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ARAVIND 

09901366442 – 09902787224

Banking Management 

CASE-01:BANKING ON RELATIONSHIP 

The birth of ABC Bank took place after the RBI issued guidelines for the entry of new private 

sector banks in January 1993. Subsequently, the promoter of ABC Bank sought permission to 

establish a commercial bank and retained KPMG, a management consultant of international repute, 

to prepare the groundwork for establishing a commercial bank. The Reserve Bank of India conveyed 

its approval in principle to establish ABC Bank on February 11, 1994. Thereafter, the Bank was 

incorporated under The Companies Act in September 1994. The bank started its operations in 

November 1995. The ABC Bank was promoted by the tenth largest development bank in the world, 

which had a magnificent record of promoting world-class institutions in India. The promoter was a 

strategic investor in a plethora of institutions, which had revolutionized the Indian financial markets. 

QUESTIONS FOR DISCUSSION 

1. Analyze the case, using SWOT. 

2. Comment on the strategies used by the bank for penetrating the Nagpur market. 

3. Suggest strategies for sustenance and growth of the bank in view of the changing scenario of 

the Nagpur region.

Section II 

Answer Any Six: 

1. Explain buyers credit and suppliers credit by giving examples of each type of credit. Also 

explain with a case study. 

2. What is correspondent banking? Explain briefly the services offered by correspondent 

banking? Explain briefly the services offered by correspondent banks to the banks having 

account relationship with them? Give some examples? 

3. Explain in brief, the role of Reserve bank of India in Indian Exchange control. Explain the role 

of EXIM bank in promotion exports, and describe briefly facilities given by EXIM bank? Give 

examples. 

4. The organizational career is a responsibility of the organization and the individual. Discuss. 

5. Explain the general architecture of an integrated banking system. How is it useful? Explain 

with examples. 

6. What do you understand by MICR? How does it help in clearing of instructions? Explain the 

field structure of MICR cheque. 

7. Explain how a digital signature is generated? Explain its use with examples. 

8. How can Indian banks use legal recognition of digital signature for development of business. 

9. What is market segmentation? Why is it important to advertisers? How is it useful for banking. 

Section I 

Answer any Six: 

10. Explain role of different parties to a documentary credit with a case example. 

Explain buyers credit and suppliers credit by giving examples of each type of credit. Also 

explain with a case study. 

11. What is correspondent banking? Explain briefly the services offered by correspondent 

banking? Explain briefly the services offered by correspondent banks to the banks having 

account relationship with them? Give some examples? 

12. Explain in brief, the role of Reserve bank of India in Indian Exchange control. Explain the role 

of EXIM bank in promotion exports, and describe briefly facilities given by EXIM bank? Give 

examples. 

13. The organizational career is a responsibility of the organization and the individual discuss. 

14. Explain with case examples

a. Role space conflicts 

b. Role set conflicts 

15. Explain the general architecture of an integrated banking system. How is it useful? Explain 

with examples. 

16. What do you understand by MICR? How does it help in clearing of instructions? Explain the 

field structure of MICR cheque. 

17. Explain different e-commerce activities and functions. What are the building blocks of e- 

commerce solution? Explain with examples. 

18. Explain the concept of transfer pricing in banks and its relevance on pricing/profit. Explain 

briefly various methods of pricing products. 

Answer any Three: 

19. Explain briefly the product life cycle concept with reference to a banks product. Selection 

development and launching a product are equally important comment. 

20. What are the advantages of packaging? Illustrate in banking context. 

21. Explain the concept of transfer pricing in banks and its relevance on pricing/profit. Explain 

briefly various methods of pricing products. 

22. Draw an approach for e-banking deployment for retail customers and explain. 

23. Explain how a digital signature is generated? Explain its use with examples. 

24. How can Indian banks use legal recognition of digital signature for development of business. 

25. What is market segmentation? Why is it important to advertisers? How is it useful for banking. 

26. Explain briefly the product life cycle concept with reference to a banks product. Selection 

development and launching a product are equally important comment. 

27. What are the advantages of packaging? Illustrate in banking context. 

Business Ethics 

1. Analyze the ethics of marketing Publius using utilitarianism, rights, justice, and caring. In your 

judgments, is it ethical to market Publius? Explain. 

2. Are the creators of Publius in any way morally responsible for any criminal acts that criminals are 

able to carry out and keep secret by relying on Publius? Is AT&T in any way morally responsible 

for these? Explain your answers. 

3. In your judgment, should governments allow the implementation of Publius? Why or why not?

1. Fully explain the effects that payment like those which Lockheed made to the Japanese have on 

the structure of a market. 

2. In your view, were Lockheed’s payments to the various Japanese parties “bribes” or “extortions”? 

Explain your response fully. 

3. In your judgment, did Mr. A. Carl Kotchian act rightly from a moral point of view? (Your answer 

should take into account the effects of the payments on the welfare of the societies affected, on the 

right and duties of the various parties involved, and on the distribution of benefits and burdens 

among the groups involved.) In your judgment, was Mr. Kotchian morally responsible for his 

Actions? Was he, in the end, treated fairly? 

4. In its October 27, 1980, issue, Business Week argued that every corporation has a corporate 

culture –that is, values that set a pattern for its employee’s activities, opinions and actions and 

that are instilled in succeeding generations of employees (pp.148-60) Describe, if you can, the 

corporate culture of Lockheed and relate that culture to Mr. Kotchian’s actions. Describe some 

strategies for changing that culture in ways that might make foreign payments less likely. 

1. In your judgment, is it wrong, from an ethical point of view, for the auto companies to submit 

plans for an automobile to China? Explain your answer? 

2. Of the various approaches to environmental ethics outlined in this chapter, which approach 

sheds most light on the ethical issues raised by this case? Explain your answer. 

3. Should the U.S. government intervene in any way in the negotiations between U.S. auto companies 

and the Chinese government? Explain. 

1. In your judgment, do the managers of the Robert Hall store have any ethical obligations to change 

their salary policies? If you do not think they should change, then explain why they have an 

obligation to change and describe the kinds of changes they should make. Would it make 

any difference to your analysis if, instead of two departments in the same store, it involved two 

different Robert Hall Stores, one for men and one for women? Would it make a difference if two 

stores (one for men and one for women) owned by different companies were involved? Explain 

each of your answers in terms of the relevant ethical principles upon which you are relying. 

2. Suppose that there were very few males applying for clerks’ jobs in Wilmington while females were 

flooding the clerking job market. Would this competitive factor justify paying males more than 

females? Why? Suppose that 95 percent of the women in Wilmington who were applying for 

clerks’ jobs were single women with children who were on welfare while 95 percent of the men 

were single with no families to support. Would this need factor justify paying females more than 

males? Why? Suppose for the sake of argument that men were better at selling than women; 

would this justify different salaries? 

3. If you think the managers of the Robert Hall store should pay their male and female clerks equal 

wages because they do “substantially the same work” then do you also think that ideally each 

worker’s salary should be pegged to the work he or she individually performs (such as by having 

each worker sell on commission)? Why? Would a commission system be preferable from a 

utilitarian point of view considering the substantial book keeping expenses it would involve? 

From the point of view of justice? What does the phrase substantially the same mean to you?

1. What are the legal issues involved in this case, and what are the moral issues? How are the two 

different kinds of issues different from each other, and how are they related to each other? 

Identify and distinguish the “systemic, corporate and individual issues” involved in this case. 

2. In your judgment, was it morally wrong for Shawn Fanning to develop and release his technology 

to the world given its possible consequences? Was it morally wrong for an individual to use 

Napster’s website and software to copy for free the copy righted music on another person’s 

hard drive? If you believe it was wrong, then explain exactly why it was wrong. If you believe it 

was not morally wrong, then how would you defend your views against the claim that such copying 

is stealing? Assume that it was not illegal for an individual to copy music using Napster. Would 

there be anything immoral with doing so? Explain? 

3. Assume that it is morally wrong for a person to use Napster’s website and software to make a copy 

of copyrighted music. Who, then, would be morally responsible for this person’s wrong doing? 

Would only the person himself be morally responsible? Was Napster, the company, morally 

responsible? Wash shawn Fanning morally responsible? Was any employee of Napster, the 

company, morally responsible? Was the operator of the server or that portion of the Internet that 

the person used morally responsible? What if the person did not know that the music was 

copyrighted or did not think that it was illegal to copy copyrighted music? 

4. Do the music companies share any of the moral responsibility for what has happened? How do you 

think technology like Napster is likely to change the music industry? In your judgment, are 

these changes ethically good or ethically bad? 

1. Discuss this case from the perspective of utilitarianism, rights, justice and caring. What insight 

does virtue theory shed on the ethics of the events described in this case? 

2. “In a free enterprise society all adults should be allowed to make their own decisions about how 

they choose to earn their living.” Discuss the statement in light of the Lily case. 

3. In your judgment, is the policy of using homeless alcoholics for test subjects morally 

appropriate? Explain the reasons for your judgment. What does your judgment imply about the 

moral legitimacy of a free market in labor? 

4. How should the managers of Lily handle this issue?


















ARAVIND 

09901366442 – 09902787224

Brand Management 

CASE 01: COMING BACK AGAIN 

CASE 02: BRANDING BY SENSING 

CASE 03: STRETCHING DOWN OR DROWNING THE BRAND 

CASE04: PC MAKERS SANDWICHED IN BETWEEN 

CASE 05: WHICH DIRECTION SHOULD THE BRAND TAKE? 

CASE 01: COMING BACK AGAIN 

BPL name reminds one of a phenomenal Indian brand in electronics and appliance 

market space that once topped in ubiquity and esteem. Starting from the south, it 

went on to become a household name. The group dates back to the ‘sixties, when the 

founder, TPG Nambiar began manufacturing hermetically sealed precision panels in 

Kerala. It was then known as British Physical Laboratories. Back then, industrial 

activity was under tight government control though reservations and licensing. BPL 

came to the forefront in the ‘eighties when industrial licensing began to give way to a 

pro-market regime. The group got further impetus in the ‘nineties, when 

globalization and liberalization became key policy initiatives for achieving economic 

growth. BPL forged alliances with foreign companies to access technology to 

improve product quality and innovation, to manufacture electronic products. This 

way, the company went on to become a powerful brand in televisions and other 

electronic products. 

The BPL brand has been a pioneer in the electronic products industry in the initial 

years of liberalization. The brand evolved with changing customer and competitive 

conditions. It offered state-of-the-art products like televisions, refrigerators and 

audio products backed by an excellent service network. Once, the brand actually 

topped the list in terms of customer trust and loyalty, at a time when the field was 

crowded with a host of prominent players like crown, Beltek and Videocon. Till the 

late ‘nineties, the brand won accolades from various quarters. 

The company was voted as the ‘most admired marketing company’ in the electronics 

and home appliances category in A&M Survey of 1999. The prestigious Far Eastern 

Economic Review rated the company as the No. 1 company in ‘innovativeness in 

responding to consumer needs’ in Jan 2000. Young customers also identified with 

this Indian company in high tech space. Accordingly, BPL was featured in ‘top ten

most preferred brands among youth’ in the Brand Equity survey of March 2000, the 

brand featured as one of the ‘top five coolest brands among youth’. In consumer 

electronics, resonance with the youth is a very important asset. Young people act as 

purchase initiators, influencers and ultimate buyers. Connecting with the youth has 

been instrumental in the brand success. 

The brand owes its remarkable success to careful brand management initiatives. The 

BPL brand has been nurtured and managed by employing strategic brand 

management tools. The marketing initiatives were controlled in line with the brand 

identity. This way, the company never allowed marketing efforts to dissipate in 

different directions without a grand scheme. The brand was among the pioneers to 

employ identity statement. The brand’s soul described two levels of values. The core 

set was defined as inherent values. These included trust, solidity, reliability, pride, 

progressiveness, dignity, quality, and intelligence. The other set of ‘added values’ 

sought to extend the brand’s soul by values like flair, glamour, style, youthfulness, 

excitement and cutting edge. 

The brand has been so well navigated that it was voted as the ‘Number One durable 

brand’ in Brand Equity in the year 2002. The brand topped in the Indian 

homegrown durable brand list. 

Brand 2002 2001 

BPL 

Godrej 

HMT 

Philips 

Titan 

Sony 

Videocon 

VIP 

Asian Paints 

Onida 1 

2 

3 

4 

5 

6

7 

8 

9 

10 3 

1 

2 

4 

5 

8 

6 

7 

NA 

9 

Source: Brand Equity, The Economic Times, 14 Aug 2002 

The brand’s achievements do not end here. In a survey designed to discover the 

most trusted brands, the brand again emerged victorious. This survey aimed to 

identify brands that bond with customers. The survey went beyond the basic brand 

familiarity paradigm to include a brand’s performance on a number of dimensions. 

These are brands that consumers believe to provide quality and assurance. The 

brands are measured on attributes like: quality, value for money, intention to buy, 

current and future popularity, uniqueness, confidence, price, and special feeling and 

associations. 

The brand emerged as the ‘Most preferred color television brand’ in Consumer 

Outlook, 2002. On the parameter of brand preference, it was rated as the strongest 

color television brand, with 37 percent score on ‘intention to buy’. The brand scored 

better than many multinational brands like LG (12%), Samsung (9%), Onida (9%), 

Philips (9%), and Videocon (8%). The brand even scored high on the flat television 

segment in comparison to foreign (Korean) brands like Samsung and LG. 

In the last couple of years, the brand has taken a severe beating. The multinational 

brands from Japan, Korea and the US were initially placed far behind to the brand. 

The Indian brands BPL, Onida and Videocon stood the ground firmly. They 

appeared unassailable. Japanese brands like Sony, Sharp, Panasonic and Sansui – 

along with Korean counterparts like LG and Samsung – did not appear to pose a 

serious challenge. But in the last five years, the color televisions market has 

undergone a complete change. The Koreans have overtaken all the other players. 

The two Korean brands dominate the market, followed by homegrown players Onida 

and Videocon. 

The Brand Equity Survey of the trusted brands for the year 2005 reveals a 

disappointing result for the brand BPL. The brand appears at the 68 spot on the list. 

ahead of it are brands like Philips (23), Onida (56), LG (57) and Videocon (61). The 

market share figures also reveal a disappointing picture for the brand. In the color

televisions, LG leads with 25.5 percent market share followed by Samsung with 15.1 

percent share. The refrigerator category is also dominated by LG and Whirlpool, 

with market shares of 27.2 and 21.2 percent share respectively. In washing 

machines, LG stands strong with 34 per cent hold followed by Whirlpool with 13.8 

market share. 

The consumer electronics market has undergone a major transformation in the post 

2000 period. Multinational brands have gradually cultivated market share by 

mounting attacks on the homegrown brands. The market, that stood at the take off 

stage in the ‘nineties, has now moved to the maturity stage. The color television 

market has fragmented into sub groups. At the top end, brands offer high tech, 

costly plasma sets. The middle segment is moving towards big-size flat screen 

televisions. The bottom of the pyramid now is located in rural areas where niche 

brands like Oscar, Citizen, Weston and Texla compete on price and low 

functionality. 

In this scenario, the BPL brand is making a comeback after receiving transfusion by 

way of technological vigour from technical collaborator Sanyo. Although the brand 

enjoys high recognition and recall with customers in the 30-plus age group, the 

youth seem to be at the loss so far as the brand is concerned. Technology 

environment is now radically different from the prevailing in the ‘nineties. The 

issues facing the brand include: with brands like LG, Samsung, Panasonic, Onida, 

and Videocon firmly entrenched in the market, can BPL leverage its equity? 

Technology alone does not appear to be sufficient hot button to create brand power 

in the current scenario. Is it a fact that the brand must hasten to redefine its 

identity, in order to differentiate and bond with chosen customer? 

CASE 02: BRANDING BY SENSING 

There is one company that is silently winning branding battles. Slowly and steadily, 

it has managed to corner over Rs 200 crores turnover in the OTC (over the counter) 

drug market. The company in question is none other than Paras Pharma. 

Headquartered in Ahmedabad, the company is owned by three brothers Girish, 

Darshan and Devendra. Not many know it by its corporate identity. It is held in the 

background. But its products and brands enjoy not only high awareness in terms of 

recall and recognition; they also stand out for their category ownership. 

The list of brands created by this closely held company is as follows: 

• Moov 

• Krack 

• Dermi Cool 

• Boro Natural 

• Boro Soft 

• Itch Guard

• Ring Guard 

• Livon 

• Numis 

• Set Wet 

• After Bath 

• Recova 

• Mrs Marino 

• D’Cold 

• Freshia 

What sets these brands apart is that they are the outcome of deep understanding of 

needs of Indian customers. The value proposition embodied in each one of them 

offers solutions to customer needs that have been lying dormant for long, but none 

of the other marketers ventured to uncover them. All these brands entered the 

cluttered market space and managed to create a unique image for themselves. When 

cutting across to the customer is really a serious issue even for multinational 

companies with deep pockets, Paras has managed to carve out a niche for each of its 

brands. The mantra that perhaps is at work in this company is to be able to see 

everyday problems faced by the customers and convert them into powerful product 

ideas and create strong brands in the process. 

Many of the products from this nimble player in the OTC drugs space places it in 

head on competition with the established multinational players. For instance, Moov 

(launched in 1986) directly assaulted the then leading body pain reliever brand 

Iodex, from GlaxoSmithKline. It recognized the potential of the rub-efficient 

category and entered with a national brand. The market was cluttered with both 

domestic and international players. Instead of focusing on all kinds of pain, the 

brand narrowed its scope to only the joints pains, including backache. It successfully 

attacked the leader by attending to a specific need. It narrowed its focus on the 

backaches of women and appropriated that position. It instead of fighting 

competition in the sprain and muscle pull, headache balms, and multi-purpose pain 

reliever segments, it narrowed its appeal to women with frequently occurring 

backaches and positioned itself as a backache specialist. 

Krack, another power brand, was born in 1993 and went on to become category 

leader. The brand attended to the acute problem of dry skin on the heels, especially 

among Indian women. Cracks in the heels are caused by winter dryness, prolonged 

exposure to water, summer dryness, and barefoot walking. Though the need solution 

came in the form of petroleum jelly, there was no specific brand which addressed 

this problem. The product was specially created to cure cracks in the heels. Since the 

time the brand was launched, it grew by leaps and bounds to become an over-35 

crores brand. The brand attacked the generic products then existing in the market 

and offered a unique solution by isolating a specific problem. The skin dryness

problem area is viewed as one single mass, but within it, there are specific types of 

dryness needs that are prevalent. Krack could see one, and create a brand out of it. 

Borosoft brand came in the space that was dominated by Himani (Boroplus) and GD 

Pharmaceuticals (Boroline). Back in 1995, the antiseptic cream market was worth Rs 

50 crores of which creams for dry and chopped skin held about half the market 

share. The ‘Boro’ word segregates the product into the sub-category of inexpensive 

‘value for money’ creams meant for dry and chapped skin. The non-Boro creams are 

perceived to be meant for cuts and wounds. Paras discovered user dissatisfaction 

with the then existing Boro creams for their stickiness and oiliness. Mounted on this 

insight, Borosoft was created as a non-sticky cream with moisturizing properties. 

The brand managed to carve out a niche for itself. Later, Boro Natural brand was 

launched in the antiseptic market. This way, Boroline was directly attacked. 

After the creation of Boro Natural and Boro Soft, the company created Dermi Cool 

brand. This brand put the company next to the then dominant player Nycil, from 

Heinz. It offered a solution to the problem of prickly heat caused by prolonged 

exposure to perspiration. The product category lacked excitement and product 

innovation. Nycil’s advertising and product formulation remained same. Dermi Cool 

challenged this inactivity and silence. The brand was positioned with cool sensation 

platform (‘thanda thanda powder’). Its high decibel and peppy advertising 

contributed excitement and infused energy into the category. 

Paras, as a company, have a unique ability to sense customer problems and convert 

them into a mega marketing opportunities. Two of its brands, Itch Guard and Ring 

Guard, are targeted at the skin problems common in hot, moisture-laden weather. 

Skin areas not exposed to sun and atmosphere typically get affected by this problem. 

Itch Guard is a specialized product formulated to address a specific problem caused 

by sweat itch. Ringworm or tinea is problem mostly occurs in the lower socioeconomic 

segment. Humidity, excessive sweating, unhygienic conditions and skin 

erosion are the root causes. Paras launched its anti-fungal specialist remedy brand 

Ring Guard in 1998. 

The other brands in Paras’ portfolio include cold and headache remedy D’Cold. 

There are legions of brands aimed at the headache market. Paras narrowed focus 

and positioned itself as a specific remedy for aches caused by common cold. D’Cold 

Open Up is a variant targeted against nasal congestion. The brand came in other 

variations like D’Cold Double and D’Cold Total as a complete package of remedies 

against heavy-headedness, blocked nose and blocked sinuses. 

The unstoppable brand-spinning machine is showing no sign of slowing down. The 

latest brand additions include Livon, Numis, Setwet, Afterbath and Recova. Livon 

and Numis brands are first-of-its-kind products. They are aimed to solve tangle in 

the hair caused by washing. The process of detangling involves heavy combing, 

which causes hair loss. This is an important problem faced by Indian women who

normally wear their hair long. Numis is a hair care product designed to nourish hair 

and lend shine. Set Wet is a hair styling brand targeted at the young male segment. 

Afterbath brand follows application time oriented positioning. It is to be applied on 

body after bath, as the name suggests. 

Paras has had its own share of debacles. These include Stopache, Winter Shield and 

Freshia. These brands were all withdrawn because of poor performance. Paras 

follow a brand model that lays emphasis of individual brand creation. It takes a lot 

of effort to create successful brands both in terms of research and development and 

cultivating brand equity. Serious contemplation now is doing the rounds of the 

company to develop and concretize brand architecture. Launching brands one after 

another without a plan may create problems for the company in the long run, as it 

happened with many MNCs. The issue at hand that needs to be addressed is: what 

architecture should be followed so that brands’ equity is maximized and leverage to 

the fullest extent? 

CASE 03: STRETCHING DOWN OR DROWNING THE BRAND 

Way back in 1888, in Wisconsin, USA, a man named George Safford Parker was 

overwhelmed with the amount of repairs that were needed to keep fountains pens 

working. This inspired him to invent his own fountain pen, one that worked better. 

In 1890, Parker patented his first pen. Later, in 1894, Parker received another 

patent for something called ‘Lucky Curve’ feed that drew excess ink back into the 

pen body when the pen was not being used. This technology remained common until 

the late nineteen twenties. Parker pens retained their position among the top pen in 

the writing instrument industry. Parker is credited with another landmark in writing 

technology by creating a quick drying ink (Quink) that eliminated the need for 

constant blotting. Since then, the company set up by Parker has come a long way. 

Parker remains a brand with strong heritage connotations and aspirational value. 

Parker came to India through the Luxor Writing Instrument Company. Luxor was 

founded in 1963 and has evolved into a dominant player in the writing instrument 

market in India. It enjoys about 15 percent market share, and offers products to suit 

varying needs of different segments. The company’s product line includes brands 

like Luxor, Pilot, Papermate, Parker and the recently introduced Waterman. 

The writing instrument industry is estimated to be worth over Rs 1500 crores. It is a 

huge opportunity. But a large portion of the market is occupied by players from the 

unorganized sector. Some put the size of this unorganized market at around Rs 1200 

crores. This portion of market offers scope for branded players to consolidate their 

positions. The pen marketed by the unorganized players lack quality and brand 

value. However, the biggest barriers to conversion are low involvement and brand 

loyalty.

At the super premium level operated brands like Mont Blanc, Cartier, Waterman 

and Dunhill. This niche is high value and low volume. The premium segment is 

targeted by brands like Cross, Parker and Pierre Cardin. Then comes the popular 

segment, where the homegrown brands like Flair and Luxor compete. At the bottom 

of the pyramid is the economy segment or mass segment (sub-Rs 50), which is the 

target of action between the organized, branded players like Cello, Today, ADD, 

Rotomac, Stic, Montex and Reynolds. Much of the turnover comes from the lower 

segment. 

A pen to most people is a functional product. And what matters in marketing pens is 

the availability, price and acceptable quality (‘it should write’). Customers in the 

mass segment generally try before buying and do not attach importance to brand 

name. The situation is reversed in the top layers of the pyramid. The higher one 

climbs up the pyramid, the more the pen becomes a source of symbolic satisfaction. 

Its writing ability or functionality is taken for granted, but what matters is the name, 

a pen becomes a device for signaling style, class, power and sophistication. It 

assumes a psycho-social character. Brands at the top end do precisely this with their 

unique motifs like Parker’s distinctive clip and Mont Blanc’s flower like tip of the 

cap. 

In keeping with the stature of the brand when Parker came to India, no less a 

personage than Amitabh Bachchan himself promoted the product. The endorsement 

worked in sync with the brand’s established heritage and premium image. The Big B, 

being an icon in the Indian film industry and hailing from a literary family, infused 

the brand with the right kind of values, making it appealing to a wide spectrum of 

the market. The brand’s initial campaign promoted the central idea of love of writing 

with a Parker. Through the association with Big B, the brand has developed an aura 

of success, elegance, exclusivity and sophistication. 

Parker offers pens suited for distinct market segments, with sub brands. But what 

runs common across these ranges is the class and sophistication. These combine 

heritage and modernity, high functionality and sign value. Some of these are: 

• Parker Dufold: brand’s identity is captured in words like opulence, iconography, 

exceptional character and outstanding workmanship. Generally limited edition and 

highly priced. 

• Parker 100: this range signifies understated status and sharp individual style. 

Combines conventional and avant-garde. Price ranges from Rs 10000 to 15000. 

• Parker Sonnet: the brand brings together achievement, distinction, balanced style 

and classic dimensions. Price ranges between Rs 8600 and Rs 4200. 

• Parker Latitude: embodies original non-conformist individuality, rebels against 

tradition and convention.

• Parker Insignia: the brand is a classic accessory for discerning individuals. Offers 

authentic quality and effortless style. Price ranges between Rs 850 to Rs 1300. 

• Parker Rialto: defined as a pen with character, grace and charm, crafted with a 

veneer of taste and tradition. Price ranges between Rs 2700 and Rs 1500. 

• Parker 45: this well known brand signifies Parker tradition, originality and 

nostalgia. It is a high performance, time-tested and trustworthy instrument. Price 

ranges between Rs 1400 and Rs900. 

• Parker Frontier: the brand combines functional utility with innovation, 

conservatism and forward thinking. Price ranges between Rs 1650 and Rs 650. 

• Parker Diamante: wears a sophisticated look and futuristic design for young, 

urban, design conscious consumers. Priced around Rs 700. 

In its bid to gain volumes, the brand has launched two variants by the name of 

Vector and Beta. The price of the Vector line varies between one hundred and five 

hundred. But parker Beta has pushed the brand down below the hundred-rupee 

threshold. Parker Beta is stated to combine superb technology and modern designs 

at a highly affordable price. The product is fitted with jotter refill and comes in 

exciting colors with a comfortable grip. The brand seeks to cash on the trend of 

increasing brand consciousness among consumers. Beta has brought a highly 

aspirational brand like Parker within the reach of masses. The Beta range comes in a 

plastic body and sports the same arrow clip, albeit not as well designed and chiseled 

as higher ranges have. 

With the Beta line, Parker’s range starts from a price level of less than hundred 

rupees to exceed well over ten thousand. Many believe this downward stretch of a 

brand like Parker is good for generating volumes. It is an easy path to succeed and 

make inroads in the lower market segment. Present consumers would be able to 

possess an aspirational brand that otherwise remained a dream for them. Others 

believe that this downward stretch would do more harm to the brand in the long 

run. The massification of the brand may rob it of its exclusivity and premium aura 

and degrade its image. 

CASE 04: PC MAKERS SANDWICHED IN BETWEEN 

The Personal Computer industry in India has been a testing ground of marketing 

acumen for players that play the branding game. The market is broadly divided into 

three groups. On the one hand is the plethora of players in the unorganized sector. 

On the other hand are established multinational brands that operate globally in a

number of countries. Somewhere in between these two are Indian companies 

staking a claim with their brands. 

The MNC players in the market include HP, Compaq (the two have since merged), 

Apple, Dell, E-sys, Acer, LG and Lenovo (that bought IBM’s PC business in 2005). 

The home grown companies in the field include players like HCL, Wipro, Pertec, 

Zenith and Vintron. All the three sets of players compete on different strategic 

platforms. The MNC products are priced relatively higher and signal quality image. 

The Indian players, on the other hand, promise product quality as good as MNC 

product besides offering some price advantage. Computer company Zenith often 

advertises their product as ‘MNC’ quality at Indian prices’. The players that 

constitute the unorganized sector compete on price and customer intimacy. 

In this market structure, the branded players have been engaged in a severely fought 

battle with unbranded players. And so far, they have been losing this battle. The 

local players beat their branded counterparts on two counts. First of all, their wares 

are priced significantly lower and secondly, they are widely available. Nowadays, it 

does not require great technical expertise to assemble a PC. The explosion in the 

computer market has attracted a lot of entrepreneurs to join the industry as 

assemblers. There is wide availability of computer assemblers (as well as 

economically-priced components and sub-assemblies) in the market. The PC 

computer manufacturers that form the organized sector, on the other hand, bank 

upon their re-sellers, and they are not so widely located as to make their products 

easily accessible to prospects. Thus, on the accessibility front, branded players scale 

poorly. 

The market for personal computer is segmented along the lines of price and users. 

There is the office segment, consisting of large corporate houses, and the small 

business segment made up of small companies and sole proprietorships. And then 

there is the home segment. Computer education in schools has opened up this 

segment in a big way. The school-going children need to have computers at home to 

pursue studies. These segments also reflect the complexity of configuration suitable 

for them. For instance, the small office and home (SOHO) segment does not require 

complicated machines and software. But the business segment certainly requires 

higher configured computers in a networked environment. 

The major factor that works in favour of unbranded computers is the price 

advantage. The local players pass on the benefit of various levies and taxes to their 

customers, hence their product costs relatively less. Further, the proximity of the 

vender with the customer and easy two-way dialogue provides a strong basis for 

relationship formation. A typical computer buyer in SOHO segment lacks computer 

literacy. It is this lack of product knowledge that makes him look for ways to reduce 

uncertainty and risk surrounding the purchase. Under such circumstances, brands 

typically are called to fill this role of advisor and after-sale provider-an area where 

they do not pass with distinction. But in the SOHO segment, the search process for

computers involves talking with friends who, in turn introduce these prospects to 

local vendors. The local vendors, through better proximity, direct contact and 

convincing power are able to convert these prospects into buyers. Due to the same 

factors, their after-sales response is also better, since they largely rely on networking 

with customers for business expansion and lucrative annual maintenance contracts. 

Unlike other luxury or conspicuous products, computers are not bought or made for 

symbolic purposes. They are typically bought rationally to solve a problem. The 

cognitive mode of approaching the purchase creates openness to information as well 

as utility assessment. It is at this stage that the local computer vendor is able to 

convince the potential buyer that a computer is nothing but assembly of parts 

manufactured by established original equipment manufacturers like Samsung, Intel, 

LG, Seagate and TVS. The assembly of their parts into a machine does not require 

much skill: it is mostly screwdriver technology. Most branded players do not employ 

any unique technology in their computer making, therefore the performance 

outcomes do not vary between the two categories. The local vendors attribute the 

price premium charged by the branded players to advertising and overhead costs, 

thus making out a powerful case against the purchase of branded computers. 

Recent duty structure changes have worked in favour of the organized segment, and 

the prices of branded machines have seen a downward trend owing to lower landed 

costs of products. Besides, the distribution strategies have been reworked. The 

number of outlets offering branded products has been increased. Simply raising the 

technical product specification is not viewed as a crucial differentiator. The 

specifications can be matched point by point by all kinds of players. For instance, 

HCL has 400 exclusive stores across 200 cities and around 1000 other selling points 

or smaller formats. Similarly, Acer also works on a two-format framework. There are 

exclusive Acer malls that stock Acer products exclusively, besides other selling 

points where its products are sold along with rival brands. 

The market for unbranded PCs used to be above 83 percent in 2003, but now it has 

come down to about 55 percent. The downward trend still continues. The organized 

sector seems to be eating into the unorganized sector. This growth is, by and large, 

attributable to duty reduction. In a study of consumer behaviour, it was discovered 

that computers are intimidating products for buyers who buy them for home use. 

Children are the major drivers of purchase. The need is often initiated at their level. 

Computers are used both for educational and entertainment purposes. Further, 

computers are perceived to be a high tech area, and an average customer finds 

himself grossly ill-equipped to handle the computer-buying task. The process of 

equipping themselves to effectively handle the purchase leaves them open to 

informational influence, i.e., networking friends and colleagues. Computers are 

undifferentiated products for customers in terms of technical specifications. All they 

crave is the confidence to make a purchase decision, and will gravitate towards a 

source of this wherever they are convinced the support is genuine.

As such, one of the major challenges that most branded players face is how to make 

a dent in the market dominated by the unorganized players. Trapped in between are 

the Indian players like Shiv Nadar’s HCL, an important player in the desktop 

segment. Its position at present is firmly established but it can drift into the line of 

fire from the MNC brands. MNC brands are consolidating their position, having 

grown at the cost of mostly Indian brands. These brands have been registering 

robust growth. Caught in between grey market and MNCs are the hapless Indian 

companies. The lower end is dominated by the players from the unorganized sector 

who operate on wafer-thin margins. On the top are MNC brands that push image 

and quality to lure upper layers of the market. Some MNC players have even roped 

in celebrities like Saif Ali and Shah Rukh Khan in their brand building efforts. 

Lenovo is banking upon the charm of Saif Ali, and Shah Rukh endorses Compaq. 

The net effect is that MNC brands are gradually building market share primarily at 

the expense of Indian players. The downward trend of prices is eroding the price 

advantage that many Indian makers so far relied upon to develop their brands. They 

combined acceptable quality with appreciably lower prices to gain market share. 

Indian brands are now finding themselves squeezed in between the unorganized 

players and MNC brands. This is leaving them looking for ways to create meaningful 

differentiation in their products. The conventional markets like metros and top 

cities have already become a battle-ground, where fierce battles are raging as 

saturation points are nearing. In this scenario, even the top players are beginning to 

explore non-traditional, non-metro markets. 

Experts are divided on the issue whether Indian computer makers would be 

completely wiped off the map. Some feel that Indian makers do not offer 

differentiated product. The MNC brands, on the one hand, form the top end, while 

unorganized players at the bottom leave very little scope for differentiation. Indian 

brands seem to losing ground every year. Some players are shifting their attention to 

non-metro markets in B and C category cities. But the real issue is: how long the 

MNC brands be prevented from getting into these markets as well? They have the 

resources and the image to do this with relative ease. Ultimately, brands have to 

develop strategies to combat competition. It is not immediately apparent what 

Indian marketers ought to be doing to carve out a survival niche for themselves. 

CASE 05: WHICH DIRECTION SHOULD THE BRAND TAKE? 

Liril made a big splash in the toilet soaps category in the late ‘seventies. The market 

then was not very competitive. The mixed economy model did not yet fulfil the 

dream of prosperity and affluence. The ‘licence raj’ tightly controlled industrial 

activity. Like most of the industry sectors, the toilet soap industry was dominated by 

only a handful of players like Hindustan Lever, Calcutta Chemicals and Tomco. 

These three players marketed a complete portfolio with brands aimed at different 

segments and offering different benefits. The other players catered to small niches, 

as did Johnson & Johnson, which limited its range to infant and kids, with

appropriate product offering including mild soap and shampoos. Other local players 

included the likes of Chandrika, Swastik, Keshnikhar, Mysore Sandal and Medimix, 

besides a host of small players that operated locally. 

This was during the ‘seventies, when marketing as we know it today had not come 

into its own; it had yet to harden into a serious discipline. Firms still followed 

traditional practices in conducting business, and marketing personnel could not be 

said to command high esteem; their job was to hunt out fresh avenues for enhancing 

sales opportunities. Very few companies differentiated between sales and marketing 

functions, preferring to club them under a single department, and few indeed were 

the ones who adopted a seriously technical approach to the activity. Demand still 

chased supply and, it being a supplier’s market, things were easier to sell, whatever 

their quality. Advertising did not use sophisticated tools both to explore consumer 

motivation and create executions. Like many other categories, brands used rational 

appeals to woo consumers. The problem – solution themes dominated the 

marketing arena. Soap fragrance, size, colour, name, etc., were seen to be major bait 

for hooking customers. The brand communication and ingredients as means to 

influence buying. The markets were still clubbed into the large masses of customers 

with little express differentiation. The whole economy seemed to have been stuck in 

a time warp, with a little clamour when it came to grappling with the competitionwhat 

there was of it. 

Liril arrived on the soap space with the promise to transform bathing from problem 

coping to providing experience. With its ‘freshness’ platform, the brand sought to 

add a psychological dimension of feeling good. The brand uniquely communicated 

and connected with its prospects through a bold advertisement by then prevalent 

values. In 1975, the brand communications showed a beautiful model in a bikini 

under a natural waterfall. The excitement and freshness so conveyed by the 

advertisement struck an emotional connect with the people. The sound track of the 

TV (then, alas, only black and white) commercial used a ‘La..la..la..’ tune that 

concretized the delivery promised by the brand. In no time, the brand became 

hugely successful. The brand headline invited the potential uses as ‘come alive with 

Liril freshness’. The brand advertising showed floating juicy sliced lemon to back up 

its freshness claim. It was the first brand that sought to play on inherent freshness 

associated with lime. 

Brand communication 

• Potential customer: young women 

• Background: natural high energy waterfall 

• Theme: young, vivacious, attractive girl having bath 

• Promised benefit- freshness experience 

• Promise support: floating juicy slices of lemon 

• Voice over: Come alive with Liril freshness

Liril cornered 14 percent market share, good enough to give it a slot in first three 

positions. It established the premium segment in soap category. The brand was a top 

performer in the toilet soaps category until 1995, when it began to lose market share. 

During this period, the brand lost big volume- over 35 percent – and its market 

share slid to below five percent. The excitement and innovation created by the brand 

could not be sustained. The later brand communication deviated from the original 

brand positioning. Further, the brand benefits of lime and freshness responsible for 

its success lost novelty. Many other brands began to focus on lime as ingredient and 

the claimed benefits of freshness. What was once a unique, pioneering benefit was 

becoming generic. Further, the brand’s original customers who grew up with it, were 

aging. Over time, the need structure of this group was shifting from experience and 

emotional delivery to functionality. This way, the brand began to lose its grip over 

the market. 

The net result of loyal customers migrating to functionality, and the brand’s unique 

positioning getting cluttered, were typical challenges associated with the life cycle. 

Lack of differentiation and resonance with the potential customers began to take is 

toll on the brand. The brand persona, that centred on lime and freshness no longer 

offered the uniqueness that the brand now required to revitalize itself. The issue 

facing Liril was how to resurrect the once very strong brand and regain its former 

glory. Many thought of launching variations and re-doing the brand’s 

communication in order to make it more attuned with the times, so that young 

customers could be included in the brand’s fold. 

Challenged at the brand was, Lever did make a heroic attempt to inject fresh blood 

into the brand. The period of change and experimentation began in 1995. The brand 

first rode on the extension mode. First, the brand saw the launch of a shower gel in 

1994, followed by a cologne variant in 1996. Later, in 1999, another variation saw 

the light of the day by the name of Rainfresh. Then came icy blue Liril. The brand 

was hooked into a number of variants, all of them trying to play around with the 

theme of freshness in different contexts. 

The brand communication that once created history of sorts – with sexy, bikini-clad 

Karen Lunel splashing about gleefully under a natural waterfall changed radically. 

The original Karen Lunel ads ran for twelve years, firmly establishing the brand’s 

associations with lime freshness. The girl in the waterfall theme was finally 

abandoned in favour of something called an ‘unusual water experience’. Instead of 

‘the girl under the waterfall’ theme, the girl came out to bathe in the open, whether 

in a car wash or by dancing in front of a fire tanker hose. In a bid to lure youth, a set 

of commercials were launched on MTV. Then came the pissing boy, the girl in the 

desert, and the Liril Icy commercial. The brand communication began to take many 

routes, as if the idea was to shoot off arrows in all direction in the hope that one 

would hit the target. But that did not seem to happen. The advertising initiatives and 

line extensions failed to infuse any energy into brand’s performance.

Like the brand communication, even the product looks and forms deviated from its 

unique green, streaked appearance. Icy blue gave way to a blue variant that 

contained menthol. With line extensions, the brand sought to deliver bathing 

experience. The brand’s bold commercial of the green bikini clad model, made way 

for a model in a green swimsuit. Later, the swimsuit of the Liril model moved on to 

become a pair of hot pants. The brand faced intense competitive pressures in 

nineties, from other lime soaps aiming to copy the freshness platform. 

Experts feel differently about the fall of Liril from its prima donna status. One expert 

ascribes the fall of the brand to the confusion between the brand idea and its 

execution. Many believe that the central brand idea was never really clear. It 

appeared that the ‘girl in the waterfall’ was the central brand idea and it should not 

have been touched. But is it this creative expression of the central idea of freshness 

– or the ideas itself – that was sacrosanct? 

Others believe that Liril drew its success from the brand personality created by the 

first model, Karen Lunel. She epitomised not only youth but also other traits like 

exuberance, vivacity, innocence and fun. The models that replaced Karen were only, 

young pretty things. They were lacking across all the other personality aspects of the 

first model that launched the brand. Lever was never been able to find another 

Karen Lunel to so uniquely capture and reflect the brand essence. 

The managers at the company believed that the brand’s creative expression of ‘girl in 

the waterfall’ hand become outdated. It had lived its life. But actually, the hangover 

persists to this very day. To give them credit, they have not altogether deviated from 

it. Be it Liril calendar or advertisements, the symbols of the waterfall and the girl 

would always be visible. Beyond communication, the brand has also seemed to have 

suffered on account of Lever’s inability to come up with the right product line in the 

case of Liril, as they did for Lux and Lifebuoy. It is suggested that the brand has to 

discover new, audacious paradigms and reach out to new horizons. It must 

transcend its current expression, only then is there some hope for revival. 

Many believe that he brand failed to progress with time. The raped changes executed 

in the communications amount to influencing the superficial. The fundamental 

problems plaguing the brand were never unearthed. The tactics to correct 

immediate problems began to drive the strategy. New variations and 

communications made the picture rosy for some time, but once the excitement 

period passes, the sales tumble to their previous levels. 

Alyque Padamsee, who initially created the brand, believes that Liril’s problems lie 

in the fact that its original bathing experience has been replaced with unusual water 

experience. The later ads like the pissing boy and the desert ad use the theme of 

water, but he questions, ‘where is the bathing experience in this? Is it central to the 

idea of freshness? The brand seems to have withered (and meandered) too far 

beyond its original core idea. All the commercials are good to view, but they fail to

touch the heart. Many industry people believe that bringing back those original 

commercials may be a good idea. 

But how would that help? A majority of the brand’s current customers do not have 

any idea or recollections of those magical advertisements from the ‘seventies. Over 

thirty years have passed, and few are the nostalgic that have survived. The 

customers to today are fundamentally different from those of the past; they have a 

more actively experiential outlook on life. They seek more active participation in 

everything. They don’t expect a brand to passively deliver a benefit. Rather, they 

want to create an experience by active participation. Presently, Liril has three 

variants: Liril Aloe Vera, Icy Cool and Liril Orange. 

BUSINESS COMMUNICATION 

CASE I: A Reply Sent to an Erring Customer 

Dear Sir, 

Your letter of the 23rd, with a cheque for Rs. 25,000/- on account, is to hand. 

We note what you say as to the difficulty you experience in collecting your outstanding accounts, but we 

are compelled to remark that we do not think you are treating us with the consideration we have a right 

to expect. 

It is true that small remittances have been forwarded from time to time, but the debit balance against you 

has been steadily increasing during the past twelve months until it now stands at the considerable total of 

Rs. 85,000/- 

Having regard to the many years during which you have been a customer of this house and the, generally 

speaking, satisfactory character of your account, we are reluctant to resort to harsh measures. 

We must, however, insist that the existing balance should be cleared off by regular installments of say Rs. 

10,000/- per month, the first installment to reach us by the 7th. In the meantime you shall pay cash for 

all further goods; we are allowing you an extra 3% discount in lieu of credit. 

We shall be glad to hear from you about this arrangement, as otherwise we shall have no alternative but 

definitely to close your account and place the matter in other hands. 

Yours truly. 

Questions: 

1. Comment on the appropriateness of the sender’s tone to a customer. 

2. Point out the old – fashioned phrases and expressions. 

3. Rewrite the reply according to the principles of effective writing in business.

CASE II: ADVERTISING RADIO FM BRAND 

A young, gorgeous woman is standing in front of her apartment window dancing to the 1970s tune, “All 

Right Now” by the one – hit band free. Across the street a young man looks out of his apartment window 

and notices her. He moves closer to the window, taking interest. She cranks up the volume and 

continues dancing, looking out the window at the fellow, who smiles hopefully and waves meekly. He 

holds up a bottle of wine and waves it, apparently inviting her over for a drink. The lady waves back. He 

kisses the bottle and excitedly says, “Yesss.” Then, he gazes around his apartment and realizes that it is a 

mess. “No!” he exclaims in a worried tone of voice. 

Frantically, he does his best to quickly clean up the place, stuffing papers under the sofa and putting old 

food back in the refrigerator, He slips on a black shirt, slicks back his hair, sniffs his armpit, and lets out 

an excited , “Yeahhh!” in eager anticipation of entertaining the young lady. He goes back to the window 

and sees the woman still dancing away. He points to his watch, as if to say “Come on. It is getting late.” 

As she just continues dancing, he looks confused. Then a look of sudden insight appears on his face, 

“Five,” he says to himself. He turns on his radio, and it too is playing “All Right Now.” The man goes to his 

window and starts dancing as he watches his lady friend continue stepping. “Five, yeah,” he says as he 

makes the “okay” sign with his thumb and forefinger. He waves again. Everyone in the apartment 

building is dancing by their window to “All Right Now.” A super appears on the screen: “Are you on the 

right wavelength?” 

Questions: 

1. What is non – verbal communication? Why do you suppose that this commercial relies 

primarily on non-verbal communication between a young man and a gorgeous woman? What 

types of non – verbal communication are being used in this case? 

2. Would any of the non-verbal communications in this spot (ad) not work well in another 

culture? 

3. What role does music play in this spot? Who is the target market? 

4. Is the music at all distracting from the message? 

5. How else are radio stations advertised on TV?

CASE III: Arvind Pandey Caught in Business Web 

Arvind Pandey is a project manager at Al Saba Construction Company in Muscat. It s a flourishing 

company with several construction projects in Muscat and abroad. It is known for completing projects on 

time and with high quantity construction. The company’s Chairman is a rich and a highly educated 

Omani. A German engineer is Arvind’s Vice – President for urban and foreign construction projects. 

Three months ago, Al Saba had submitted a tender for a major construction project in Kuwait. Its 

quotation was for $ 25 million. In Kuwait the project was sponsored and announced by a US – based 

construction company called Fuma. According to Al Saba, their bid of $ 25 million was modest but had 

included a high margin of profit. 

On 25 April, Arvind was asked to go to Kuwait to find out from the Fuma project manager the status of 

their construction proposal. Arvind was delighted to know that Fuma had decided to give his company, 

(Al Saba) the construction project work. The project meant a lot of effort and money in planning the 

proposed construction in Kuwait. 

But before Arvind could tank the Fuma project manager, he was told that their bird should be raised to $ 

28 million. Arvind was surprised. He tried to convince the Fuma project manager that his (Arvind 

company had the bast reputation for doing construction work in a cost effective way. However, he could 

always raise the bid by $ 3 million. But he wanted to know why he was required to do so. 

The Fuma manager’s reply was, “That’s the way we do our business in this part of the world, $ 1 million 

will go to our Managing Director in the US, I shall get $ 1 million, you, Mr. Pandey, will get $ 1 million in a 

specified account in Swiss Bank. 

Arvind asked, “But why me?” 

“So that you never talk about it to any one.” The Fuma Project Manager said. 

Arvind promised never to leak it out to any one else. And he tried to bargain to raise the bid by $ 2 

million. For Arvind was familiar with the practice of “pay – offs” involved in any such thing. He thought it 

was against his loyalty to his company and his personal ethics. Arvind promised the Fuma project 

manager that the bid would be raised to $ 28 million and fresh papers would be put in. He did not want to 

lose the job. 

He came back to Muscat and kept trying to figure out how he should place the whole thing before his 

German Vice President. He obviously was at a loss. 

Questions: 

1. Analyse the reasons for Arvind Pandey’s dilemma. 

2. Does Arvind Pandey really face a dilemma? 

3. In your view what should Arvind Pandey do? Should he disclose it to his German Vice 

President?

CASE IV: Company Accepting a Contract 

A computer company was negotiating a very large order with a large size corporation. They had a very 

good track record with this client. 

In this corporation, five different departments had pooled their requirements and budgets. A committee 

was formed which had representation from all the departments. The corporation wanted the equipment 

on a long lease and not outright purchase. Further, they wanted the entire hardware and software form 

one supplier. This meant that there should be bought – out items from many suppliers since no one 

supplier could meet all the requirements of supply from its range of products. 

The corporation provided an exhaustive list of very difficult terms and conditions and pressurized the 

vendors to accept. The computer company who was finally awarded the contract had agreed to overall 

terms that were fine as far as their own products were concerned but had also accepted the same terms 

for the brought – out items. In this case, the bought – out items were to be imported through a letter of 

credit. The percentage of the bought – out items versus their own manufacture was also very high. One of 

the terms accepted was that the “system” would be accepted over a period of 10 days after all the 

hardware had been linked up and software loaded. 

The computer company started facing trouble immediately on supply. There were over 100 computers 

over a distance connected with one another with software on it. For the acceptance tests, it had been 

agreed that the computer company would demonstrate as a pre-requisite the features they had claimed 

during technical discussions. 

Now, as you are aware, if a Hero Honda motorcycle claims 80 km to a litre of petrol, it is under ideal test 

conditions and if a motorcycle from the showroom were to be tried for this test before being accepted, it 

would never pass the test. In corporation’s case, due to internal politics, the corporation persons from 

one department – who insisted on going exactly by the contract – did not sign acceptance since the 

“system” could not meet the ideal test conditions. 

Further, in a classic case of, “for want of a horse – shoe, payment for the horse was held up”, the computer 

company tried to get the system accepted and payment released. The system was so large that at any 

point of time over a period of 10 days something small or the other always gave problems. But the 

corporation took the stand that as far as they were concerned the contracts clearly were concerned the 

contract clearly mentioned that the “system” had to be tested as a whole and not module by module. 

Questions: 

1. Comment on the terms and conditions placed by the corporation. 

2. What factors influenced the computer company’s decision to accept the contract? 

3. Was it a win – win agreement? Discuss?

Case V: HAZARDS OF HILLS 

INTRODUCTION 

This case is based on an actual incident which took place in an Army Unit deployed in field area. A part of 

a Battery (about ¼ of an Artillery Regiment) was deployed in a snow bound high altitude area of 

Kashmir. This was the first time, an artillery unit was deployed in an area with roads and tracks still 

under development. Preparation of this area for such a development needed a lot of digging for guns, pits 

for ammunition storage, living place of the personnel, slit trenches and weapon pits for local defence 

against any possible enemy/terrorists’ attack on the position, place for storage of rations, cook-house and 

communication trenches, etc. 

The total strength of the party deployed there was 

a) Officer - 1 (Second Lieutenant with about one year service) 

b) Junior Commissioned Officer (JCO) - 1] 

c) Jawans – 40 

The Battery Commander (BC) remained with the Regiment Headquarters at Srinagar (with the remaining 

part of the Battery) as per the orders of the commanding Officer. There was a vehicle with the part of the 

Battery which was deployed at high altitude to assist in the daily administration of the troops like 

collection of ration, stores for preparation of defences, water, and ferrying of personnel from one place to 

another. The vehicle could go only upto a limited number of places due to bad road conditions and steep 

gradients. Only one driver was kept for this vehicle to reduce administrative problems due to more 

number of personnel. The vehicle completed about 35 to 40 kms. of running daily in its routine 

commitments. 

The part had just been inducted about two weeks back. The defences were being prepared which 

involved lot of effort in digging of hardened ground due to the cold winter months of November. The 

defence stores were to be collected, once the digging was complete, from another Engineering Unit 

located about 5 kms. to the rear. The roads were treacherous; with a number of stones and slides falling 

down occasionally during drizzle due to precipitation in atmosphere, there were steep gradients, narrow 

roads with sheer falls on one side due to the road having cut into the side of hills. The digging was 

complete by end November. In the month of December, snow fall at that location was expected any time, 

as it had already started snowing in the higher reaches and tops of mountains. The digging had been 

completed in a record time of two weeks. The party under the stewardship of the young officer had done 

a commendable job. 

In the first week of December, the only driver of the vehicle reported pain in the chest and problem in 

breathing. He was evacuated by helicopter the next day with instructions to inform the unit to send 

another driver for the vehicle. It took about three days for any one to reach this area, with staying of two 

nights enroute in order to acclimatise by stages. The detachment was to be without any driver for about 

three days. Another driver was detailed to proceed to this area, after having been medically examined 

and found fit. A day after the dispatch of the driver, the young officer with this party arrived in the unit 

and reported that the vehicle had fallen from a hill-side road and was completely damaged. The office 

was in a complete state of disarray and shock. What actually had happened goes something like this. 

After the first driver of the vehicle was evacuated, the weather started turning bad and it seemed that it 

was going to snow that day. The officer realised that in case of snow fall all the efforts put in by the troops 

would go waste, if the dug-ins were not covered. Realising this, he borrowed a driver of an ambulance

from a local medical unit to direct his vehicle for collection of defence stores. After the stores had been 

collected and dumped at the site of defences, the vehicle was being driven back to the party’s location. 

Before it could reach this location, it had to negotiate a dusty and steep track. At a steep climb the vehicle 

stalled and got switched off. All the men got down, prevented the vehicle from reversing by putting 

stones behind the wheels and started checking what had gone wrong. 

After the check on the engine had been carried out, the bonnet cover slipped off the hands of the driver 

while closing it and fell to closing it and fell to closing position with a bang. Because of the jerk thus 

created, the stones placed behind the vehicle slipped off. It was later discovered that there was a glassy 

smooth layer of ice under the thin layer of dirt which could not hold the stones firmly and stopped upside 

down because of the obstruction created by a big boulder. As there was no one in the vehicle, there were 

no injuries to personnel. On close inspection by the officers, it was found that the vehicle body, cabin, 

bonnet steering wheel and two of the four wheels were badly damaged. The office, being quite young and 

inexperienced, could not ascertain the real condition of the engine and chassis. He thought those too were 

damaged, whereas because of some providential chance, the chassis and engine remained intact. 

The BC was given the responsibility of getting the vehicle back to the unit. He was given a vehicle fitter 

and recovery vehicle with a driver. The BC took two more Non-Commissioned Officers (NCOs) and 

proceeded to the location to retrieve the vehicle. It took two days to reach with a few hours of the last leg 

of the journey in complete darkness in that snow bound area with treacherous slippery roads. On 

reaching the location, the Commanding Officer of the local unit, who happened to be the Station 

Commander of that sector, expressed his unhappiness on their taking such a great risk. With the 

assistance of all ranks of that unit, who came in willingly, it took two days to get the vehicle out of the 

boulder strewn area on to a track. It was a minor military operation in itself in that hostile terrain, and 

inclement weather of high altitude. The troops and officer had a very good rapport with those of the local 

unit and there was not much of a problem in getting the men of that unit to assist. 

While coming back, the hazards of night journey were very obvious. There was a thick layer of snow on 

the road with slope towards the khuds as layers after layers kept on accumulating, freezing before the 

water could roll down the complete slope. There were steep falls on one side. Both these phenomena, 

peculiar to hilly terrain, were not very discernible because of the darkness. The headlights of the vehicles 

exposed very little. There were frozen nalas where the vehicle would skid, aligning itself in the direction 

of the frozen nala, which tended to prove quite dangerous at times. At such places, the few troops and 

officer available would get down, push the vehicle to keep it aligned to the road and in turn slip down 

themselves on the frozen snow, most of the times face-down, in an attempt to push the vehicle. Though 

the situation was quite grave, it sometimes bordered on being humorous with everyone laughing 

spontaneously. At one place, the BC, pushing the vehicle to keep its tail and aligned to the direction of 

road, fell down, slipped a few feet down the frozen nala and landed up head down in a frozen khud about 

five feet deep. But for the direction of landing, the slip and fall could have proved quite dangerous. There 

was complete silence. The vehicle was gently stopped on the snow itself, secured with pegs along the 

wheels and rescue operation commenced for the ditch. There were several humorous remarks by the BC 

and the tension was relieved at once, with troops working on the vehicle with renewed vigour and 

strength once again. 

At another place, the recovery vehicle with the damaged vehicle behind it at suspension toe slipped, but 

because of the dexerity of the driver, it was saved from going down a nala by putting it on the left. The BC 

himself was in the recovery vehicle to give encouragement and moral support to the driver, sharing all 

the risks which his troops were facing. He did all that the troops did, while directing, controlling and 

executing. The party with the vehicle, reached the unit location on the evening of the second day after 

starting from a high altitude area. The problem of recovery of the vehicle being resolved, the question of 

enquiry into the caused embarrassment to all those in authority in the unit and also the officers and

jawans of the sub-unit/battery. Meanwhile, the inspection of the vehicle was carried out to assess the 

extent of damage. It was found that the engine and chasis were intact and the rest of the items of the body 

or fitment were damaged, either lightly or severely. To avoid embarrassment to the unit and loss to the 

exchequer, as well as in view of the administrative difficulties, the BC decided to have the vehicle put on 

road with the units’ efforts and at the earliest. Meanwhile, the cabin-hood of the vehicle had been 

purchased for about Rs 650 and was paid for by the BC, from his own pocket, thus setting an example to 

others. The JCO and jawans were also keen to pay for other damages. The offer was appreciated but 

declined. 

The Officer-in-charge of the local Army Workshop happened to be an officer with commendable helping 

attitude, positive bent of mind and with an understanding of peculiarities and problems of the area where 

such accidents were quite frequent and possible. When approached to assist, he listened to the whole 

incident very sympathetically and promised to assist in whatever way he could. This officer was a 

contemporary of the unit in a previous station and had excellent relations and interaction with the unit. 

Some items were offered by the workshop officer and replaced accordingly. The vehicle was made 

roadworthy again within a fortnight and put on road for duty. All the enquiries were dispensed with and 

there was no loss of face by anyone at any level. It is pertinent to mention that it had snowed in that 

location as soon as the recovery party came out of the hills. 

QUESTIONS 

1. What are the qualities of a good leader? In this case, how were they applied? 

2. Which factors contributed to motivate the troops to go ahead for such a difficult task as 

recovering a damaged vehicle from such a difficult and treacherous terrain and getting it 

repaired in such a short time? 

3. Which incidents indicate the importance of good interpersonal relationships with juniors, 

peers and superiors and what is the importance of good interpersonal relationships?

Case VI: Checking Out a Guest 

A guest walked up to the front desk agent in an upscale hotel, ready to check out. As she would normally 

do when checking out a guest, the agent asked the guest what his room number was. The guest was in a 

hurry and showed his anxiety by responding, “I stay in a hundred hotel rooms and you expect me to 

remember my room number?” 

The agent then asked for the guest’s name, to which he responded, “My name is Mr. Johnstein.” After 

thanking him, the agent began to look for the guest’s last name, but the name was not listed in the 

computer. Because the man had a heavy accent and the agent assumed that she had misunderstood him, 

she politely asked the guest to spell his last name. He answered, “What? Are you an idiot? The person who 

checked me in last night had no problem checking me in.” Again, the agent looked on the computer to find 

the guest. 

The guest, becoming even more frustrated, said, “I have a plane to catch and it is ridiculous that it has to 

take this long to check me out. I also need to fax these papers off, but I need to have them photocopied 

first.” The agent responded, “There is a business center at the end of the counter that will fax and 

photocopy what you for it. Haven’t you ever heard of customer service? Isn’t this a five-star hotel? With 

your bad attitude, you should be working in a three-star hotel. I can’t believe they let you work here at 

the front desk. Haven’t you found my name yet?” 

The agent, who was beginning to get upset, asked the guest again to spell out his full name. The guest only 

replied, “Here are my papers I want faxed if you are capable of faxing them.” The agent reached to take 

the papers, and the guest shouted, “Don’t grab them from my hand! You have a bad attitude, and if I had 

more time, I would talk to someone about getting you removed from your position to a hotel where they 

don’t require such a level of customer service.” The agent was very upset, but kept herself calm in order 

to prevent the guest from getting angrier. 

The agent continued to provide service to the guest, sending the faxes and making the photocopies he had 

requested. Upon her return, the agent again asked the guest to repeat his last name, since he had failed to 

spell it out. The guest replied by spelling out his name, “J-o-h-n-s-t-o-n-e.” The agent was finally able to 

find his name on the computer and checked him out, while he continued to verbally attack her. The agent 

finished by telling the guest to have a nice flight. 

Questions 

1. Is it appropriate to have the manager finish the check-out? Or, should the front desk agent 

just take the heat? 

2. Would you have handled the situation in the same manner? 

3. What would you have done differently? 

4. Communication improvement is required for both of the parties involved or any one of 

them? Justify your opinion.

LEADERSHIP 

1. Would you classify Richard Branson as a manager or a Leader? What qualities distinguish him as 

one over the other? 

2. Followers are part of the leadership process – Describe the relationship between Branson and his 

followers. 

3. Identify the Myths of leadership development that Richard Branson’s Success helps to disprove. 

1. Consider Walt Disney’s effectiveness in terms of the three domains of leadership- the leader, the 

followers, and situation. For each domain name factors that contributed to Disney’s success. 

2. Now think about Michael Eisner’s Leadership effectiveness. Name factors within the three 

domains of leadership that might be responsible for controversy surrounding Eisner’s success and 

then ultimate failure and removal as Disney’s CEO. 

1. What are the major skills Jovita Carranza has demonstrated in her career at UPS that have made 

her a successful leader? 

2. Consider the spiral of experience that Jovita Carranza has travelled. How has her experience 

affected her ability as a leader? 

3. List out the characteristics of successful leaders. How many of this is demonstrated by Jovita 

Carranza? 

1. As we have discussed, competency models describe the behaviors and skills manager need to 

exhibit if any organization is to be successful. Consider the general competencies found in figure 

8.3 and apply these to Andra Rush, providing example of why these competencies apply. 

2. Mentoring has played a role in the careers of many successful minorities in leadership positions. 

Who could be identified as a coach or mentor for Andra Rush? 

3. Consider some of the self-defeating behaviors outlines in this chapter that contribute to 

management derailment. What lessons has Andra Rush obviously learned from the failure of 

others? 

1. Like many leader, Marco has team in place and does not have the luxury of building a new team 

from the ground up to adapt to the changing business environment his firm is face with, Use the 

TLM to help Marco diagnose the problems faced by the firm and identify leverage points for 

change. 

a. Consider the major functions of the TLM—input process and output where do most of the 

firm’s challenges fall? 

b. What are the team’s goals for outputs? 

2. Identify potential resources for Marco and his team in implementing a strategy to change the way 

they do business at Hernandez & Associates. 

3. Would you classify Bill Gates as a charismatic or transformational leader? Why? 

4. Consider followers/employees of gates. What are some of the unique characteristics of Gate’s 

followers that might identify him as a charismatic or transformational?

CONSUMER BEHAVIOR 

CASE-I: MAKING MAGIC THE MULTIPLEX WAY 

The middle class of India, a virtual nonexistent entity on Independence, has gradually become more 

sensible, educated and demanding. The overall growth of the economy has given a tremendous thrust to 

the middle class, expected to grow by 5 to 10 percent annually. It has grown over 57 million by 2001-02 

and is expected to cross 153 million by 2009-10. 

The average household income in urban India has grown at a CAGR of 5 per cent over the last decade, not 

only is this, but the age profile of the INDIAN spenders is also undergoing a sea of changes. NCAER has 

identified five categories of household on basis of income which is summarised in Table 1 below: 

Table 1 

Classification of Indian Households on the Basis of Income 

Number Of Households [in millions] 

1994-95 1999-2000 2006-07 

Very rich 1 3 6 

Consuming 29 55 91 

Climbers 48 66 74 

Aspirants 48 32 15 

Destitute 35 24 13 

Table1 reveals the paradigm shift in Indian households over the last decade. The number of effective 

consumers is expected to exceed 600 millions by 2010.This big bang in consumers in Indian is being seen 

as the driving force in emergence of various new business, which aim at high consumer tide. Availability 

of easy financing schemes is another aspect of the story: owinga house, or buying a car or going abroad 

on a pleasure trip is no more a distant dream to the average Indian consumer. With the consumers’ 

gradually get skewed towards the young, there is a greater tendency towards increased spending on 

consumption. A very interesting piece of information is that average Indian household has increased its 

spending on movies and theatres from 1 to 4.6 per cent of its disposable income. This amazing spurt in 

spending on entertainment has affected the quality and delivery of films as an industry. The single screen 

theatres with poor maintenance and inadequate infrastructure are gradually paving way for high tech 

multiplexes with three to as many as eleven screens, digitalized films and Dolby surround audio system. 

The industry is undergoing a sawing, driven by consumer behaviour. 

Reports indicate that multiplexes account for 0.6 per cent of the total cinemas, 2.3 per cent of the total 

screens and have a total capacity of more than two lakh seats. The average gross collection per multiplex 

is around Rs. 5.72 crore fetching about 29 to 35 per cent of the revenue for the film industry. 

India’s multiplex bandwagon has spread its tentacles beyond the metros to redefine entertainment in B 

and C class towns. While the first phase of the growth of multiplexes was in metros, now this is spreading 

to tier two and three cities like Lucknow, Nashik, Aurangabad, and Kanpur. Top multiplexes players like 

PVR, Adlabs Films, Inox Leisures, Shringar Cinemas (Fame Multiplexes), Fun Multiplex and Cinemax India 

are venturing to small towns across the country and redefining entertainment to the vast Indian Masses. 

The multiplex business has rightly tapped the growth of consumerism in India as it has understood the 

pulse of the Indian Consumer’s preference towards superior ambience, comfortable seating, airconditioning 

and good quality snacks, even at the cost of paying higher price. The average price of ticket 

in a conventional theatre is Rs. 15-35, while a multiplex charges on an average of Rs. 75-350 and

consumer is willing to dish out this extra amount to enjoy the “complete” movie experience, which most 

of the traditional theatres could not render and are thus facing the fate of near extinction. It thus 

promises to take the moviegoers’ experience to a whole new level and giving a new dimension to 

watching movies at theatres. 

Posers 

1. What lessons can you draw from the above case regarding consumer behavior? 

2. Do you think change in consumer perception in middle class has been instrumental in 

emergence of multiplexes? What can be other reasons? 

3. Observe Table 1. Which of the groups, according to you, would have demand for multiplexes? 

4. Would law of diminishing marginal utility apply to movie watching? Will this affect the growth 

rate of multiplexes? Or can it be seen a cause for establishment of multiplexes? Give argument 

in support for your contention. 

5. Can multiplexes use the concept of consumer surplus for attracting more consumers? How?

CASE II: SUNDER SINGH 

Sunder Singh had studied only up to high school. He was 32-years of age, lived alone in a rented room, 

and worked eight-hour shift at one petrol pump, then went to the other one for another eight-hour shift. 

He had a girl friend and was planning to marry. 

One day when he returned from work, he got a note from his girl friend that she was getting married to 

someone else and he need not bother her. This was a terrible shock to Sunder Singh and he fell apart. He 

stopped going to work, spent sleepless nights, and was very depressed. After a month, he was running 

Iowan his savings and approached his earlier employers to get back his job, but they would not give him a 

second chance. He had to quit his rented room, and sold few things that he had. He would do some odd 

jobs at the railway station or the bus terminal. 

One day, nearly two years ago, he was very hungry and did not have any money and saw a young man 

selling newspapers. He asked him what he was selling and he told him about Guzara (an independent, 

non-profit, independent newspaper sold by the homeless, and economically disadvantaged men and 

women of this metro city). Sunder Singh approached the office and started selling the newspaper. He did 

not make a lot of money, but was good at saving it. He started saving money for a warm jacket for next 

winter. 

He was reasonably happy; he had money to buy food, and no longer homeless and shared a room with 

two others. One day, with his savings he bought a pair of second-hand Nike shoes from flea market. 

Sunder Singh is not unique among low-income consumers, especially in large cities, in wanting and 

buying Nike shoes. Some experts believe that low-income consumers too want the same products and 

service that other consumers want. 

The working poor are forced to spend a disproportionate percent of their income on food, housing, 

utilities, and healthcare. They solely rely on public transportation, spend very little on entertainment of 

any kind, and have no security of any kind. Their fight is mainly day-to-day survival. 

QUESTIONS: 

1. What does the purchase of a product like Nike mean to Sunder Singh? 

2. What does the story say about our society and the impact of marketing on consumer behavior?

CASE-III: TOYOTA 

Of all the slogans kicked around Toyota, the key one is kaizen, which means “continuous improvement” in 

Japanese. While many other companies strive for dramatic breakthrough, Toyota overtook Ford Motor 

Company to become the second largest automaker in the world. Ford had been the second largest since 

1931. 

Toyota simply is tops in quality, production, and efficiency. From its factories pour a wide range of cars, 

built with unequaled precision. Toyota turns out luxury sedans with Mercedes-Benz-like quality using 

one-sixth the labor Mercedes does. The company originated just-in-time production and remains its 

leading practitioner. It has close relationships with its suppliers and rigid engineering specifications for 

the products it purchases 

Toyota’s worldwide leadership in the automotive industry was built on its competitive advantage across 

the supply chain. Between 1990 and 1996, Toyota reduced part defects by 84 percent, compared to 47 

percent for the Big 3. It also reduced the ratio of inventories to sales by 35 percent versus 6 percent. 

These reduction advantages occurred despite the fact the Big 3 relied on identical suppliers. A study by 

Jeff Dyer of The Wharton School of the University of Pennsylvania and Kentaro Nobeoka of Kobe 

University attributed Toyota’s success partly to its implementation of bilateral and multilateral, 

knowledge-sharing routines with suppliers that result in superior Interorganizational or network 

learning. Toyota uses six approaches to facilitate knowledge sharing: (1)a supplier association;(2) teams 

of consultants;(3)voluntary study groups;(4)problem-solving teams;(5)interfirm employee transfers; and 

(6)performance feedback and monitoring processes. This effort also involves intense levels of personal 

contact between Toyota and its suppliers. 

Toyota pioneered quality circles, which involve workers in discussions of ways to improve their tasks 

and avoid what it calls the three Ds: the dangerous, dirty, and demanding aspects of factory work. The 

company has invested $770 million to improve worker housing, add dining halls, and build new 

recreational facilities. On the assembly line, quality is defined not as zero defects but, as another slogan 

puts it, “building the very best and giving the customer what she/he wants.” Because each worker serves 

as the customer for the process just before hers, she becomes a quality control inspector. If a piece isn’t 

installed properly when it reaches her, she won’t accept it. 

Toyota’s engineering system allows it to take a new car design from concept to showroom in less than 

four years versus more than five years for U.S. companies and seven years for Mercedes. This cuts costs, 

allows quicker correction of mistakes and keeps Toyota better abreast of market trends. Gains from 

speed feed on themselves. Toyota can get its advanced engineering and design done sooner because, as 

one manager puts it, “We are closer to the customer and thus have shorter concept time.” New products 

are assigned to a chief engineer who has complete responsibility and authority for the product from 

design and manufacturing through marketing and has direct contacts with both dealers and consumers. 

New-model bosses for U.S. companies seldom have such control and almost never have direct contact 

with dealers or consumers. 

The 1999 Harbour Report, a study of automaker competencies in assembly, stamping, and powertrain 

operations, stated that the top assembly facility in North America (based on assembly hours per vehicle) 

is Toyota’s plant in Cambridge, Ontario. In this plant, a Corolla is produced in 17.66 hours. Toyota was 

also rated number one in engine assembly, taking just 2.97 hours to produce an engine. 

In Toyota’s manufacturing system, parts and cars don’t get build until orders come from dealers 

requesting them. In placing orders, dealers essentially reserve a portion of factory capacity. The system is

so effective that rather than waiting several months for a new car, the customer can get a built-to-order 

car in a week to 10 days. 

Toyota is the best carmaker in the world because it stays close to its customers. “We have learned that 

universal mass production is not enough,” said the head of Toyota’s Tokyo Design Center. “In the 21 st 

century, you personalize things more to make them more reflective of individual needs.” 

In 1999, Toyota committed to a $13 billion investment through 2000 to become a genuinely global 

corporation without boundaries. In this way, it will be able to create worldwide manufacturing facilities 

that produce cars according to local demand. Its goal is to achieve a 10 to 15 percent global market share 

by 2010. 

Why the drive towards customization of vehicles? Part of this is due to fierce competition that provides 

consumer with a multitude of choices. The Internet enables consumers to be more demanding and less 

compromising. They now have access to the lowest prices available for specific models of vehicles with all 

of the bells and whistles they design. From the comfort of their homes, they are able to bypass dealers 

and still find the vehicle of their dreams. 

Senior management at Toyota believes that kaizen is no longer enough. The senior vice president at the 

Toyota USA division, Douglas West, states that his division is committed to both creating and executing a 

new information system to drive the fastest, most efficient order-to-delivery system in the North 

American market. Toyota management has come to realize Kaizen alone can no longer predict business 

success. The sweeping changes taking place in the business environment can no longer rely on the kaizen 

philosophy of small, sustained improvements. In fact, one expert in the industry believes that “pursuing 

incremental improvements while rivals reinvent the industry is like fiddling while Rome burns.” 

Competitive vitality can no longer be defined by continuous improvement alone. 

Questions: 

1. In what ways is Toyota’s new-product development system designed to serve customers? 

2. In what ways is Toyota’s manufacturing system designed to serve customers? 

3. How does Toyota personalize its cars and trucks to meet individual consumer needs?

CASE-IV: EXPOSURE, ATTENTION, AND COMPREHENSION ON THE INTERNET 

The Internet universe literally grows more cluttered by the minute. According to Network Solutions, Inc., 

which registers the vast majority of Web addresses around the world, about 10,000 new addresses are 

registered each day. That means by the time you finish reading this case, about 60 new domain names 

will have been gobbled up. With all the clutter on the Web, how have some firms been able to stand out 

and attract millions of customers? 

First, there are some basics to which online firms must attend. These cost little more than some time and 

a little creativity. The first is creating a good site name. The name should be memorable (yahoo.com), 

easy to spell (ebay.com), and/or descriptive (wine.com—a wine retailer). And, yes, ideally it will have a 

.com extension. This is the most popular extension for e-commerce, and browsers, as a default, will 

automatically add a .com onto any address that is typed without extension. 

The second priority is to make sure the site comes up near the top of the list on any Web searches. If you 

use Lycos.com to perform a search for “used books,” you get a list of more than 2.6 million websites. 

Studies have shown that most people will look only at the top 30 sites on the list, at most. If you are a 

used-book retailer and you show up as website #1,865,404 on the search list, there is a very good chance 

you will not attract a lot of business. A 1999 Jupiter Research study reveals that “searching on the 

Internet” is the most important activity, and Internet users find the information they are looking for by 

using search engines and Web directories. A good Web designer can write code that matches up well with 

search engine algorithms and results in a site that ranks high on search lists. 

Virtually all popular websites have those basics down pat. So the third step is to reach out proactively to 

potential customers and bring them to your site. Many companies have turned to traditional advertising 

to gain exposure. Television advertising can be an effective option—albeit an expensive one. In late 

January 1999, hotjobs.com spent $2 million—half of its 1998 revenues—on one 30-second ad during the 

Super Bowl. According to CEO Richard Johnson, so many people tried to visit the site that the company’s 

servers jammed. Johnson says the number of site hits was six times greater than in the month before. A 

quirky ad campaign may or may not help. Pets.com, now de-func, built its image around a wise-guy sock 

puppet. CNET, a hardware and software retailer, ran a series of television ads featuring cheesy music, 

low-budget sets, and unattractive actors. One such ad featured two men—one in a T-shirt that said ”you,” 

another in a T-shirt labeled “the right computer” – coming together and joining hands thanks to the 

efforts of another guy in a CNET T-shirt. The production quality was rudimentary enough that any 

sophomore film student could have produced it. The spots were so bad that they stood out from the slick, 

expensive commercials to which viewers were accustomed. Critics ripped the campaign to shreds, but 

CNET called it a success. 

Other Internet firms have used sports sponsorships to increase visibility. CarsDirect.com, a highly rated 

site that allows consumers to purchase automobiles online, once purchased the naming rights to NASCAR 

auto race (the CarsDirect.com400). Lycos also has tried to make the most of NASCAR’s increasing 

popularity. It spent hundreds of thousands of dollars to have its name and logo plastered all over the car 

of popular driver Johnny Benson. Meanwhile, online computer retailer Insight and furniture seller 

galleryfurniture.com each targeted football fans by purchasing the naming rights to college bowl games. 

Of course, if you can reach consumers while they are in front of their computers rather than their 

television sets, you may stand an even better chance of getting them to your site. However, typical banner 

ads are inefficient, averaging click-through rates of only about 0.5 per cent (only one of every 200 people 

exposed to the ad actually clicked on the ad). Too often, banner ads are just wallpaper; consumers may 

see them but they usually are not sufficiently stimulated to click-through. However, Michele Slack of the 

online advertising group Jupiter Communications believes banner ads can be useful if used correctly.

“The novelty factor is wearing off,” she says. But “when an ad is targeted well and the creative is good, 

click-through rates are much higher.” 

An alternative way to reach people who are already online is through partnerships. One of the most 

visible examples of such an alliance is the one between Yahoo! And Amazon.com. Let’s say you’re working 

on a project on the Great Depression and you want to see what kind of information is available online. If 

you go to Yahoo! And type in “Great Depression,” you will not only be presented with a list of websites, 

but you will also see a link that will allow you to click to see a list of books on the Great Depression that 

are available through Amazon. Another example of a successful partnership was forged in 1998 between 

Rollingstone.com and the website building and hosting service Tripod. Every one of the 3,000 artist pages 

on Rollingstone.com contained a link to Tripod. The goal was to encourage fans to use Tripod’s tools to 

build webpages dedicated their favorite singers or bands. According to the research company Media 

Metrix, during the course of the alliance Tripod jumped from the Web’s fourteenth most popular website 

to number eight. Alliances with nonvirtual companies are another options. In 2003, the Internet classified 

firm CareerBuilder kicked off a cross-promotional campaign with major Internet firms, including AOL 

and MSN. 

A less subtle but nonetheless effective way to build traffic is to more or less pay people visit your site. One 

study showed more than half of Internet consumers would be more likely to purchase from a site if they 

could participate in some sort of loyalty program. Hundreds of online merchants in more than 20 

categories have signed up with a network program called ClickRewards. Customers making purchases at 

ClickRewards member sites receive frequent-flier miles or other types of benefits. Mypoints.com offers a 

similar incentive program in which customers are rewarded with air travel, gift certificates and discounts 

for shopping at member merchants. The search engine iwon.com was even more direct. It rewards one 

lucky visitor each weekday with a $10,000 prize. According to Forrester Research, companies in 2002 

spent about $6 billion annually on online incentives and promotions. 

Finally, some firms rely on e-mail to thoroughly mine their existing customer databases. The auction site 

On sale (later merged with Egghead.com) proved just how successful e-mail can be. It sent out targeted e- 

mails to its customers based on their past bidding activities and previously stated interests. Click-through 

rates on these targeted e-mails averaged a remarkable 30 percent. E-mail marketing also holds promise 

for business-to-business firms. The Peppers and Rogers Group is a marketing firm that gives 

presentations around the United States. At the end of the presentations, people are invited to go to the 

company’s website and sign up for their e-mail newsletter, Inside 1 to 1. The newsletter invites readers to 

visit the Peppers and Rogers website to learn more about various articles, promote their products and 

services, and participate in forums. Inside 1 to 1 now boasts a subscriber base of 45,000, but the company 

estimates that about 200,000 people actually see it because subscribers forward it to their friends and 

colleagues. About 14,000 people visit the Peppers and Rogers site each week, with traffic often peaking 

immediately after the newsletter is sent. 

As you can see, there is no one effective method for generating interest in a website. The same methods 

that have worked for some firms have failed for others. One certainty is that as the Internet grows and 

more people do business online, Internet firms will have to find ever more creative ways to expose 

customers to their sites and keep their attention once there. 

Question: 

1. Consider the e-mail campaigns discussed in the case. Why do you think these campaigns were 

successful? Discuss the attention processes that were at work. Do you see any potential 

drawbacks to this type of marketing? 

2. During the 2000 Super Bowl, ABC invited viewers to visit its Enhanced TV website. Fans could 

play trivia, see replays, participate in polls and chat rooms, and view player statistics. The site

eceived an estimated 1 million hits. Why? Frame your answer in terms of exposure, attention, 

and comprehension. 

3. Think about your own Web surfing patterns. Write down the reasons you visit sites. Which of 

the marketing strategies discussed in the case do you find most (and least) influential? 

CASE: V PEAPOD ONLINE GROCERY—2003 

The online grocery turned out to be a lot tougher than analysts thought a few years ago. Many of the early 

online grocers, including Webvan, ShopLink, StreamLine, Kosmom, Homeruns, and PDQuick, went 

bankrupt and out of business. At one time, Webvan had 46 percent of the online grocery business, but it 

still wasn’t profitable enough to survive. The new business model for online grocers is to be part of an 

existing brick-and-mortar chain. Large grocery chains, like Safeway and Albertson’s, are experiencing 

sales growth in their online business but have yet to turn a profit. Jupiter Research estimates that online 

grocery sales will be over $5 billion by 2007, about 1 percent of all grocery sales, while it expects more 

than 5 percent of all retail sales to be online by then. A few years ago, optimistic analysts estimated online 

grocery sales would be 10 to 20 times that by 2005, but it didn’t work out that way. 

One of the few online grocers to survive in 2003 is Peapod, the first online grocer, started by brothers 

Andrew and Thomas Parkinson in 1990. However, even Peapod was failing until 2001 when Dutch 

grocery giant Royal Ahold purchased controlling interest in the company for $73 million. Peapod 

operates in five markets, mainly by closely affiliating itself with Ahold-owned grocery chains. Peapod by 

Giant is in the Washington, DC, area, while Peapod by Stop and Shop runs in Boston, New York, and 

Connecticut. The exception is Chicago, where Peapod operates without an affiliation with a local grocery 

chain. Peapod executives claim the company is growing by 25 percent annually and has 130,000 

customers, and all of its markets except Connecticut are profitable. Average order size is up to $143 from 

$106 three years earlier. 

The online grocery business seemed like a sure winner in the 1990s. Dual-income families strapped for 

time could simply go online to do their grocery shopping. They has about the same choices of products 

that they would have had if they went to a brick-and-mortar grocery, about 20,000 SKUs (stockkeeping 

units). They could browse the “aisles” on their home computers and place orders via computer, fax or 

telephone. The orders were filled at affiliated stores and delivered to their homes in a 90-minute window, 

saving them time and effort and simplifying their daily lives. For all this convenience, consumers were 

willing to pay a monthly fee and a fee per order for packaging, shipping, and delivery. Since most of the 

products purchased were well-known branded items, consumer faced little risk in buying their 

traditional foodstuffs. Even perishables like produce and meat could be counted on to be high quality, and 

if consumers were concerned, they could make a quick trip to a brick-and-mortar grocery for these 

selections. However, while all of this sounded good, most consumers didn’t change their grocery 

shopping habits to take advantage of the online alternative. 

Currently analysts do not expect the online grocery industry to take off in the near future, if ever. Miles 

Cook of Bain & Company estimates that only 8 to 10 percent of U.S. consumers will find ordering 

groceries online appealing, but only about 1 percent will ever do so. He concludes: “This is going to 

remain a niche offering in a few markets. It’s not going to be a national mainstream offering.” Jupiter 

Media Metrix analyst Ken Cassar concludes that “The moral of the story is that the ability to build a better 

mousetrap must be measured against consumers’ willingness to buy it.” 

Question: 

1. What behaviors are involved in online grocery shopping? How does online shopping compare 

with traditional shopping in terms of behavioral effort?

2. What types of consumers are likely to value online grocery shopping from Peapod? 

3. Overall, what do you think about the idea of online grocery shopping? How does it compare 

with simply eating in restaurants and avoiding grocery shopping and cooking altogether?

CASE: VI SONY 

In just over half-century, Sony Corporation has from a 10-person engineering research group operating 

out of a bombed-out department store to one of the largest, most complex, and best-known companies in 

the world. Sony co-founders Masaru Ibuka and Akio Morita met while serving on Japan’s Wartime 

Research Committee during World War II. After the war, in 1946, the pair got back together and formed 

Tokyo Telecommunications Engineering Corporation to repair radios and build shortwave radio 

adapters. The first breakthrough product came in 1950, when the company produced Japan’s first tape 

recorder, which proved very popular in music schools and in courtrooms as a replacement for 

stenographers. 

In 1953, Morita came to the United States and signed an agreement to gain access to Western Electric’s 

patent for the transistor. Although Western Electric (Bell Laboratory’s parent company) suggested Morita 

and Ibuka use the transistor to make hearing aids, they decided instead to use it in radios. In 1955, Tokyo 

Telecommunications Engineering Corporation marketed the TR-55, Japan’s first transistor radio, and the 

rest, as they say, is history. Soon thereafter, Morita rechristened the company as Sony, a name he felt 

conveyed youthful energy and could be easily recognized outside Japan. 

Today Sony is almost everywhere. Its businesses include electronics, computer equipment, music, 

movies, games, and even life insurance. It employs 190,000 people worldwide and does business on six 

continents. In 1999, Sony racked up sales of $63 billion; 31 percent of those came from Japan, 30 percent 

from the United States, and 22 percent from Europe. (To visit some of Sony’s country-specific websites, 

go to www.sony.com and click on “Global Sites.”) 

Perhaps Sony’s most famous product is the Walkman. Created in 1979, the Walkman capitalized on what 

some perceived as the start of a global trend towards individualism. From a technological standpoint, the 

Walkman, was fairly unspectacular, even by 1979 standards, but Sony’s marketing efforts successfully 

focused on the freedom and independence the Walkman provided. One ad depicted three pairs of shoes 

sitting next to a Walkman with the tag line “Why man learned to walk.” By 2000 more than 250 million 

Walkmans had been sold worldwide, but Sony was concerned. Studies had shown that Generation Y (ages 

14 to 24) viewed the Walkman as stodgy and outdated. So Sony launched a $30 million advertising and 

marketing campaign to reposition the product in the United States. The star of the new ads was Plato, a 

cool, Walkman-wearing space creature. The choice of a nonhuman character was no accident according 

to Ron Boire, head of Sony’s U.S. personal-mobile group. He wanted a character that would appeal to the 

broadest possible range of ethnic groups—thus, the space creature. Boire explains, “An alien is no one, so 

an alien is everyone.” 

Sony’s current vision, however, extends far beyond the Walkman: to become a leader in broadband 

technologies. Sony looks forward to a day when all of its products—televisions, DVDs, telephones, game 

machines, computers, and so on—can communicate with one another and connect with the Web on a 

persona network. A Sony executive provides an example of such technology in action: “Say you are 

watching TV in the den, and your kids are playing their music way too loud upstairs,” he says. “You could 

use your TV remote to call up an onscreen control panel that would let you turn down your kids’ stereo, 

all without having to get up from your recliner.” 

Sony sees its new PlayStation2 filling a major role in the Internet of the future. In March 2000, Sony 

introduced the PlayStation2 in Japan and sold 1 million units within a week. Newsweek featured the 

PlayStation2 on its cover that spring, even though it wasn’t offered in the United States until later in the 

year. Most consumers probably bought PlayStation2 to play video games, but its potential goes far 

beyond that. It is actually powerful enough to be adapted to guide a ballistic missile. Sony envisions 

consumers turning to the PlayStation2 for not only games but also movies, music, online shopping, and

any other kind of digital entertainment currently imaginable. Ken Kutaragi, president of Sony Computer 

Entertainment, predicts the PlayStation2 will someday become as valuable as the PC is today: “A lot of 

people always assumed the PC would be the machine to control your home network. But the PC is a 

narrowband device that… has been retrofitted to play videogames and interactive 3-D graphics. The 

PlayStation2 is designed from the ground up to be a broadband device.” 

The PlayStation2 also reflects a changing attitude within Sony regarding partnerships with other 

companies. Toshiba helped Sony design the Emotion Engine, which powers the PlayStation2. In previous 

years, these kinds of alliances were the exception rather than the rule with the Sony. Sony was perceived 

as arrogant because it rarely cooperated with other companies, preferring to develop and popularize new 

technologies on its own. Recently, however, that has changed. Sony has worked with U.S. based Palm to 

develop a new hand-held organizer with multimedia capabilities, cooperated with Intel to create a set of 

standards for home networks, and launched a joint venture with Cablevision to build a broadband 

network in the New York metropolitan area. Nevertheless, some critics believe Sony remains too insular, 

looking on from the sidelines while other companies join forces to create entertainment powerhouses. 

Sony has no alliances with U.S. cable or television networks, raising some doubts about its ability to fully 

develop its home Internet services. Sony has talked with other music companies about possible joint 

venture, but nothing has come to fruition. 

Unlike many U.S.-based multinationals, Tokyo-based Sony traditionally has marketed itself on a regional 

rather than a global basis. For example, Sony has almost 50 different country-specific websites from 

which consumers can order products. However, there are signs that strategy may be changing, at least to 

some degree. Sony launched www.Sonystyle.com, a website that is the company’s primary online outlet 

for selling movies, music, and electronic products. Sony also plans to provide product service and support 

on the site, and eventually software upgrades as well. The current main website (www.sony.com) is 

mainly a source for corporate and investor information. Also, in 1997 Sony embarked on a worldwide ad 

campaign to make itself and its products more relevant in the eyes of younger consumers. Ironically, 

much of Sony’s future growth may come from its own backyard. The primary buyers of electronic and 

digital products are ages 15 to 40. It is estimated that by 2010, two-thirds of the people in the world in 

that age bracket will live in Asia. Tokyo is already a powerful influence on Asian culture. Asia’s most 

popular youth magazines are published in Tokyo, and most of the music Asian young people listen to 

comes form Tokyo. So part of Sony’s challenge is to continue to grow on a global scale while paying close 

attention to the burgeoning market at home. 

Immediately following World War II and for some years thereafter, the label “Made in Japan” connoted 

cheap, shoddy, imitation products. Today, for many people, that same label stands for excellence and 

innovation. Certainly Sony can take much of the credit that transformation. Now the question is whether 

Sony’s products and marketing efforts can keep pace (or set the pace) in the upcoming age of digital 

convergence. 

Question: 

1. Identify and discuss some of the cultural meanings for Sony possessed by consumers in your 

country. Discuss how these cultural meaning were developed and how they influence 

consumers’ behaviors (and affect and cognition). What is the role of marketing strategies in 

creating and maintaining (or modifying) these cultural meanings? 

2. It is often stated that the world is becoming smaller because today people communicate 

relatively easily across time and distance. Discuss whether that has been beneficial for Sony. 

What are some marketing challenges it presents?

3. What do you think about Sony’s tradition of region-specific or nation-specific marketing? 

Would Sony be better served by working to create a more uniform global image? 

HUMAN RESOURCES MANAGEMENT 

1. What should Divan do? 

1. Discuss the long-term relevance of motivational techniques used by Baheti in the light of 

prevailing environment in the organization. 

2. Had you been Baheti, what other techniques you would have used to improve the special 

services provided by the organization? 

1. Had you been in place of Alok Trivedi, what additional measures would you have taken? 

2. Critically analyze the Employee Relations Audit in the light of its contribution to self 

motivation of employees. 

1.If you were Malik, what strategies would you adopt to solve the problem? 

2.With high employee turnover in insurance industry, how can the company retain a person 

like Malik? 

1.What role do the non-financial incentives play in motivating the workers and minimizing the 

rate of absenteeism? 

2.What innovative solutions would you suggest to minimize the rate of absenteeism? 

1.Discuss merits/demerits of the role of strike, agitation and legal approach in union 

management relations. 

2.What role does mutual trust play in building union-management relations? 

Auditing 

1. Discuss the advantages and disadvantages of balance sheet audit. Also state the auditor’s position 

in relation to balance sheet audit. 

2. Draft a form of questionnaire, that you would use to determine the effectiveness of the client’s 

internal control over payrolls.

3. An enterprise purchases an item of machinery on 1.4.2002 for Rs. 100,000. It depreciates this 

item at the rate of 10% per annum on straight-line basis. On 1.4.2005, the enterprise decides to 

change the method of depreciation from straight-line to written down value. The applicable rate 

under the new method is 15%. How should the enterprise give effect to this change in the method 

of depreciation? 

4. Under what circumstances, an auditor can be appointed by the following: 

(a) The Board of Directors 

(b) The shareholders 

(c) The central government 

5. While examining the accounts of a company, you find the following items on credit 

side of profit and loss account: 

Profit on revaluation of land. 

(a) Bounties received from central government 

(b) Excess depreciation charged in the previous year now written back 

(c) Unclaimed dividend 

Would you have any objection as auditor in passing the accounts of the company? State with 

reasons. 

6. What is a Clean Report? Give a specimen of a qualified report of the auditor. 

7. What is investigation? Distinguish investigation from audit. 

8. Define ‘Professional Misconduct’ and state how professional misconduct and professional ethics 

are related. Give few instances of professional misconduct with case decisions. 

9. What special points should the auditor consider in conducting audit in the following institutions 

(a) Charitable institution (b) Educational institution 

10. State the controls that can be applied over inputs and processing of data in a computerized 

accounting environment. 

Business Strategy Environment 

1. Consider the vision and mission statements of the Reserve Bank of India. Comment on the 

quality of both these statements. 

2. Should the RBI go for a systematic and comprehensive strategic plan in place of its earlier 

pragmatic approach of responding to environmental events as and when they occur? Why? 

1. Identify the opportunities and threats that the retailing industry in India offers to local and 

foreign companies. 

2. Prepare an ETOP for a company interested in entering the retailing industry in India

1. In your opinion, what is the distinctive competence of HelpAge India? 

2. Prepare a strategic advantage profile for HelpAge India. 

1. BHEL is mainly formulating and implementing concentration strategies nationally as well as 

globally, in the power equipment sector. Do you think it should broaden the scope of its 

strategies to include integration or diversification? Why? 

2. Suppose BHEL plans to diversify its business. What areas should it diversify into? Give reasons 

to justify your choice 

1. What is the motive for internationalization by the Kalyani Group? Discuss. 

2. Which type of international strategy is Kalyani Group adopting? Explain. 

1. Comment on the steps taken to reduce the extent of vertical integration at the Indian Railways. 

Suggest a few more measures that could be taken. 

2. Discuss the measures taken for corporate restructuring of the Indian Railways, in your opinion, 

are these adequate for dealing with the problems faced? Why? 

3. Propose the basic elements of a corporate turnaround for the Indian Railways. 

Management Information Systems 

1. Do you agree with the argument made by Nick Carr to support his position that IT no longer 

gives companies a competitive advantage? Why or why not? 

2. Do you agree with the argument made by the business leaders in this case in support of the 

competitive advantage that IT can provide to a business? Why or why not? 

3. What are several ways that IT could provide a competitive advantage to a business? Use some 

of the companies mentioned in this case as examples. Visit their websites to gather more 

information to help you answer. 

1. What is the business of wireless technologies in the chemicals and automotive manufacturing 

industries? What other manufacturing applications might benefit from wireless technologies? 

Why? 

2. What are some of the business benefits of wireless technologies in finance and investments? 

What other applications would you recommend? Why? Check the website of Fidelity.com to 

help you answer. 

3. What are some of the business benefits and challenges of using wireless technologies in 

retailing? What are some other applications that might be beneficial to consumers, as well as 

retailers? Why? 

1. What is the business value of AI technologies in business today? Use several examples from the 

case to illustrate your answer.

2. What are some of the benefits and limitations of data mining for business intelligence? Use 

Bank Financial’s experience to illustrate your answer. 

3. Why have banks and other financial institutions been leading users of AI technologies like 

neural networks? What are the benefits and limitations of this technology 

1. What are the benefits and limitations of the Rowe Companies’ ROI methods for IT project 

planning? 

2. What is the business value of the ROI methodology required for project planning by Merrill 

Lynch? 

3. Do you agree with the IT investment decisions being made by the Rowe Companies in response 

to changing economic conditions? Why or why not? 

1. What security measures should companies, business professionals, and consumers take to 

protect their systems from being damaged by computer worms and viruses? 

2. What is the ethical responsibility of Microsoft in helping to prevent the spread of computer 

viruses? Have they met this responsibility? Why or why not? 

3. What are several possible reasons why some companies (like GM) were seriously affected by 

computer viruses, while others (like Verizon) were not? 

Marketing Management 

1. What have been the key success factors for Nike? 

2. Where is Nike vulnerable? What should it watch out for? 

3. What recommendations would you make to senior marketing executives going forward? 

What should they be sure to do with its marketing? 

1. What have been the key success factors for Disney? 

2. Where is Disney vulnerable? What should it watch out for? 

3. What recommendations would you make to their senior marketing executives going 

forward? What should it be sure to do with its marketing? 

1. What have been the key success factors for HSBC? 

2. Where is HSBC vulnerable? What should it watch out for? 



1. What have been the key success factors for Krispy Kreme?

2. Where is Krispy Kreme vulnerable? What should it watch out for? 



1. What are the key success factors for Southwest Airlines? 

2. Where is Southwest Airlines vulnerable? What should it watch out for? 

3. What recommendations would you make to senior marketing executives moving forward? 


Business Law 

1. (a) Discuss the term ‘Continuing Guarantee’. How can it be revoked? 

(b) State briefly the rights and obligations of a bailee. 

2. (a) What do you understand by the term Implied ‘Authority of a partner’? 

(b) Enumerate the acts, which are not covered under implied authority. 

3. (a) What are the rights and duties of a minor in relation to partnership business? 

(b) Distinguish between -- 

(i) Sub-agent and Substituted Agent 

(ii) Sale, Bailment and Pledge 

4. (a) Explain the rights of a partner. 

(b) Distinguish between the following: 

(i) Succession and Assignment. 

(ii) Contract of Indemnity and Contract of Guarantee. 

5. Write short note on. 

i) Non-registration of a firm. 

ii) Capacity of Contract 

iii) Kinds of Bailment. 

iv) Anticipatory breach of a Contract. 

6. a) When is a Surety Discharged from Liability by the conduct of the creditor? 

b) Describe the rules relating to passing of property in the sale of goods. 

7. a) What is an illegal agreement? State the effects of illegality. 

b) What is ‘Supervening Impossibility’? What are their effects upon the contract? 

c) What are the remedies available to the buyer when goods in wrong quantity delivered to 

him? 

d) When shall a retired partner be discharged from his liabilities for the acts of the firm 

before retirement? 

8. (a) State the principles on which damages are assessed for breach of contract. 

(b) Describe the law relating to the ‘right of resale’ available to an unpaid seller in the Sale 

of Goods Act, 1930. 

9. a) What are the rules regarding delivery of goods? 

b) Distinguish between:

i) Novation and Alteration. 

ii) Liquidated damages and penalty 

10. Comment on 

a) Transferee of a partner’s interest cannot exercise the right of transferring partner. 

b) Appropriation is a right primarily of the debtor and for his benefit. 

c) A proposal can be revoked otherwise than by communication. 

d) Right of stoppage in transit is an extension of the right of lien. 

















aravind.banakar@gmail.com

ARAVIND 

09901366442 – 09902787224 

Retail Management 

1. Develop a positioning chart for jewelry. Include Wal-Mart, Tiffany, and department stores with 

jewelry departments, on the chart. Explain your choice of axes, as well as each store’s 

positioning. 

2. Do you agree that the events described in this case are contributing to the blurred positioning 

of jewelry retailing? Explain your answer and its ramifications. 

3. What are the pros and cons of Tiffany selling items priced as low as $200? 

4. As a jewelry shopper, how would you expect the total retail experience to differ in Wal-Mart, 

department stores, and high-end retailers? 

1. As an independent supermarket operator, would you want to become a Piggly Wiggly 

franchisee? Why or why not? 

2. What are the advantages to Piggly Wiggly of having franchised outlets instead of its own 

stores? The Disadvantages? 

3. What criteria should Piggly Wiggly use in evaluating potential franchisees? 

4. Should Fleming require Fresh Brands to use the Piggly Wiggly name and all of its promotions? 

Explain your answer. 

1. Is the new high-tech research environment going to eliminate the use of human researchers? 

Explain your answer. 

2. What are the pros and cons of using 3-D CAD systems for marketing research purposes versus 

traditional focus groups? 

3. Describe the ideal marketing research uses for 3-D animation software in the creation of a 

virtual grocery shopping environment for supermarkets. 

4. Devise a short consumer questionnaire for Burger King to use in assessing its 3-D CAD 

simulations. 

1. Describe how accounting irregularities can play havoc with a firm’s reputation, supplier 

relations, and manager morale. 

2. Discuss other means of measuring and improving financial performance at Dollar General. 

3. What are the financial management pros and cons of Dollar General’s placing greater emphasis 

on perishables? 

4. Evaluate Dollar General’s inventory management initiatives.

1. Evaluate Sports Authority’s new design in light of the retailer’s objectives. 

2. Discuss the pros and cons of Sports Authority’s use of specialty boutiques instead of its 

previous warehouse format. 

3. Develop a promotional campaign for Sports Authority to capitalize on “the authority” image. 

4. Do you think the WTSA network will prove to be a major contributor to Sports Authority’s 

atmospherics or will it turn out to be a fad? Explain your answer. 

Sales & Distribution Management 

1. What action should the Phillips Company have taken to change the company image in the 

public utility field? 

1. Describe Castleberry’s major operations responsibilities. How well is he carrying out each of 

these responsibilities? 

2. What kind of planning activities should Castleberry be carrying out regularly? What planning 

areas need immediate attention? 

3. How do you suppose Castleberry’s time should be divided operations and planning? 

1. Suggest what Wagner should have done to reduce personnel turnover and eliminate the other 

problems at Central CATV. 

1. If you were acting as a consultant for the Driskill Company, what recommendations would you 

make with respect to the preparation of quotas of the sales force? 

2. How would you evaluate the arguments of the sales manager and the marketing research 

director? 

GENERAL MANAGEMENT 

CASE: 1: TRI – STATE TELEPHONE 

John Godwin, Chief executive of Tri – State Telephone, leaned back in his chair and looked at the ceiling. 

How was he ever going to get out of this mess? At last night’s public hearing. 150 angry customers had 

marched in to protest Tri – State’s latest rate request. After the rancorous shouting was over and the 

acrimonious signs put away, the protesters had presented state regulators with some sophisticated 

economic analyses in support of their case. Additionally, there were a number of emotional appeals from 

elderly customers who regarded phone service as their lifeline to the outside world 

Tri – State Telephone operated in three states and had sales of over $3 billion. During the last five years, 

the company had experienced a tremendous amount of change. In 1984, the AT & T divestiture sent 

shock waves throughout the industry, and Tri-State Telephone had felt the effects, as pricing for long 

distance telephone service changed dramatically. The Federal Communications Commission instituted a 

charge to the effect that customers should have “access” to long – distance companies whether or not

they were in the habit of making long distance calls. Consumer groups, including the Consumer 

Federation of America and the Congress of Consumer Organizations, had joined the protest, increasing 

their attention on the industry and intervening in regulatory proceedings wherever possible. The FCC 

was considering deregulating as much of the industry as possible, and congress was looking over the 

commissioner’s shoulder. Meanwhile, the Department of Justice and Judge Harold Greene both of whom 

were responsible for monitoring the AT & T divestiture) continued to argue about what business 

companies like Tri – State should be engaged in. 

In addition, technology was changing rapidly. Cellular telephones, primarily used in cars, were now 

hand-held and could be substituted for standard phones. Digital technology was going forward, leading 

to lower casts and requiring companies like Tri – state to invest to keep up with the state of the art. 

Meanwhile, rate increases negotiated during the inflationary 1970s were keeping earnings higher than 

regulators would authorize. New “Intelligent” terminals and software developments gave rise to new 

uses for the phone network (such as using the phone for an a arm system), but as long as customers paid 

one flat fee, the phone company could not benefit from these new services. 

Godwin’s company has recently proposed a new pricing system whereby users of local telephone services 

would simply pay for what they used rather than a monthly flat fee. All of the senior managers were 

convinced that the plan was fairer, even though some groups who used the phone with notable frequency 

(like real estate agents) would pay more. It would give the company an incentive to bring new services to 

their customers, and customers would be able to choose which ones to buy. None of them had 

anticipated the hue and cry from the very customers who would save money under the new plan. For 

instance, Godwin’s studies showed that the elderly were very light users of local service and could save as 

much as 20 percent under the new plan. 

After the debacle at the hearing the previous night, Godwin was unsure how to proceed. If he backed off 

the new pricing plan, he would have to find a different way to meet the challenges of the future – may be 

even different businesses to augment company income. Alternatively, the company could not stand the 

negative press from a protracted battle, even though Godwin thought that the regulators were favorably 

disposed toward his plan. In fact, Godwin himself believed the company should help its customers rather 

than fight with them. 

Questions: 

1. Who are the stakeholders in this case? 

2. Which stakeholders are most important? 

3. What are the critical trends in Tri – State’s environment? 

4. Why do you think Tri – State’s customers are so upset? 

5. What should John Godwin do?

CASE NO. 2: FRESH IDEAS AT FRESH FIELDS 

Fresh Fields may be a supermarket, but what it’s super at selling is its image : “Good for you foods.” 

A New Age grocery store - ‘Fresh Fields’ falls somewhere between a health food store and a traditional 

supermarket. It is not merely a health food store, because it carries a wider variety of foods including 

fresh pasta, baked goods, sea-food and deli selections. What distinguishes Fresh Fields from 

supermarkets lies in what is absent from the shelves, rather than what is present, for Fresh Fields 

shoppers will not find foods containing lots of preservatives and artificial flavorings, such as Jell – O and 

Oreos, that they can purchase at other supermarkets. What Fresh Fields offers is “ organic and 

conventional produce, meats, seafood, dairy products, baked goods from an in – store bakery, deli items 

gourmet and vegetarian prepared foods, a wide array of cheese, a full grocery department, an extensive 

selection of supplements, skin enriching cosmetics and natural health care products and environmentally 

friendly household goods.” 

The arrival of Fresh Fields coincides with that of the New Age, health – conscious trend of the 1990s, and 

the company has not hesitated in taking advantage of consumers’ new whopping preferences resulting 

from the trend. According to a 1992 survey by Health Focus, a Pennsylvania – based research firm, 90 

percent of shoppers say that health has become a factor in determining the food they buy. This perhaps 

accounts for why many Americans are willing to pay up to 20 percent more for natural foods. Actually, 

the Fresh Fields premium tends to hover closer to 5 percent, and when in season, Fresh Field’s locally 

grown organic produce can even cost less than produce sold at other supermarkets. 

A team of entrepreneurs began Fresh Fields in 1991. The team included 33 year old Mark Ordain, former 

Goldman Sachs investment banker as CEO and President, 75 years Old Leo Kahn, founder of Staples, the 

prosperous office – supply sores, as chairman and 44 year old Jack Murphy, former manager of the 

Heartland supermarket chain in New England, as Chief operating officer. 

Within the first 19 months, five Fresh Fields locations opened in Maryland and Virginia. Expanding into 

Pennsylvania and Illinois, by mid – 1994 Fresh Fields had opened a total of 14 stores in the four states, 

with more in the planning stages. 

Much of Fresh Field’s success can be attributed to the fact that the company offers only the freshest 

produce, often from local growers. The company screens growers to find those who use natural methods 

of pest management and apply the least amount of agricultural chemicals. In addition, Fresh Fields seeks 

meat and poultry from farms, not factories, to avoid the growth – promoting drugs often used. Fresh 

Fields also makes an effort to get to know the people who catch the seafood, and seeks out fish caught in 

deep, clean waters, not from coastal waters threatened by pollution. 

According to Kahn, though, the key to Fresh Field’s success lies in pleasing the customer. “Everybody 

says the same things please the customer – but while everybody says it, not too many practice it. The 

customer is smarter than all of us. Here we’re building an organization that zeroes in and keeps 

customer satisfaction in mind.” 

Instilled in Fresh Fields is a warm, friendly caring culture that begins with Kahn and travels through to all 

stakeholders: employees, suppliers, customers, community members. Whereas at other stores, such as 

Wal – Mart, there is a single, symbolic greeter by the door, every employee at Fresh Field is a sort of 

“greeter”, and he or she looks up, smiles and says “hello” to shoppers as they pass by. Within the 

company, there are no employees, there are only “associates” many of whom Kahn knows by name.

Much of what Fresh Fields is about is relationship building. The warm relationship between the company 

and associates lies at the heart. From there, associates build relationship with suppliers to add the 

personal touch that is integral to the Fresh Fields quality image. 

As shoppers walk through the stores, numerous samples are offered. 

“Originally, I bought organic produce and spent $25 to $30 every week or two.” Says Merri Mukai, a 

homemaker in Annandale, Virginia. “Then I tried the baked goods and upped my spending by $60. Now 

I’m buying meats and eyeing the fish. They’ve definitely got me hooked.” 

Says Fresh Fields, “We guarantee your satisfaction unconditionally. You can consider our guarantee as an 

opportunity to be adventurous and to try new products, without risk. If for any reason you are less than 

completely satisfied with something you purchase at Fresh Fields, we will cheerfully offer you a full 

refund.” 

Questions: 

1. What economic and social factors should Fresh Fields managers watch? 

2. Suppose you manage a local supermarket and Fresh Fields comes to town. How would you 

reinvent your organization to meet the challenges posed by Fresh Fields?

CASE: 3: RESPONDING TO ALLEGATIONS OF RACISM: FLAGSTAR AND THE PLEDGE 

The 1990 s have witnessed an increased emphasis on valuing diversity. With both the marketplace and 

the workforce becoming more and more diverse, many managers have redesigned their companies 

cultures to reflect and encourage multiculturalism. Changing a company’s culture, however, is often 

more difficult than managers might first believe. At Denny”s for example, promoting multiculturalism 

required a reworking of its corporate culture from top to bottom. 

In the early 1990s, Denny’s found itself the target of numerous allegations of racism, by both customers 

and employees. Black customers asserted that they were not receiving the same treatment at Denny’s as 

white customers. Some complained that they were either forced to wait for their food longer than white 

customers or denied service entirely, others said that they were forced to pre-pay for their meals while 

white customers in the restaurant were not. There were also allegations that Denny’s restaurants would 

close if there were too many black customers. In addition, Denny’s was accused of discriminatory hiring 

practices as well as preventing blacks and other minorities from reaching management and franchise 

positions. None of this garnered much attention, however, until a suit was filed on March 24, 1993, by a 

group of minority customers in San Jose, California, who made the all – too – familiar allegation that 

Denny’s had required cover charges and pre-payment of meals from minority customers, but not from 

white customers. 

In response to these charges, Denny’s parent company, Flagstar, formally apologized to the customers, 

and Flagstar CEO Jerry Richardson dropped the cover charge and pre-payment policies and explained 

that they had been intended to prevent late night “ dine – and – dash” theft and that any discriminatory 

implementation of them was in direct violation of corporate policies. Richardson admitted, however, that 

he had been unaware that the cover charge and pre-payment policies even existed within the company. 

Furthermore, Richardson began talks with civil rights groups such as the NAACP. Flagstar also signed a 

consent decree issued by the Justice Department that required spot testing of Denny’s restaurants for 

discriminatory practices as well as an anti-discrimination training program for all Denny’s staffers. “ Our 

company does not tolerate discrimination of any kind,” Richardson assured all, and his actions seemed to 

support his words. 

Then, on May 24, 1993, six black Secret Service agents filed suit against Denny’s for allegedly having 

denied them service at a Denny’s in Annapolis, Maryland. The six men claimed that while they received 

deliberately slow service, their white counter parts were served in a timely fashion. “Hearing the 

allegations made yesterday by Six African – American Secret Service agents on national television that 

they were not treated fairly at Denny’s was a painful experience for our company,” Richardson admitted. 

The highly publicized suit served as a catalyst that set off a whirlwind of changes throughout Flagstar. In 

a late May Richardson issued an internal memo that marked the beginning of Richardson’s pledge to 

change. “ I am distressed that some people in our company haven’t gotten the message that we will not 

tolerate unfair treatment of customers,” he wrote. “The past year has been a trying experience, 

particularly for many of our African – American employees who are embarrassed by what happened. This 

is my personal pledge to them to restore their pride in Denny’s. 

Richardson stopped promising change and started creating it. On July 1, 1993, Flagstar reached an 

historic agreement with the NAACP. The agreement, which was the most far-reaching arrangement the 

civil – rights organization had ever signed, represented a breakthrough in relations between minorities 

and businesses. The plan targeted several specific problem areas within Flagstar. For example, of 

Flagstar’s more than 120,000 workers, 20 percent were black, but only 4.4. percent of its managers were 

black. Under the agreement, at least 12 percent of Flagstar’s managers will be black by the 2000. The 

company also wanted to increase the number of black-owned franchises; only one of Denny’s 405

franchises was owned by a black person as of 1993, but Flagstar planned to have at least 53 black-owned 

franchise by 1997. Flagstar also agreed to direct more marketing funds toward minority advertising and 

to begin purchasing more goods and services from minority – owned businesses. In addition, Flagstar 

promised to appoint at least one minority to its board of directors. In all the plan will direct more than 

one billion dollars in jobs and economic benefits to minority workers and companies by the year 2000. 

Richardson also undertook efforts to restore Denny”s reputation as well as his own at the forefront of his 

efforts was “The Pledge”. “The Pledge” was the name given to a 60 – second TV spot, which aired in 41 

television markets and on the Black Entertainment Television network during a two-week period in June 

1993. In it, Jerry Richardson and a representative sample of Flagstar’s 46,000 employees endorsed a 

solemn pledge to treat customers with “respect, dignity, and fairness.” “The whole idea for the ‘pledge’ 

started with our desire to express support for our own employees.” Explained David Hurwitt, Flagstar’s 

senior vice president of marketing “These people have been very much under the gun. We chose 

television for this special campaign because we felt it was important to show people exactly who the 

Denny’s employees are”. Overall, response to “The Pledge” was favourable. “ Our phone has been ringing 

off the hook since Denny’s aired this ad,” said W. Gregory Wims, president of the NAACP in Rockville, 

Maryland, the largest branch in the Washington, D.C.area. “About 90 percent of our members approve of 

the commercials and the steps Denny’s has been taking to improve relations with people of color. 

Experience, however, had taught Flagstar that mere policy statements do little good in the absence of 

training and monitoring. With this in mind, Flagstar reaffirmed its commitment to its agreement with the 

Department of Justice by steping up its multicultural training programs and agreeing to allow the NAACP 

to conduct its own inspection of Denny’s restaurants. Denny’s also set up a hot line for employees to use 

to report possible instances of discrimination. In addition, Flagstar made significant management 

changes during the summer of 1993 by installing three executives considered particularly sensitive to 

diversity in the workplace: Norman Hill, Joe Russell, and Ron Petty. Russell was appointed head of the 

diversity training program, and Hill came on board to oversee field hiring. “There are companies that 

bury their heads in the sand and say, I’m going to conduct my business the same way I’ve always 

conducted my business,” said Petty. “And then there are enlightened companies that say, “There are 

opportunities outside of the way we’ve normally done business.” 

The steps taken by Flagstar have been significant, not only because of the model the company has set for 

other companies, but also because of Flagstar’s own holdings, including 530 Hardee’s fast food units, 

1,400 Denny’s family restaurants, 200 Quincy’s steak houses, 120 El Pollo Loco outlets and more than 

2,000 Canteen Corp. Food and Recreation Service accounts. The community’s response to the allegations 

against Denny’s confirm that multiculturalism can no longer be ignored. 

Questions: 

1. How would you describe the organizational culture at Flagstar? 

2. How does Flagstar deal with diversity? 

3. What challenges could Flagstar face in its near future?

CASE: 4: DISNEY’S DESIGN 

The Walt Disney Company is heralded as the world’s largest entertainment company. It has earned this 

astounding reputation through tight control over the entire operation : control over the open – ended 

brainstorming that takes place 24 hours a day ; control over the engineers who construct the fabulous 

theme – park rides; control over the animators who create and design beloved characters and 

adventurous scenarios ; and control over the talent that brings the many concepts and characters to life. 

Although control pervades the company, it is not too strong a grip. Employees in each department are 

well aware of their objectives and the parameters established to meet those objectives. But in 

conjunction with the pre-determined responsibilities, managers at Disney encourage independent and 

innovative thinking. 

People at the company have adopted the phrase “Dream as a Team” as a reminder that whimsical 

thoughts, adventurous ideas, and all – out dreaming are at the core of the company philosophy. The over 

all control over each department is tempered by this concept. Disney managers strive to empower their 

employees by leaving room for their creative juices to flow. In fact, managers at Disney do more than 

encourage innovation. They demand it. Projects assigned to the staff “imaginers” seem impossible at 

first glance. At Disney, doing the seemingly impossible is part of what innovation means. Teams of 

imaginers gather together in a brainstorming session known as the “Blue Sky” phase. Under the “Blue 

Sky”, an uninhibited exchange of wild, ludicrous, outrageous ideas, both “ good” and “ bad”, continues 

until solutions are found and the impossible is done. By demanding so much of their employees, Disney 

managers effectively drive their employees to be creative. 

Current Disney leader Michael Eisner has established the “Dream as a Team” concept. Eisner realized 

that managers at Disney needed to let their employees brainstorm and create with support. As Disney 

president Frank Weds says, “If a good idea is there, you know it, you feel it, you do it, no matter where it 

comes from.” 

Questions: 

1. What environmental factors influenced management style at Disney? 

2. What kind(s) of organizational structure seem to be consistent with “Dream as a Team”? 

3. How and where might the informal organization be a real asset at Disney?

CASE: 5: “THAT’S NOT MY JOB” – LEARNING DELEGATION AT CIN-MADE 

When Robert Frey purchased Cin – Made in 1984, the company was near ruin. The Cincinnati, Ohi-based 

manufacturer of paper packaging had not altered its product line in 20 years. Labor costs had hit the 

ceiling, while profits were falling through the floor. A solid quarter of the company’s shipments were late 

and absenteeism was high. Management and workers were at each other’s throats. 

Ten years later, Cin – Made is producing a new assortment of highly differentiated composite cans, and 

pre-tax profits have increased more than five times. The Cin – Made workforce is both flexible and deeply 

committed to the success of the company. On-time delivery of products has reached 98 percent, and 

absenteeism has virtually disappeared. There are even plans to form two spin – off companies to be 

owned and operated by Cin-Made employees. In fact, at the one day “Future of the American Workforce” 

conference held in July 1993, Cin-Made was recognized by President Clinton as one of the best – run 

companies in the United States. 

“How did we achieve this startling turnaround?” Mused Frey; “Employee empowerment is one part of 

the answer. Profit sharing is another.” 

In the late spring of 1986, relations between management and labor had reached rock bottom. Having 

recently suffered a pay cut, employees at Cin- Made came to work each day, performed the duties 

required of their particular positions, and returned home-nothing more. Frey could see that his company 

was suffering. “To survive we needed to stop being worthy adversaries and start being worthy partners,” 

he realized. Toward this end, Frey decided to call a meeting with the union. He offered to restore worker 

pay to its previous level by the end of the year. On top of that, he offered something no one expected: a 

15 percent share of Cin-Made’s pre-tax profits. “I do not choose to own a company that has an adversarial 

relationship with its employees.” Frey proclaimed at the meeting. He therefore proposed a new 

arrangement that would encourage a collaborative employee-management relationship “Employee 

participation will play an essential role in management.” 

Managers within the company were among the first people to oppose Frey’s new idea of employee 

involvement. “My three managers felt they were paid to be worthy adversaries of the unions.” Frey 

recalled. It’s what they’d been trained for. It’s what made them good managers. Moreover, they were not 

used to participation in any form, certainly not in decision making.” The workers also resisted the idea of 

extending themselves beyond the written requirements of their jobs. “ (Employees) wanted generous 

wages and benefits, of course, but they did not want to take responsibility for anything more than doing 

their own jobs the way they had always done them,” Frey noted. Employees were therefore skeptical of 

Frey’s overtures toward “employee participation.” “We thought he was trying to rip us off and shaft us,” 

explained Ocelia Williams, one of many Cin-Made employees who distrusted Frey’s plans. 

Frey, however, did not give up, and he eventually convinced the union to agree to his terms. “ I wouldn’t 

take no for an answer,” he asserted. “Once I had made my two grand pronouncements, I was determined 

to press ahead and make them come true.” But still ahead lay the considerable challenge of convincing 

employees to take charge: 

I made people meet with me, then instead of telling them what to do, I asked them They resisted. 

“How can we cut the waste on his run?” I’d Say, or “How are we going to allocate the Overtime on this 

order?” 

“That’s not my job,” they’d say.

“But I need your input,” I’d say. “How in the World can we have participative management If you won’t 

participate? 

“I don’t know,” they’d say. “Because that’s not my job either, that’s your job.” 

Gradually, Frey made progress. Managers began sharing more information with employees. Frey was 

able slowly to expand the responsibilities workers would carry. Managers who were unable to work with 

employees left, and union relations began to improve. Empowerment began to happen. By 1993, Cin 

Made employees were taking responsibility for numerous tasks. Williams, for example, used to operate a 

tin-slitting machine on the company’s factory floor. She still runs that same machine, but now is also 

responsible for ordering almost $ 100,000 in supplies. 

Williams is just one example of how job roles and duties have been redefined throughout Cin-Made. 

Joyce Bell, president of the local union, still runs the punch press she always has, but now also serves as 

Cin- Made’s corporate safety director. The company’s scheduling team, composed of one manager and 

five lead workers from various plant areas, is charged with setting hours, designating layoffs, and 

deciding when temporary help is needed. The hiring review team, staffed by three hourly employees and 

two managers, is responsible for interviewing applicants and deciding whom to hire. An employee 

committee performs both short – and long – term planning of labor, materials, equipment, production 

runs, packing, and delivery. Employees even meet daily in order to set their own production schedules. 

“We empower employees to make decisions, not just have input,” Frey remarked. “I just coach.” 

Under Frey’s new management regime, company secrets have virtually disappeared. All Cin-Made 

employees, from entry-level employees all the way to the top, take part in running the company. In fact, 

Frey has delegated so much of the company’s operations to its workers that he now feels little in the dark. 

“ I now know very little about what’s going on, on a day-to-day basis,” he confessed. 

At Cin-Made, empowerment and delegation are more than mere buzzwords; they are the way of doing 

business – good business. “ We, as workers, have a lot of opportunities,” said Williams. “ If we want to 

take leadership, it’s offered to us.” 

Questions: 

1. How were principles of delegation and decentralization incorporated into Cine – Made 

operations? 

2. What are the sources and uses of power at Cin – Made? 

3. What were some of the barriers to delegation and empowerment at Cin –Made? 

4. What lessons about management in a rapidly changing marketplace can be learned from the 

experience of Cin – Made?

CASE NO. 6: HIGH-TECH ANSWERS TO DISTRIBUTION: PROBLEMS AT ROLLERBLADE 

When a manger finds that demand exceeds inventory, the answer lies in making more goods. When a 

manager finds that inventory exceeds demand, the answer lies in making fewer goods. But what if a 

company management finds that they just do not know which situation applies? 

This is the situation that recently confronted management at Rollerblade, the popular skate manufacturer 

based in Minnetonka, Minnesota. Rollerblade has been one of the leading firms in the fast growing high 

performance roller skate marketplace, it matters a great deal for Rollerblade managers whether demand 

and inventory are in balance, or not. 

Rollerblade was in a bind. The product literally could not be shipped out the door. The managers found 

that workers were not able to ship products because, as a result of poor storage structures, they could not 

find the products. Once they were found, overcrowded aisles, in addition to other space constraints, still 

prevented efficient shipping because the workers could barely manage to get the products out the door. 

“We were out of control because we didn’t know how to use space and didn’t have enough of it,” said Ian 

Ellis, director for facilities and safety. “Basically, there was no more useable space left in the warehouse, 

a severe backlog of customer orders, and picking errors were clearly in the unacceptable range,” added 

Ram Krishnan, Principal of NRM Systems, based in St. Paul, Minnesota. 

The answer for Rollerblade was found in technology. High-tech companies have introduced a collection 

of computer simulations, ranging in cost roughly from $10,000 to $30,000, that assist managers in 

generating effective facility designs. With the help of layout Master IV simulation software, developed by 

NRM, Rollerblade Management was able to implement a new distribution design. As a result of the 

distribution improvement, Rollerblade was able to increase the number of customer orders processed 

daily from140 to 410 and eliminate order backlog. “Now we have a different business,” says Ellis. “The 

new layout has taken us from being in a crunch, to being able to plan. 

Questions: 

1. With retailers as their primary customers, what customer competitive imperatives could be 

affected by Rollerblade’s inventory problems? 

2. How appropriate might a just – in – time inventory system is for a product such as roller 

skates?” 

3. What opportunities are therefore Rollerblade managers to see themselves as selling services, 

instead of simply roller skates? 

ORGANIZATIONAL BEHAVIOR 

Note: Attend any 04 case studies. All Cases carry equal marks. 

CASE 01: THE FLYNN EFFECT 

CASE 02: PUSHING PAPER CAN BE FUN 

CASE 03: HOW DID I GET HERE?

CASE 04: THE SHIPPING INDUSTRY ACCOUNTING TEAM 

CASE 05: BRIDGING THE TWO WORLDS—THE ORGANIZATIONAL DILEMMA 

CASE 06: CONFLICT IN CLOSE QUARTERS 

CASE 01: THE FLYNN EFFECT 

Given that a substantial amount of intellectual ability (up to 80 percent) is inherited, it 

might surprise you to learn that intelligence test scores are rising. In fact, scores have 

risen so dramatically that today's great-grandparents seem mentally deficient by 

comparison. 

First, let's review the evidence for rising test scores. Then, we'll review explanations for 

the results. 

On an IQ scale where 100 is the average, scores have been rising about 3 points per 

decade, meaning that if your grandparent scored 100, the average score for our 

generation would be around 115. That's a pretty big difference - about a standard 

deviation - meaning that someone who's from your grandparent's generation whose 

score was at the 84th percentile would only be average (50th) percentile by today's 

norms. 

James Flynn is a New Zealand researcher credited with first documenting the rising 

scores. He first reported the results in 1984, when he found that almost everyone who 

took a well-validated IQ test in the 1970s did better than those who took it in the 1940s. 

The results appear to hold up across cultures. Test scores are rising not only in the 

United States but in most other countries in which the effect has been tested, too. 

What explains the Flynn Effect? Researchers are not entirely sure, but some of the 

explanations offered are: 

1. Education. Students today are better educated than their ancestors, and education 

leads to higher test scores. 

2. Smaller families. In 1900, the average couple had four children; today the number 

is less than two. We know firstborns tend to have higher IQs than other children, 

probably because they receive more attention than their later-born siblings. 

3. Test-taking savvy. Today's Children have been tested so often that they are test 

savvy: They know how to take tests and how to do well on them.

4. Genes. Although smart couples tend to have fewer, not more, children, it's 

possible that due to better education, tracking, and testing, those who do have the right 

genes are better able to exploit those advantages. Some genetics researchers also have 

argued that if two people of different intelligence mate, because the gene of the more 

intelligent mate is stronger, it wins out, meaning the child's IQ will be closer to the IQ of 

the smarter parent. 

Questions: 

1. Do you believe people are really getting smarter? Why or why not? 

2. Which of the factors explaining the Flynn Effect do you buy? 

3. Are there any societal advantages of disadvantages to the Flynn Effect? 

CASE 02: PUSHING PAPER CAN BE FUN 

A large city government was putting on a number of seminars for managers of various 

departments throughout the city. At one of these sessions the topic discussed was 

motivation—how to motivate public servants to do a good job. The plight of a police 

captain became the central focus of the discussion: 

I’ve got a real problem with my officers. They come on the force as young, 

inexperienced rookies, and we send them out on the street, either in cars or on a beat. 

They seem to like the contact they have with the public, the action involved in crime 

prevention, and the apprehension of criminals. They also like helping people out at fires, 

accidents, and other emergencies. 

The problem occurs when they get back to the station. They hate to do the paperwork, 

and because they dislike it, the job is frequently put off or done inadequately. This lack 

of attention hurts us later on when we get to court. We need clear, factual reports. They 

must be highly detailed and unambiguous. As soon as one part of a report is shown to 

be inadequate or incorrect, the rest of the report is suspect. Poor reporting probably 

causes us to lose more cases than any other factor. 

I just don’t know how to motivate them to do a better job. We’re in a budget crunch, 

and I have absolutely no financial rewards at my disposal. In fact, we’ll probably have to 

lay some people off in the near future. It’s hard for me to make the job interesting and 

challenging because it isn’t-it’s boring, routine paperwork, and there isn’t much you can 

do about it.

Finally, I can’t say to them that their promotions will hinge on the excellence of their 

paperwork. First at all, they know it’s not true. If their performance is adequate, most 

are more likely to get promoted just by staying on the force a certain number of years 

than for some specific outstanding act. Second, they were trained to do the job they do 

out in the streets, not to fill out forms. All through their careers the arrests and 

interventions are what get noticed. 

Some people have suggested a number of things, like using conviction records as a 

performance criterion. However, we know that’s not fair—too many other things are 

involved. Bad paperwork increases the chance that you lose in court, but good 

paperwork doesn’t necessarily mean you’ll win. We tried setting up the team 

competitions based on the excellence of the reports, but the officers caught on to that 

pretty quickly. No one was getting any type of reward for winning the competition, and 

they figured why should they bust a gut when there was on payoff. 

I just don’t know what to do. 

Questions: 

1. What performance problems is the captain trying to correct? 

2. Use the MARS model of individual behavior and performance to diagnose the 

possible causes of the unacceptable behavior. 

3. Has the captain considered all possible solutions to the problem? If not, what else 

might be done? 

CASE 03: HOW DID I GET HERE? 

Something was not right. John Breckenridge opened his eyes, saw the nurse’s face, and 

closed them once more. Cobwebs slowly cleared from his brain as he woke up from his 

brain as he woke up from the operation. He felt a hard tube in his nostril, and tried to lift 

his hand to pull it out, but it was strapped down to the bed. John tried to speak but 

could make only a croaking sound. Nurse Thompson spoke soothingly, “Just try to relax, 

Mr. Breckenridge. You had a heart attack and emergency surgery, but you’re going to be 

OK.” 

Heart attack? How did I get here? As the anesthesia wore off and the pain set in, John 

began to recall the events of the past year; and with the memories came another sort of 

pain – that of remembering a life where success was measured in hours worked and 

things accomplished, but which of late had not measured up.

John recalled his years in college, where getting good grades had been important, but 

not so much as his newly developing love for Karen, the girl with auburn hair who got 

her nursing degree the same year as he graduated with a degree in software 

engineering. They married the summer after graduation and moved from their sleepy 

university town in Indiana to Aspen, Colorado. There John got a job with a new software 

company while Karen worked evenings as a nurse. Although they didn’t see much of 

each other during the week, weekends were a special time, and the surrounding 

mountains and nature provided a superb quality of life. 

Life was good to the Breckenridges. Two years after they were married, Karen gave birth 

to Josh and two years later to Linda. Karen reduced her nursing to the minimum hours 

required to maintain her license, and concentrated on rearing the kids. John, on the 

other hand, was busy providing for the lifestyle they increasingly became used to, which 

included a house, car, SUV, ski trips, and all of the things a successful engineering 

career could bring. The company grew in leaps and bounds, and John was one of the 

main reasons it grew fast. Work was fun. The company was growing, his responsibilities 

increased, and he and his team were real buddies. With Karen’s help at home, he 

juggled work, travel, and evening classes that led to a master’s degree. The master’s 

degree brought another promotion—this time to vice president of technology at the 

young (for this company) age of 39. 

The promotion had one drawback: It would require working out of the New York office. 

Karen sadly said goodbye to her friends, convinced the kids that the move would be 

good to them, and left the ranch house for another one, much more expensive and 

newer, but smaller and just across the river in New Jersey from the skyscraper where 

her husband worked. Newark was not much like Aspen, and the kids had a hard time 

making friends, especially Josh, who was now 16. He grew sullen and withdrawn and 

began hanging around with a crowd that Karen thought looked very tough. Linda, 

always the quiet one, stuck mostly to her room. 

John’s new job brought with it money and recognition, as well as added responsibilities. 

He now had to not only lead software development but also actively participate in 

steering the company in the right direction for the future, tailoring its offerings to 

market trends. Mergers and acquisitions were the big things in the software business, 

and John found a special thrill in picking small companies with promising software, 

buying them out, and adding them to the corporate portfolio. Karen had everything a 

woman could want and went regularly to a health club. The family lacked for no material 

need. 

At age 41 John felt he had the world by its tail. Sure, he was a bit overweight, but who 

wouldn’t be with the amount of work and entertaining that he did? He drank some, a 

habit he had developed early in his career. Karen worried about that, but he reassured

her by reminding her that he had been really drunk only twice and would never drink 

and drive. Josh’s friends were a worry, but nothing had yet come of it. 

Not all was well, however. John had been successful in Colorado because he thought fast 

on his feet, expressed his opinions, and got people to buy into his decisions. In the New 

York corporate office things were different. All of the top brass except the president and 

John had Ivy League, moneyed backgrounds. They spoke of strategy but would take 

only risks that would further their personal careers. He valued passion, integrity, and 

action, with little regard for personal advancement. They resented him, rightly surmising 

that the only reason he had been promoted was because he was more like he president 

than they were, and he was being groomed as heir apparent. 

On November 2, 2004, John Breckenridge’s world began to unravel. The company he 

worked for, the one he had given so much of his life to build was acquired in a hostile 

takeover. The president who had been his friend and mentor was let go, and the 

backstabbing began in earnest. John found himself the odd man out in the office as the 

others jostled to build status in the new firm. Although his stellar record allowed him to 

survive the first round of job cuts, that survival only made him more of a pariah to those 

around him. Going to work was a chore now, and John had no friends like those he had 

left in Aspen. 

Karen was little help. John had spent nearly two decades married more to his job than 

his wife, and he found she was more of a stranger than a comforter as he struggled in 

his new role. When he spoke about changing jobs, she blew up. “Why did I have to give 

up nursing for your career?” she said. “Why do we have to move again, just because you 

can’t get along at work? Can’t you see what the move did to our kids?” 

Seeing the hurt and anger in Karen’s eyes, John stopped sharing and turned to his bottle 

for comfort. In time that caused even more tension in the home, and it slowed him down 

at work when he really needed to excel. John would often drink himself into oblivion 

when on business trips rather than thinking about where his life and career were going. 

On his last trip he hadn’t slept much and had worked far too hard. Midmorning he had 

been felled by a massive heart attack. 

All of this history passed through John Breckenridge’s mind as he woke after the 

operation. It was time for a change. 

Questions: 

1. Identify the stressors in John Breckenridge’s life. Which ones could he have 

prevented?

2. What were the results of the stress? Would you consider these to be typical to 

stress situations and lifestyle choices John made, or was John Breckenridge unlucky? 

3. Assume you are a career coach retained by John Breckenridge to guide him 

through his next decisions. How would you recommend that John modify his lifestyle and 

behavior to reduce stress? Should he change jobs? Do you believe he is capable of 

reducing his stress alone? If not, where should he seek help? 

CASE 04: THE SHIPPING INDUSTRY ACCOUNTING TEAM 

For the past five years I have been working at McKay, Sanderson, and Smith Associates, 

a mid-sized accounting firm in Boston that specializes in commercial accounting and 

audits. My particular specialty in accounting practices for shipping companies, ranging 

from small fishing fleets to a couple of the big firms with ships along the East Coast. 

About 18 months ago McKay, Sanderson, and Smith Associates became part of a large 

merger involving two other accounting firms. These firms have offices in Miami, Seattle, 

Baton Rouge, and Los Angeles. Although the other two accounting firms were much 

larger than McKay, all three firms agreed to avoid centralizing the business around one 

office in Los Angeles. Instead the new firm—called Goldberg, Choo, and McKay 

Associates—would rely on teams across the country to “leverage the synergies of our 

collective knowledge” (an often-cited statement from the managing partner soon after 

the merger). 

The merger affected me a year ago when my boss (a senior partner and vice president 

of the merger) announced that I would be working more closely with three people from 

the other two firms to become the firm’s new shipping industry accounting team. The 

other team members were Elias in Miami, Susan in Seattle, and Brad in Los Angeles. I 

had met Elias briefly at a meeting in New York City during the merger but had never met 

Susan or Brad, although I knew that they were shipping accounting professionals at the 

other firms. 

Initially the shipping team activities involved e-mailing each other about new contracts 

and prospective clients. Later we were asked to submit joint monthly reports on 

accounting statements and issues. Normally I submitted my own monthly reports to 

summarize activities involving my own clients. Coordinating the monthly report with 

three other people took much more time, particularly because different accounting 

documentation procedures across the three firms were still being resolved. It took 

numerous e-mail messages an a few telephone calls to work out a reasonable monthly 

report style.

During this aggravating process it became apparent—to me at least—that this team 

business was costing me more time than it was worth. Moreover, Brad in Los Angeles 

didn’t have a clue about how to communicate with the rest of us. He rarely replied to e- 

mail. Instead he often used the telephone tag. Brad arrived at work at 9:30 a.m. in Los 

Angeles (and was often late), which is early afternoon in Boston. I typically have a 

flexible work schedule from 7:30 a.m. to 3:30 p.m. so I can chauffeur my kids after 

school to sports and music lessons. So Brad and I have a window of less than three 

hours to share information. 

The biggest nuisance with the shipping specialist accounting team started two weeks 

ago when the firm asked the four of us to develop a new strategy for attracting more 

shipping firm business. This new strategic plan is a messy business. Somehow we have 

to share our thoughts on various approaches, agree on a new plan, and write a unified 

submission to the managing partner. Already the project is taking most of my time just 

writing and responding to e-mail and talking in conference calls (which none of us did 

much before the team formed). 

Susan and Brad have already had two or three misunderstandings via e-mail about their 

different perspectives on delicate matters in the strategic plan. The worst of these 

disagreements required a conference call with all of us to resolve. Except for the most 

basic matters, it seems that we can’t understand each other, let alone agree on key 

issues. I have come to the conclusion that I would never want Brad to work in my 

Boston office (thanks goodness he’s on the other side of the country). Although Elias 

and I seem to agree on most points, the overall team can’t form a common vision or 

strategy. I don’t know how Elias, Susan, or Brad feel, but I would be quite happy to 

work somewhere that did not require any of these long-distance team headaches. 

Questions: 

1. What type of team was formed here? Was it necessary, in your opinion? 

2. Use the team effectiveness model in Chapter 9 and related information in this 

chapter to identify the strengths and weaknesses of this team’s environment, design, 

and processes. 

3. Assuming that these four people must continue to work as a team, recommend 

ways to improve the team’s effectiveness. 

CASE 05: BRIDGING THE TWO WORLDS—THE ORGANIZATIONAL DILEMMA 

William Todorovic, Purdue University

I had been hired by Aluminum Elements Corp. (AEC), and it was my first day of work. I 

was 26 years old, and I was now the manager of AEC’s customer service group, which 

looked after customers, logistics, and some of the raw material purchasing. My superior, 

George, was the vice president of the company. AEC manufactured most its products, a 

majority of which were destined for the construction industry, from aluminum. 

As I walked around the shop floor, the employees appeared to be concentrating on their 

jobs, barely noticing me. Management held daily meetings in which various production 

issues were discussed. No one from the shop floor was invited to these meetings unless 

there was a specific problem. Later I also learned that management had separate 

washrooms and separate lunchrooms, as well as other perks that floor employees did 

not have. Most of the floor employees felt that management, although polite on the 

surface, did not really feel they had anything to learn from the floor employees. 

John, who worked on the aluminum slitter, a crucial operation required before any other 

operations could commence, had suffered a number of unpleasant encounters with 

George. As a result George usually sent written memos to the floor to avoid a direct 

confrontation with John. Because the directions in the memos were complex, these 

memos were often more than two pages in length. 

One morning as I was walking around, I noticed that John was very upset. Feeling that 

perhaps there was something I could do, I approached John and asked him if I could 

help. He indicated that everything was just fine. From the looks of the situation and 

John’s body language, I felt that he was willing to talk, but John knew that this was not 

the way things were done in AEC. Tony, who worked at the machine next to John’s, then 

cursed and said that the office guys cared only about schedules, not about the people 

down on the floor. I just looked at him, and then said that I began working here only 

last week, and I thought that I address some of their issues. Tony gave me a strange 

look, shook his head, and went back to his machine. I could hear him still swearing as I 

left. Later I realized that most of the office staff were also offended by Tony’s language. 

On the way back to my office, Lesley a recently hired engineer from Russia, approached 

me and pointed out that the employees were not accustomed to managers talking to 

them. Managers only issued orders and made demands. As we discussed the different 

perceptions between office and floor staff, we were interrupted by a loud lunch bell, 

which startled me. I was happy to join Lesley for lunch, but she asked me why I was not 

eating in the office lunchroom. I replied that if I was going to understand how AEC 

worked, I had to get to know all the people better. In addition, I realized that this was 

not how things were done, and I wondered about the nature of this apparent division 

between the managers and the floor workers. In the lunchroom the other workers were 

amazed to see me there, commenting that I was just new and had not learned the ropes 

yet.

After lunch, when I asked George, my supervisor, about his recent confrontation with 

John, George was surprised that John got upset, and exclaimed, “I just wanted John to 

know that he did a great job, and as a result, we will be able to ship on time one large 

order to the West Coast. In fact, I thought I was complimenting him.” 

Earlier, Lesley had indicated that certain behavior was expected from managers and 

therefore from me. I reasoned that I do not think that this behavior works, and besides 

it is not what I believe or how I care to behave. For the next couple of months I simply 

walked around the floor and took every opportunity to talk to the shop employees. Often 

when the employees related specific information about their workplaces, I felt that it 

went over my head. Frequently I had to write down the information and revisit it later. I 

made a point of listening to them, identifying where they were coming from, and trying 

to understand them. I needed to keep my mind open to new ideas. Because the shop 

employees expected me to make requests and demands, I made a point of not doing 

any of that. Soon enough the employees became friendly and started to accept me as 

one of their own, or at least as a different type of management person. 

During my third month of work the employees showed me how to improve the 

scheduling of jobs, especially those on the aluminum slitter. In fact, the greatest 

contribution was made by John, who demonstrated better ways to combine the most 

common slitting sizes and reduce waste by retaining some of the “common-sized” 

material for new orders. Seeing the opportunity, I programmed a spreadsheet to 

calculate and track inventory. This, in addition to better planning and forecasting, 

allowed us to reduce our new order turnarounds from four to five weeks to one or two 

days. 

By the time I was employed for four months, I realized that members from other 

departments came to me and asked me to relay messages to the shop employees. When 

I asked why they were delegating this task to me, they stated that I spoke the same 

language as the shop employees. Increasingly I became the messenger for the office-tofloor 

ship communication. 

One morning George called me into his office and complimented me on the levels of 

customer service and the improvements that had been achieved. As we talked, I 

mentioned that we could not have done it without John’s help. “He really knows his 

stuff, and he is good,” I said. I suggested that we consider him for some type of 

promotion. Also, I hoped that this would be a positive gesture that would improve the 

communication between the office and shop floor. 

George turned and pulled a flyer out of his desk: “Here is a management skills seminar. 

Do you think we should send John to it?”

“That is a great idea,” I exclaimed. “Perhaps it would be good if he were to receive the 

news from you directly, George.” George agreed, and after discussing some other 

issues, we parted company. 

That afternoon John came into my office, upset and ready to quit. “After all my effort 

and work, you guys are sending me for training seminars. So am I not good enough for 

you?” 

Questions: 

1. What barriers to effective communication existed in Aluminum Elements Corp? 

How did the author deal with these? What would you do differently? 

2. Identify and discuss why John was upset at the end of the case. What should the 

writer do at this time? 

CASE 06: CONFLICT IN CLOSE QUARTERS 

A team of psychologists at Moscow’s Institute for Biomedical Problems (IBMP) wanted to 

learn more about the dynamics of long-term isolation in space. This knowledge would be 

applied to the International Space Station, a joint project of several countries that would 

send people into space for more than six months. It would eventually include a trip to 

Mars taking up to three years. 

IBMP set up a replica of the Mir space station in Moscow. They then arranged for three 

international researchers from Japan, Canada, and Austria 110 days isolated in a 

chamber the size of a train car. This chamber joined a smaller chamber where four 

Russian cosmonauts had already completed half of their 240 days of isolation. This was 

the first time an international crew was involved in the studies. None of the participants 

spoke English as their first language, yet they communicated throughout their stay in 

English at varying levels of proficiency. 

Judith Lapierre, a French-Canadian, was the only female in the experiment. Along with 

obtaining a PhD in public health and social medicine, Lapierre had studied space 

sociology at the International Space University in France and conducted isolation 

research in the Antarctic. This was her fourth trip to Russia, where she had learned the 

language. The mission was supposed to have a second female participant from the 

Japanese space program, but she was not selected by IBMP. 

The Japanese and Austrian participants viewed the participation of a woman as a 

favorable factor, says Lapierre. For example, to make the surroundings more

comfortable, they rearranged the furniture, hung posters on the walls, and put a 

tablecloth on the kitchen table. “We adapted our environment, whereas Russians just 

viewed it as something to be endured,” she explains. “We decorated for Christmas 

because I’m the kind of person who likes to host people.” 

New Year’s Eve Turmoil 

Ironically, it was at one of those social events, the New Year’s Eve party, that events 

took a turn for the worse. After drinking vodka (allowed by the Russian space agency), 

two of the Russian cosmonauts got into a fistfight that left blood splattered on the 

chamber walls. At one point a colleague hid the knives in the station’s kitchen because 

of fears that the two Russians were about to stab each other. The two cosmonauts, who 

generally did not get along, had to be restrained by other men. Soon after that brawl, 

the Russian commander grabbed Lapierre, dragged her out of view of the television 

monitoring cameras, and kissed her aggressively—twice. Lapierre fought him off, but the 

message didn’t register. He tried to kiss her again the next morning. 

The next day the international crew complained to IBMP about the behavior of the 

Russian cosmonauts. The Russian institute apparently took no against the aggressors. 

Instead the institute’s psychologists replied that the incidents were part of the 

experiment. They wanted crew members to solve their personal problems with mature 

discussion without asking for outside help. “You have to understand that Mir is an 

autonomous object, far away from anything,” Vadim Gushin, the IBMP psychologist in 

charge of project, explained after the experiment had ended in March. “If the crew can’t 

solve problems among themselves, they can’t work together.” 

Following IBMP’s response, the international crew wrote a scathing letter to the Russian 

institute and the space agencies involved in the experiment. “We had never expected 

such events to take place in a highly controlled scientific experiment where individuals 

go through a multistep selection process,” they wrote. “If we had known… we would not 

have joined it as subjects.” The letter also complained about IBMP’s response to their 

concerns. 

Informed about the New Year’s Eve incident, the Japanese space program convened an 

emergency meeting on January 2 to address the incidents. Soon after the Japanese 

team member quit, apparently shocked by IBMP’s inaction. He was replaced with a 

Russian researcher on the international team. Ten days after the fight—a little over the 

month the international team began the mission—the doors between the Russian and 

international crews’ chambers were barred at the request of the international research 

team. Lapierre later emphasized that this action was taken because of concerns about 

violence, not the incident involving her. 

A Stolen Kiss or Sexual Harassment

By the end of experiment in March, news of the fistfight between the cosmonauts and 

the commander’s attempts to kiss Lapierre had reached the public. Russian scientists 

attempted to play down the kissing incident by saying that it was one fleeting kiss, a 

clash of cultures, and a female participant who was too emotional. 

“In the West, some kinds of kissing are regarded as sexual harassment. In our culture 

it’s nothing,” said Russian scientist Vadim Gushin in one interview. In another interview 

he explained, “The problem of sexual harassment is given a lot of attention in North 

America but less in Europe. In Russia it is even less of an issue, not because we are 

more or less moral than the rest of the world; we just have different priorities.” 

Judith Lapierre says the kissing incident was tolerable compared to this reaction from 

the Russian scientists who conducted the experiment. “They don’t get it at all,” she 

complains. “They don’t think anything is wrong. I’m more frustrated than ever. The 

worst thing is that they don’t realize it was wrong.” 

Norbert Kraft, the Austrian scientist on the international team, also disagreed with the 

Russian interpretation of events. “They’re trying to protect themselves,” he says. 

“They’re trying to put the fault on others. But this is not a cultural issue. If a woman 

doesn’t want to be kissed, it is not acceptable.” 

Questions: 

1. Identify the different conflict episodes that exist in this case. Who was in conflict 

with whom? 

2. What are the sources of conflict for these conflict incidents? 

3. What conflict management style(s) did Lapierre, the international team, and 

Gushin use to resolve these conflicts? What style(s) would have worked best in the 

situation?


















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