Group 8

DIVYA SHARMA PGP09152

GURPRIYA SAHNI PGP09154
MANOHAR GUPTA PGP09157
NIRAJ PGP09162
PRASHANT KUMAR PGP09165

Was the decision to close down the weaving unit justified? Justify your position.
Yes, the decision of closing down the weaving unit is justified because:

•Huge capital investment: Required to set up the spinning unit in comparison to weaving and
processing unit implicates lesser competition on field

•Raw material requirement of yarn supply for the 92% fabric weaved by power looms
implicates a larger market potential for business expansion

Availability of specialized personnel for the selection of the perfect variety of cotton as raw
material procurement gave the company a competitive edge

Oudated technology: Weaving unit offered no promises of giving any return on the future

-High frequency production cycle: Cost of production of weaving unit was high owing to the
high labor costs of weaving

High Cost of labour in weaving.

Spinning did not require any investment in pollution control, hence it was profitable

Was the decision for the merger with Arvind Mills justified? Justify your position.

Yes, the decision for the merger with Arvind Mills was justified as:
● High Liability: Many of the financial institutions were feeling insecure about their
returns and hence were pressurizing Asoka for bailout. This merger helped in paying off
these creditors
● Cost to other firms experience in turnaround of a company. They have helped in
turnaround of another sick company Laxmi Cotton Mills
● Arvind Mills was a profit making company and could benefit Asoka Mills with its deep
pockets
● Its past relation with the company made it the most viable option
 However, there are losses too such as the sale of Artex to Arvind mills. But looking at the
the fact that this merger provided way more benefits than to losses this deal is justified.

Major managerial implications learnt from handling the case

● Motivation
 The employees were convinced that the mill will not close down and also the fact
that this is going to be possible only if the employees would do their best.
 Further, good performers were given quick and big raises in monetary and
positional terms.
● Communication
 Sharma was going to each and every corner of the mill, talking to workers about
their problems and trying to understand their issues.
 He also insisted traders to provide suitable raw material and stop overutilization
of raw materials.
 Whenever required, but to come with probable solutions to the problems.
● Facilitation and support
1. Efforts were made to help employees upgrade their skills
2. Special emphasis was being given to hone multi-skills among employees by
rotating them among different departments
● Style of management
1. Authoritarian style worked in restoring discipline, and communicating the
importance of quality and productivity
2. But this could not be used as a long term strategy

Action plan

 As no improvement in the existing

product quality can be achieved, try Follow the sales report
and increase the volume to increase and feedback from
0-3
Production market share buyers to check on the
months
 Train the workers and maintain the volume and quality of
machinery to stop fluctuations in the the product
quality of products
 In addition to performance appraisal for
Internal company
every 6 months, an incentive or reward
surveys to learn the
Workforce programme can be introduced to 3-6
impact the interactions
development motivate workers to take care in months
have on employee
maintaining the consistency of quality to
satisfaction
avoid fluctuations

Try and come up with customer External surveys to learn

engaging programs to increase the the impact of customer
3-9
Customers number of repeated customers in order to services offered have on
months
ensure maximum sale and developing the satisfaction and trust
the goodwill of the company of customers