Cablex Industries liked to be seen as itself a bastion of tradition. The original owner, Jagan, had maintained close control over the business for 25 years as it developed a number of cables for two wheelers. Until he retired in 1995, Jagan knew the names of every one of the 250 staff members and their families. He made all decisions about products, clients, and employment conditions, even signed every leave application. Jagan knew all dealers and major two wheeler manufacturers personally. Jagan was Cablex Industries. He knew his industry and business very well. Cablex’s business comprising of two wheelers cables consisted of manufacturing factory, packaging division and distribution, sales and office. Cablex had maintained the same business focus and systems for a long time. Sales were steady and reliable- after all, from 1970 to 1995- every Indian middle class dream was to own a two wheelers. Auto spare market was booming.
Employees were proud to tell friends that 95% of staff had been with the company for over 20 years. They boasted of their well developed systems and everyone had complete control on their work. Everybody has had a particular role, and there was a strong informal understanding of where each fitted. Everyday was predictable, and the level of work was comfortable. No one needed to think too hard, or consider how things could be done differently.
Jagan’ son Smart took over the reins of Cablex on his retirement. Smart was a MBA who believed that his father ran Cablex like a welfare state and felt that with changes company can become the market leader in auto part Industry. Jagn died of heart attack within three months of his retirement. The death of Jagan caused major upheaval. Smart started to hire expensive industry managers, and started acquiring new businesses by diversify from two wheeler cables to four wheelers cables and engine components manufacturing. The company expended to 1000 employees in two years. The number of cable products was reduced, and the output of each product was increased by more automation and computer controlled machines. Several teams were responsible for building similar products, and bonuses were introduced for higher performance. This created great stress among old hands as they had never worked in competitive work environment earlier. A new centralized computer based management information systems was introduced in all functions and departments. The introduction of computer into all areas caused additional stress for those who were in company for long. They did not know basics of computers and were being asked to enter their work time, leave applications and supervisory records online. Stress was very high and taking a toll in accidents, absenteeism and turnover.
Within two years, Smart found that 100 of original 250 staff had retired or voluntarily retired or resigned. They indicated that they could not see where they fitted now and were feeling too over whelmed with the rate of change. Many quoted they could not sleep at night, because they were being asked to learn too quickly. In addition a number of newly acquired people were also resigning. Many were commenting that it was too hard to integrate with the Cablex old People. They felt that new staff is not been provided any hand holding and support from old timers. Old timers when confronted that they can not share much as every thing was in their brain and it is too difficult to explain. Besides, there was not enough time to stop and natter when they themselves had so much to do and learn in their new work roles. Many key people found new jobs and left, often taking several other good members of team with them to competitors.
Smart at first was happy that old timers are leaving and fresh blood coming in company. However, he found that defect rates were increasing. Major customers have started complaining on product quality. Bajaj Auto cancelled an order of cable SX-4 due to...