Case Study - Competency to Measure - Decision Making
Competency to Measure - Decision Making
TIME – 90 Minutes
Read the CASE and think of the company and its work practices as if you were the direct report R Raheja.
As a group discuss possible decision options. Choose 1.
You would need to discuss the consequences of potential actions of R Raheja in the case based on choice 1 as above and his possible decision options and the way it would impact the organization? Would you agree with his decision? If yes, why and if not why? Explain what will you do now?
Did the CEO act in favor of the parent company and in favor of the group/acquired company? Was his decision in favor of his product/customer/markets?
Would you like to work for somebody like this CEO? What work practices would you like implemented in your company? Would it be similar to a new CEO or would it be different? In what way would it be different? Why?
Can you relate to any experience from your real life on a similar situation when you were disappointed like the General Manager Smithers? What did you do at that time? Is the situation similar or different? Explain?
Have you ever made promises that you could not keep because of a change in circumstance or the situation? How did you handle it?
What aspects of organizational culture appear to strike you?
If you were the R Raheja what would you do now that you know that you know you may or may not get the support of your people if politics is not fixed in terms of organizational culture?
What would you communicate to your direct reports? Write a communication note?
What comes first for a leader? The interest of the group, product, customer, team, culture etc.? What would be your order of preference?
What is your learning from this case study? What is that you would not do based on this learning?
You have 90 minutes to INTERPRET, DISCUSS and may be write a presentation. IT IS POSSIBLE THAT YOU MAY ALSO BE ASKED TO MAKE A PRESENTATION to the HR Head on the difficulties faced by you as R Raheja and actions you are proposing to take consequent to this decision. If you were a departmental/functional head what would you do?
Rishab Raheja Case
Rishab Raheja, the chief executive officer of Unichem Limited, a large Indian chemical and pharmaceutical company, was troubled by a long and distraught letter he had received from the general manager of a company located in Australia. He had at first assumed that the letter might be from some customers, but before he'd read far, he realized it was from the managing director of a small patent medicine company that Unichem now owned. The company, Rodgers Cough Drops Pty., was a subsidiary of a substantial Australian chemical company that Unichem had acquired three years earlier. Rishab presides over this high performing company with an ambitious growth target.
The substance of the complaint from Rodgers' general manager, Harry Smithers was that internal company politics were standing in the way of Rodgers making a major sales gain in the current years. Post-acquisition of the company there have been several instances of product optimization challenges. Smithers felt that the parent company lacked professional processes to manage conflicting product categories.
A month earlier a major scientific journal had reported on the findings of an exhaustive research effort on the effectiveness of cough drops. The article, which Smithers had enclosed, showed that Rodgers' cough drops were the most effective of all those tested in relieving sore throats and major promotional campaign based on these things. They had ordered 50,000 reprints of the article to be sent to chemists across the country. And they had approached the advertising agency that handled Unichem in Australia, asking them to help draft consumer advertising to promote the survey. Smithers was anxious to put most of his promotional budget for the year into the campaign, which he was certain could not fail to boost sales dramatically for Rodgers' cough drops.
However, no sooner had Smithers' marketing manager presented his plans to the agency, then the account executive was on the telephone to the marketing director for Unichem Throat Lozenges! Unichem Throat Lozenges was currently in the midst of a major advertising campaign attempting to enlarge the share of this popular European product in the Australian market. Since the lozenges had been introduced in Australia three years earlier, they had climbed to a sales level approaching $392,800,000 a year, this represented only 5% of Unichem's worldwide sales for this product. Even so, its Australian sales exceeded those of Rodgers' cough drops.
Dropping the campaign
When the Unichem marketing director in Australia discovered the results of the surveys he is alarmed. Unichem throat lozenges were rated as the most effective of a dozen lozenges tested. But they were outranked by the market leader as well as the front runner, Rodgers. Marketing, sales, advertising and team building challenges were now being confronted.
Smithers' letter recounted how the Unichem marketing director in Australia had called his counterpart for continental Europe. He, in turn, had taken the case to Karl Sonata, the board director responsibility for non-prescription medicines. Shortly thereafter Sonata had telephoned Smithers from Switzerland. Sonata began by trying to explain that "over all corporate interests must be taken into account. That group goals were more important than individual business lines or product targets and goals" He advised Smithers not to proceed with his campaign. At first Smithers had resisted altogether. But during the course of the conversation he offered to cancel all the mailings of the reprints and delete all mention of Unichem lozenges in his advertising campaign. However, he recounted, even this compromise did not satisfy Sonata. This Swiss executive had brusquely ended the telephone conversation by saying: "I want this advertising campaign dropped completely. Now do as you are told!"
It was this that had prompted Smithers to sit down and write the angry letter to Raheja. He was enraged that the cooperation was sacrificing great growth opportunity for Rodgers' cough drops in favor of promoting "a second-rate Swiss product". He even went so far as to suggest that by suppressing the advertising campaign the Swiss parent company "was cheating the Australian consumer".
Despite the extreme remarks, Raheja carried out an investigation. He discovered from Sonata that Smithers' account was substantially correct. Sonata argued that such an advertising campaign would even have repercussions in Europe. Besides, he explained, Rodgers' cough drops tasted "awful". The Unichem lozenges, he insisted, were much more palatable. And even if you believed the survey, they were only slightly less effective in soothing through. He also insisted that Rodgers' advertising campaign would mean spending corporate money to undermine Unichem's sizeable investment in establishing its own product in Australia.
Then Sonata added: "By the way, I've been thinking it might be a good idea, so long as we have a facility in Australia, to phase out Rodgers’ cough drops altogether and manufacture Unichem lozenges on the spot."
"Before we make a move like that," Raheja responded, I'd like to think it over, along with this whole situation.