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UPO Case Study Analysis 1

1) ABC Bearings is a global manufacturing company with facilities around the world, including one in Chennai, India that produces oil-cooled bearings and employs local southern Indian workers. 2) In 2009, a new CEO, John Marker, was appointed to the Chennai plant. He implemented changes like restricting break times and canteen usage that disengaged employees. He also pushed new product lines and brought in his own leadership team from Germany. 3) These changes caused issues like lack of communication and coordination between new leadership and local employees. It resulted in poor financial performance in 2011 with a 30% drop in the top line and 20% drop in profits, leading to the first factory lockout

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94 views4 pages

UPO Case Study Analysis 1

1) ABC Bearings is a global manufacturing company with facilities around the world, including one in Chennai, India that produces oil-cooled bearings and employs local southern Indian workers. 2) In 2009, a new CEO, John Marker, was appointed to the Chennai plant. He implemented changes like restricting break times and canteen usage that disengaged employees. He also pushed new product lines and brought in his own leadership team from Germany. 3) These changes caused issues like lack of communication and coordination between new leadership and local employees. It resulted in poor financial performance in 2011 with a 30% drop in the top line and 20% drop in profits, leading to the first factory lockout

Uploaded by

vidya
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UPO Case Study Analysis

ABC Bearings –The Organizational Turmoil

ABC Bearings is a global conglomerate company which is involved in manufacturing of Bearings for all
types of use. It has its corporate office is in Munich, Germany and it has 12 manufacturing facilities
across the globe. It manufactures two types of bearings:

Oil cooled (OC)

Air cooled (AC)

The Oil cooled bearing is used for manual transmission in south Asian and part of Chinese markets and
Air-cooled bearing is used for Automatic transmission. Most of the Western, European Union and
Australian Markets use AC which helps in reduction of emissions and helps the plants which
manufacture AC get carbon credits and tax concessions

A plant was set-up in Chennai in 1969 to meet the demand of Asian markets. This was their second plant
after Chennai. It was known for high-Quality manufacturing of OC Bearings and this became cash cow
for the ABC Group.

About 98% of the employees are from southern part of India:

1. 64% Tamils
2. 18% Keralians
3. 4% Andhras
4. 4% Kannadigas
5. 4% Non-Indian Executives

Character Introduction

Mr Howitzer-Chairman

Ice lee- John’s secretary

John Marker

CEO and business head of ABC Bearings unit of Chennai.

He was from Germany

He did not know the local languages of India. He felt difficult to communicate with the managers
and the employees

During his term, employees dint feel belongingness to the company.

Raghu Srinivasan

When he joined the company, he was an young apprentice and became the chief head of the
Chennai plant in 1994. Called as “Uncle Srini”- former CEO of ABC
He had grown the Indian operations as a good profitable unit compared to other ABC units
worldwide

He maintained a good relationship with his employees

He had good market knowledge

He was a responsible leader who also had corporate responsibility since he as CEO would contribute
a new facility to school when he was invited in programmes

He continued to serve as CEO beyond his tenure because of his performance, friendly nature and
the bonding that he shared with this employees. He continued till 2009

Mr Neelakantan

COO in 1994

Started as production engineer, was very close to workers

He was a very soft spoken person and was often seen unable to take in tough decisions

Did not take any interest in going for higher studies even if the opportunity was provided for him

Lacked aggression for holding CEO position.

Mr Neelakantan

Financial wizard

He made clear that he wanted to continue as CEO

HN Sreenivasan(HNS)

HR guy CHRO

He was a non-engineer, Therefore he never contributed to operations side

In 2009 chennai ABC plant needed new CEO. Corporate found no other internal candidate who could fit
the shoes of shrini. John landed in Chennai on 5 th June 2009

John set up a new vision to increase ABC Indian revenue to 10 billion and market share to 60% in India
by 2012 and to double the production capacity in the next 5 years and wanted to export 30% of the
production

After few weeks Jon decided to bring his own team of leaders from Germany for some critical positions.

Within 3 months the organisation structure got changed

Issues

No coordination and communication gap

There was no coordination between CEO and the employees and the managers and the CEO felt difficult
to communicate with his employees because the CEO did not know the local languages so he always
preferred to communicate more on e-mail and newsletter than face to face communication
No direct communication with employees

John used to speak only with his immediate leaders and they did not communicate well with the
managers.

Disenagement

Employess did not feel belongingness to the company and there was disengagement

John restricted the breakfast and lunch timings of the employees because he thought that employees
are spending more time in canteen. John interfered in their comfort level and changed their timings.
Workers showed unhappiness and expressed vocal resentment

Product diversification

Even though the oil cooled bearings was selling good in Indian market, he diversified the product . He
made his workers to manufacture AC bearings, even though it was not accepted much in indian maket.
He lacked market analysis.

Community disconnect

When Raghu Srinivasan was the CEO, he used to sanction new building or some other facility to school
which did not happen in John’s tenure. He lacked empathy as he did not attended his employees funeral
and sent someone else to attend.

In DEC 2011 , ABA India performed very poor with 30% drop in the top and 20% drop in the bottom line.

Negotiation between the employees and the management failed as management thought that the
demand were unrealistic

Factory went into a lockout for the first time

Recommendation

The vision set by Srinivasan and john had many differences. The vision set by sreenivasan was clear
whereas the vision setup y john was too long and complex which employees felt difficult to achieve

Jon didn’t understand the need of his employees where the CEO should understand the needs of the
employees and try to be friendly with them and make the employees feel they belong to the
company

The employees also felt difficult to change immediately


There has to be proper low of communication between the top , middle and the low level of
managemnent

The companies should provide more incentives to the employees because when the employees
don’t get more incentives they will be less productive . This can be be seen in the case as most of the
long serving employees left the company.

When john made the decision , he should have considered the opinion of other stakeholders and
also he should have done the market analysis

An organization to success there has to be corporate social responsibility.

John showed dictatorship

John didn’t make strategic decsions and he was not empathetic

John was not flexible as he didn’t made any attempt to learn the local language, whereas the CEO
should be flexible.

John should not have changed the structure of the organization. He should have tried to adapt to
the previous structure.

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