2nd Assignment (EOM)

Case Study 1
Mr. Raju Raman had a family consisting of his wife and two children. He was a carpenter who used to work
on daily wages. In the spare time, he used to make tables and sell it to his neighbours and in the local area.
After 10 years of hard work as a daily wage labourer who worked for others, he thought he will stop doing it
and make and sell tables on a full-time basis. He hired a small room for Rs. 3000 a month, bought some
electric saws and other tools with the saving he had made, asked his wife and son to help him. He then went
around various furniture shops and told them that he makes tables to order and gave them his mobile
number. Soon orders started to flow and Raju decided to call his carpenter friends, Shyam and Sanju, to
come and work for him on a daily basis but offered them Rs. 350 per day instead of the market rate of Rs.
400. They were happy as they had work daily and could do it in an organized manner under one person. As
the work grew, he told them that he will pay them a daily wage of Rs. 350 and an additional of Rs. 50 per
table they made. They worked hard and often late into the evening and on an average made Rs. 500 a day
as it was easy making a table to clear specifications and using the electric tools rather than sweat it out in
the backyard of someone as a casual labourer sawing away with their handsaws. Despite their long hours,
they could not complete the order. Hence, Raju hired 4 more carpenters and made his friend Shyam to take
charge of making tables with two newly hired carpenters and Sanju to take charge of making chairs with the
other two newly hired carpenters. In addition, he hired Pankaj to buy wood and other fitments, take the
finished tables and chairs to various stores, collect the money, and pay electricity bills, and other odd jobs
outside the shop. The cost of wood suddenly rose, and his traditional timber mill owner explained to him the
how the increase in cost of diesel has resulted in increased cost of transportation. He could understand that
since the tempo owner who takes his finished products to various stores too had hiked the cost of trips.
Fortunately, one engineering college was coming up near his shop and their demand for tables and chairs
seemed to be ever increasing. Raju pitched in showing how he made the very same furniture for big furniture
shops in the city and how he could provide them these at a lower cost if they gave him bulk orders. As he
saw growth, he put together a team to make new products for the colleges so that they can be modular,
strong to withstand the rough use by students, low cost, and with good aesthetics and called this team
‘creative team’. Of course, the members of the creative team were select carpenters and his favourite Pankaj
who by now had three assistants and had mastered the business of marketing and pricing of the products
and book keeping to an extent.

Questions to be answered:

1. Explain how this case study provides an idea to you regarding transforming a family organization
in to a formal one by adhering to Fayol’s principles of management (Any 7 principles – 3.5 marks).
2. Describe the relative importance of each of the three basic managerial skills with reference to
the above case study (1.5 marks).
Case Study 2
Sambhavi Bakers was one of the prosperous bakeries in Salem. People from neighbouring districts often
came to Sambhavi to order cakes and other items for their weddings and parties. The brand name was well
known in the neighbourhood. People used to suggest its owner, Rakhi to open her outlets in other districts
so that they could avoid the travel. Rakhi smiled it away for several years. But as her children grew and she
could get more time, she began to consider the suggestion more seriously. She had the good will, good
knowledge of the product, and a loyal customer base from other districts. But she was not familiar with
business in multiple towns, the problem of logistics, the need for scaling up the production without
compromising her quality, the headache of finding places to locate these outlets, having managers to run it
and who knows that they will not pilfer the money. She intuitively knew that she could open her outlets in
three of four neighbouring districts where she is known well. She was wondering how to go about doing this.
Her daughter who was doing an MBA programme from the city college suggested her to make a detailed
plan and see if it will work rather than sit and worry and talk about it all day. She was familiar with this word
plan since she was a child but this is different. She had to actually do it. When she started her Salem venture,
she had not made any formal plan but started it in her house after the death of her husband primarily to
earn additional money but as her popularity grew, she set up a larger shop in the town and used her old
home and the area around it for production of her confectionery. She managed without a loan as she was in
no hurry to grow. The production place and the shop was just a kilometre apart. If there was a problem in
the production, she rushed there and sorted it out and if something was amiss, she could rush to the
production, pick it up, and send the customer happy. At last, yielding to the wisdom of her daughter, which
she hardly trusted, she decided to ask a local consultant to help her. The consultant asked her several
questions. What is the purpose of this expansion? Which customers do you want to serve? If it is the rich
ones, in any case they come and buy from you here. Which are the towns she wants to have it and what time
frame does she plan to do it? What is the likely cost per shop and how will she find money? Who will run it
and how will she account for it, deposit the money in the bank daily, pay wages, etc.? Of greater worry for
her were the latest bout of increase in the raw material and fuel prices. She had been holding prices even at
the cost of her margin and did not increase her prices over the last three years despite six to seven fuel price
hikes and the increase in raw material cost over a 100%. Fortunately, her products were so unique that she
had little competition and the workers were loyal and committed. Why cannot she simply franchise it and
stick to only production while letting someone else run the shops? Oh! Unthinkable that someone else sells
her stuff and how she could be living without all those dotting and caring remarks by the customers who
loved her product. The questions kept whizzing in her mind. Finally, the consultant told her that she needs
to plan and decide on all these and that he would be back after week. He said, “in the meanwhile, you should
think of other planning issues so that next time we meet, we can draw out a final plan”. As the consultant
left, the word plan rung in her ears, yet she knew little about what she had to do though she knew that she
was a successful baker without doing all these…..or had she done all these unconsciously?
Questions to be answered:
1. Rakhi is the owner of Shambhavi Bakers. Discuss the functions performed by Rakhi as a manager and
the principles followed by Rakhi while the managing the things, in the above case study (Any 7
principles – 3.5 marks)
2. Describe the relative importance of each of the three basic managerial skills with reference to the
above case study (1.5 marks).
Case Study 3
Mr. Raju Raman had a family consisting of his wife and two children. He was a carpenter who used to work
on daily wages. In the spare time, he used to make tables and sell it to his neighbours and in the local area.
After 10 years of hard work as a daily wage labourer who worked for others, he thought he will stop doing it
and make and sell tables on a full-time basis. He hired a small room for Rs. 3000 a month, bought some
electric saws and other tools with the saving he had made, asked his wife and son to help him. He then went
around various furniture shops and told them that he makes tables to order and gave them his mobile
number. Soon orders started to flow and Raju decided to call his carpenter friends, Shyam and Sanju, to
come and work for him on a daily basis but offered them Rs. 350 per day instead of the market rate of Rs.
400. They were happy as they had work daily and could do it in an organized manner under one person. As
the work grew, he told them that he will pay them a daily wage of Rs. 350 and an additional of Rs. 50 per
table they made. They worked hard and often late into the evening and on an average made Rs. 500 a day
as it was easy making a table to clear specifications and using the electric tools rather than sweat it out in
the backyard of someone as a casual labourer sawing away with their handsaws. Despite their long hours,
they could not complete the order. Hence, Raju hired 4 more carpenters and made his friend Shyam to take
charge of making tables with two newly hired carpenters and Sanju to take charge of making chairs with the
other two newly hired carpenters. In addition, he hired Pankaj to buy wood and other fitments, take the
finished tables and chairs to various stores, collect the money, and pay electricity bills, and other odd jobs
outside the shop. The cost of wood suddenly rose, and his traditional timber mill owner explained to him the
how the increase in cost of diesel has resulted in increased cost of transportation. He could understand that
since the tempo owner who takes his finished products to various stores too had hiked the cost of trips.
Fortunately, one engineering college was coming up near his shop and their demand for tables and chairs
seemed to be ever increasing. Raju pitched in showing how he made the very same furniture for big furniture
shops in the city and how he could provide them these at a lower cost if they gave him bulk orders. As he
saw growth, he put together a team to make new products for the colleges so that they can be modular,
strong to withstand the rough use by students, low cost, and with good aesthetics and called this team
‘creative team’. Of course, the members of the creative team were select carpenters and his favourite Pankaj
who by now had three assistants and had mastered the business of marketing and pricing of the products
and book keeping to an extent.
Questions to be answered:
1. Citing the lines from above case, discuss the managerial functions performed by Raju (3.5 marks).
2. Describe the relative importance of each of the three basic managerial skills with reference to the
above case study (1.5 marks).
Case Study 4
She is trying to “make a difference” in the way the U.S. federal government operates and in the way the
public perceives it. She’s a champion of change who is inspiring confidence both within and outside her
department. Who is she? “She” is Hazel O’Leary-the Secretary of Energy in President Bill Clinton’s
administration. Although she manages only one department in the vast and cumbersome federal
bureaucracy, O’Leary is attempting to bring a new look to the way her small corner of the government is
managed.
Her main goal for managing the Department of Energy is making sure that the department is accountable
for what it accomplishes. She’s also interested in changing the way the department does its work. She’s on
a crusade to open up for public scrutiny a department that’s long been shrouded in secrecy-building bombs,
creating enormous supplies of toxic waste while building those bombs, and keeping Americans in the dark
about many of the Department of Energy’s activities. What spurred O’Leary into action was the surprising
discovery that her department had secretly carried out radiation experiments on Americans for nearly forty
years. O’Leary says, “To look in the eyes of one who clearly has been a victim or believes that he or she has
clearly been a victim and to find those individuals shocked because anyone in government gives a damn is
what drives me.”
O’Leary recognizes how important it is for her to be a visionary, dynamic leader. Soon after taking the
position as Secretary of Energy, she proposed to her senior staff members that they be prepared to change.
She also recommended that they make plans for what changes needed to be implemented and how to bring
about that change. The type of dramatic change effort that O’Leary is spearheading has meant negotiating
with and bringing together dozens of departmental “fiefdoms” that would have preferred to keep things as
they were. In “opening up” the Department of Energy, O’Leary is also taking her message beyond
Washington, DC. She’s talked to top scientists throughout the United States about the need to abandon
weapons technology research and instead to focus on finding ways to apply this expertise to the business
world and peace-time applications.
Hazel O’Leary vividly demonstrates the varied roles that managers must play and the types of functions
they must engage in as they get important activities completed effectively and efficiently with and through
other people. She’s a good example of the new look of management in the federal government.
Questions to be answered:
1. What management functions do you think O’Leary might be engaging in as she attempts to change
the Department of Energy? Discuss. (3.5 marks)
2. Describe the relative importance of each of the three basic managerial skills with reference to the
above case study (1.5 marks).
Case Study 5
Anita Singh started an organization 20 years ago when funding from Government and donor agencies was
not common. She set up a programme for training and rehabilitating the physically disabled teenagers of her
area in New Delhi. At that time, general society also did not make much donations for charitable purposes
and, thus, her programme faced the problem of financial crunch. She managed her programme in a manner
that she could raise money for running on its own. She approached the Ministry of Human Welfare and
managed to get some donation. She also used her personal resources and raised personal loans. Along with
two friends, thus, she set up the Helpage Union to take care of the physically challenged teenagers.
She set up various work centres where the disabled were taught to work on assembly line operations
like cotton, lamps, jute carpets, baskets, textile, wool, candles, tea etc. Each person was placed on a specific
operation and his output was passed at the next work station for further processing.
The goods produced were used for internal consumption and surplus was sold in the market for
sustenance of the programme. The goods were produced, priced and sold according to market demand.
People bought these goods because of their quality and not as charity.
Today, Anita’s programme has grown to an enormous size. There are about 80 handicapped adult trainers
who teach vocational skills to about 500 handicapped adults in the town. Financing is no more a problem. It
is generating internal surplus and donations are also generously given by the organisations and society
members. Her organisation is turning into a full-fledged Non-Government Organisation (NGO) working for a
social cause.
Questions to be answered:
1. Citing the lines from above case, discuss the managerial functions performed by Anita Singh (3.5
marks).
2. Describe the relative importance of each of the three basic managerial skills with reference to the
above case study (1.5 marks).