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Case Overview

The document summarizes the case of ABC Bearings, a global manufacturing company. It describes how the Chennai plant was established and grew successfully under former CEO Raghu Srinivasan. However, issues arose when a new CEO, John Marker, was appointed with a goal of expansion. Due to differences in leadership style and lack of communication, employees resisted the changes and eventually went on strike. The case outlines various internal issues that contributed to the conflict between management and employees.

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prerana jain
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44 views6 pages

Case Overview

The document summarizes the case of ABC Bearings, a global manufacturing company. It describes how the Chennai plant was established and grew successfully under former CEO Raghu Srinivasan. However, issues arose when a new CEO, John Marker, was appointed with a goal of expansion. Due to differences in leadership style and lack of communication, employees resisted the changes and eventually went on strike. The case outlines various internal issues that contributed to the conflict between management and employees.

Uploaded by

prerana jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Case Overview:

ABC bearing is a global conglomerate that manufactures two types of bearing-


(1) Oil Cooled and (2) Air Cooled. It has its corporate office in Munich,
Germany and 12 manufacturing facilities across the globe.
ABC Chennai plant was set up in 1969 to meet the demands of the Asian
market. This plant grew having ability for the highest manufacturing of Oil
Cooled bearings and became cash cow for whole ABC group.
Raghu Srinivasan was the young apprentice when the Chennai plant started in
1969 and later became the CEO of the plant in 1994. In 2009 Raghu declared
retirement. James Arnold, chief of international operations appointed John
Marker as new CEO of Chennai plant.
John had a new mission and goal of Increasing ABC Indian plant to 10 billion
market share and increase export by manufacturing Air cooled bearings.
Due to several issues mentioned further, by By December 2011 ABC India was
in a chaotic state. Failure in negotiation with employee union, the employees
went into strike for the first time in history of ABC India and factory went into
lockdown.

Characters:
Following are the characters in the case. Let us understand the nature of key
characters:
 Raghuraman Srinivasan, Former CEO of ABC bearings, Chennai. He had
given a good profitable business for Indian plant compared to other
branches worldwide. He was adored by the entire organization.
Management never had any issues and functioned very smoothly during
his tenure.
 John Marker, CEO and business head of ABC bearings, Chennai. He
started career as management trainee after completing MBA and Worked
in three different countries – US, Germany, Taiwan. His sincere efforts
and knowledge raised him to the position of CEO and business head of
ABC bearings, Chennai.
 Neelakantan, started career as machine operator in ABC bearing and
grew to a position of COO. Neelakantan was offered an opportunity to
serve as an acting CEO but due to lack in managerial skills he could not
meet up to the desired expectation.

 MVLN Rao, started career as financial advisor in ABC bearing, Chennai


in 1978 and rose to the position of Chief Financial Officer (CFO) in 1994.
Rao preferred to continue as CFO and not willing to take up the
responsibility of CEO

Kindly have a look at the characters of the case

Let us now analyse the issues in the case:


Internal Hiring: Board of ABC headquarter considered the option of internal
hiring completely ignoring the prospect of external hiring. Also, the existing top
management were not prepared to take up the responsibility of CEO.
Change in Leadership Style – As employee’s at Chennai plant were
accustomed with Raghu’s leadership style and his way of management, they
failed to cope up and understand John’s leadership style.

Also, John being an outsider to Chennai plant, did not make any efforts to gain
the trust and understand his employees. He was more inclined towards the
results being generated by the company, making him truely result oriented.

Communication Barrier: As majority of them were comfortable in their


regional language, and barely conversed in English, John found it difficult to
understand their accent, so he was confined to opt for indirect mode of
communication.
Resistance to Change – John aimed to bring change in the organizational
culture and structure, change in expertise of the bearings etc which resulted in
individual resistance of the employees.

Complete makeover of the Organization chart: The organization chart was


revised completely, where the existing top management were replaced by the
team members of John who had come from Germany.
Poor Interaction: Due to lack of interaction between the management and
John, there was no smooth functioning and understanding seen in the
organization.

Hamper in Existing Organizational Culture : The workforce environment


during Raghuraman’s tenure was cordial, interactive and enthusiastic while
John’s tenure was other extreme.

Apart from these, there was lack of connect between the top management and
rest of the organization, lack of flow of information was also observed.

With No experience in manufacturing of the Air-Cooled Bearings:


Supervisors lacked confidence even after training, which is not a good sign.

Impacts of the issues are:

• Change in Work Floor Environment – The top-level long-term


employees were replaced by John new team; this change had impacted on
the bottom level employees and made the work floor environment dull
and gloomy.

• Lower Employee Morale – The issues collectively hampered the morale


of existing employees, making them loose the trust in the management.
As a result, the individual performance, dedication, enthusiasm was
lowered.

• Conflict Between Management and Employee Union – Due to


unsuccessful negotiation with the employee union, the workers in ABC
Chennai branch for the first time in history declared strike which resulted
in factory lockout. 

• Lack of Support – John did not receive enough support from the
employee on the growth plan though John explained the advantages of
new technology and even trained a few people on the same.

Now moving to suggested solution:


Getting every employee’s mind into the game is a huge part of what a CEO job
is all about. Taking everyone’s best ideas and transferring them to others is the
secret. There’s nothing more important than this.”

Do the Groundwork: As a new CEO, to make the transition smooth, John Marker
could spend time in understanding the culture of the organization, understand
mission and vision and most importantly understand the people around him
during his first 100 days.

Build Trust and Gain Confidence with Top Management: John Marker could meet
all the members of Top management to find out their expectations and
aspirations.

Create Bond and Open Environment: He should accept the workforce and put
efforts to create a bond with employees. His goal should be to make the cultural
diversification as strength and opportunity to grow, over a barrier.

Open Communication – John should communicate all his decisions, plans and
actions openly and make sure that the organization understands the need and
motive behind every step he takes.

New Vision and Mission – After getting the staff onboard by gaining their trust
and support, John should then communicate the new vision and mission to the
entire Organization.

John can Encourage Decentralization and low chain of command. And use
his power as CEO to persuade and influence the employees.

Use of Lewin’s 3-Step Model – As the employees at the ABC Chennai plant
are showing Resistance to Change towards the new goals and objectives of John
it is recommended to use Lewin’s 3-Step Model of Unfreezing, Moving and
Refreezing.

RECOMMEDATIONS

 Employee are assets and back bone of any organization. We suggest to


set employee grievance committee to address the issues.

 We also suggest appointing change agents who could be within or outside


the organization to ensure smooth transition of power and authority.
 Further inclusion of conflict management and collective barging to sort
out the issues between union and the management.
 As a leader, John can take up the responsibility by acknowledging what
went wrong and fix it for better results. We as a team would suggest
giving a fresh start with  open communication, smooth flow of decisions
by building support and commitment.

 MANAGERIAL IMPLICATIONS
 We realised that effective communication is important and significant for
managers in the organizations to perform the basic functions of
management, i.e., planning, organizing, leading and controlling. 

 Communication along with listening helps managers to perform their jobs


and responsibilities without facing obstacles. 

 Participation and interaction are necessity in any organization;

 Coordination is the essence of management and an integral part of all the


managerial functions.

 Diversity plays a vital role as it brings out difference in opinion. Hence


accepting diversity is crucial and failing in which can hinder the
organization growth. 

 Every employee should be open to change as it opens the doors to many


new opportunities to grow and learn. But change is often viewed as a
barrier, and if taken otherwise it stands a capability to bloom the existing
career.

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