Raju Electronics is one of the major manufacturers of components for electronic appliances, such as televisions, stereo systems and cordless telephones. Mr. Raju started the company in 1962 in the foothills of Himachal Pradesh, with a vision of expansion; Mr. Raju bought a large plot of land for future expansion next to the existing plant. The company currently employs about 700 employees.
With sales soaring through the roof and accumulation of millions of rupees in cash flow, the company decided about a year ago to diversify and add other types of consumer items to its product line. This move was also considered important because the field of electronic goods was becoming saturated and there was a fear of declining profits in the future in this area.
Mr. Dilbagh Singh, a Vice President with the company was asked by the President of the company to form a group that would study and recommend some ideas for new products in the consumer markets within the given facilities and resources of the company. Mr. Singh selected a group of 7 persons from arrears such as production, finance, research and marketing and gave them the responsibility and guidelines for decisions & operations and then gave the group complete freedom to brainstorm and come up with a feasible idea. The group elected Mr. Sharma as their leader and liaison between the group and Mr. Singh.
Group members meet twice a week for brainstorming sessions of discussions of many and after about a period of three months, they come up with the idea of making golf balls and golf clubs. Their reasoning was that because of the availability of various types of household appliances, people were having more leisure time and also the number of middle class families was increasing and the game of golf having an elite image of status and success, would welcomed by the middle class people. With excitement & expectation of appreciation, the group prepared a report and Mr. Sharma gave the report to Mr. Singh.
After about one week, Mr. Singh called Mr. Sharma in his office and informed him of his belief that the idea would not be accepted by the top management, simply because the demand was very limited and the middle class was not yet financially ready to get involved in a very expensive leisure time.
Disappointed at this evaluation, Mr. Sharma went back to his group and asked the members to start working on some other ideas. After another three months of discussions & brainstorming, one idea gained importance. The idea was to manufacture plastic dolls for children with a small tape player inside, which played a one sentence message such as “Hello, My name is Marry” or some thing like that. There would be a number of statements in different dolls and the doll would talk when its belly was pressed. To cut cost and make it affordable for everyone, ex-convicts out of prison would be hired, partly to socially rehabilitate them and partly because they could be hired at cheaper rates. The primary focus was on the social acceptance and appreciation that the company was giving these convicts along with a chance to make a respectable life for themselves.
When Mr. Sharma gave the report about this idea, Mr. Singh was highly receptive to the idea. However the idea was turned down by the top management on the grounds that the convicts could never be trusted and that the company would be spending too much ito supervising and checking the behavior of these workers and there would be continuous air of suspicion and fear at the plant.
The group was sent back to the drawing board.
QUESTIONS
- Speculate on the reasons that must have gone into the group discussion when they came up with the idea of golf clubs and golf balls. Do you think that Mr. Singh was justified in rejecti8ng this idea without presenting it to the top management for their reaction?
- Do you think the second idea of baby dolls was a feasible idea? What was the group’s main focus and why, considering that the company is not in the business of social welfare?
- Do you think that management was justified in rejecting that second idea considering that all organizations have a social & ethical responsibility of community service?
- If you were a member of the group, would you have supported either one or both of these ideas? Give reasons for your support.
