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Cost of employee loyalty@Anand Finance

CASE STUDY, ORGANIZATIONAL BEHAVIOR
Emerald Group Publishing Limited,
AUTHOR(S) : Vandana Jayakumar, R. Muthukumar, and Dr. Nagendra V. Chowdary
Rs 0
Product code: Anand Finance

Abstract

This case study can be used effectively for understanding the nuances of employee loyalty, especially if there is a cost of employee loyalty. While Anand Finance is happy that its workforce has largely been loyal, the volatile, uncertain, complex and ambiguous times force it to chart new course of action. The newly appointed Business Head, Ashok Singh's challenges compound when he finds that there was not’t a single innovation or best practice adopted over the past three years. Given his mandate to make Anand Finance as the Walmart of financial services, can he aspire to rally the forces behind the new mission? This case study facilitates an interesting discussion on the significance of operational and strategic alignment at organizations in the backdrop of an interesting story of Anand Finance, one of the leading non-banking financial companies (NBFCs) in India. The non-alignment was noticed by Ashok Singh (Singh) who took over as the Business Head of Anand Finance. While the company boasted of long-standing employees, Singh was quick to notice that the company had been paying a cost for employee loyalty. What was the cost of employee loyalty? Singh could also sense that the company was in a state of active inertia. Expected to make Anand Finance Walmart for financial services by 2025, Singh had a big task at hand given the lack of strategic orientation of the employees. What would be the likely course of Singh's actions? As the case study deals with strategic dilemmas related to the organizational culture, it can be suitably used for organizational behavior and strategic management courses. This case study is meant highlight that even if an organization is operationally sound and successful, it cannot afford to be strategically disoriented, as its strengths may prove to be its weaknesses with changing business conditions.

Expected learning outcomes

At the end of this case discussion, the participants are expected to know the merits and demerits of employee loyalty and the implications of the same for organizational change; whether employees’ relatively longer stints at companies would contribute to active inertia (as defined by Donald N. Sull in Harvard Business Review article, “Why Good Companies Go Bad”); and the ways to align operational orientation with strategic mindset, especially in the case of employees who rose through the ranks and had been serving the company for relatively longer period.

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