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Business Communication

A REPLY SENT TO AN ERRING CUSTOMER

Dear Sir,

Your letter of the 23rd, with a cheque for Rs. 25,000/- on account, is to hand.

We note what you say as to the difficulty you experience in collecting your outstanding accounts, but we are compelled to remark that we do not think you are treating us with the consideration we have a right to expect.

It is true that small remittances have been forwarded from time to time, but the debit balance against you has been steadily increasing during the past twelve months until it now stands at the considerable total of Rs. 85,000/-

Having regard to the many years during which you have been a customer of this house and the, generally speaking, satisfactory character of your account, we are reluctant to resort to harsh measures.

We must, however, insist that the existing balance should be cleared off by regular installments of say Rs. 10,000/- per month, the first installment to reach us by the 7 th. In the meantime you shall pay cash for all further goods; we are allowing you an extra 3% discount in lieu of credit.

We shall be glad to hear from you about this arrangement, as otherwise we shall have no alternative but definitely to close your account and place the matter in other hands.

Yours truly,

Questions:

1. Comment on the appropriateness of the sender’s tone to a customer.

2. Point out the old – fashioned phrases and expressions.

3. Rewrite the reply according to the principles of effective writing in business.

NO. 2

WAVE

(ATV : Advertising Radio FM Brand)

A young, gorgeous woman is standing in front of her apartment window dancing to the 1970s tune, “All Right Now” by the one – hit band free. Across the street a young man looks out of his apartment window and notices her. He moves closer to the window, taking interest. She cranks up the volume and continues dancing, looking out the window at the fellow, who smiles hopefully and waves meekly. He holds up a bottle of wine and waves it, apparently inviting her over for a drink. The lady waves back. He kisses the bottle and excitedly says, “Yesss.” Then, he gazes around his apartment and realizes that it is a mess. “No !” he exclaims in a worried tone of voice. Frantically, he does his best to quickly clean up the place, stuffing papers under the sofa and putting old food back in the refrigerator, He slips on a black shirt, slicks back his hair, sniffs his armpit, and lets out an excited , “Yeahhh!” in eager anticipation of entertaining the young lady. He goes back to the window and sees the woman still dancing away. He points to his watch, as if to say “ Come on. It is getting late.” As she just continues dancing, he looks confused. Then a look of sudden insight appears on his face, “Five,” he says to himself. He turns on his radio, and it too is playing “All Right Now.” The man goes to his window and starts dancing as he watches his lady friend continue stepping. “Five, yeah,” he says as he makes the “okay” sign with his thumb and forefinger. He waves again. Everyone in the apartment building is dancing by their window to “All Right Now.” A super appears on the screen: “Are you on the right wavelength ?”

Questions :

1. What is non – verbal communication ? Why do you suppose that this commercial relies primarily on non-verbal communication between a young man and a gorgeous woman ? What types of non – verbal communication are being used in this case ?

2. Would any of the non-verbal communications in this spot (ad) not work well in another culture ?

3. What role does music play in this spot ? Who is the target market ?

4. Is the music at all distracting from the message ?

5. How else are radio stations advertised on TV ?

NO. 3

ARVIND PANDEY CAUGHT IN BUSINESS WEB

Arvind Pandey is a project manager at Al Saba Construction Company in Muscat. It s a flourishing company with several construction projects in Muscat and abroad. It is known for completing projects on time and with high quantity construction. The company’s Chairman is a rich and a highly educated Omani. A German engineer is Arvind’s Vice – President for urban and foreign construction projects.

Three months ago, Al Saba had submitted a tender for a major construction project in Kuwait. Its quotation was for $ 25 million. In Kuwait the project was sponsored and announced by a US – based construction company called Fuma. According to Al Saba, their bid of $ 25 million was modest but had included a high margin of profit.

On 25 April, Arvind was asked to go to Kuwait to find out from the Fuma project manager the status of their construction proposal. Arvind was delighted to know that Fuma had decided to give his company. (Al Saba) the construction project work. The project meant a lot of effort and money in planning the proposed construction in Kuwait.

But before Arvind could tank the Fuma project manager, he was told that their bird should be raised to $ 28 million. Arvind was surprised. He tried to convince the Fuma project manager that his (Arvind company had the bast reputation for doing construction work in a cost effective way . However, he could always raise the bid by $ 3 million. But he wanted to know why he was required to do so.

The Fuma manager’s reply was, “That’s the way we do our business in this part of the world, $ 1 million will go to our Managing Director in the US, I shall get $ 1 million, you, Mr. Pandey, will get $ 1 million in a specified account in Swiss Bank.

Arvind asked, “ But why me ?”

“ So that you never talk about it to any one.” The Fuma Project Manager said.

Arvind promised never to leak it out to any one else. And he tried to bargain to raise the bid by $ 2 million. For. Arvind was familiar with the practice of “ pay – offs” involved in any such thing. He thought it was against his loyalty to his company and his personal ethics.

Arvind promised the Fuma project manager that the bid would be raised to $ 28 million and fresh papers would be put in. He did not want to lose the job.

He came back to Muscat and kept trying to figure out how he should place the whole thing before his German Vice President. He obviously was at a loss.

Questions :

1. Analyse the reasons for Arvind Pandey’s dilemma.

2. Does Arvind Pandey really face a dilemma ?

3. In your view what should Arvind Pandey do ? Should he disclose it to his German Vice President ?

NO. 4.

COMPANY ACCEPTING A CONTRACT

A computer company was negotiating a very large order with a large size corporation. They had a very good track record with this client.

In this corporation, five different departments had pooled their requirements and budgets. A committee was formed which had representation from all the departments. The corporation wanted the equipment on a long lease and not outright purchase. Further, they wanted all the hardware and software form one supplier. This meant that there should be bought – out items from many suppliers since no one supplier could meet all the requirements of supply from its range of products.

The corporation provided an exhaustive list of very difficult terms and conditions and pressurized the vendors to accept. The computer company who was finally awarded the contract had agreed to overall terms

that were fine as far as their own products were concerned but had also accepted the same terms for the brought – out items. In this case, the bought – out items were to be imported through a letter of credit. The percentage of the bought – out items versus their own manufacture was also very high. One of the terms accepted was that the “system” would be accepted over a period of 10 days after all the hardware had been linked up and software loaded.

The computer company started facing trouble immediately on supply. There were over 100 computers over a distance connected with one another with software on it. For the acceptance tests, it had been agreed that the computer company would demonstrate as a pre-requisite the features they had claimed during technical discussions.

Now, as you are aware, if a Hero Honda motorcycle claims 80 km to a litre of petrol, it is under ideal test conditions and if a motorcycle from the showroom were to be tried for this test before being accepted, it would never pass the test. In corporation’s case, due to internal politics, the corporation persons from one department – who insisted on going exactly by the contract – did not sign acceptance since the “ system” could not meet the ideal test conditions.

Further, in a classic case of, “ for want of a horse – shoe, payment for the horse was held up”, the computer company tried to get the system accepted and payment released. The system was so large that at any point of time over a period of 10 days something small or the other always gave problems. But the corporation took the stand that as far as they were concerned the contract clearly were concerned the contract clearly mentioned that the “system” had to be tested as a whole and not module by module.

Questions :

1. Comment on the terms and conditions placed by the corporation.

2. What factors influenced the computer company’s decision to accept the contract ?

3. Was it a win – win agreement ? Discuss

NO. 5

EMPLOYMENT INTERVIEW OF R P SINHA

Mr. R P Sinha is a MBA. He is being interviewed for the position of Management Trainee at a reputed company. The selection committee’s is chaired by a lady Vice – President. Mr. Sinha’s interview was as follows :

Committee : Good morning !

Mr. Sinha : Good morning to Sirs and Madam !

Chairperson : Please, sit down.

Mr. Sinha : Thank you (sits down at the edge of the chair, keeps his portfolio on the table)

Q. Chairperson : You are Mr. R. P. Sinha

A Sinha : Yes, Madam. This is how I am called.

Q. Chairperson : You have passed MBA with 1st Division.

A. Sinha : Yes, Madam.

Q. Chairperson : Why do you want to work in our organization ?

A Sinha : It is just like that. Also, because it has good reputation.

Q. Member A : This job is considered to be quite stressful. Do you think you can manage the stress involved.

A. Sinha : I think there is too much talk about stress these days. Sir, would you tell clearly what you mean by stress ? I am very strong for any stress.

Q. Member B : What are your strengths ?

A. Sinha : Sir, who am I talk boastfully about my strengths. You should tell me my strengths.

Q. Member C : What are your weaknesses ?

A. Sinha : I become angry very fast.

Q. Member A : Do you want to ask us any questions ?

A Sinha : Yes Sir ! What are the future chances for one who starts as a management trainee ?

The member tells M. Sinha the typical career path for those starting as Management Trainee. The Chairperson thanks Mr. Sinha. Mr. Sinha promptly says in reply, “you are welcome,” and comes out.

Questions :

1. Do you find Mr. Sinha’s responses to various questions effective ? Give reasons for your view on each answer given by Mr. Sinha.

2. Rewrite the responses that you consider most effective to the above questions in a job interview.

3. Mr. Sinha has observed the norm of respectful behaviour and polite conversation. But, do you think there is something gone wrong in his case ? Account for your general impression of

Mr. Sinha’s performance at the interview.

NO. 6

Comment on the form and structure of the Report.

SUB:  International Business.

International Business Section A (8 Marks Each Question) ( Attempt any 5 )

1. What are basic differences between domestic and international business?

2. While some see globalization as the avenue to the development of poor nations, others see it intensifying misery and inequalities. Critically examine the above statement in today's context?

3. Explain - Localisation of global strategy

4. Explain - Technology contracting (licensing) as an alternative to FDI or ownership strategy.

5. Explain - Major factors contributing to the success of international strategic alliances.

6. Explain the role of “Power Distance" in understanding Hofsted's work on cross-cultural prospective. How does this help in managing international environment?

7. Discuss the relationship between an MNE and its subsidiaries in the context of the "make or buy" decision. What are the implications so far as the organization structure/design is concerned?

8. Explain the role of bargaining power" in managing negotiations in international business.

9. Briefly discuss the direct and indirect impacts of FDI on LDCs

SECTION B (20 Marks Each Case)

6. Please read the following case study carefully and answer the questions given at the end. SEN-SCHWITZ

To the Florid-faced German at Frankfurt Airport's immigration-counter, he appeared to be just another business traveller. True, but a bit of an understatement. The man under scrutiny was Binoy Sen, whom the Indian media referred to as the Boom-Box king.

At 14, he had assembled, from parts scavenged from the local dump, a spool-recorder that had fitted nicely into a suitcase. By the time he time he was 37, in 1979, Sen & Sen (S&S), a company he had promoted with his elder brother, Sanjoy --- who made up for his lack of technical expertise with a razor sharp business brain --- was Asia's largest manufacturer of radios and cassette-recorders. Now, at 56, he presided over India's largest audio-Products Company. Sen-Schwitz, a joint venture with the Frankfurt-based consumer electronics giant, Schwitz GMBH. S&S association with Schwitz had actually begun in 1984. Music had become a movement in Europe at that time, with immigrant labour of all colour and teenagers of all sizes constituting market-segments that no company could afford to ignore. But their means were slender, and intensity of output, rather than nuances of pitch and tone, was what they were concerned about. Since assembling was a labour and cost intensive process, at least in Europe, Schwitz could not manufacture low-end boom-boxes cheaply. So, the company turned to Asia, where it was certain some Chinese or Taiwanese company could meet its requirements. None could. However, on a reach of Taiwan, one of the company's managers had spotted a couple of S&S products at a retail outlet. While this Indo-German relationship had begun as a vendor-buyer one, Helmut Schwitz, 51, the CEO of Schwitz --- no relation of Adolf Schwitz, who had founded the company just after the end of World War II --- took an instant liking to the Sen brothers. Two years after S&S started supplying it products, in 1986, the German company acquired a 10 per cent stake in its Indian supplier. IN 1992, when Schwitz released that he could no longer ignore the Indian market and the Sens accepted the fact that they couldn't survive the threat from global competition without technology and marketing support from their German Partner, they formed a formal joint venture. The Sens and the German company both held 26 per cent stakes in Sen-Schwitz, with the rest being divided between the financial institutions and the investing. The joint venture did well right from its inception. The transnational's superior quality standards and S&S strong distribution network worked wonders. Within 2 years, the company had managed to carve out a 45 per cent share of the Rs. 795-crore market. The Sens were happy and so was Schwitz. By 1998, Sen Schwitz's share had increased to 65 per cent in a market that had grown to Rs. 1,150 crore, And when Sen reached Frankfurt for the annual review of the joint venture that Schwitz GMBH insisted on --- the company had 7 joint ventures across Asia and Latin America --- he could not but help feeling that all was well with the world of music and money. Sen's feelings were only amplified during the review. After the preliminary greetings, Helmut Schwiz took the oais. The room darkened, and a series of PowerPoint images flashed on the screen behind Schwiz as he spoke. Sen caught only fragments of the German's heavily accented voice, his attention was focused on the images and the bullets of text they contained. Sen scrawled a few of them on his notepad

* A turnover of $ 100 billion by 2005 * AQ growth - rate of 20 per cent a year. * 35 per cent of the growth coming from India and China Then. Schwiz started speaking about India and Sen's attention moved from the screen to the man. What he heard pleased him. "Sen-Schwiz has a marketshare of 65 per cent in a market that is growing at the rate of 30 per cent a year. As far as our targets for 2005 go, we believe that it is our most promising joint venture." The blow fell later, during the break for lunch. Sen and Chris Liu who headed the company's joint venture in Taiwan, were exchanging notes when Schwiz butted in and, in his characteristic overbearing fashion, quickly monoeuvrec Sen to one corner of the room. "India is, clearly, the market of the future, Binoy," he said, biting into a roll. "You're doing a great job, and can expect support from me for all your endeavours. But I'm worried about your margins." Here it comes, thought Sen, the twist in the tall. "A post tax margin of 8 per cent doesn't look too good," continued Schwiz, "especially when seen in the light of rising volumes. We should take a fresh look at our Indian operations, Why don't you meet with Andrew?" Suddenly, Sen was on guard. The 55 year old Andrew Fotheringay was Schwiz's President (International Operations). Sen liked him; they had worked together when the joint venture was being set up, and had been impressed by his eye for detail. But he also knew that Fotheringay was Schwiz's hatchetman. "What's on your mind, Helmut ?" he asked point-blank "oh, nothing yet," replied Schwiz, "but we have to find a way to introduce more products into the Indian market without stretching Sen-Schwitz, Talk to Andrew." That wasn't to be Fotheringay, whose wife was 9 months pregnant, had to suddenly leave for London, but promised to fly down to Calcutta, where Sen-Schwitz was based as soon as the baby was born. Now, Sen was sure that something was up : Fotheringay wasn't the kind of manager to do something like that for nothing. Sen voiced his fears at a meeting of the Sen-Schwitz board, which had been scheduled on the day of his return. One of the board members, R. Raghavan, 53 a professor of corporate strategy at the Indian Institute of Management, Gauhati, felt that Sen was over reaching I don't think it is quite what you think, Sanjoy he started although Sen hadn't put any specifics to his fears. "Sen-Schwitz is, as BUSINESS TODAY keeps reminding us, evidence that there is, indeed, scope for a win-win joint venture even in the Indian context." He was wrong. Sure, the joint venture has benefited from the German parent's technical expertise. In turn Schwitz GMBH had profited substantially from Sen Schwitz's dividend pay-outs : more than 25 per cent every year. Werner Kohl, 48 Sen Schwitz's Technical Director, seemed to agree with the professor. Kohl was a Schwitz nominee on the board, and had been a Vice-president (Operations) at the transnational's Hamburg plant before being seconded to Sen-Schwitz for a 5 year period. But Kohl Sen knew was not likely to know what was happening back home.

The one person who agred with Sen was Rajesh Jain 44, the IDBI nominee on the board, who expressed the opinion that Schwiz GMBH could possiibly, be planning another joint venture with some other company. That sounded far-fetched even to Sen. Sen-Schwitz's closest per cent. Besides, no company could match Sen-Schwitz;'s distribution network. So, he decided to let his fears abate till Fotneringay could either dispet them --- or make them come alive. True to his word, Fotheringay, now the proud father of his first daughter landed up in Calcutta a week later. He first met the company's functional heads, and gave them a pep talk: " Sen-Schwitz's volumes-thrust should be backed by a profitability focus. Once we ensure margins of 13 to 15 per cent, we will be on our way." Alone with Sen, though, Fotheringay quickly laid his cards on the table. Schwitz, he informed Sen, wished to set up a 100 per cent subsidiary in the country. Sen's mind was, suddenly, clear. He had been a fool not to see it coming. All that talk about restructuring the joint venture, introducing newer models, and the need for higher margins led up to just one thing: a fully-owned Schwiz subsidiary." So what does this mean for us, Andrew," he asked, "Is this advance warning about a parting of ways?" Fotheringay was quick to dispel this notion. "The subsidiary will not compromise the interests of the joint venture. Schwitz has a long-term commitment to the India market, and this subsidiary is just a step in that director." All this talk-about commitment, realized Sen, was taking them nowhere. He sounded just a little imitated when he spoke: "I just can't understand why you people are even considering a subsidiary when the joint venture has been so successful. We have a great brand, good products, the finest distribution network in the business, and an excellent supply chain Together, we have created a matrix that has delivered. Why does Schwitz want to reinvent the wheel?" Fotheringay's answers didn't satisfy him. He made some noises about the subsidiary taking upon itself a large portion of the expenses involved in building the Sen-Schwitz brand, thereby reducing its operational expenses, and improving its margins. Sen was quick to point out that the Government of India did not view proposals for fully-owned marketing subsidiaries favourably. "Besides, does this mean that we transfer our marketing and distribution network to the subsidiary?" he asked incredulously. Fotheringay side-stepped the issue: "No, no, the subsidiary will only manufacturer products." Reading the look on Sen's face, he hastened to enumerate Schwitz's gameplan: 'Of course, none of our offerings will complete directly with Sen-Schwitz As you are aware,the audio systems market is fairly segmented, so there is a great deal of potential for new offerings. We want to set up a committee from Sen-Schwitz and Schwitz to decide on the respective roadmaps of the joint venture and the subsidiary so as to avoid any conflict." "That apart," he smiled, here comes the carrot, thought Sen and he wasn't wrong,"the Sens will have the option to buy upto 49 per cent of the subsidiary's equity when it goes in for an

IPO." The subsidiary is not even off the ground, thought Sen and Andrew is already speaking in terms of US and THEM Fotheringay took Sen's silence to mean acceptance."The other reason," he continued, "is that we cam use the subsidiary to introduce our premium brands into the country. There is evidence that the market for premium audio-systems is all set to boom. Think about it, Binoy. The subsidiary will only strengthen the strategic relationship between the Sens and Schwitz GMBH." The Sens aren't involved, thought Sen; this is an issue that concern Sen-Schwiz andSchqitz. But he didn't want to split hairs, and promised, instead, to think about it. Sen-Schwitz's Executive Committee thought about it for 3 months. And it still didn't make sense to them. Schwitz GMBH operated through joint ventures in every part of the developing world. Only in the US, UK, and France did it have fully-owned subsidiaries, using the subsidiary as a sink that would absorb the joint venture's marketing expenses didn't make sense too. "It sounds altruistic," said V.K. Kapur, 44, the company's head of marketing. "If launching more products is the only behind the subsidiary, there is no reason why the joint venture cannot serve that purpose." Sen and the rest of the Committee had to agree. "There's also no reason why we cannot improve our margins by focusing on our operational efficiencies," argued Ajay Singh, 46, Sen Schwitz Director, operations, and Sen had to agree. He decided to discuss the matter with Sanjoy, who had retired from the business, and was involved in managing a charity. But Sen didn't get a chance. News-agency had picked up a report that had appeared in the Financial Times Schwitz's decision to set up a 100 per cent subsidiary in India. The report created a major stir in the Bombay stock Exchange, with the price of Sen-Schwitz's stock falling by 30 per cent a day. It was evident to Sen that no matter what Fotheringay and Schwitz thought, the stock-market perceived the subsidiary as a threat to the joint venture. It was also evident that the stock-market viewed Schwitz as the more valuable brand."I understand,"Sanjoy told Binoy, when the situation had been explained to him. The technology is Schwitz's. The brand, at least the more powerful one, is theirs. And they have access to our distribution network. Face it, we don't have a plank to fight on."

Questions: (a) Identify the sequence of events that has led to the current problem. (b) Analyse the problem in the context of the process of

globalization that has been increasingly witnesses over the past decade or so. (c) Examine the "fairness" of establishing a 100% subsidiary by Schwitz GMBH when the alliance is on. (d) What future course of action would you suggest to S&S? Give reasons for your answer.

7. Please read the following case study carefully and answer the questions given at the end. Sunlight Chemicals Starting at the vast expanse of the Arabian Sea from his comer office at Bombay's Nariman Point, Ramcharan Shukla the 53-year old executive vice-chairman and managing Director of the 500-crore Sunlight Chemicals. (Sunlight felt both adventurous and apprehensive. He knew he had to quicken the global strides Sunlight had made in the last four years if the company was to benefit from its early gains in the world markets. However, he was also shaken by a doubt: would his strategy of prising open international markets by leveraging the talents of a breed of managers with transnational competencies succeed? Globalisation had been an integral part of Sunlight's business plans ever since Shukla took over as managing director in 1990 with the aim of making it the country's first international chemicals major Since then Sunlight --- the country's third-largest chemicals maker --- had developed export markets in as many as 40 markets, with international revenues contributing 40 per cent of its Rs. 500 crore turnover in 1994-95. The company also set up manufacturing bases in eight countries --- most recently in China's Shenzhen free trade zone --- manned by a mix of local and Indian employees. These efforts at going global first took shape in December 1991 when Shukla, after months of deliberations with his senior management team, outlined Sunlight's Vision 2001 statement. It read " "We will achieve a turnover of $ 1 billion by 2001 by tapping global markets and developing new products." The statement was well-received both within and outside the company. The former CEO of a competitor had said in a newspaper report: "Shukla has nearly sensed the pressures of operating in a new trade with a tough patents regime." But Shukla also realised that global expertise could not be developed overnight. Accordingly, to force the company out of an India-centric mindset, he started a process of business restructuring. So, the company's business earlier divided into domestic and export divisions, was now split into five areas: Are I (India and China), Area 2 (Europe and Russia), Area 3 (Asia Pacific), Area 4 (US) and Area 5 (Africa and South America). Initially managers were incredulous, with one senior manager saying: "This is crazy. It lacks a sense of proportion." The Cynicism was not misplaced. After all, the domestic market --- which then contributed over 90 per cent of the company's turnover --- had not only been dubbed with the Chinese market, but had also been brought at par with the areas whose collective contributions to the turnover was below 10 per cent Shukla's explanation, presented in an interview to a business magazine: "Actually, the rationale is quite simple and logical. We took a look at how the market mix would evolve a decade from now and then created a matrix to suit that mix. Of course, we will also set up manufacturing facilities in each of these areas to change the sales-mix altogether." He wasn't wrong. Two years later, even as the first manufacturing facility in Vietnam was about to go on stream, the overseas areas' contribution to revenues rose to 20 per cent. And the mood of the management changed with the growing conviction that export income would spoon surpass domestic turnover. Almost simultaneously, Shukla told his senior managers that the process of building global markets could materialise only if the organisation became fat flexible, and fleet-footed. Avinash Dwivedi, am management

consultant brought in to oversee Sunlight's restructuring exercise, told the board of directors: "Hierachies built up over the years have blunted the company's reflexes, and this is a disadvantage while working in the competitive global markets." The selection of vice-president for the newly-constituted regions posed no immediate problem. For Sunlight had several general managers --- from both arms of marketing and manufacturing -- whose thinking had been shaped by the company's long exposure to the export markets. For obvicus reasons, the ability to build markets was the primary criterion for selection. The second criterion was a broad business perspective with a multi-functional, multi-market exposure. That was because Shukla felt it did not make good business sense to send a battalion of functional managers to foreign markets when two or three business managers could suffice. But Specific markets also needed specific competencies. That was how Sunlight chose to appoint a South African national to head Area 5. The logic" only a local CEO could keep track of changes in regulations and gauge the potential of the booming chemicals market in the US. However, the effort was always focused on using in-house talent. Shukla put it to his management team: "We should groom managerial talent --- whether local or expatriate --- for all our overseas operations from within the company and should rotate this expertise worldwide. In essence, we should develop global managers within the company." While doing the personnel planning for each area and fixing the compensation packages for overseas Assignment. Sunlight realised the importance of human resource (HR) initiatives. The HR division headed by vice president Hoseph Negi, had been hobbled for years with industrial relations problems caused by the unionisation of the salesforce, " You have to move in step with the company's global strategy." Shukla had told his HR managers at a training session organised by Dwivedi who was spearheading the task of grooming global managers. Four years down the line, Shukla felt that Sunlight was still finding its way around the task Sure, a system was in place. Depending on the requirements of each of the four areas, Sunlight had started recruiting between 25 and 30 MBAs every year from the country's leading management institutes. During the first six months, these young managers were given cross-functional training, including classroom and on-the-job inputs. The training was then followed by a placement dialogue to determine the manager -area fit. If a candidate were to land, for instance, on the Asia-Pacific desk at the head office, he would be assigned a small region, say, Singapore, and would be responsible for the entire gamut of brand-building for a period of one year in coordination with the regional vice-president. The success with which he would complete his task would decide his next job: the first full-time overseas posting. He could be appointed as the area head of, say, Vietnam, which was equivalent to an area sales manager in the home market. After a couple of years, he would return to base for a placement in brand management or finance. A couple of years later, the same manager could well be in charge of a region in a particular area. Over the past four years. Sunlight had developed 30 odd potential global managers in the company spanning various regions using this system. But, considering that the grooming programme was only three years old, Shukla felt that it would take some time for the company's homespun managers to handle larger markets like China on their own. The real problem in this programme was in matching the manager to the market. Dwivedi suggested a triangular approach to get the right fit: define the business target for a market in an area. Look at the candidiate's past Performance in the market, And identify the key individual characteristics for that market. Dwivedi also identified another criterion: a good performance rating at home during the previous two years. Once selected for an overseas posting, the candidate would be given cross-cultural training: a course in foreign languages, interactive programmes with repatriated managers on the nature of the assignment and, often, personality development programmes on the nuances of country business etiquette. Further, an overseas manager would be appraised on two factors: the degree to which he had met his business plan targets for the market, and the extent to which he had developed his team. After all, he had to cachet the posting within three years to make place for his replacement. Achievements were weighed quarterly and annually against sales targets set at the beginning of the year by the vice-president of the region. The appraisal would then be sent to the corporate headquarters in Bombay for review by the senior management committee. Shukla had often heard his senior managers talk appreciatively of the benefits of transrepatriation. "The first batch of returnees are more patient tolerant and manure than when they left home," said Manohar Vishwas, vice-president (finance),"and they handle people better." But the litmus test for the company, Shukla felt would be in managing a foreign workforce --- across diverse cultures --- at the manufacturing facilities in six countries outside India. The Shenzhen unit, for instance had 220 employees, out of which only 10 were expatriate Indians. Further, the six-member top management team had only two Indians. Of course, the mix had been dictated by the country's laws and language considerations. Some of the African markets had their own peculiarities. The entire team of medical representatives, for example, comprised fully-quilifies, professional doctors. Sharad Saxena, vice-president, Area 5, told Shukla: "As there is heavy unemployment in Africa doctors are attracted to field sales work for higher earnings." There were other problems too: as both Chinese and Russian had been brought up on a diet of socialism, they were not used to displaying initiative at the workplace. Dwivedi had suggested that regular training was one of the ways of transforming the workforce. So, Shukla hired a training group from Delhi's Institute of Human Resource Management training to spend a month at Shenzhen. This was later incorporated as an annual exercise. Observing that interpersonal conflicts were common in situation where with single-country background were working together, a new organisational structure was introduced. Here, Sunlight positioned local managers was introduced. Here, Sunlight positioned local managers between an Indian boss and subordinate. Similarly, some Indian managers were positioned between a local boss and subordinate. Says Avishek Acharya vice-president, Area 3: "There were some uncomfortable moments, but it led to a better integration or management principles, work practices, and ethics." Obviously, reflected Shukla, Dwivedi was doing a great job. As he watched the setting sun, however, he found his thoughts turning to a more fundamental question. However immaculate his HR planning had been, had he made a mistake by not developing his strategies first? Was he mixing up his priorities by putting people management" ahead of issues like marketing, technology, and

global trade? Even the HR strategy he had chosen worried Shukla. Should he have opted for more locals in each country? If expatriate managers failed more often than they succeeded in India wasn't the same true for other countries? Questions: 1. Is Sunlight on the right track in going global without trying to consolidate its position further in the home market? 2. Can Sunlight realise its global vision with its current mix of strategies? However fine the company's HR planning had been, had Shukla made a mistake by not developing his strategies first? 3. Are there any gaps in Shukla's game plan to conquer the globe? 4. What are the learnings that you can derive from the "Sunlight" case so far as the internationalization of business is concerned?

8) Please read the following case study carefully and answer the questions given at the end:

Electrolux Electrolux is Sweden's largest manufacturer of electrical household appliances and was one of the world's pioneers in the marketing of vacuum cleaners. However, not all the products the Electrolux name are controlled by the Swedish firm. Electrolux vacuum cleaner sold and manufacturer in the United States, for example, have not been connected with the Swedish Firm since the U.S subsidiaries were sold in the 1960s. The Swedish Firm reentered the U.S. market in 1974 by purchasing National Union Electric, which manufacturers Eureka vacuum cleaners. Electrolux pursued its early international expansion largely to gain economies of scale through additional sales. The Swedish market was simply too small to absorb fixed costs as much as the home markets for competitive firms from larger countries. When additional sales were not possible by exporting, Electrolux was still able to gain certain scale economies through the establishment of foreign production. Research and development expenditures and certain administrative costs could thus be spread out over the additional sales made possible by foreign operations. Additionally, Electrolux concentrated on standardized production to achieve further scale economies and rationalization of parts. Until the late 1960s, Electrolux concentrated primarily on vacuum cleaners and the building of its own facilities in order to effect expansion. Throughout the 1970s, though, the firm expanded largely by acquiring existing firms whose product lines differed from those of Electrolux. The compelling force was to add appliances lines to complement those developed internally. Its recent profits ($220 million in 1983) have enabled Electrolux to go an acquisitions binge. Electrolux acquired two Swedish firms that made home appliances and washing machines. Electrolux management felt that it could use its existing foreign sales networks to increase the sales of those firms in 1973, Electrolux acquired another Swedish firm, Facit, which already had extensive foreign sales and facilities. Vacuum cleaner producers were acquired in the United States and in France; and to gain captive sales for vacuum cleaner. Electrolux acquired commercial cleaning service firms in Sweden and in the United States. A French Kitchen equipment producer, Arthur Martin, was bought, as was a Swiss home appliance firm. Therma, and a U.S. cooking equipment manufacturer, Tappan. Except the Facit purchase, the above acquisitions all involved firms that produced complementary lines that would enable the new parent to gain certain scale economies, However, not all the products of acquired firms were related, and Electrolux sought to sell off unrelated businesses. In 1978 for example, a Swedish firm, Husgvarna, was bought because of its kitchen equipment lines. Electrolux was able to sell Husqvarna's motorcycle line but could not get a good price for the chain saw facility. Reconciled to being in the chain saw business. Electrolux then acquired chain saw manufacturers in Canada and Norway, thus becoming one of the world's largest chain saw producers. The above are merely the most significant. Electrolux acquisitions: the firm made approximately fifty acquisitions in the 1970s. In 1980, Electrolux announced a takeover that was very different from those of the 1970s. It offered $175 million, the biggest Electrolux acquisition, for Granges Sweden's leading metal producer and fabrication Granges was itself a multinational firm (1979 sales of $ 1.2 billion) and made about 50 percent of its sales outside of Sweden. The managing Directors of the two firms indicated that the major advantage of the takeover would be the integration of Granges aluminum, copper plastic, and other materials into Electrolux production of appliances. Many analysts felt that the timing of Electrolux's bid was based on indications that Baijerinvest, a large Swedish conglomerate, wished to acquire a non--ferrous matels mining company. Other analysis felt that Elctrolux would be better off to continue international horizontal expansion as it had in the 1970s. The analysts pointed to large appliance makers such as AEG Telefunken of West Germany that were likely candidates for takeover because of recent poor performance. Questions:

1. What are Electrlox's reasons for direct investment? 2. How has Electrolux's strategy changed over time? How has this affected its direct investment activities? 3. Which of Electrolux's foreign investments would be horizontal and which would be vertical? What are the advantages of each? 4. What do you see as the main advantages and possible problems of expanding internationally primarily through acquisitions as opposed to building one's own facilities? 5. Should Electrolux take over Granges?

SUB: Marketing Management

N. B.: 1) Attempt all four case studies

2) All questions carry equal marks.

CASE 1 : TRUST TOOTHPASTE

Study the Case entitled "Positioning 'Trust' Toothpaste" and give your specific recommendations regarding the action to be taken by the company. Your decision must be based on a careful analysis of the situation given in the case and your answer should be precise and up to the point.

Positioning Trust' Toothpaste

In September 1990, Mr. Sarin, the Marketing Manager of Deepa Products (P) Limited was wondering what marketing and product positioning strategy the company should follow for launching their two new brands of toothpaste. Trust Night and Trust Regular in a market which was becoming highly competitive.

Deepa Products (P) Ltd. was one of the successful manufacturers of various types of packaging materials for both industrial and consumer products. Established in 1960, the company has shown substantial growth over the years. Much of the company's growth was attributed to the high quality of its products and also the systematic manner in which its marketing decisions were made.

In 1990, keeping in view the growing market for consumer goods, the top management of the company decided to diversify into new consumer products areas. In the first instance the company thought of entering into the toothpaste market. Depending upon their success in the market, the company would decide their expansion plans into other areas of consumer goods sector.

The company chose to enter toothpaste market simply because the market for toothpaste was growing fast almost by 15 to 20% in India and it provided enough profit opportunities. The market was dominated only by a very few players. Further Mr. Sarin felt that there was scope for capturing a significant market share in the growing toothpaste market, since the company's products had some unique features to meet the emerging new market segments.

Questions

1. What marketing strategy should be designed by Mr. Sarin to be able to achieve the targeted 5% market share?

2. How should Deepa Products (P) Ltd. position Trust Regular and Trust Night to induce customers to buy it? What should be the key benefits of their toothpastes?

3. Should the company price its products economically, or should it aim for premium pricing?

CASE 2: THE CATERPILLAR TRACTOR COMPANY

Caterpillar Tractor Company (CTC) is a large manufacturing firm headquartered in Illinois, USA. Its familiar 'CAT" logo and yellow paint are known throughout the world. Indeed in its business, CTC has an estimated 37% of world market. Its closest rival, Japan's Komatsu has an estimated 15%. A multinational company CTC has manufacturing and dealer representatives throughout the world. The products, which the firm designs, manufactures and markets, can be classified into two basic segments:

Earth moving, construction and materials handling equipment-track type tractors, bulldozers, rippers, track and wheel type loaders, pipe layers, wheel dozers, compactors, wheel scrapers off highway trucks and tractors, motor graders, hydraulic excavators, long skidders, lift trucks and related parts and equipment.

Engines– for earth moving and construction machines on highways trucks, marine, petroleum, agricultural, industrial and electric power generation systems. Engines either, diesel or natural gas, have power ranges from 85 to 1600 horsepower or in generator set versions from 55 to 1200 kilowatts. Turbines range from 10 to 7,900 kilowatts.

CTC's market success is based to a great extent on its four-point product strategy. First, advances technology is incorporated into machines so that users derive optimal productivity and efficiency. To maintain the flow of product application the organization commits hundreds of millions of dollars each year to research and development. A second product guideline is quality. Within the last ten years several billion dollars have been spent on plant and equipment to ensure reliability in the hostile environments the machines endure. The third aspect of product strategy is to offer a full line of products. This implies machines capable of performing on job sites as small as a residential plot or as large as the Alaskan product line offers over 100 different machines within nearly infinite option/modifications. The fourth and final principle of the product strategy is to design and build only machines that can be produced on an assembly line, to take advantage of manufacturing expertise and efficiency of Caterpillar plant and to provide significant economies of scale.

Questions to be answered

1. How important is new product development to Caterpillar?

2. What sources of new product ideas might a company like caterpillar use?

3. Evaluate CAT as a brand name.

4. Evaluate each of the four points of CTC's strategy.

CASE 3: ABC HANDLOOMS Ltd.

ABC Handlooms Ltd. (ABC) was established in the year 1991 to manufacture and market handloom furnishings throughout the country. Over the years, it has developed a wide network of handloom units in and around Delhi. ABC manufactures a wide range of furnishings catering to the needs of different strata of society. The pattern of sales of the company during the last three years was as under:

State Percentage Sale

Punjab

Haryana

U.P.

M.P.

Rajasthan

Other states and Union territories

total

65

5

10

10

5

5

100

The market for furnishings was highly competitive. ABC had not only to face competition from well established houses but it had also to face competition from various state government corporations. Besides, the product had to face competition with the imported material, which was freely available. Prices of different types of furnishings differed widely. Private and cooperative channels marketed different brands. The Coops accounted for more than 60 per cent of material sold. Though there was no brand loyalty yet a large manufacturer in Western India was able to market similar products at a marginal premium in Rajasthan and Madhya Pradesh.

Questions:

1. How do you explain the present situation faced by the company?

2. Was it a good idea to enter into a three-year contract with the Cooperative Society? Why?

3. Is it possible to renew the contract with the Cooperative Society? If so, how? Suggest a detailed programme on a crash basis with the budget constraint of Rs. 50, 00, 000.

CASE 4: APEX ELECTRICAL COMPANY LTD.

Mr. Nathan, Sales Manager of Apex Electrical Co. Ltd. had just received a proposal from his Regional Manager at Bangalore for opening a sub-office in Madras and was considering what would be the best decision in the company's short run as well as long run interest.

The company was in the business of manufacturing and marketing electric motors of a wide range of horse power that could be used as a prime mover in numerous applications. The company's factory and head office were situated in Bombay and it had its branch offices at New Delhi, Calcutta and Bangalore, each headed by a Regional Manager.

The Regional Office at Bangalore was responsible for sales in Karnataka, Tamil Nadu and Kerala. The company also maintained a godown at Bangalore which was used as the stocking centre for feeding sales in the complete region. The company's distribution network had grown over several years and as such there was no one rule by which the arrangements could be explained. In Karnataka, due to the proximity of the Regional Headquarters, the distribution, network was closely controlled by the Regional Office. Company had several dealers covering the State and they all purchased goods directly from the Regional Office. All the dealers got a fixed percentage of discounts. The ultimate prices to the consumers were fixed by the company. Each dealer covered a specific area which was generally one to several districts and the company discouraged one dealer interfering in other's territory. However, in main cities of Bangalore and Mysore, there was more than one dealer who collectively covered the sales in the city. The company salesmen regularly contacted the dealers and the office maintained good marketing information.

Questions:

1. What decision would you take if you were in place of Mr. Nathan?

2. Do you feel the proposal of a new sub-office is economically justified against the stated policy of the company? If yes, why? If no, then how could it be made justifiable?

Organizational Behaviour

Max. Marks: 80

Answer any 8 questions. All questions carry equal marks

1. As a manager how do you improve workers perception in the organization?

2. Explain the factors affecting individual differences.

3. Write a short note on Hawthorne studies.

4. Discuss the need for studying OB.

5. Briefly explain defensive mechanisms.

6. Explain the factors influencing individuals’ personality development.

7. Explain two factor theory of motivation.

8. How do you create and sustain organizational culture.

9. Explain the Managerial grid leadership style of Blake and Mouton.

10. Explain the various sources of attitudes formation.

11. What is self concept? How you defend yourself from various environment problems.

Subject – Principles and Practice of Management

Communicating in a Crisis

Overview Valley High School, situated in Kodaikanal, was established in 1980 and is owned by a well respected charitable trust. It overlooks a lake and is a modern building equipped with state-of-the-art facilities. The total student enrolment is 2000, out of which more than 50% are girls and the rest boys. The students are all from affluent, educated families. The school has established a good reputation for itself, thanks to the consistently good performance of students in the public examinations. The school is headed by a lady Principal and also has a couple of Supervisors and a team of 25 teachers. The teachers have had extensive experience, are well qualified and are known for their commitment to imparting quality education to students. Due to the recent heavy monsoons, the school was faced with the problem of flooding, with water entering the rooms on the ground floor and water seepage on the terrace. Since repair work had to be done, the school had to be closed for a couple of weeks. The work was carried out by reputed contractors, but the building still looks a little run down.

The crisis the school had just reopened after this two week break. The same morning, a fire suddenly broke out on the third floor and spread to other floors, blocking the stairways. There was widespread panic, as the children started jumping off the balconies, injuring themselves in the process. The Principal and staff had a tough time trying to calm down the children and take control of the situation. Fire engines were called and several of them arrived and began their fire fighting operations. In the meanwhile, many parents also arrived and tried to enter the building to speak to the Principal. The phones were ringing continuously. There was total chaos.

Question 1 :- How communication crises arise?

Question 2 :- What Principal should do to calm down the angry parents?

Question 3 :- How school will regain its reputation? What services school should provide in order to maintain its reputation?

Case Study 2

Case Study on The power of Non-Verbal Communication

The Power of Nonverbal Communication Soon after I graduated from engineering college, I accepted a position with the Sundaram Foundry, a medium-sized firm located in a small town in Tamil Nadu. It was a good position, since I was the assistant to Mr. Vishwanath, the General Manager and president of this family owned company, although there were many technical problems, the work was extremely interesting and I soon learnt all about the foundry business. The foundry workers were mostly older men and were a closely knit team. Many of them were related and had been in the foundry for several years. Therefore, they felt that they knew the business in and out and that a technical education had no value. In fact, Mr. Vishwanath had mentioned to me even at the time of my joining, that I was the only engineer ever to be employed in the foundry. He also let me know that the foundry workers, although a good group, were very clannish, since they had been working together for several years. Therefore, it would probably take them some time to accept me. I introduced myself to the group of foundry workers, a few days after my joining. As I went around in turn, I felt them eyeing me coldly. As I went down the main aisle of the foundry, I heard them talking to each other in low voices and laughing. I found their behavior to be very childish and felt that it was best to ignore these signs of hostility. I thought that if I ignored them, they would automatically stop these antics. A few weeks after this incident, I happened to visit the enamel shop. As I entered, I noticed a worker cleaning the floor with a hose, from which water flowed at high pressure. I was aware that it was the practice to clean the shop at least once a week. I turned my back on the worker and was busy near a dipping tank, when I suddenly felt the force of a stream of water hitting me. I was almost knocked down by the pressure and slipped on the wet floor. When I turned around, the worker looked away in the other direction, as if he had not noticed this happening. However, I was pretty sure that he had intentionally turned the hose on me.

Question 1 - What message did the foundry workers and the new engineer convey to each other through their non-verbal behavior?

Question 2 - Mr. Vishwanath, the General Manager and President, was not often present at the foundry. What could this non-verbal behavior mean to the workers and the new engineer?

Question 3. How could the engineer, the foundry workers and Mr. Vishwanath be more effective, both verbally and nonverbally?

Question 4. What do you suggest that the engineer should do, after the hosing incident?

Case Study 3

BS GETS A D-PLUS ON DIVERSITY FROM MULTIETHNIC COALITOIN

On February 3, 2000, President and CEO of CBS Leslie Moonves signed a pact with Kweisi Mfume, president and CEO of the national association for advancement of colored people (NAACP), who had joined forces with the Hispanic media coalition, and the American Indians in film and television to request the CBS help to increase Indians in film and television to request that CBS help to increase ethnic presence in the television industry. The agreement stipulated the CBS would increase minority participation both on and off screen by June 30.

In April 2000, CBS announced the appointment of Josie Thomas to the newly created position of senior vice president of Diversity at CBS Television. Her job was to improve outreach and recruitment, hiring, promotion, and monitoring practices in all divisions of CBS. That fall Moonves announced that 16 of the 21 CBS shows, including news magazines, would prominently feature minorities. “We think we are a leader in this area,” Moonves said “We think we are ahead of the curves”

Despite Mooves’s Statement that as “broadcasters, we believe strongly that it is our duty to reflect the public that makes up our viewing audience,” there were many who did not feel the company was sincere in its efforts to improve hiring practices. The national Hispanic Foundation for the Arts criticized CBS for not scheduling “American Family,” A pilot drama about middle – class Hispanic family. Moonves said “American Family” simply did not fit in CBS’s schedule, since there were already too many strong dramas planned. He said he took the unusual step of allowing the show’s producer to pitch the CBS-developed networks but no one picked it up. Meanwhile, the June 30 deadline had come and gone without much outward sign of change at CBS television.

Josie Thomas is committed to CBS’s new mandate for multicultural diversity. Twelve of CBS’ prime time series will have minorities in permanent roles and other series will have minority in recurring role. Fore of the network’s shows- C.S.I., the district, the fugitive and welcome to New York have minorities in leading roles.

Since signing the agreement, CBS has established a strong working relationship with national minority supplier council in order to help minority supplier council and women’s businesses. The company has bolstered its internship program to include paid internships on the west coast, pairing up interns with their areas of interest, Such as finance or entertainment. There are 10 minority interns in the program. Moreover, CBS has now made diversity a factor in employee job performance evaluation. “Each area of the network has developed a detailed plan for diversity,” said Thomas. “Manager will be reviewed with respect to their diversity efforts and that will be a factor in compensation decisions.” Ms. Thomas noted that Ghen Maynard, an Asian American Pacific Islander, had just been promoted form director to vice president of alternative programming for the entertainment division.

“Will all believe there is a long way to go,” Thomas said. “What I have found is there are some things that already exist that are positive, such as news magazines having minority anchors. We think ‘city of angels’ renewal was an important step. The ratings were mediocre to low, and we did feel the program was a risk. It says a lot about our commitment”

In June 2001, the coalition gave the Big 4 Broadcast Networks (all of whom had signed an agreement) a report card for their efforts to diversity shows on – air and behind the scenes. CBS got a D-plus.

Mr. Nogales, of the National Hispanic Media Coalition, said he was disappointed “We expect progress; we signed for progress” “The numbers in comparison to last year actually look better” Nogales says. “There have been gains for people of color. There was movement. But it has to be

movement across the board, not just for one group.” He is referring to the fact that most of the gains have been made by black actors, writes and producers. Black actors appear as regular in at least 19 of the six major networks’30 new prime-time series. Hispanics shows up in only eight, Asians in five and Native Americans in one.

The pressure being put on the networks- including threats of “boycott” and legal action – is having results. At CBS the number of minority writers and producer has more than tripled, from four to fourteen, including six executive or co executive producer however, obstacles to a fully integrated future remain serious-particularly because of misconceptions about the nature of the television audience and about the way pop culture works. Network executive worry that “ghetto shows” might promote stereotypes. They wonder if shows like The cosby show are “black” enough. Then again, they think that casting too many minorities may drive white viewers away. Some network executives are afraid to cast minority actors in “negative” roles because they may be criticized for it minority writers, who have been getting more work lately, wonder if they are not just “tokens”; and despite some progress it is still almost impossible for Hispanic actor to get non- Hispanic roles.

Both the NAACP and the coalition have been battling discrimination for years. CBS is just finding out that a profound change toward pluralism can take place only with true insight on the part of management. CBS spokesperson Chris Ender says “We have made tremendous strides to increase diversity on screen, behind the camera and in the executive suites. However we certainly recognize that more can be done and more will be done.”

As far as Nogales is concerned. “It’s still a white guy’s world,” and the june 2001 statics for network television prove he is right.

Questions

Question 1:- What advantages would accrue to CBS if it becomes a more diverse workplace?

Question 2:- Where would you have placed CBS on the organizational diversity continuum and where would you place CBS now? Why?

Question 3:- Which approach (es) to pluralism best sums up the diversity policy that is being developed at CBS? Explain

Question 4:- How do the attitudes of management at CBS as depicted in your case study affect the company’s progress toward forming a more diverse workforce? Explain.

Case Study 4

McDonald’s Listening Campaign At the end of 2002, the world's largest quick service retailer made its first ever quarterly loss and faced a number of challenges. It responded by launching its Plan to Win program, part of a global strategy to modernize the business, followed by the Listening Campaign in the UK. Here, Ali Carruthers explains how the two initiatives were linked in the UK, and the impact The Listening Campaign has had on communication, culture, image and media perception.

In 2003, things were looking bleak for McDonald's. Its share price was the lowest it had been in a decade and it faced a series of seemingly insurmountable problems: It was demonized by the UK media in the fierce debate raging over obesity; it faced huge competition on the high street; and it was suffering under a wave of Anti-Americanism in the wake of the wars in Afghanistan and Iraq. Added to this was the fact that the restaurants themselves were beginning to look dated and UK health lobbyists were determined to push home the message that McDonald's food was bad for people. Speaking earlier this year to the BBC, the UK CEO Peter Beresford said: "We had taken our eye off the customer, we were not customer focused, we were not customer driven.

And so we reorganized and regrouped. We decided we had to stop and take stock of where we were. We had to be better, but we had to change the way we were running this business." The Plan to Win The senior management put their heads together and devised the Plan to Win program, which went public in the last quarter of 2003. A key part of its focus was a shift to more choice and variety foods, with salads appearing permanently on the menu for the first time in the organization's history. Key restaurants began to receive make over and a supporting advertising campaign with international stars was planned, all of which were intended to turn the food chain's image around. But just as things were beginning to look up for the organization, trouble raised its head again in the shape of the documentary film "Supersize me," which in turn re-ignited the obesity debate in the media. It was then discovered that one of the salads McDonald's was marketing contained more calories than one of its hamburgers. The UK press reacted with predictable glee and once again McDonald's was in the spotlight for all the wrong reasons. The Listening Campaign. The company responded promptly. Working with agency Blue Rubicon, the in-house communication and media relations team devised the Listening Campaign. It made the most of the arrival of new UK CEO Peter Beresford in July 2004, building on his personal credibility and that of McDonald's with the Listening Tour. Beresford spoke directly to customers in focus groups, met with franchise holders and with employees in 12 UK cities over the space of six weeks, starting at the end of October. The key ingredient was listening to customers and staff and then showing the results of this. "Part of the reason [for doing it] was that we had to introduce Peter very quickly to employees, customers and stakeholders," says head of internal communications AIi Carruthers. "It was also signaling that he'd continue to work to change our culture and lead the drive for a real transparency of approach. We've been building on that work ever since." Focus groups for stakeholders

The communication team made the most of Beresford's time by booking ahead so that local franchisees could meet him when he travelled to regional centers for customer focus groups. Next, Listening Groups were created for the company's regional offices with corporate rather than restaurant-based employees taking part. Initial meetings were centered around three classic focus group questions: * What works? * What would you change? * How would you change it? In each session, six to 10 employees took part and the sessions lasted around two hours. After the first session, an action plan was drawn up and fed back to the employees in a second round of focus groups. Then the agreed proposed changes were put in place by the organization. Proposed changes put in place A range of short, medium and long term actions have been instigated as a result of the focus groups. These include a firm commitment to hold monthly town-hall sessions to

regularly address key issues within the organization. "We've agreed to use these sessions to feature various departmental heads," says Carruthers. "That's so people can put names to faces, understand the organizational structure better and get an understanding of what goes on outside their own departments." The company has also committed itself to involving a new group of employees every six months, and to being more transparent about its promotion process and how people are assessed for promotion. It now holds regular Plan to Win meetings, which are related to the global strategy. "We're using the town-hall sessions to communicate the global strategy to thebroader office group rather than just senior management so there's a wider understanding of what we're doing," says Carruthers. The company has also committed to a peer-nominated quarterly recognition scheme for the regional and head offices. It's planned that the town halls will also be used in the recognition scheme. "People need to say well done to each other and be acknowledged by the senior team," says Carruthers. A change in company culture According to Carruthers, the strategy has been recognized globally - a drive for greater face-to-face communication, more transparency, a growth in leadership behavior and accountability. "Basically we've been trying to make people feel they're able to ask questions," she says. "There's nothing wrong with challenging the status quo as long as it's done in a constructive and respectful way. If we can use some of those ideas we can probably make it a more enjoyable place for everyone to work." There's no doubt that the Listening Campaign has had an impact on the senior team and general employees alike. Carruthers has had feedback from both groups and believes the exercise has been an eye-opener for the senior team: "They frequently mention experiences they've had in those groups. There's nothing quite like hearing issues for yourself; the good ones and the more awkward ones." The feedback from focus-group participants has been very good; employees say they feel listened to and think their feedback is being taken on board. "They feel confident to ask questions or send e-mails directly to people they thought wouldn't have listened to their suggestions previously. It's changing the culture. Anything that builds trust and transparency is good. Now it's about delivering on the changes that we said we'd make." A hotline to the CEO A hotline to the CEO has made the company's drive for transparency and commitment to employees even more credible. The "Ask Peter" e-mail address was established when Beresford took up his post and has seen a fair amount of traffic. "It's word of mouth - people see that it's well responded to," says Carruthers. She sees it as important to be straight with employees about how e-mails are dealt with and who sees them. "We're very up-front about the fact that I see all e-mails as well as Peter, but if we forward them to other departments, they'll be anonymous." A combination of high and low technology adds to the feeling of personal contact: Beresford will often answer e-mails with a hand-written reply. In one famous instance he replied to nearly 100 in one week. "It doesn't always happen that way, but it's these things that make a difference. People see it's coming from him and it's quite a personal touch." Committing to communication, A new round of Listening focus groups with fresh employees is due to kick off in October. The whole cycle of questions, action-planning and feedback will be replayed. "We're working with a new group of employees because

we want to keep changing and avoid having a formalized council of volunteers," says Carruthers. "They'll look at what they think has happened so far, whether anything could have been done differently and then we'll hold a review of the proposals." It's a genuine commitment to keep the focus groups running on an ongoing basis. Carruthers is also expecting that the flexibility and fresh new faces will ensure that new topics arise: "They're things that inevitably come up along the way and get added to the agenda for change. We just need to follow them through and then tell people the results." The results Since Beresford's Listening Tour there's been a turnaround in the media coverage of McDonald's, which has been much more positive. The Listening Campaign is changing the internal culture of the company and its focus group cycles are becoming permanent two-way communication channels. Results back in August this year from the last employee survey showed that internal communication is now ranked by employees as number four out of 25 departments. "The communications strategy has helped people become aware of who we are and what we do," says Carruthers. The Listening Campaign has also helped McDonald's raise its profile externally, as it was nominated in this year's UK Chartered Institute of Public Relations Excellence Awards and short-listed for Best Use of Media Relations in the PR Week Awards.

Questions

Question1. Based on this case, develop guidelines for improving communication with each of different stakeholders, through better listening.

Question 2:- What are the essentials for the effective communication?

Question 3:- Write about McDonald marketing plan which they have implemented for the success?

Question 4:- Do the SWOT analysis of following:-

McDonald Food Industry