CASE STUDY

Mr. Raj Agarwal was an M.Tech in chemical engineering, working as a teacher in a college. He
is very patient and hardworking. His interest lied in research and hence after the hard work of
one year with the help of some science graduates he came up with a formula of washing powder
which was different from what is available in the market in aspect that it was economical, less
time consuming, very effective and also very gentle to clothes. Considering the market scenario
and opportunities available for the product he decided to start the new venture to produce the
same instead of selling the formula to the third company. Since he was a more into the research
work, he wanted someone trusted who could join him in establishing this venture
wholeheartedly. Thus, he called up Jay, his best friend, to help him out.

Mr. Jay Gupta was working as marketing manager in a big multinational firm for quite some
time and was very successful over there. He is having good leadership qualities and is very
enthusiastic in nature. But he was not satisfied with the job as he has dreams of running his own
venture. When Jay listened to the proposal of his friend Raj he immediately gave a positive
response as he knew that this venture would give him a lot of chances to show his
entrepreneurial skills and give the satisfaction which he was looking for.

The initial investment of the company was around Rs. 20 lakhs which was fully funded by Raj.
Since Jay and Raj were very good friends, Raj decided the partnership to be 80:20 and apart from
that Jay will be given some salary as an employee too. Thus came into being ‘Shine Pvt ltd’ on
07th June 1980 at Ahmedabad, with the owner being Mr.Raj as the financials and scientific
expertise were provided by him and Jay was hired as the manager of the company. Jay was given
all the responsibilities of the company from hiring to marketing the product. Raj decided that he
would be just doing the research work. As Raj and Jay shared a very friendly relationship they
decided not to interfere in each other work and collectively work for success of Shine.

Raj was a very dedicated and sincere person whose life was research work and also he cared a lot
for Jay and his other employees. Jay being a very sharp-minded, hardworking, creative person
whose only goal was to take the company to the utmost height. He hired some talented
employees, chalked out the vision and mission statement and strategies of the company and also
drew out a plan to market the company’s first product. Hence after days of hard work and
dedication ‘Shine Detergent powder’ was launched on 10th Oct 1980 in some of the states and
after the success it was launched all over the India. Slowly with the help of the R&D team lead
by Raj the company was able to introduce some new products in the same segment. By the year
2000 the company recorded the turn over 200 Crores and distributed the bonus of 100% to their
employees.

During this time period, Jay had good control over the company from inventory, production till
marketing of the products. Every employee of the company considers him as the owner, respects
him and took orders from him only. Raj being the true owner of the company was not visible to
the employees that much and he did not have any wrong feelings about the same as he was happy
with his research work and success of the company on the whole. Also, he was looking forward
for his son, Rajat Agarwal, to join his company after returning from abroad.

Rajat Agarwal, joined the organization in 2002 after completing his MBA from Boston
University of USA. He was very energetic and focused towards taking his father’s, Mr. Raj
Agarwal, company to new horizons and make it multinational. After joining the firm he
understood the working of the firm thoroughly from Jay and his father and started exploring the
points where he could improve on things. Initially Rajat used to consult Jay in each decision he
used to take and even discuss his strategies with him so as to gain the thorough knowledge of the
company.

As time passed, Rajat took the whole responsibility of managing the company, sidelining Jay
Completely. Soon he restructured the organization into subdivisions to perform it more
efficiently and increase the profit margins. He divided the company into separate departments
like marketing, operations, supply chain, finance, human resource etc. He also created a new
hierarchy of management with the help of a new team of managers who were young MBA
graduates like him hired by him to help the cause. For this some of the old managers who were a
part of Jay’s team resigned by force or by choice. This step of his demotivated and frustrated Jay
a lot, but he kept quiet for his relationship with Raj. The young managers he had appointed were
assigned as head of each department and were responsible and free to take all the decisions on
their own and were answerable directly to Mr. Rajat. Hence by this move the complete power of
the company shifted in the hands of Rajat leaving Jay as merely a pawn. Raj was unaware of all
this as he had gone abroad for an overseas scientific experiment.
Employees had initial problems adjusting to the new way of working under new bosses but his
approach created a new wave of energy in the company making it highly professional and helped
the company to come in terms with international standards. This helped the company to
rejuvenate the brand of Shine in market again and also create a new market for it.

Rajat also managed to increase the customer base with his new and powerful understanding of
business strategies. He also got into the act of supplying raw materials to different companies
and hence created a whole new market for the company.

After three years of this innovation and work, ‘Shine’ became the market leader in the category
of detergent soap and was going great.

Everyone was happy the way company was progressing but all this development left Jay very
angry, disappointed and frustrated as he was not in sync with the new team of managers and also
was not part of their success. He felt that he was being left alone and the power and respect
which he has gained in the last 25 years is all going in vain. He also started feeling insecure
about the position which he carries in the company. This result him to do something which
wasn’t expected of him.

Using his influence of 20 years over the workforce, he started to manipulate their thoughts by
creating a negative image for Rajat. He also strived to create a lobby for him with politics aimed
at creating support for himself and eventually convinced the workforce to go on a strike. Rajat by
his convincing style convinced the employees to withdraw the strike. They did that but some
employees who were loyal to Jay started showing disrespect and disinterest towards their
managers and their job.

Between all this Rajat had planned to diversify the company by launching personal care products
which includes soap and face wash for which he was working for the last 1 years. The companies
future lies on the success of the launch and its performance in the market. At the same time when
the enthusiasm in the market is high about the company the company has fallen apart into two
groups who are fighting a cold war between them which was noticed by Raj when he returned
from his foreign tour after 3 months.
Since there are so many things on stake for Shine Pvt Ltd, therefore it was very important to
resolve the conflict going on in the company. Raj being the major shareholder has right and say
to change the situation but he is in confusion that whom he should support? On one side is his
best friend who has worked very hard to establish this company from the scratch and on the other
hand it’s his son who has a dream to take this company ahead and had make his effort in doing
so. Now the question with Raj is that with divided workforce, dirty political games, and strain in
relationships prevailing in the Shine, should he go forward with the launch of the personal care
products? And if the launch has to be made successful then the company has to work collectively
for which he has to resolve the conflict between Rajat and Jay. Raj has to find out the best
possible solution to overcome this situation.