MBA Ist Semester Case Studies 3 Bharat Engg Works Limited Questions Answers Study Material Notes Sample Papers Notes 3 Mock papers for self-assessment Chapter wise notes Unit-wise division of the content solved case studies for practice.
Case Study 3
Bharat Engg. Works Limited
MBA Ist Semester Case Studies 3 Bharat Engg Works Limited Questions Answers
Bharat Engg. Works Limited other engineering products. It has enjoyed considerable market preference for its machinery because of limited competition in the field. Usually, there have been more orders than what the company could supply. However, the scenario changed quickly because of the entry of two new competitors in the field with foreign technological collaboration. For the first time, the company faced a problem in marketing its products with the usual profit margin. Sensing into the likely problem, the Chief Executive appointed Mr. Arvind Kumar as General Manager to direct the operations of industrial machinery division. Mr. Kumar has a similar assignment abroad before coming back to India.
Mr. Kumar had a discussion with the Chief Executive about the nature of the problem being faced by the company so that he could fix-up his priority. The Chief Executive advised him to consult various heads of departments to have first-hand information. However, he emphasized that the company lacked an integrated planning system while members of the Board of Directors insisted on introducing this in several meetings both formally and informally.
After joining as General Manager, Mr. Kumar got briefings from the heads of all departments. He asked all departmental heads to identify major problems and issues concerning them. The Marketing Manager indicated that in order to achieve higher sales, he needed more sales managers and sales professionals. His main concern was a lack of engineering support to sales and marketing efforts. The company had adequate engineers but they were spread under three separate engineering groups. Sales people had no central organization which had the responsibility to provide sales support. Therefore, some jobs were being done from outside at higher costs or with lower quality. Besides, he needed a generous budget for a demonstration system which could be sent on a trial basis to customers to win business.
The Production Manager complained about the old machines and equipment used in manufacturing Therefore cost of production was high but without corresponding quality. While competitors had better equipment and machinery, Bharat Engineering neither replaced its age-old plant nor got it reconditioned. Therefore, to reduce the cost, it was essential to automate production lines by installing new equipment.
Director of Research and Development did not have any specific problem and, therefore, did not indicate for any change. However, a principal scientist in R&D indicated on one day that the Dire of R&D though very nice in his approach did not emphasize short-term research projects which could. easily increase production efficiency to the extent of at least 20 percent within a very short period. Moreover, such projects did not involve any major capital outlay.
Mr. Kumar got himself convinced about the management process going on in the division and the type of problems being faced.
Q.1. Discuss the nature and characteristics of management process followed in the company.
Ans. Nature and Characteristics of Management Process: The management process followed in Bharat Engineering Works Limited, a major manufacturer of Industrial machinery, has the following characteristics:
1.Planning: Planning is the conscious determination of a future course of action to achieve the desired results. Planing is the process of thinking before doing. It means the determination of what is to be done, how and where it is to be done, who is to do it and how results are to be evaluated. In Bharat Engineering Works Limited, the planning process was separate for different functional areas; there is a lack of centralized planning system which is the main cause of all the problems.
2. Organising: It is the process of dividing work into convenient tasks or duties, of grouping such duties in the form of posts, of delegating authority to each so that work is carried out be Organisation contributes to the efficiency of the enterprise In the company, the sales department had a decentralised organisation where the responsibility and authority for carrying out tasks to lower-level managers. Because of the lack of centralised sales organisation in the company lack of sales support to the sales people.
3. Staffing: It means manning the positions created by organisation process. This place by organisation process. This process includes the selection of the candidates for positions, fixing financial compensation, training and development promotion, transfer etc. Marketing manager indicated that in order to achieve higher sales, he needed more sales managers and sales professionals, therefore it can be said that there is an imbalance the staffing process in the company. Because of lack of personnel in the marketing department, we company is outsourcing its work which is causing higher cost of the work done.
4. Directing: Direction is the key to the achievement of the desired result. Once subordinates are oriented, the superior has a continuous responsibility of guiding and leading them for better work performance and motivating them to work with zeal, confidence, and enthusiasm. The directing process of the R&D department of the company was focused on long-term research projects and did not focus on short-term research projects which could easily increase production efficiency. The production manager wanted to replace the old machines and equipment used in manufacturing but there was lack of support from the top management.
5. Coordination and Control: Coordination, as a function of management refers to the task of integrating the activities of separate units of an organisation to accomplish the goals efficiently. The controlling function brings to light the deviations if any, and assists the management in making the necessary changes in the plan or policies. Because of the lack of centralised planning and organisation, the company was lagging behind in terms of coordination and control
Q.2. What are the real problems of industrial machinery division of the company?
Ans. Problems of Industrial Machinery Division of the Company: The industrial machinery division of the company faces the following problems which hinder the growth of the company:
1. Earlier the company had limited competition so it enjoyed considerable market preference for its machinery, but because of the entry of two new competitors among which had foreign technological collaboration, the company faced problem in marketing its products with a usual profit margin.
2. Bharat Engineering Works Limited faced many problems due to the lack of an integrated planning system. In the absence of the integrated system of planning, it becomes difficult to coordinate with
different departments and construct effective plans.
3 A major problem in the industrial machinery division of the company is the use of old machinery for manufacturing. Due to this, the manufacturing cost is high.
4. The company is unable to provide engineering support to the sales and marketing departments as the engineers are spread under separate engineer groups.
5. Another problem is that the research and development department focuses on long term projects only and does not contribute in increasing the production efficiency
6. There is also a problem of outsourcing as some jobs were being done from outside. These jobs were done at higher costs or with lower quality.
7. The company also faces the problem of competition as the competitors have better equipment and machinery at their disposal.
8. The industrial machinery division of the company also has a problem of producing poor quality products due to old and obsolete machines.
Q.3. What steps should be taken by Mr. Kumar to overcome these problems?
Ans. Mr. Arvind Kumar was appointed as a General Manager to direct the operations of industrial machinery division. He should take the following steps to overcome the problems of the industrial machinery division of the company:
1. Mr. Kumar should to 1. MI. lunar should focus on enabling an integrated planning system in the company. This integrated system can help in coordinating planning activities in functional areas.
2. A centralized organization should be established for the sales people and also a generous budget for a demonstration system which could be sent on a trial basis to customers to win business.
3. The company should recruit more sales managers and
professionals to support sales and marketing efforts. The company should also focus on reforming the three separate engineering groups into a single group so that the engineers can offer their support when needed.
4. Mr. Kumar should take steps to change the functioning techniques in the research and development department and to encourage the director of R & D department to emhasise on short-term projects which could easily increase production efficiency to the extent of atleast 20 per cent within a very short period.
5. The company should replace or recondition the old machineries and equipments in order to reduce production cost as well as to improve the quality of the products. This will also help the pany to counter competition and win back their position in the market.