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Case Detail :
Please read the case study given below and answer questions given at the end.

Case Study

Madhya Pradesh Medical Equipments Limited (MPMEL)


Ram Krishan Dhir (RKD) was extremely happy to be selected as the corporate MD of the United
Group at Indore. The United Group consisted of three industries, all located within 30 Km of the
corporate office, Indore. Madhya Pradesh Medical Equipments Ltd. (MPMEL) was one of the
industries of this group. Each industry of the group had its own CEO who was directly answerable
to the corporate MD.
MPMEL established in 1980, with Japanese collaboration, had soon earned a
name for its quality and customer responsiveness. By 1983, with employee strength of around 300
MPMEL with very harmonious industrial relations, and the latest technology had registered a good
turn over o over Rs. 80 Crores. But there the success story ended. Mr. Raj Anand , The original
promoter of the group died in an air crash and his eldest son Mr. Virat Anand (VA) took control of
entire business in January ,1984. Virat was a spoiled brat, lived in luxury, had no qualms about
swindling money wherever possible and had least regards and considerations for the professional
management and the employees.
MPMEL`s down ward journey had truly begun. By 1987, it had witnessed change of
4CEOs and 12 middle /junior levels managers. Most of present set of managers were hand picked
by Virat and groomed in his culture of scant concern for the employees and the organizational
growth. In the following years, the MPMEL lost many of its major customers, Performance, quality
of its medical equipment and industrial relations deteriorated. It was defaulting often on its
payment to the lending bankers and even the salary payment to its employees was often delayed
and even withheld. By February 1989, when RKD was taking over as corporate MD, the situation
was:

a. Two of its leading lending banks (Syndicate Bank and Bank of Baroda) had stopped further
payments & over drafting to MPMEL and had served notices to MPMEL for clearance of its
dues.
b. Four of its old and professional directors of the Boars of Directors, had resigned and
replaced by cronies and relatives of VA
c. Industrial relations in the MPMEL were bad and there was total lack of trust between the
management and employees. A number of local DADAS were in control of the employees
and MPMEL employees had gone on a violent strike in November, 1988 for irregular
payment of salaries, adhoc promotions and inaction of outstanding issues. The striking
employees had physically beaten up the CEO and some other managers and damaged a
number of buildings and windows. They had however, spared the main air- conditioned
production complex. The strike had ended by police intervention and signing of a Long
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Term Agreement (LTA)with the Union employees. Promised actions by the management
were over due.
d. The other two industries of the United Group were only slightly better but heading
downwards.
e. MPMEL was still operative and producing good quality equipment at about 50% capacity.
The rejection rate however, had increased considerably and there was a large dump of
rejected quality equipment. The quality control department was totally disheartened due to
dismissal of its good manager six months ago without any replacement and no one was
paying any attention to their concerns and suggestions.
f. The turn over in 1988 had dropped to Rs. 36 crore.

RKD, an MBA and an ex DIG Police, with an excellent track record as a good administrator
and a person of high integrity was determined to bring about a major change in MPMEL.
Within a month of his taking over, after his discussions with a section of employees and
their union leaders, senior managers, some experts (two of them were ex-MDs) and the
Chairman of the BOD, he realized that their problems had nothing to do with their products
and technology but they seem to weave around the management of Human Resources and
excessive withdrawal of funds by the Chairman. There were strong indications of
continuing rumblings, dissatisfaction among employees and lack of faith in management
despite the LTA.
Please give your answer in at least 25 words and press save and continue button.
S.
No.
Questions Marks - 10
1. Analyze the situation, as RKD, as you see it and suggest a course of action you propose
to take?

2. What actions in particular you plan to take to change the culture of MPMEL?

3. Nil





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