Concerns Fundamental Management Issue you
see related to the topic notes/readings to support your
What are the 1. Market Differentiation: The case
pertinent facts in the elucidates the notable disparities
case? between hand-knotted and tufted
carpets, encompassing not only the
intricacies of their production methods
and associated expenses but also their
distinct market positioning. Hand-
knotted carpets, being a superior
offering, boast elevated profit margins
and an extended lifespan. In contrast,
tufted carpets cater to a distinct market
segment by offering more affordable
prices and a comparatively shorter
lifespan.
2. Weaver-Centric Business Model:
JRCPL's unique business model involves
direct collaboration with artisan
weavers, mainly women, aiming to
empower them economically and
socially. The company's commitment to
fair wages, transparent dealings, and
improving the quality of life for the
weavers distinguishes it in the industry.
3. Cultural Values and Leadership: The
case emphasizes the importance of
cultural values, specifically those of
founder N. K. Chaudhary, in shaping the
company's identity. Chaudhary's
emphasis on love as a fundamental
aspect of the organizational culture and
the challenge of aligning professionals
with these values forms a crucial aspect
of the case.
4. Product Focus Dilemma: The central
Evidence from the case and class Recommended Solution to
the issue
diagnosis
1. Role of Family Members: The case
introduces family members playing key
roles in different aspects of the business.
For instance, Asha Chaudhary, the eldest
daughter, is the CEO of Jaipur Rugs Inc.
(JRI), emphasizing the family's
involvement in decision-making and
leadership roles.
2. Initiatives for Weaver Development:
JRCPL's commitment to the
development of artisan weavers is
evident through initiatives like the
creation of Jaipur Rugs Foundation (JRF).
JRF focuses on improving the working
conditions of weavers, providing looms,
and engaging in community
development activities, showcasing the
company's dedication to social
responsibility.
3. Product Revenue Distribution: The
case provides evidence that in
FY2013/14, hand-knotted carpets
contributed 37% of the company's
turnover, while tufted carpets
contributed 33%. This demonstrates the
significant financial contribution of both
product categories to JRCPL's overall
revenue.
4. Export Leadership: According to
Mahesh Agarwal, the head of Finance
and Accounts at JRCPL, the company is
the number-one exporter of hand-
knotted carpets from India and ranks
third or fourth in the export of tufted
 issue in the case revolves around the
dilemma faced by Jaipur Rugs Company
Private Limited (JRCPL) regarding its
product focus. The founder, N. K.
Chaudhary, and his family are grappling
with the decision of whether to
exclusively focus on hand-knotted
carpets or also include tufted carpets,
which currently contribute significantly
to the company's revenue.
5. Management-Professional Balance:
JRCPL experiences challenges in
maintaining a balance between family
values and the values of non-family
professionals within the management
team. Recent departures of non-family
members hint at the need for aligning
values across the organization.
What is/are the 1. Product Focus Dilemma: One primary
primary problem (s) problem is the internal debate within
and the cause (s)? the Chaudhary family regarding
whether to focus exclusively on hand-
knotted carpets or include tufted
carpets in their product line. The cause
of this issue lies in conflicting opinions
among family members, particularly
between Asha Chaudhary, advocating
for tufted carpets, and others favoring a
focus on hand-knotted carpets. This
poses a challenge in aligning the
company's strategic direction.
2. Departure of Non-Family
Professionals: The departure of non-
family professionals from the
management team raises concerns
about maintaining a balance between
family values and the values of hired
carpets. This indicates the company's
strong position in the market.
5. Divergent Lifespan and Costs: The
case provides data on the substantial
differences between hand-knotted and
tufted carpets. Hand-knotted carpets
have a longer lifespan (20-100 years)
compared to tufted carpets (around five
years). Additionally, the gross margin on
tufted carpets is lower (5-10%) than on
hand-knotted carpets (30-35%).
1. Lack of Articulated Vision and
Mission: The case indicates a challenge
in articulating a clear vision and mission
for JRCPL. The evidence suggests that
despite efforts, the core values, vision,
and mission of the company remain
unclear. This lack of clarity can lead to a
lack of direction and unity among
employees, impacting overall
organizational effectiveness.
2. Weaver-Centric Focus vs. Business
Sustainability: The evidence shows a
strong focus on the well-being of artisan
weavers, which is integral to JRCPL's
identity. However, the challenge lies in
balancing this commitment with the
need for business sustainability. The
case hints at the potential tension
between prioritizing the welfare of
professionals. The cause of this issue is
a potential misalignment in values and
organizational culture, leading to
turnover. It indicates a need for better
integration and understanding between
family and non-family members in
leadership roles.
3. Unclear Core Values: The case
highlights the difficulty in articulating
and communicating the core values of
JRCPL. The cause is attributed to a large
gray area, making it challenging for
employees to understand and embody
the values. This lack of clarity in core
values poses a risk to organizational
cohesion and may impact decision-
making.
4. Profit Margins and Operational
Efficiency: The challenge of improving
profit margins from the current 5-6% to
an optimal 10% reflects a problem in
operational efficiency and cost
management. The cause includes rising
labor costs, raw material costs, and
other direct expenses. There is a need
for better processes, quality control,
and improved efficiency to achieve the
desired profit margins.
5. Skills and Capability Gap: The case
mentions the family members' lack of
capabilities in certain areas,
necessitating the involvement of non-
family professionals. The cause is a skill
and capability gap within the family.
This problem highlights the importance
of identifying and addressing
competency issues to ensure effective
weavers and ensuring the company's
profitability.
3. Cultural Clash with Hired
Professionals: The departure of non-
family professionals implies a potential
clash between the values of the
Chaudhary family and those of the hired
professionals. The evidence suggests
that maintaining a balance between
family values and external expertise is
challenging and can lead to conflicts
within the management team.
4. Strategic Decision-Making for
Product Lines: The case presents a
strategic decision-making challenge
related to product lines—whether to
focus on premium hand-knotted carpets
or include tufted carpets. The evidence
suggests that this decision is not solely
based on financial considerations but
also involves family preferences and a
long-term vision for the company.
5. Difficulty in Co-Creation of Core
Values: The evidence highlights the
difficulty in co-creating the company's
core values. The case suggests that the
values of the Chaudhary family may not
align seamlessly with those of the
professionals. This misalignment can
affect the co-creation process, hindering
the establishment of shared values
within the organization.
 management and decision-making.
What are the 1. Strategic Leadership
alternatives for Succession Planning: Given
action? the founder's vision of a
weaver's child becoming the
CEO, JRCPL should engage in
strategic leadership
succession planning. This
involves identifying and
grooming potential leaders
from within the weaver
community. Training
programs, mentorship
initiatives, and educational
support can prepare the
next generation to lead the
company while preserving
its values.
2. Structured Thinker-Doer
Exchange Programs: To
bridge the gap between
"thinkers" and "doers,"
JRCPL could implement
structured exchange
programs. This involves
periodic field immersion for
office employees and
reciprocal visits by weavers
to the company's
headquarters. These
programs facilitate a deeper
understanding of each
other's roles, fostering
collaboration and empathy
between different parts of
the organization.
3. Enhanced
Communication for Vision
and Mission: JRCPL should
prioritize efforts to articulate
a clear vision and mission.
This involves open
communication channels
between family members,
professionals, and other
stakeholders. Regular
meetings, workshops, and
collaborative sessions can
facilitate the co-creation of a
compelling vision and
mission that reflects the
company's values while
providing a strategic
direction.
4. Weaver-Centric Business
Model Optimization: While
maintaining a commitment
to the weavers, JRCPL could
explore optimization
strategies for its business
model. This might involve
improving production
processes, reducing waiting
times, and enhancing the
overall efficiency of hand-
knotted carpet weaving.
Such optimizations aim to
increase profit margins
without compromising the
well-being of the artisan
weavers.
5. Strategic Product
Diversification: JRCPL could
consider a balanced
 approach by strategically
diversifying its product
portfolio. This might involve
maintaining a focus on
hand-knotted carpets, which
contribute significantly to
the company's identity and
profit margins, while also
exploring ways to enhance
the market presence of
tufted carpets. This
approach allows the
company to cater to
different market segments
and revenue streams.
What readings or 1.https://
other research www.businessofhandmade.com/jaipur-
helped you come to rugs
conclusions on the 2. https://jrc-media-v1.s3.ap-south-
topics? 1.amazonaws.com/B2C/web-content/m
edia/articles/the-fortune-at-the-bottom-
of-pyramid-by-c.k.-prahalad-
635675587071220353.pdf
3.http://sociallydrivenmag.com/
catalysts/the-rug-company-that-
transformed-the-lives-of-40000-women-
in-rural-india/
4.https://web.archive.org/web/
20160113060728/http://
articles.economictimes.indiatimes.com/
2012-01-26/news/30666627_1_supply-
chain-case-study-tribals