\"Modern Foods Industries Ltd, New Delhi was established by Government of India
ID: 389553 • Letter: #
Question
"Modern Foods Industries Ltd, New Delhi was established by Government of India in 1965. It was managed well upto 1995. There-after, the company stopped production ( became a defunct company) In year 2000, Government of India sold the company to HUL. HUL could manage the company for two years and again the Modern Foods Industries Ltd became a non-operative company. HUL tried to revive but it was in vain. In year 2015, one financial company in the name of Everstones Capital Ltd entered into a Joint venture with HUL to revive the company. Yes, the things did go well but somehow HUL wanted to get rid of Modern Foods so it has sold out the company to Everstones Capital Ltd ( including, brand, plants, and whole set of employees) Mr. Balaji was the Executive Director of HUL managing the Modern Foods while at HUL. On taking over the Modern Foods, Everstone has appointed Mr Balaji as the Managing Director to manage the Modern Foods.
Assignment questions :
1. List out the challenges of Mr Balaji as the MD of the company.
2. What kind of leadership styles and posture Mr Balaji needs to adopt.
3. What all needs to be done by Mr Balaji to get the company back into Identify the parties with whom the MD will be negotiating with and for what purpose."
Explanation / Answer
The case is all about to revive the "Modern Food Industries Ltd."
1) Mr. Balaji was the Executive Director of HUL. After selling the Modern Foods to him, Mr. Balaji was appointed as the Managing Director of Modern Foods. Here are the following challenges he has to face being the MD of the company.
a) Responsible for overall operations of the company- The designation of Managing Director itself depicts responsibility towards business. As a MD of the company, Mr. Bajaj has to take the responsibility to make proper divisions and hierarchy for the company for its smooth operations.
b) Set proper standards for the work to be done- Mr. Balaji has to gauge the overall performance of the employees by setting some targets and goals to be achieved on regular basis so as to revive their position in the market. Once standards set are communicated well to the employees, they will work with great zeal to achieve the targets.
c) To face cut throat competition- Competition helps in improvising the condition of the business. As other competitors are also existing in the market, Mr. Bajaj has to make strategies from time to time with the help of their employees. This will make the employees pro active in taking smart move to face competition, winning the trust of customers and fulfilling the demands of people.
d) To increase profits- Profits can be achieved in a number of ways. The best way to increase the profit is by making more number of customers even by charging less price from them. Once customers will come to Modern Foods, they will come again and again and their word of mouth will help in making more customers. Example- JIO has first made its customer by giving free internet connection for more than a year. Once customers are made, the company started charging less amount from the customers.
e) Making contacts with promotional companies- For example, SWIGGY is one of the promotional company which helps in listing the renowned food companies in their list and then offering discounts to the customers. Mr. Balaji should try to list its company with such promotional companies. It will help the company to make its reputation. When customers will be checking online for food companies, they may see company Modern Foods listed in SWIGGY. Through this, more customers will get to know about the company.
2) There are various kinds of leadership styles to be adopted by the leader. But it is always better to adopt the style of leadership based on the current situation of the company. Here are the following style of leadership to be adopted by Mr. Balaji for the company.
(a) Democratic leadership- Under this style, a leader decentralises the authority and listen to the suggestions given by employees. Mr. Balaji should try to take smart action on the basis of the suggestions of its employees as employees are the backbone of the company. Without them no work can be done. So in order to come out of losses and maintain the reputation of the company, there should be participation and involvement from its employees.
Such style of leadership if adopted will develop the trust among employees for the work and they will work with great vigour which will ultimately help the company.
(b) Laissez-fair Leadersip- Another way which can be adopted by Mr. Balaji is Laissez fair style of leadership. In this approach, the subordinates takes the decisions on their own. The leader does not have any power, he only helps the employees to get the proper information and resources needed.
Such style of leadership helps to utilise the full efforts of employees. Herein, the employees get motivation and the company can get the innovation in doing work.
3) In order to get the company back and maintain its reputation in the market, Mr. Balaji has to take the following steps:-
(a) Setting objectives to be achieved- Once the objectives are set, SWOT analysis is to be done. Based on the identification of strengths, weaknesses, opportunities and threats, the company should take the steps cautiously to revive the situation. Strengths can be employees, finance and loyalty for customers. Weakness indicates the low market reputation, brand image. Opportunities can be acheived by fulfilling customer's demands, obeying the laws framed by the Governement. Threats and be reduced using the strengths.
(b) Making strategies- Strategies are the course of action taken in times of contingency. Mr. Balaji need to make strategy regarding product formation, pricing, marketing and facing the tough competition. Such strategies gives the strengths to the company and open new ways to work.
(c) Making contacts with promotional companies- Every step taken to promote the company is worth. Necessary contacts should be made by Mr. Balaji with the companies who can promote the Modern Foods.
(d) Mr. Balaji should try to play the role of liasioning officer, leader, figurehead, negotiator, entrepreneur, risk taker, innovator. With the help of all these roles, Mr. Balaji who is the MD of Modern Foods can justify its designation and will do good to regain the market position of the company.
To negotiate means to bargain with something. As a negotiator, Mr. Balaji should try to have a healthy give and take relationship with others.
(i) Negotiation can be related to wages and salaries with the employees.
(ii) It can be done with regard to promotion policies with the client.
(iii) Negotiation can also be done with the customers with respect to the pricing policy adopted by the company
There are various purposes for which negotiation can be done. These can be related to salaries, wages, pricing, promotion of product, investment. etc.
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