Post Midterm Assignment

Program : MBA Class of 2011

Credit : 3 Sessions 33
Course
Code : SL GM 602 Fourth Semester

This assignment tests your ability to analyse a situation showing

knowledge of the subject, sound reasoning, effective persuasion and
competent writing skills.

Be sure to organize your information in a clear, concise and logical

manner. Support your reasoning. Merely stating information given
in the case or gathered from elsewhere will not be adequate. If you
have gathered data from somewhere, please indicate the source of
your data/information. There must be logical arguments.

** You must be critical in thinking through the problems and

presenting your conclusions. Your analysis of the information that
you have gathered must be sound and its presentation persuasive.

The last date for the submission of written assignment is 06 Jan 2011

Q No 1

a) What are the norms about the board size and the split between inside
and outside directors? Is there any difference between an “outside”
director and an “independent” director?

b) What are the advantages and disadvantages of having the same person as the Chairman of
the Board and the CEO?

c) What are the different types of committees recommended by the SEBI regulations? How
do those committee improve or help to improve the functioning of the board?

Q No 2 Read the caselet below and answer the questions given below.

CASELET

Two students of IBS, Bangalore, who were very active in social causes after passing out of
IBS set up a company to produce a premium consumer product. The founders had made their
interest in social causes right from the beginning. A per centage of the profits were
committed to the support of various social and environmental causes. The social activism of
the promoters were well accepted and praised by friends and the local media. After a few
years of business, the promoters realised that to grow further they have to go public and raise
more capital. The initial promoters owned a significant amount of the outstanding shares,
which gave them controlling stake in the company and they could continue with their
proclaimed social activities.

But over time, due to cyclical changes in the environment, the profits declined and some of
the shareholders and analysts started commenting on the requirement of more attention to the
profitability and in increasing the share price. The board continued to reflect the interests of
the founders in community and social/environmental issues, with a heavy emphasis on
directors with social responsibility connections and far fewer with business backgrounds.

The basic product of the company had good potential and consequently, there were enquiries
from potential acquirers. The promoters also were willing consider the sale of majority stake.
When this was made public, several potential bidders stepped in and came up with
increasingly favourable offers.

The board had to consider the various bids and decide on the final choice?

Q No 2

What are the issues the board of directors have to consider while choosing the final
buyer?

Q No 3 In the recent past, there has been a buy-out of makers of Jaguar Land Rover by M/s
Tata Motors. The final deal was confirmed only after prolonged consideration by the boards
of both companies.

a) What are the issues to be discussed by the board of JLR?

b) What are the issues to be discussed by the board of Tata Motors before making the bid?

c) Is there any difference in the emphasis of topics being considered in the case given in Q
No 2 above? Highlight.