Masters Program in Business Administration - Case Study Solutions

Masters Program in Business Administration (MBA)

Note :- Solve any 4 case study

All case carries equal marks

CASE I

NAVEEN FISHERIES LTD.

The managing director of Naveen Fisheries Ltd. (NFL) received a message from one of the members of the crew that their mechanized boats had sunk at sea off Paradeep Port Trust due to unfavorable weather. The other directors of NFL ascertained the detailed information regarding the incident. All the promoters were fresh graduates.

Naveem, Praveen, Nagain, Ravi and Chandra were the promoters of the organization (NFL at Vishakhapattanam) with a capital contribution of Rs. 25 lakh each. Three of them had an engineering background. The other two were commerce graduates. They had thought of designing the vessels themselves so that the cost each mechanized boat would be reduced from Rs. 30 lakhs (if they bought them) to Rs. 22 Lakh. They designed three boats and these were sent out with a newly - appointed crew. Two vessels were sent to Paradeep and the third to Kakinada. Unfortunately, the weather was unfavourable. All the vessels sank. The crew also did not have experience. Two workers were injured and the rest arrived sagely. There was significant damage to the vessels and the residue was considered scrap. The cost of scrap of the vessels was nominal. As their working capital was scarce, and they were unable to invest more capital, they were in a dilemma whether to continue the business or not.

Case I Questions:

1. What were the reasons for the sinking of the vessels?

The reasons for the sinking of the vessels could be of the following:

1) The weather was not favorable and they didn't foresee it before they sent out their new vessels onto the sea.

The company could have avoided sinking of all the vessels if they probably had foreseen the weather condition since it was their first dry run of their mechanized vessels. Rough waves and heavy storm had always been a major reason behind the sinking of ships, however big and huge they were designed to hit against the waves.

2) They had compensated on the quality of the vessels by using lesser quality materials to reduce the cost since they had a low capital.

The vessels also had the probability that they sank due to the saving they tried to do buy not buying the vessels and designing themselves. Though the designers were of engineering background, they are inexperienced in designing and would not have known the apt materials required for a strong vessel. This is proved from the text that the residue was scrap and they could have got nothing from it.

3) The vessels were not designed properly and it might have malfunctioned during their course on sea.

The ship Titanic though so huge and well designed, it malfunctioned by

hitting iceberg. Similarly, vessels malfunctioning during the course is

also a high probability why the company lost all the vessels.

Sometimes, malfunctioning cannot be avoided when the weather is

unfavorable too.

4) They had not hired experienced staff instead they were all freshly hired.

They had all new hires on the crew, if they were a experienced crew, they would have probably known how to handle the vessel and the situation better. They could have even probably avoided two among them getting injured.

2. How could they reorganize the businesses?

The dilemma could be solved by reorganizing the business efficiently. There are probably two things by which they could improve. They are:

1. Increasing their capital investment in the business:

They should find new sources to increase their capital investment so that they get better designed and efficient vessels which on the long run could give them profit for the increase in investment they made. They can look for investors from outside, and get vessels designed to defend the heavy storms and rough waves.

2. Hiring Experienced People:

Hiring experienced staff on the team can help the company in incurring heavy losses like their experience with fresh hires. They can guide the company in the kind of vessels they need to help them work better, and even avoid loss of employee lives in case of an accident with unfortunate weather conditions.

3. Forming a designing team in the company:

Hiring experienced design people and reduce their cost by self-designing vessels too. Striking deals with other companies that give materials could help them in getting the materials at a lower rate.

CASE II

MNC CORPORATION

At MNC Corporation, a foreman of inspection noticed a mistake in the assembly of transmitter cases. The foreman, a shy man when speaking to his immediate superiors, mentioned this matter to the senior supervisor in a weak, ineffectual manner. The senior supervisor nodded his head and continued to work on a report that he was writing. Later, a production slowdown occurred, and it was discovered that this flaw in the transmitter was the cause. The chief of production engineering, upset because this error had passed inspection unnoticed, reproved the senior supervisor in a brusque manner.

The senior supervisor called in the foreman of inspection and asked why this error had not been brought to his attention. The foreman said, "I told you the other day they were missing same of the punch-outs in those transmitter cases." The senior supervisor said, "Yes, but you did not pound the desk when you told me!"

Case II Questions:

1. Why did the communication problem arise?

The communication problem arose, due to the shyness of the inspection officer and in his inefficiency to report the matter in a strong matter. Being an inspection officer, he would have analyzed the consequence of the defect he