Two of the leading manufacturers of high end mobile phones

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Principles and Practice of Management

Case Studies
CASE STUDY (20 Marks)
Two of the leading manufacturers of high end mobile phones, Motorola, Inc. (Motorola) and Research in Motion Ltd. (RIM), had entered into an agreement in February 2008, whereby the two companies had agreed not to poach each other's employees. In September 2008, Motorola sued RIM and claimed for damages accusing the latter of poaching 40 of its employees in Florida. In December, RIM countersued Motorola accusing the company of illegally preventing it from hiring employees who had been fired from Motorola though the original agreement between the two companies had expired in August 2008. While experts are still divided on whether talent poaching is ethical, there has been a steep increase in employee poaching lawsuits across all sectors as employers are concerned with protecting their trade secrets . In December 2008, Research in Motion Ltd. (RIM) sued Motorola Inc. (Motorola) for, what it called, illegally preventing it from hiring employees that Motorola had laid off. According to RIM, the two companies had entered into an agreement in February 2008 on not hiring each other's employees or the newly separated ex employees. When Motorola announced layoffs in large numbers, RIM, attempted to hire and gain some engineers at a lower cost. RIM considered that the agreement had expired in August 2008 and prayed to the Chicago court for damages. RIM contended that despite the agreement having expired, Motorola had unlawfully extended the contract and prevented RIM from offering jobs to the fired Motorola employees.

Answer the following question.

Q1. Give an overview of the case.

Q2. Discuss talent poaching and give reasons why talent poaching is illegal

CASE STUDY (20 Marks)
In August 2008, WalMart Stores announced that its profit rose 17 percent in the second quarter and that it is raising its full year forecast. In a challenging economy, the world’s largest retailer benefited from low prices and its moves to cut costs. WalMart’s President and Chief Executive Lee Scott said that, "While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that WalMart is well positioned for this economy.” Chief Financial Officer Tom Schoewe attributed the better second quarter profits to tighter inventory controls, which led to fewer markdowns on merchandise. One of WalMart’s goals – which it successfully met – was keeping inventory growth at half the rate of its sales growth which it successfully met. In contrast, sales at department stores and specialty retailers were lagging behind. What is the key to such good results? WalMart overhauled its strategy. Instead of announcing any price increases to cope with the tough economy, the company slashed its expansion plans. It refocused on lower prices, improved the mix of merchandise offered, cleaned up its stores and provided friendlier and faster customer service. But there is more to WalMart’s success over the years than just tighter inventory controls and lower prices. WalMart is truly a great company. A strong organizational culture is the foundation for making a good company a great one. The secret to WalMart’s success has long been attributed to its strong culture. Analysts like Jim Collins believe that WalMart had the kind of ‘cultlike’ culture that is shared by all great companies. WalMart employees are referred to as ‘Walmartians’ which is a sign of a unique culture shared by them. This culture is responsible for a company of this magnitude to be able to sustain its entrepreneurial spirit decade after decade. Since its early days, WalMart achieved remarkable growth rates and was the first trillion dollar company in the world. In 1999, WalMart became the largest private employer in the US with 1,140,000 Associates. But with amazing success also came criticism. WalMart was sued many times and even held the record for being sued the maximum at onetime. Its practices and culture were held responsible for killing small local retailers. It was also criticized for gender based discrimination, its overtime policies and using sweatshop products.

Answer the following question.

Q1. What does the reference of WalMart employees as ‘Wlalmartians’ indicate?

Q2. Discuss why WalMart was criticized and often sued.
Q3. Give the reasons for great success of WalMart, the retailer company.

Q4. Debate the importance of organizational culture in making the company great.

CASE STUDY (20 Marks)
Safety of aero planes has been a major issue with airlines. The human life in itself is priceless and any accident evens a minor one is a setback to the accountability and reputation of the airline. Apart from this loss, accidents destroy assets worth in crores of rupees including aircrafts, crew and pilots. The magnitude of an air accident is large and thus all the airlines have to constantly maintain and improve upon safety standards. One critical factor in these accidents is human error. The fact about accidents is that majority of them occur at taking off or landing or within ten minutes of any start or end of journey. These operations are done by pilots and administered by the ground control authorities, thus the human factor becomes important. Considering this, International Airways, a private airline, has recently taken up the issues at major level. The top management has decided to compare and study the best available monitoring systems and adopt the one which is most suitable for their process. The top management decided that one of the actions taken in this direction will be to provide the best training to their pilots and crew. It decided to approach one of the best and most advanced airlines. Eska which is a multinational leader in equipment and quality to train their employees. The deal was finalized and a team of twelve senior trainers and pilots came to International Airways. After initial introductions, twenty pilots and twelve senior crew managers were to start their training under these foreign trainers. The top management also took keen interest in their system developed in house and training schedules. Generally the people at International Airways have been very positive about this training. The Group Chief training Anil has served many national and international airlines and is considered an icon in the industry. He had cultural differences in the company and its counterpart, Eska. He also felt that the cultural difference is even more apparent in the area of development and training. The trainers have a task oriented style and very upright about it. During training, the trainers used the class room teaching and flight simulators to achieve maximum benefits. The group of trainees for around ten days was fully captivated by the teaching style and the techniques displayed. The concept advocated strongly by the trainers were the ones they never encouraged for in their company. The trainers on the other hand emphasized that the ultimate aim to the pilot and the crew is to avoid a crisis.

Answer the following question.

Q1. What is the case all about? Give brief.

Q2. Compare the cultural aspects of the International Airways with those of their trainers.

Global Car Industry (20 Marks)
How the Lexus Was Born and Continued Its Success in the United States, but will Lexus Succeed in Japan? One of the best examples of global competition is in the car industry. As the Japanese gained market share in America, U.S. car makers required the Japanese to self impose quotas on cars exported to the United States. This encouraged Japanese firms not only to establish their plants in the United States but also to build bigger and more luxurious cars to compete against the higher priced U.S. cars and the expensive European cars such as the Mercedes and the BMW. One such Japanese car is the Lexus, by Toyota. This car is aimed at customers who would like to buy a Mercedes or BMW but cannot afford either. With a sticker price of $35,000, the Lexus is substantially less expensive than comparable European imports. In 1983, Toyota set out to develop the best car in the world measured against the Mercedes and the BMW. The aim was to produce a quiet, comfortable, and safe car that could travel at 150 miles per hour and still avoid the gas guzzler tax imposed on cars getting less than 22.5 miles per gallon. This seemed to be an idea of conflicting goals: cars being fast seemed irreconcilable with cars being at the same time fuel efficient. To meet these conflicting goals, each subsystem of the car had to be carefully scrutinized, improved whenever possible, and integrated with the total design. The first version of the 32valve V8 engine did not meet the fuel economy requirement. The engineers applied a problem solving technique called "thoroughgoing countermeasures at the source." This means an attempt to improve every component until the design objectives are achieved. Not only the engine but also the transmission and other parts underwent close scrutiny to make the car meet U.S. fuel requirements. Toyota's approach to achieving quality is different from that of German car manufacturers. The latter use relatively labor intensive production processes. In contrast, Toyota's advanced manufacturing technology aims at high quality through automation requiring only a fraction of the work force used by German car makers.Indeed, this strategy, if successful, may be the secret weapon to gain market share in the luxury car market.

Answer the following question.

Q1. Prepare a profile of the potential buyer of the Lexus.

Q2. What should Mercedes and BMW do to counteract the Japanese threat in the United States and Europe?

Q3. Why has the Lexus model been very successful in the U.S. but has not been marketed in Japan? (Suggestion: Review the frequency of repair records of luxury cars. Also talk to Lexus dealers or Lexus owners).

Q4. Do you think Lexus will succeed in Japan? Why or why not?

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Project Report and Thesis contact
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