LIST OF CONTENTS
Numbers Contents Pages
1. Case study 1-2
2. Overview of the case 3
3. Questions and answers 4-7
4. Conclusion 7
5. References 8
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CASE STUDY
MAKAR GAINED PROFIT BY MISSED OPPORTUNITY & LOST WEALTH
“Makar” a textile manufacturing that located in city of Jaipur with enough
infrastructure and good work force. The organisation is specialised in shirting and suiting
particularly the supplies are done in Rajasthan only. The organisation is run by CEO who is
commonly known for well educated, experienced, business man with humanity approach. Mr
Mukund CEO “Makar” considered employees as competitive advantage of his organisation
and want to keep the work force always updated to face challenges from their competitors.
Mr Mukund, who heads the production himself, developed a efficient top
management group which includes Mr Prem as Heading Marketing, Mrs Mrunal as leading
HR and T&D, Mr Vaidya as leading finance. All this department heads are always been
supportive heads for ideas of Mr Mukund in handling the work force. They also believe that
satisfied, educated, dedicated workforce will be a key to success at any condition to any
organisation. Money spent on employees will always be an investment to the organisation.
Training and development becomes a day to activity in the organisation. Employees
are been trained by well versed trainers in that area. The organisation also encourage the
employees to do further studies as part of the career development programme and they get a
helping hand from the organisation.
The employees of Makar are very much satisfied with these kind of support from the
organisation and they realised that being with Makar their personal growth will assured.
Because of the above said things Makar had many advantages like highly trained and
qualified work force, highest quality of supplies assured, less rate of attrition, dedicated
workforce, meeting the targets on time and satisfied work force.
One day the employees of Makar were in deep Grief when the news hit the office that
Mr Mukund CEO decided to handover the charge to Mr Mithun only son of Mr Mukund who
had completed his studies and returned to India.
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Now it has been three months since Mr Mithun take over the charge and from day one
he started auditing in almost all the departments with a motto to reduce cost. And he got a
strong statistics that the compensation is the highest cost bared by the company compared to
any other cost incurred in the organisation.
So he called Mrs Mrunal the Head of HR and to asked her decide the plan for
reducing the labour cost 30% by way of Lay-off. Mrs Mrunal shocked by listening to his
decision and said to Mr Mrunal that “Sir it is my responsibility to tell you that the work force
which we have excellent, well trained , loyal and self motivated work force. In case of lay off
such the competitors will take an advantage of that. We can think of other options rather than
layoff.”
Mr Mithun was not in a position to listen to her words and he said that “sorry Mrs
Mrunal I am not ready to review my decision and neither wants any alternatives for this. I
want this work to be done within a week”. Finally with all her regrets Mrs Mrunal reduced
the workforce until 30%. In the other hand the employees who were waived of from Makar
joined the competitors with better package.
One day in his office Mr Mithun was discussing with Mrs Mrunal that the cost labour
in the organisation has been reduced to great level which increases the net profit also, after
listening to this Mrs Mrunal said that “it is well said we have reduced the labour cost and
increased the profit but it is true that we have missed the great opportunity to grow more
using our wealth to the competitors”.
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2
OVERVIEW
Makar is textile manufacturing company which run by the CEO Mr Mukund, who is
commonly known for well educated, experienced and a business man with humanity
approach. He as the Head of Production, have a developed an efficient top management
group which includes Mr Prem Heading Market, Mrs Mrunal Leading HR and T&D, Mr
Vaidya as Leading Finance. They believe that the wealth of company standing for a satisfied,
educated, dedicated workforce which can lead as a key to success at any condition of an
organisation. They also thought the money spent on employees will always be an investment
to the organisation.
Meanwhile, the organisation also trained the employees by well versed trainers to became as
highly trained and qualified work force plus encourage the employees to do further studies as
part of the career development programme. Therefore, the employees of Makar was very
happy and satisfied with these kind of support and realised that their personal growth will be
assured.
One day, Mr Mukund decided to handover the charge of Makar to his son Mr Mithun. After
Mr Mithun take charge on the business he decided to reduce the labour cost to 30% by way of
lay off. This is because, he comes out with a strong statistics that, company bared highest
compensation cost compared to cost incurred in organisation after auditing all the
departments about three months. Because of his sudden decision, many workers were waived
of from Makar and joined the competitors for better package.
Finally, he achieved a great level of net profit by reduced the labour cost but he missed a
great opportunity to grow more by losing his well trained, loyal and self-motivated
employees who were known as the ‘wealth of organisation’.
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3
QUESTIONS
1. “Employees are the competitive advantage of Makar” comment on this statement relating
to the approach of Mr Mukund CEO.
As a textile manufacturing organization, the main asset for “Makar” are their labours. A
strong team of employees can become a company's competitive strengths to compare with
other competitors. Following the case, Mr Mukund and his management team believe that a
satisfied, educated and dedicated workforce will be key to success at any condition to any
organization. Their employees are been trained by well and organization always investing a
high cost on employees. Besides that, the organization also encourage the employees to do
further studies as part of the career development programme and they get a helping hand
from the organization. In this way, the employees in “Makar” will become more skilled and
quality to help company stabilize in market.
When a company has a competitive advantage, they will be able to stand firmer against
competitors in the market. Just like Makar, the skills and good quality of employees have
become their advantage. Mr. Mukund ensures that all employees are given adequate training
and are constantly updating their staff to meet the challenges of their competitors.
Based on the above, we can know that employees with considerable skills are equivalent to
creating a large number of quality products, while at the same time bringing benefits to the
company. To comment on the statement said by Mr. Mukund, so-called "Employees are the
competitive advantage of Makar" can be considered as the employees' skills, education,
experiences, high productivity and always ready to cope with market changes let Makar have
a strong competitive advantage to stabilize in market.
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2. How did you judge the actions taken by Mr Mithun to reduce the cost of labour? Was it
really a success one?
In my opinion, Mr Mithun is too intense to make some achievement after he took over the
company from his father, Mr Mukund. His initial intention is good but the actions are not that
good. Although his actions may look success as his targets to reduce cost and increase net
profit were achieved but his successful is only for short term period. Here are some reasons
why I would said the actions are not that good:
i. Mr Mithun only took over the company for 3 months so he may not really know how
the company operate. He made the decision to lay off workers based on the statistical
report without knowing the intention of his father to spend so much money to train the
employees and he refused to listen the advice given by Mrs Mrunal, the Head of
Human Resource. In my opinion, Mr Mithun should do some analysis to find out why
the labour cost will be that high before making any decision. Moreover, he should
listen and consider opinion and advises from top management of the company as he is
still new to the company.
ii. Employees fired by Mr Mithun will provide their service and contribution to the
others company, which is the competitors. This will be a great loss to “MAKAR”
because the employees are using what they learnt in MAKAR to contribute to the
competitors, causing MAKAR to loss their competitive advantage and helping the
competitors to lower the cost to train workers. In my opinion, experience and skills of
employees are priceless especially for manufacturing industry. Mr Mithun should
appreciate his employees but not fire them.
iii. Mr Mithun’s actions to lay off so many employees in such a short period will cause
panic among the other employees. The loyalty of employees towards the company are
affected as they don’t know when they will be fire. In my opinion, Mr Mithun should
show his care towards the employees so that the employees will feel their importance
to the company and will work hard to contribute all their effort towards the company.
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3. “We have gained the profit by losing our wealth”
Discuss the statement of Mrs Mrunal and support her statement.
Mrs Mrunal, the Head of Human Resource had lay off workers as instructed by Mr Mithun
although she doesn’t agree with his actions. As the consequence of lay off, the labour cost of
company is reduced and gained profit. However, the company had loss their wealth which is
not notice by Mr Mithun. The wealth here is the employees who are well trained. Mr Mukund
spend so much to train his workers and even help the workers who want to do further studies
because he knew that the money spent is kind of investment by having knowledgeable, loyal
and skilled workers as return. Action of laying off employees cause the company to lose their
wealth-well trained workers .
4. From the above said case find the opportunity which was missed by Makar due to the lay
off as mentioned by Mrs Mrunal.
The opportunity mentioned by Mrs Mrunal is expansion of the business. It can be seen that
Makar has good facilities and employee’s quality, and it has also gained a good reputation
among customers in the Rajasthan area. Internally, employees are also satisfied with the
various support of the organization, they realize that growing up with the company will
ensure their personal growth. Therefore, having such competent employees and customers'
reputation can be a stepping stone for their expansion of business. Regrettably they only pay
attention to the supply in Rajasthan area.
With such loyalty and trust by employees and customers, they may be able to consider
expanding their business to other regions and getting more profit. However, if layoffs are
made at this time, the employee's loyalty to the company will be reduced, and some bad
messages will be spread among the customers, which will have a bad influence on the
internal and external aspects of the company. Not only that, competitors will also be able to
take advantage of this time, taking advantage of Makar's stable market position. This will be
the opportunity which missed by Makar.
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What's more, if the employees who have got a good education in the company are dismissed,
they will choose other competing companies in the same industry. Isn't this is giving a
advantage to competitors? Although the labour cost has been reduced and increase in net
profit, but they have missed a great opportunity which can get a larger profits by breaking the
opportunity of competitors with a group of skilled and trained employees.
CONCLUSION
In the conclusion, Mr Mithun is the new CEO of Makar and the only son of Mr
Mukund, the formal CEO of the organisation. Mr Mithun take a decision after he take in
charge as CEO of the organisation based on his auditing in all department the decision taken
by him was reduce the labour cost to 30%. It’s give good result for the organisation that was
reduce the labour cost and increase the profit. The reason he ensure this decision is when he
auditing in all department and organisation he can strongly prove that the organisation spend
a lots of money for employees or workforces and also can prove based on the statistics of the
organisation. Meanwhile, when he proceed for the decision reducing the labour cost by 30%,
the organisation have to lay-off so that the decision also can give a negative impact for the
organisation. This is because the organisation have to lose some employees that well trained,
educated and also who can produce high quality products among their competitors.
Therefore, the words that said by Mrs Mrunal that Makar missed the great opportunity to
grow more their wealth to the competitors is also true. Lastly, this also can reduce the level of
motivation of the rest employees and it can reduce the production of the organisation
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REFERENCES
1. Prof. Deepak Pore. Makar gained profit by missed opportunity and lost wealth.
Retrieved March 2, 2013 from http://www.indiaclass.com/human-resource-
management-case-studies/
2. R.Wayne Mondy & Joseph J.Martocchio (2016) Human Resource Management
Fourteenth edition. Pearson Education Limited
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