Bharat Engg Works

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Principles of Management

Case Study

Bharat Engineering Works Ltd.

Group Members

Bhavesh Gohil (75)

Lijo Mathen (88)

Pranav Thakker (118)

Bharat Engineering Works Ltd

Bharat Engineering Works Limited is a major manufacturer of industrial machineries besides other engineering products. It has enjoyed considerable market preference for its machineries because of limited competition in the field. Usually there have been more orders than what the company could supply. However, the scenario changed quickly because of the entry of two new competitors in the field with foreign technological collaboration, for the first time, the company faced problem in marketing its products with usual profit margin. Sensing into the likely problem, the Chief Executive appointed Mr. Arvind Kumar as General Manager to direct the operations of industrial machinery division. Mr. Kumar had similar assignment abroad before coming back to India. Mr. Kumar had a discussion with the Chief Executive about the nature of the problems being faced by the company so that he could fix up his priority. The Chief Executive advised him to consult various heads of department to have first hand information. However, he emphasized that the company lacked an integrated planning system while members of the board of directors insisted on introducing this in several meetings both formally and informally. After joining as general manager, Mr. Kumar got briefings from the heads of all departments. He asked all departmental heads to identify major problems and issues concerning them. The Marketing Manager indicated that in order to achieve higher sales, he needed more sales managers and sales professionals. His main concern was a lack of engineering support to sales and marketing efforts. The company had adequate engineers but they were spread under three separate engineering groups. Sales people had no central organization which had responsibility to provide sales support. Therefore, some jobs were being done from outside at higher costs with lower quality. Besides, he needed a generous budget for demonstration system which could be sent on a trial basis to customers to win business.

The Production Manager complained about the old machines and Equipments used in manufacturing. Therefore, cost of production was high but without corresponding quality. While competitors had better equipments and machinery, Bharat Engineering neither replaced its age-old plant nor got it reconditioned. Therefore, to reduce the cost, it was essential to automate production lines by installing new equipment. Director of Research and Development (R&D) did not have any specific problem and, therefore, did not indicate for any change. However, a principal scientist in R&D indicated on one day that the director, R&D, though very nice in his approach, did not emphasize on short-term research projects which could easily increase production efficiency to the extent of at least 20 per cent within a very short period. Moreover, such projects did not involve any major capital outlay. Mr. Kumar got himself convinced about the management process going on in the division and the type of problems being faced.

Questions
Q 1. Discuss the nature and characteristics of management process followed in the company. Q 2. What are the real problems of industrial machinery division of the company? Q 3. What steps should be taken by Mr. Kumar to overcome these problems?

Analysis of the Case:

• Bharat Engineering Works has been a dominating market player with ample orders for its industrial machinery and other products and has faced limited competition so far.

• The entry of two competitive players with foreign collaborations quickly changes the game with Bharat Ltd. unable to sell the products with the usual profit margin.

• Mr. Arvind Kumar appointed as GM to direct the operations of the machinery division, who immediately seeks to tackle...
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