CASE STUDY ON ALLIED

ELECTRONICS CORPORATION
LTD.
SUBMITTED BY – Jaidev Venubhai Nair
Roll No- EPGCHRM-06-009
Submitted to Manoranjan Dhal
INTRODUCTION
 Altron published its first second integrated annual
report covering the reporting period from March
1,2010 to Feb 2011
 Altron served as perfect example of the underlying
values that drove Altron’s appetite for innovation and
leadership and put the organization in a proactive,
rather than reactive position to face the regulatory
change
 Altron resulted in the identification of 11 strategic
themes critical to the future sustainability of
organization and previously they had 8 Strategic
theme
 These 11 Strategic themes include environment,
human capital and corporate governance .Several
other had been rearticulated in a broader
sustainability context
 The reshaped corporate strategy , however also
brought challenge that had not been faced before.
Regulatory requirement imposed additional pressure
of the change
 Altron existing policy claimed to meet the
requirement, given the change in strategy there were
some with in the organization who were questioning
the adequacy of the existing compensation policy
while other were more reluctant to change the
compensation policy and raised reasonable question
round its effectiveness.
 Venter had made clear commitment to sustainable
development and was confident that the
commitment was shared across the sustainable
development and was confident that the commitment
was shared across the senior management team
ALTRON “FAMILINESS” IN EVOLUTION
 Altron was family owned and closely controlled
group. The share capital was divided between
ordinary shares and the participating preference
shares.
 Venter family controlled 56 percent of the voting
share and had an economic interest between 20
and 25 percent of Altron
 The opportunity cane when STC ultimate holding
company, the mighty ITT in America decide to
divest itself of the STC under political pressure
from the IS administration under President
Jimmy Carter.
 Altron to continue to grow after the acquisition of
STC and because of apartheid ,Dr Venter had to go
wide rather than deep in order to re-invest within
south Africa
 Adaptability was the big part of the business culture
he developed and made it possible for him to acquire
good businesses when multinational had to divest
their South African holding due to the political
pressure and other reason. Altron strategy was to
pickup the business side rather than political side
 The adaptability was central to Altron’s family
centered, value base culture. The company ensured
that its mission and values were updated anually
 Its code of etics was revisited all year around. It responded
quickly to changing external forces and trends
 Venter referred family influence as “Familiness” that was
unique contribution that family involvement brought to
any business and bundle of resources a firm had as result
of interaction among the family involvement brought to
any business and the bundle of resources a firm had as a
result of the interaction among the family ,firma and
individual
 Dr Venter held his cards very close to his chest and he was
respected and his decision was accepted as fair
 To certain extent subsidiaries and BU competed against
each other and was challenge to align such individual
subsidaries and business unit to the corporate strategy
while maintaining their autonomous decision making
structure.
PARTICIPATIVE DECISION MAKING
 Venter is more different from his father and he is
more casual and approachable and listens to all
point of view
 He has prior foreign work experience and
frequently travelled to Altron facilities to which
he quickly earned the trust and respect from
internal and external stakeholder
 In2004 Venter established more participative
decision making process and put in place
systematic internal and external consultantation
process and increasing commitment to
transpency
 When it came to issue solving sustainability, this
process typically involves four step
 1) An originator of an idea, its “Champion”, did the
initial work to build the business case.
 2)The business case was bought to the company
Secretary who evaluated and had to convince to
support it
 3)It went to the executive committee for debate.
 4)If they supported it, it would go to the relevant
board committees and then to the Altron board for
final decision
 There are basic criteria which new idea should meet
and should make to both bottom line and reputational
sense
CARBON FOOTPRINTING
 The decision to begin foot printing across Altron
was a test case for this process
 To develop the case, it was important to obtain
the firm and unwavering commitment of senior
management and the board, as well as to develop
a clearly thought through
 Carbon footprinting not only reduce the emission
but also save money
 The idea which vetern took was based on
business model rather than environmental model
 A committee of 35 real champion was
established and ensured this strategy would
reach to all corner of the organization
 It was divided into the five stage like awarness
and communication, carbon footprint calculation,
refinment of scope and footprinting methodology,
setting reduction targets, identifying commercial
opportunities
EMBRACING SUSTAINABILITY INTO
STRATEGY

 Altron saw it as perfect opportunity to rethink the

opportunities and challenges presented by corporate
reporting and to embed sustainability into corporate
strategy .The champion once again was Andrew
Johnston
 He knew the world of accounting was changing and
there was less opportunity to hide things and he also
believed the new age of accountant are more inclined
to greater transparency
 They built their case around the following points:-
 1) Sustainability was about effective and integrated
risk management throughout the organization
 2) Effective risk management
 3)Stakeholder who could influence their success
need more complete information to make
informed assessments and decision
 4) Management was operating responsibly and
with requirement of King III
COMPENSATION STRATEGY :-INTENT AND
PRINCIPLES
 Altron was committed to a compensation philosophy
that focused on rewarding consistent , long term
individual and corporate performance that directed
employees energies and activities toward business
goal
 They aimed to ensure appropriate alignment
between the interests of shareholder and the
operational requirement, strategic direction and
business specific value driver of the group
 To support this policy Atron put no of policy in place:
 1)Policy on guaranteed pay
 2)Policy on Performance base pay
 3)Policy on Pay mix top
COMPENSATION & STRATEGIC THEMES

 External factors, which include non financial

risk
 Business partner relationship include range of
ethical and social considerations
 Product and services which linked the product
and Service
 Customer relationship which addressed the
concerns and expectation of this stakeholder
group
 Human capital which addressed the concern and
expectation of another important stakeholder
group
 Transformation which addressed a broad rang of
economic and social development concern
 The environment which include both material
input and impact from process, producer and
services
 Business conduct in foreign which include range
of ethical and societal consideration