A Dilemma for Mr.

Bansal

Ravi Bansal was upbeat, but a bit uneasy too. He had returned late last night from Kuala Lumpur
after three days of grueling negotiations with Wan Abdul Rahman, Chairman and MD of Malay Heavy
Electricals Limited (MHEL). Both had agreed, in principle, to form a joint venture for manufacturing
high-tech belts for a variety of uses and to set up a supportive state-of-the-art R&D centre in
Malaysia. Market research had predicted a growth rate of over 20 per cent for the proposed
products.

Ravi took a sip of the fresh coffee that his secretary had just placed before him and promised
himself: . “Some day I shall launch Bansal models of cars! Not now. But some day soon!

The contract is not in hand, but the prospect was bright. Rahman was coming for a visit at the end
of the following month. Another round of negotiations and Ravi was sure he would have an iron-
clad contract. A lot of groundwork was yet to be done. Ravi looked at the wall clock; he still had
half-an-hour before he met his directors to set the ball rolling.

Rahman, Ravi recalled, was a lucky guy! He had got everything on a platter. Coming from a very
affluent family, he took advantage of the government policy after independence in 1957 of favouring
bhumiputras (sons of the soil) over the Chinese, who earlier dominated Malay business. He got a
license to set up MHEL, liberal doses of incentives and long tax holidays that turned MHEL into a
leading national company with a strong capital base, large workforce, an extensive distribution
network, an army of vendors and distributors and an order book that was full for the next five years.
Rahman had connections with political heavy weights of all hues and colours.

In comparison, Bansal Industries was small, very small. But that was more than compensated for by
Ravi’s burning ambition and street doggedness that Rahman lacked! Rahman was too complacent.
Their chemistry matched. Ravi walked while reminiscing to the window from where he could
oversee his factory, spread over a sprawling 20 acre plot with a lush green background. The factory
was one of the best in the world. But that was not what Ravi was looking at. Before his eyes was a
vivid image of a motor garage from 20 years ago.

He still remembered the day he was recalled from his second year at engineering college for the
funeral of his father, who owned a Maruti service centre. He was angry, but also aware of his
obligations to take care of his mother and his younger brother, Suraj, who was just finishing high
school at that time. “This garage is not my destination”, he kept repeating for the next few years.
And, his ambition and hard work outgrew the garage. Maruti Udyog was impressed enough to let
him change the garage into a small factory supplying fan belts, at first to Maruti and then later to
other retailers all over the country. Bansal Service Centre turned into Bansal Industries Pvt. Ltd.

It grew fast. The old factory was sold and Bansal Industries moved to its current location. Ravi
travelled East and West to get the best available technology. Bansal Industries started
manufacturing multi-ribbed V-belts for meeting the growing demands of companies such as Maruti,
Tata Motors, Ford, Hyundai, Toyota, Ashok Leyland and others. It obtained the ISO 9001
certification in the year 1997 and the ISO 9002 two years later for manufacturing industrial belts,
automotive belts, multi-ribbed belts etc. The turnover increased from Rs.20 million to Rs.800
million.

The workforce increased accordingly to its current strength of 45 managers, 280 permanent workers
and around 350 causal helpers, besides about 50 persons in the staff. Ravi’s youngest brother,
Suraj, graduated from a business school and became the joint managing director (JMD). The
director of finance was lured from a competing company. A retired senior engineer from Maruti
was hired to head the production division. A dashing young man with a degree in marketing was
recruited. He was Ravi’s wife’s distant cousin. A close friend’s son was hired to take care of
administration. An MA from a Delhi institute was hired to run the Human Resources (HR)
department. Ravi trusted them all. He gave them full authority to pick up his team. As Suraj
developed a grip over management, Ravi concentrated largely on strategic issues.

But Ravi seemed to have lost touch with his employees. Except for the directors, the other
employees hardly saw him. The directors, Ravi could sense, had a lot of differences that they kept
sweeping under the rug during the meetings. There, were, however, instances of gaps in
communications or discrepancies in reports that Suraj had a hard time in reconciling. Ravi hd
become the distant boss to most of his employees. There was a time when Ravi used to know
most of the workers personally, when he would visit Managers socially and walk around the shop
floor calling out to people at random. But this was no longer the case.

Maybe, Ravi wondered, it was time that he got to know his people better. Ravi felt that he should
again start walking the shop floor, chatting with employees to find out how they felt about becoming
a part of a multinational organization that he is going to form. He felt that this exercise might even
help him intuitively see which of the employees would like to move to Malaysia, how they need to
be selected or it might just change his high profile image. “Or maybe, there is a better way! I guess I
need an outside help, a consultant”, thought Ravi.

1. Suppose you are the consultant who has been invited to do the job, explain the approach
you would take to reinforce Ravi’s confidence about stabilizing the organization.

2. Do a SWOT analysis to study how the organization as a whole was functioning and how
improvement can be brought about.

3. What should the company do to orient its employees in becoming a part of a multinational
organization.