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Challenges of Growth and Continuity in a Co-operative Organization*

CASELET, STRATEGIC MANAGEMENT
ET Cases - GSMC, 8 Pages

Case Preview

Challenges of Growth and Continuity in a Co-operative Organization

 

An initiative was taken in 1980s by the State Government to develop textile industry base in Assam. A number of textile mills for production of yarn and fabric were set up. But due to various problems including poor-management, non-competitiveness of the mills, all the units had been closed except one. Assam Polyester Co-operative Society Limited (APOL) is the only unit now functioning in this region, thanks to the government’s drive to boost textile industry. It started as a textile composite mill for production of grey & dyed yarn and fabric in its spinning, weaving and processing units. The spinning mill was commissioned on 24th June, 1988. But this pioneering unit in the textile industry of Assam too had seen difficult days and has been still struggling to survive. In fact, the mill stopped production in December 2003 and was completely shut down for not being able to withstand the internal problems and external challenges. However, it started again in June 2006 to focus exclusively on yarn production......................

Teaching Note Preview

Challenges of Growth and Continuity in a Co-operative Organization

 

Synopsis

This caselet depicts the evolution of a textile manufacturing unit in the co-operative sector. Established way back in September 1981, Assam Polyester Co-operative Society Limited (APOL) commissioned production of yarn with a capacity of 6000 kg per day in 1988. It’s primary motto was to generate rural entrepreneurship and was registered as a co-operative society. APOL was created out of an initiative of the state government to boost textile industry in Assam. A few engineering graduates, with their mentor, a fiber technology expert, came together to create this textile unit. Initially it was an integrated textile unit engaged in yarn production, dyeing and garment making. In a few years, it expanded its activities to include retailing of its garments. APOL fabrics became popular and gained market acceptance amongst the middle income segment. However, the good days did not last long. Wrought by internal problems and external challenges, the organization saw itself in a crisis situation after being in operation for a decade and a half. The revival of the unit after being closed down for 3 years came about with the support of government machinery.

The first part of the case reviews APOL’s efforts to become a successful player in the local textile industry. The case goes on to identify the challenges met during its journey prior to closure. The second part of the case highlights the utilization of the resources viz., physical, financial and human resource. Problem areas in its various functions have been focused upon.

Pedagogical Objectives

This case is appropriate for strategy course. Discussion can be focused on identification of strengths, weaknesses, opportunities and threats for the unit, turnaround strategies for continuity and growth of the organization. The case can also be discussed in a session devoted to entrepreneurship. Specifically, the objectives of this caselet are to:

  • • Highlight the factors that made an enterprise go through a decline phase after experiencing a growth phase
  • • Discuss how the internal resources of an organization can be used to turnaround an organization
  • • Analyze organization’s internal environment as well as external environment to achieve a fit between the two

 

Case Positioning and Setting

This case study is relevant for MBA or Executive MBA programs and can be used for Strategic Management classes. It deals with strategic issues in production, HR and marketing areas.

Assignment Questions

  • I. What factors are responsible for suspension of operations of the organization in 2003?
  • II. Assess the post-revival performance of APOL.
  • III. Conduct a SWOT analysis for the organization.
  • IV. ...........

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Product code: STG-2-0029, STG-2-0029A

Abstract

This caselet examines an organization which saw various phases of a business cycle such as growth, downslide, closure and revival. Registered as a co-operative  society, the organization started operations in 1988 with the activities of spinning, dyeing and weaving. It’s finished products got wide acceptance in the market and the  unit performed well during its first 10 years of existence. However, the good years were not to last long. Unable to tackle the internal problems and withstand the external challenges, the unit had to be closed. It started again in June 2006 to focus exclusively on yarn production. However, financial and physical performance remained very  poor. With low employee morale, low productivity, frequent machine breakdown, excess manpower, fund crisis, the Managing Director (MD) had to decide on a course of  action that would improve the current status of the unit and arrest further deterioration of its financial status. He was sure that a sound production strategy had to be  worked out and implemented at the earliest in order to turn around the unit and bring its long lost glory. But he also knew that there would be other softer management  issues needed to be addressed. The MD was wondering which approach would be appropriate; or were there some other options too.



Pedagogical Objectives

  • Highlight the factors that made an enterprise go through a decline phase after experiencing a growth phase
  • Discuss how the internal resources of an organization can be used to turnaround an organization
  • Analyze an organization’s internal environment and the external environment to achieve a fit between the two

Case Positioning and Setting
This caselet is relevant for MBA or Executive MBA programs and can be used for Strategic Management course. It deals with strategic issues in production, HR and marketing areas


* GSMC 2016, IIM Raipur

This Case Pack Includes:
- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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