussed.
Case Study – 25
‘Apparels’ is India’s second largest manufacturer of branded Lifestyle apparel. The company now plans to diversify into personal care segment by launching perfumes, hair care and skin care products. Moreover, it is planning to open ten exclusive retail outlets in various cities across the country in next two years.
In context of the above case: Identify the two factors affecting the fixed capital needs of the company by quoting lines from the paragraph.
Answer:
- Diversification:
- Growth prospects:
Case Study – 26
Financial Market
Supriya’s grandmother who was unwell, called her and gave her a gift packet. Supriya opened the packet and saw many crumpled share certificates inside. Her grandmother told her that they had been left behind by her late grandfather. As no trading is now done in physical form, Supriya wants to know the process by adopting which she is in a position to deal with these certificates.
- Identify and state the process.
- Also give two reasons to Supriya why dealing with shares in physical form had been stopped.
Answer.
- Dematerialization
- Problems with dealing in physical form to be written.
Case Study – 27
Marketing
Identify the Marketing Management philosophy adopted in the following cases:
- Mansi, a shoe manufacturer for school students, decided to maximize her profit by producing and distributing at large scale and thereby reducing the average cost of production.
- Nisha, a school bag manufacturer decided to improve the product for profit maximization and thus added a water bottle holder to the existing design.
- Jasdeep, a dealer in school uniforms, decided to maximize his profit by using different aggressive promotional efforts.
- Amar is engaged in manufacturing of refrigerators. He surveyed the market and found that customers need a refrigerator with a separate provision of water cooler in it. He decided to launch the same refrigerator in the market.
Answer.
- Production concept
- Product concept
- Selling concept
- Marketing concept
Case Study - 28
“Every time I travelled, people asked me to bring them chips, khakra and pickles from all over the country,” says Anoushka. Finally, she and her colleague, Sumeet, decided to make out of it. They launched a face book bags, asked people what they wanted, and they came up with a list of about 100 places and tried up with two dozen vendors to begin with. They were servicing people from Jaipur who wanted spices from Kerala, people form Panipat who wanted halwa from Jammu and people from Delhi who ordered for fresh tea leaves form Darjeeling. Through their business they wished to bridge the gap between sellers and buyers. The business is now worth millions.
Explain any two important activities that Anoushka and Sumeet will have to be involved in for making the goods available to the customers at the right place, in the right quantity and at the right time.
Answer.
Activities / Components of Physical Distribution: (any two)
- Order processing
- Transportation
- Warehousing
- Inventory Control
Case Study - 29
Consumer Protection
Pragya bought an iron of a reputed brand for ₹1500 but it caused an electric shock while it was being used. Pragya wants to exercise her ‘Right’. Identify the ‘Right’ under which she can be protected.
Answer.
Right of safety
Case Study - 30
Dushyant, who was a vegetarian, went to a snack bar for having French fries and later on found out that it has non-vegetarian content. Neither the advertisement nor the packing of the product displayed that the product has non-vegetarian content. Will Dushyant be able to claim compensation? Which right of the consumer is violated?
Answer
- Yes
- The seller has violated the Right to information.
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