St.

Joseph Evening College

SYNERGY 2012
THE DUKE
SIX FORCES
VARUN D
CASE STUDY

SAGAR PVT. LTD. Is a small company, which manufactures plastic products

such as mugs, buckets, and other household utility products. This company
which is situated in an industrial belt in new Mumbai has typical labour
needs. Since quite a few operations including packing of products are done
manually, the company employs 80 workers on the shop floor. The company
supplies its products to retailers in and around Mumbai. It has a long
production run and longer product life-cyles and therefore the management
believes that the company is making fewer profits because of this. As a
result, the top management, which comprises of the members of
Maheshwari family, since this is a family managed business, decided to
invest resources on automation to have shorter production runs and shorter
product life-cycles. It has decided to introduce packaging machines to
reduce semi-skilled and unskilled labour.

The company has a bad record in industrial relations since workers in the
past have had several problems pertaining to wages and working conditions
.Rajnathdube, a worker who I soften pampered by management to get their
way, dominates the company union. Rajnath is a man who ranks very low in
personal and professional ethics but has a way with people and is good at
politics. He has a substantial clout with the workers who trust him and
would act on his advice. But the management is fully aware that rajanth may
not be able to help much if the company thinks of retrenching workers.
However the management decided to speak to rajnath regarding their
decision to introduce automatic machines and subsequent lay off of workers.
Rajnath immediately sensed a good opportunity to make a big sum so he
pretended that convincing the workers was a herculean task and he would
need at least 6 months time to do this. The management was however
impatient to introduce automation and told rajnath to convince workers
within 3 months to help them implement the decision. Of course rajnath

Played his game and asked for a huge sum in reciprocation of his effort.
The maheshwari brothers were shocked at the price that rajnath wanted.
They however knew that things would only get worse if they refused
rajnath’s proposal.

CASE QUESTIONS;

1. Was the maheshwari family’s method of introducing change in sagar

private limited appropriate? Please substantiate your response giving
suitable reasons.
2. What was the tactic used by top management to overcome resistance
to change? What tactic would you have used to overcome workers
resistance to change if you were in the top management’s position?
3. How would you handle rajnath if you were in place of the
maheshwaris?

Case Study Report on Sagar Private Limited

1. In my opinion Maheshwari’s family method of introducing

change in Sagar Private Limited is appropriate assuming that the
business proposal plan shows the need for the changes with
higher profits and opportunity for expansion of other new
products.

 Sagar Private Limited is currently making less profits than it is

supposed to especially knowing that the company is totally
dependent on the manual labor of unskilled and semi-skilled
workers.
 Sagar Private Limited needs a plan going forward to show how it
can make better profits with higher production efficiency and
also has a big need of introducing newer products thereby
increasing revenue as well.
 Sagar Private Limited business plan needs to show the need for
automation thereby reducing the labor force of unskilled and
semi-skilled workers.
 Implementation of the Management change will show increase
in production efficiency and also enables return on investment
in a short period. This plan will not only increase profit levels but
also increase revenue by introducing newer products.

2. The tactic used by the top management was to introduce

automation by bringing in the packaging machines in the
production assembly lines and eliminate the unskilled and semi-
skilled work force. This change will shorten both the production
runs and product life-cycles thereby increasing profits to the
company.
To execute this plan the management decided to bring in the
their union leader Rajnath.
Even though the company had several issues in the past with the
workers pertaining to wages and working conditions, Rajnath
has good relations with the labor force and knowing this fully
well the management decided to negotiate with the labor force
through their union leader.
 If I were to be in the top management’s position I would bring in
the same change with a different tactic.
Management to bring in a memorandum to all employees that
they are looking for a fewvolunteers (Should be equal to
unskilled and semi-skilled workers)who are interested taking
voluntary retirement package as a first come first serve basis.
This will bring in reducing the labor workforce of unskilled and
semi-skilled workers. This approach will not only avoid paying a
huge sum to Rajnath but also is morale booster for the labor
workforce as such because it does not force for laying off
people. Obviously this plan should only to be taken forward if it
agrees with the business plan, means the investment made on
automation with additional cost of compensation package must
have early returns to see higher profits in a short period of time.
If there are no volunteers who wants to take this compensation
package then I would pursue company management tactic with
further negotiations with Rajnath.

3. I would handle Rajnath by questioning his strategy of laying off

labor workforce in a 3 month timeframe. Understand in depth as
to how his strategy affects the morale of the company knowing
the past history. Also evaluate whether the business plan is
effective or not after knowing how much Rajnath is expecting.

Return on investment of automated machines including Rajnath

cost of his effort must be recovered in a short period of time and
start seeing higher profits.