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The Case of Kitler Electric Firm: Are Organizations Keeping their Promise of Employee Engagement?*

CASE STUDY, HUMAN RESOURCE MANAGEMENT
ET Cases - GSMC, 14 Pages

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The Case of Kitler Electric Firm: Are Organizations Keeping their Promise of Employee Engagement?

 

The ambulance was hurtling down the winding road in the Sahyadri mountain range. Mr. Sinha, VP (HR) of Kitler Electrical Ltd. (KEL) along with a few of his colleagues was rushing the union leader who had suffered a heart attack at the Moral Rearmament Institute while undergoing training. Mr. Sinha was heading the team comprised of employees and union leaders of INTUC (Indian Trade Union Congress). They were into their first day of course-stay when the mishap occurred in the wee hours of the dawn. Mr. Sinha was tensed and praying that medical aid was reached in time to the patient. Mr. Trivedi, the INTUC union leader, was an obstinate foe of the company and had made the life of the managers of Mr. Sinha’s team particularly hard. The ambulance swung dangerously while negotiating around the curves and reached the hospital in 20 minutes. The patient was wheeled out and the emergency team of doctors rushed him to ICCU (Intensive Critical  Care Unit). Mr. Sinha fell down like a heap of sand. He was bracing up to hear the worst from the doctor. The company’s wage revision and workers’ demand for canteen facility was pending approval.

Mr. Sinha buzzed the company’s Director at 5 AM and heard a sleepy voice from the other end. A voice inside him said that things would not turn out as bad as he feared. But he gave the bad news to his boss who became concerned and assured support and urged that no stone be left unturned to save the union leader. He promised to arrange a specialist to be flown from Mumbai to Pune by afternoon. Sinha’s face went pale as he tried to absorb the train of events. He recalled how Mr. Trivedi had gheraoed the plant gate two weeks back and had roughed up some managers. Lost in his thoughts, Sinha’s thoughts were interrupted by a gentle tap on his shoulder. Dr. Kulkarni did not waste his time, “I’ve both good and bad news.” Sinha anxiously asked, “tell me, Doc.” Dr. Kulkarni replied, “We have saved him for now, but he would need a heart surgery”, before Mr. Sinha could respond, he said, “it will cost anything between 3-4 lakh. Shall we proceed?”.....................

Teaching Note Preview

The Case of Kitler Electric Firm: Are Organizations Keeping their Promise of Employee Engagement?

 

Synopsis

Kitler Electric Limited (KEL) was facing severe market challenges as its manufacturing activities had to be radically reorganized at its various locations so that performance and productivity could be shored up without increasing cost. The routine HR activities were not helping it to resolve the problem. Continuous work rationalization in the plant had spelled doom for the union-management relationship whose mutual distrust had increased and were driven to take a stand against management out of desperation. The leadership was grappling with familiar and unfamiliar issues of recalibrating the work norms such as MOST (Maynard Operating Sequence Technique) to make it responsive to organizational concerns, make the turn-around of the organization possible, and initiate conclusion of new wage revision successfully. The top management lacked a sense of direction. Motivation level of the team was also down. The challenges for leadership were to become relevant, focused and neutralize the crisis. It also needed to overcome the organizational inertia, resistance to cultural change, and create an inspiring goal that could rally the whole organization.

Mr. Sinha (VP-HR) of KEL realized that the change in work norms and the culture that he was envisaging was a big, radical shift in terms of commitment, scope and impact. He needed to create a compelling goal but had to tread the ground carefully. He therefore convened, after some delay, several rounds of wage revision negotiations that ended in disputations. Opportunities to criticize and evaluate claims and counter-claims vitiated the ‘clan’ culture of solidarity. Advocates for different opinions crossed their swords on different occasions seriously undermining worker’s commitment. They soon realized that their option was diminishing day by day. Eventually, such changes bring intrigue, power struggle and conflict. Mr. Sinha was aware about the phenomena. Notwithstanding Mr. Sinha’s consultative style, the intransigence of the internal union left him bitter as management’s concern about keeping the cost as low as possible seemed defeated. In view of lack of union’s support, he was unable to steer the direction of company’s approach towards wage revision. He went offensive and called the internal union’s leaders names. Recalibrating the HR policy in view of new work norms would have been an affirmation that the organization could have been doing wrong and it was a case of mismatch and therefore the allegation of purposeful delay in wage revision was not baseless. He also stereotyped the opposition as the myth of false unanimity of union-management lay shattered. Instead of triggering an open debate about the future course of action, he chose to attack and throw mud on those workers who opposed the management’s proposed wage. He wore his morality for display and self-aggrandizement not realizing that worker’s engagement in the changed scenario would become its first casualty. He determined to stand up for management’s right, spoke his mind out clearly and encouraged hostile debate. He lost supporters within the organization. He thus accomplished the unmaking of KEL’s culture, damaging employee engagement without his reaching amicable settlement on wage revision for the moment. The workers had accepted the work rationalization grudgingly and wanted suitable compensation for their effort. Respecting their clan culture, the workers did not reciprocate VP (HR)’s disparaging gesture and language. The company’s wage revision was negotiated successfully eventually and the company lurched forward. Yet the fundamental conflict between work rationalization, new means of monitoring and evaluation was left unaddressed foreboding ill for the future...........................

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Abstract

This study is based on a single case of a key manufacturing company of medium and large electrical equipments. It is a market leader in India and henceforth referred to as Kitler Electrical Ltd. (KEL). It was directed towards understanding employee engagement, organizational culture, communication and interpersonal dynamics. KEL, operated in a highly fragmented market, was beset with various problems like environmental sustainability issues, dependence on government projects, economic growth rate, etc. Employee engagement was studied by analyzing quantitatively the Organizational Culture Assessment Instrument (OCAI) survey and interviewing workers, leaders, managers in conjunction with observation and official documents such as the Gallup survey results, company magazines, and office reports.

Engagement is an individual’s involvement with, satisfaction with, and enthusiasm for the work he or she does (Robins, Judge, and Sanghi, 2009). Employee group is an important stakeholder in achieving organizational purpose. Moreover, things have changed due to the pervasive influence of knowledge economy that makes employees more critical than capital (Drucker, 2001). Employees’ attitude, opinion and expectations were not homogeneous and massive organizational changes in culture, work, and wage-determination method could adversely impact performance, productivity and profit. The case study focuses on how employees perceived change and adapted to the changing norms throwing light on the dynamics of internalization of new norms among Indian workers. The case analyzes employees’ attitude towards changes in policies and culture and probes whether the cultural shift is worth the effort.


Pedagogical Objectives
The case explores how top leadership engage employees and usher in an organizational transformation, impacting team cohesiveness, performance, productivity and its morale. It discusses variety of contemporary issues confronting KEL and the role of its leaders and employees in making meaningful sense of the sweeping changes and direction. It elaborates the ethical and moral imperatives of the problem context, shrinking business fortune, and the power of engaged employees in forging collaborative management-union relationship. Value-based management action unfolds the miraculous story of trust and bonding which transcends class-conflict and scripts successful partnership. Engaged employees positively affected the firm’s bottom-line triggering a whole series of contingent responses implying readaptation of workers’ commitment to changing norms of output evaluation.
A few learning objectives are as follows:

  • The case highlights how a perceptive leader can turn a problem into opportunity to engage his work-force for higher performance and productivity
  • The case is about creative engaging the work-force through innovative informal forums and use of internal communication
  • The case elucidates ways of institutionalizing changes notwithstanding historicity of circumstances, the pre-existing structural and cultural characteristics
  • In a skewed age profile of an organization, where 60% of the senior workers are in middle ages, the case is an example in aggressively engaging the executives and workers in embracing new roles and responsibilities
  • The case illustrates how employee engagement is achieved successfully by the leadership and how a myopic uncritical implementation of changing norms without regard to specific local contingent context can expose vicissitudes of scientific innovation

Case Positioning and Setting
The case study illustrates the nature and concept of employee engagement, management-union relationship and role of commitment, passion and innovation behavior. Organizational commitment and affirmative employee engagement requires an ethically sensitive and committed leadership. The case can be taught in MBA, Executive MBA, and Executive Development programs for courses related to organizational development, corporate HR policy, General Management, and public sector business.


* GSMC 2017, IIM Raipur

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