Case Studies

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CASE STUDY -1

Tangy spices Ltd, the countries’ biggest spices marketer has decided to launch a
hostile bid for Italy’s major spice marketer Chilliano. This is a rare case of an
Indian company making an unsolicited hostile bid for a foreign company. The
Tangy Spices Ltd. has competencies in Indian spices. The major destination
markets for the Tangy spices Ltd. exports have been the Europe and America. The
competencies of Chilliano lie in Italian herbs and spices. The Indian company with
the takeover wishes to synergies its operations in the world market. It also wants to
take advantage of the reach enjoyed by the Italian company in several countries
where its products are not beng sold presently. The move of hostile takeover
follows Chilliano’s rejection to an agreement entered a year back. At that time
Chilliano was suffering losses and it offered majority shares at a price of € 2.25. A
total of 20% shares were transferred at that time. In one year Chilliano was able to
turnaround its operations and the company made handsome profits in the last
quarter. The promoters who have residual holding of 35% in the company are
reluctant to transfer the shares now. They have rejected the agreement with a plea
that the earlier offer price was not sufficient. Tangy spices Ltd has revised its offer
to € 2.95. By this lucrative offer some of the large shareholders of Chilliano reveal
their interest for selling their stakes. On the other hand, promoters maintained their
position on this matter. Through the process of buying of shares in the market the
Tangy spices Ltd. gradually consolidated its holding in Chilliano to 45%. Being a
major shareholder they were ready for a takeover. At the same time, Tangy spices
Ltd. was trying hard to improve their position so that they do not leave any space
for Chilliano’s promoters in future.
Read the above case and answer the following questions:

Q .(1) What strategic alternative is followed by Tangy spices Ltd?


Q. (2) Is the hostile takeover by an Indian company appropriate?
Q.(3) Why the Tangy Spices Ltd. is interested in this takeover?
CASE STUDY-2
Meters Limited is a company engaged in the designing, manufacturing, and
marketing of instruments like speed meters, oil pressure gauges, and so on, that are
fitted into two and four wheelers. Their current investment in assets is around Rs. 5
crores and their last year turnover was Rs. 15 crores, just adequate enough to
breakeven. The company has been witnessing over the last couple of years, a fall in
their market share prices since many customers are switching over to a new range
of electronic instruments from the ange of mechanical instruments that have been
the mainstay of Meters Limited. The Company has received a firm offer of
cooperation from a competitor who is similarly placed in respect of product range.
The offer implied the following: (i) transfer of the manufacturing line from the
competitor to Meters Limited; (ii) manufacture of mechanical instruments by
Meters Limited for the competitor to the latter's specifications and brand name; and
(iii) marketing by the competitor. The benefits that will accrue to Meters Limited
will be better utilization of its installed capacity and appropriate financial
compensation for the manufacturing effort. The production manager of Meters
Limited has welcomed the proposal and points out that it will enable the company
to make profits. The sales manager is doubtful about the same since the demand for
mechanical instruments in shrinking. The chief Executive is studying the offer.

Q.(1) What is divestment strategy? Do you see it being practised in the given case?
Explain.

Q(2) What is expansion strategy? What are the implications for Meters Limited in
case it is adopted?
CASE STUDY -3

Sahni Auto Industries is a manufacturer and exporter of Autoparts with an annual


turnover of Rupees one thousand crores. It employs about 2,00 persons in its
factory in Punjab and its other offices in India and abroad. The Personnel
Administration and Human Resources Department of the company is headed by
Mr. Amit Kapoor‐the Chief Personnel Manager. Mr. Amit Kapoor, an automobile
Engineer joined the company 5 years ago as Product Development Manager. After
a successful stint of 4 years as Product Development Manager, he was transferred
to Personnel Administration and Human Resources Department as the Chief
Personnel Manager as a part of Career development plan. Mr. Vikas, MBA in
Human Resources from a renowned Business school, joined the company as
Personnel Manager only 3 months back. He reports to Mr. Amit Kapoor‐the Chief
Personnel Manager. He handles all routine personnel and industrial relations
matters. One day, during informal discussion with Mr. Amit Kapoor, Mr. Vikas
suggested him of linking Human Resources Management with Company's
strategic goals and objectives to further improve business performance and also
to develop Organisational culture that fosters more innovative ideas. He also
advocated creating abundant 'Social Capital' on the ground that people tend to be
more productive in an environment which has trust and goodwill embedded init
rather than which is highly hierarchical and formal. Mr. Amit Kapoor disagreed
with Mr, Vikas and told him that the role of Human Resources Department was
only peripheral to the business and all his suggestions about its strategic role
were beyond the purview of Personnel Administration and Human Resources
Department. After this, Mr. Vikas started having number of arguments with Mr.
Amit Kapoor in several issues relating to personnel and industrial relations since
he felt that a person with a degree in Human Resources Management was in a far
better position to run Personnel Administration and Human Resources
Department. Mr. Amit Kapoor‐‐the Chief Personnel Manager had often shown his
displeasure on Mr. Vikas's argumentative ‐ tendency and had made it known to
the General Manager. The General Manager called Mr. Amit Kapoor in his office
to inform him that he has been elected for an overseas assignment. He further
told him to find a suitable person as his successor; he even suggested Mr. Vikas as
a possible candidate. Mr. Amit Kapoor, however, selected Mr. Balram, who was
working as Training Manager in a Multinational Company for the last 5 years. Mr.
Vikas, soon started having arguments with Mr. Balram also over number of issues
relating to industrial relations since he felt that he had no experience in handling
industrial relations matters. Mr. Balram now realized that Mr. Vikas was trying to
make things difficult for him. After a series of meetings with the General
Manager, Mr. Balram eventually succeeded in convincing him to transfer Mr.
Vikas to an office outside Punjab. On learning about his impending transfer, Mr.
Vikas wrote a letter to the General Manager joining details of various instances,
when Mr. Balram had shown his incompetence in handling problematic
situations. When asked for explanation by the General Manager, Mr. Balram had
refuted almost all the allegations. The General Manager accepted his explanation
and informed Mr. Vikas that most of his allegations against Mr. Balram were
unwarranted and baseless. He further advised him to avoid confrontation with
Mr. Balram. Mr. Vikas then wrote a letter to the Chairman repeating all the
allegations against Mr. Balram. On investigation, the Chairman found most of the
allegations true. He then called all the three‐the General Manager, the Chief
Personnel Manager and the Personnel Manager in his office and implored them
to forget the past and henceforth to wor in coordination with each other in an
environment of Trust and Goodwill.

Q.(1) Identify and discuss the major issues raised in the case.

Q.(2) Would you justify Mr. Vikas's argumentative tendency with the Chief
Personnel Managers ? Give reasons for your answer.
Case study 4

The JAW Bottling company has recently introduced a new beer to the market
called HEAVY. It is extra high in calories. It has been developed
specifically for those people that enjoy feeling full after only one beer.
The materials handling supervisors at JAW Bottling have been receiving
complaints from lift truck drivers that cases of the new HEAVY beer are
slipping off pallets during intra-plant movement and truck deliveries.
Thus far the JAW engineering department has tried to eliminate or reduce
case slippage through the use of the following methods:
1. Top case clamp on the fork truck.
2. Strapping cases to pallet.
3. Plastic wrapper around cases.
4. The use of a large size pallet with a retainer strip nailed along
the edges.

Question: Using a method other than those described above, can the case
slippage problem be solved?

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