MANAGEMENT

CASE Turnaround @ Motorola India-

describes a real-life situation
faced, a decision or action
taken by an individual Mobile Devices Business through
manager or by an

the HR Lever
organization at the strategic,
functional or operational level

Pallavi Srivastava and Jyotsna Bhatnagar

June 5, 2006: Motorola Unveiled the First Indian MOTOSTAR—

Abhishek Bachchan

D
ressed in black jacket and denim, Abhishek Bachchan, the rising Bollywood1
star, was present at the function where he was officially declared as the
Motostar for Motorola cell phones. Abhishek fitted in as the iconic
“MOTOSTAR,” joining the elite club of tennis top seed, Maria Sharapova; soccer
player, David Beckham; and Bono, the pop star, as a brand ambassador for Motorola
globally. Motorola’s brand quotient of youthful spirit, courage, smartness, and dar-
ing-to-be-different approach, was in sync with Abhishek’s bold and adventurous
attitude, looks, and unconventional style. Both had a rich heritage. Yet this was no
mere celebrity endorsement. Before the stardom dawned on him, Abhishek was
declared a flop by the media. “Before he succeeded, he struggled for five years.
Seventeen of his movies were a box office flop,” quipped Sudhir Agarwal, Director-
Sales for mobile devices, Motorola India. Motorola struggled in the same way in
India before making a comeback in mobile devices in 2006.
The deal with Bollywood actor, Abhishek Bachchan, marked a relatively new
celebrity track for the company—teaming up with non-US stars who appeal to inter-
national markets, or even individual foreign countries. This was something which
Motorola had never done before. It took some convincing for the marketing team
under the leadership of Lloyd Mathias, Director-Marketing, Mobile Devices Busi-
ness (MDB), Motorola, India to win more dollars from Schaumburg2 to localize the
KEY WORDS flavour of advertising in India.

Turnaround Past Performance of Motorola in India

Strategic HRM Motorola started selling mobile phones in India in 1995 and was one of the first
telecom companies to enter the country. However, it failed to capitalize on its early
High Performance Work
mover advantage. That gave competitors like Nokia a near monopoly on the mar-
System
ket. According to Gartner India estimates, Motorola’s market share kept on falling
Talent Management and was very low, just 1.8 per cent, in early 2005. The company lost out completely
Employee Engagement before it realized it.
1 Mainstream Hindi film industry
India 2 Headquarters of Motorola Inc.

VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008 119

The reasons were an improper product portfolio, ineffi- portion and therefore smaller growth than the develop-
cient distribution system, lack of branding, improper ing markets actually represent.
market campaigns, and non-focus on people manage-
ment strategy. Also, the team was not well-equipped. India: The Headquarters for High Growth Markets
Only 7-8 people were handling the mobile handsets di-
The market dynamics was chaotic. India was to be the
vision which was then known as the Personal Commu-
world economic giant by 2020 as suggested by the
nications Division. In India, marketing was not a separate
Goldman Sachs Report, 20073 . The talent pool of telecom
function; it merely meant reporting to sales. The team
engineers was being fished by the leading players in the
was not fully geared for this. The distributors did not
market, namely, Nokia and Samsung. India was the hap-
have Motorola as their core business. On the whole, fo-
pening place for telecom sector. (Exhibit 1).
cus on the mobile phone business was missing.
Suddenly, there was a realization that the Indian
Motorola realized that India was a great low-cost hub
telecom market was the fastest growing market in the
for software development but failed to see the consumer
world. The entire focus of Motorola Inc. started shifting
potential. In a land of 1.1 billion people, the company
back to India. It had to move fast… even faster than the
had a sales team of only five employees. It offered only
competition. However, the edge was lost. The top man-
five models of phones. The market was completely domi-
agement was in a pensive mood to regain the market
nated by Nokia which had a better distribution system,
and then rule it. It had to be done at double speed with
a strong brand presence and also a product portfolio cus-
the right kind of talent pool.
tomized for the Indian customers with features like flash-
A core team was created to harness the ‘India fac-
lights, useful in a country where blackouts are common.
tor’. On August 22, 2005, Zander, announced that the
Despite the fact that Motorola had one of the largest
company had established India as its headquarter for
software development centres in India and 40 per cent
the High Growth Markets (HGM) because of the coun-
of the software in its phones was designed in India, the
try’s strategic importance to Motorola’s global opera-
Indian consumer was not interested in buying the phone.
tions and the highest growth rate and potential within
Many of them were not even aware of its presence. The
the identified HGMs and the geographic advantage. The
company’s first cell phones here were transplants from
Personal Communications Division of Motorola India
the U S market, with nothing tailored to the Indian way
was rechristened as the Mobile Devices Business (MDB).
of life. Luring the Indian customers as well as the In-
Allen Burnes, Vice President, HGM, Mobile Devices,
dian telecom talent to Motorola proved to be quite dis-
Motorola Inc., was appointed to head this turnaround.
appointing.
He came to India along with his team of Senior Direc-
tors — Michael Warren-Smith, Director Finance, HGM;
Enter Ed Zander
Steen Ronholt, Director Business Operations, HGM;
On January 5, 2004, Edward J Zander was selected as Andre Kangas, Director Product Marketing, HGM; and
the Chairman and Chief Executive Officer of Motorola David Taylor, Director Strategy, HGM. Burnes, Warren-
Inc., by the Motorola board of directors. He succeeded Smith and Taylor had done amazingly well in the emerg-
Chris Galvin who retired in September of 2003 as the ing markets of Russia. They were brought in to deal with
Head of the electronics giant, ending a three generation a similar situation in India. (Exhibit 2)
reign of his family. Zander successfully reorganized the The company was facing the challenge of develop-
company, oversaw the introduction of several exciting ing cost-effective solutions in the price-sensitive market
new products, and sharpened Motorola’s focus on in- of India. Motorola’s market share in India had been con-
novation and operational efficiency. sistently falling in the last few years. By the end of 2005,
While building Motorola’s strategy in Asia, Zander Motorola invited international consultants, McKinsey,
focused on the high-growth markets (HGMs). HGM re- to undertake a study to find the India-specific features
gion covers 107 countries across Africa, Middle East, for its mobile handsets.
Indian sub-continent, South East Asia, with exceptions
like Australia and Singapore, which are very mature
3 Source: http://www.usindiafriendship.net/viewpoints1/Indias_
markets and had a much higher mid- and high-tier pro-
Rising_Growth_Potential.pdf retrieved on 28.05.2007.

120 TURNAROUND @ MOTORALA INDIA

 Motorola considered India to be very strategic from
two perspectives—firstly, as a development hub and
secondly, as a market. (Refer to the background note on
‘Big Opportunities’). On the product development front,
close to 40 per cent of the software for cellular phones
was being developed in India. As a market, with grow-
ing consumerism, it was the fastest growing mobile
market (Exhibit 3). Motorola decided to launch a host of
mobile handsets at different price levels to gain a greater
market share. It started revamping its Indian operations
and renewed focus on this high-growth market under
the supervision of its emerging marketing expert, Allen
Burnes.
Recruitment and Formation of Management Team
An entirely new team was created to handle the mobile
devices division. While the strategy for the Indian sub-
sidiary was already under the supervision of Motorola’s
emerging marketing expert, Allen Burnes, the new team
was expected to bring in a fresh approach in implemen-
tation of the plans. The company charted an aggressive
plan to capture a bigger pie of the mobile handset mar-
ket in the country with a revamped product strategy to
tap both the top end and entry level markets.
Redemption began with aggressively recruiting the
right people. As an HR strategy, they left out people
from No.1 players in the corporate world. They scanned
for personal experiences of people in beating No.1 play-
ers. What were the factors that excited them and what
challenges were they looking for? They looked for peo-
ple with technical competency and the ability to fight
back. They went for people who had worked in turna-
round situations and were eager to face challenges and
perform. Reddam quotes, “The culture fit was an im-
portant criterion for talent acquisition. We aggressively
poached employees who were hungry to perform; who
could fight back and had a passion and energy to work.”
There was an aggressive out-of-the-box buying of tal-
ent from all sectors for sales and marketing. Though the
telecom sector dominated the recruitment strategy, some
were lateral talent “buy-ins”. In 2005, when Agarwal left
the local giant, Bharti Telecom, to run the sales for
Motorola in India, he was among a group of 45 new hires.
Similarly, Lloyd Mathias of PepsiCo, a renowned name
in the area of brand turnarounds, also joined as the Di-
rector - Marketing. The HR dilemma was whether to
build or to buy talent. They decided to aggressively buy
talent. The second dilemma was how much breadth and
VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008
depth they should go for in the team. It was synchro-
nized with Motorola’s commitment towards India and
its business strategy.
The sense of urgency was palpable. That year,
Motorola CEO, Edward Zander, visited India to an-
nounce that the company’s offices in Gurgaon, near
Delhi, would be Motorola’s new headquarters for “high-
growth markets” in Asia and Africa. He charged the new
recruits with bringing about a Motorola renaissance in
the booming Indian market which resulted in an eight-
fold growth in the market share. The brand value of
Motorola also jumped from not being even amongst the
top 50 to No. 5 position.
Roadblocks
All this progress was not without any constraints. Ini-
tially, the turnaround started with resistance from the
older employees. It was also a challenge to balance the
global and local HR and to convince the corporate head-
quarters for the local requirements. Motorola India had
to convince the parent company about the special needs
of the Indian market – for larger phonebooks, high fre-
quency sound, lower recharge times, heat and dust. Fi-
nalizing the budget also took away the time advantage
which resulted in a slowdown in accumulating the
headcounts. Yet, from a pocketful of 8 employees in 2005,
the year 2006 saw a dramatic rise to 75 employees who
were passionate, hungry, ready to fight, and willing to
perform. Excitement was reaching new heights. The HR
leader gave a serious thought to building the excitement
further and sustaining the energy for the action of hold-
ing the turnaround bull by its horns with an engine of a
team of 75 individuals ready for the war. It kick-started
with ‘Prarambh’.
‘Prarambh’: Learning the Motorola Ropes
Prarambh4 anchored the engagement of employees. It
was supported by the top management, Allen Burnes,
celebrity cricket commentator, Harsha Bhogle, and the
HR leader, Raghuram Reddam. Everything was happen-
ing very fast. It took MDB nearly a month to formally
induct its employees as they were spread all over the
country and it took time for all of them to get together.
‘Prarambh’ was customized to the Indian point of view.
The success stories of Indians like Padmashree Warrior,
4 In Hindi means “The Beginning”.
121
Mohan Kumar, and others who had done extremely well
at Motorola India and had risen from the ranks, was nar-
rated to the new recruits. The induction in Motorola
worldwide is conducted through a mix of online and
classroom training but MDB wanted its employees to
do it on their own.
Reddam at MDB went for two interventions—‘Hai
Dum-I’ and ‘Hai Dum-II’—and challenged its team mem-
bers to perform. They put up a boxing ring and roped in
the celebrity cricket commentator, Harsha Bhogle, who
added the punch by asking, “Do you have it in you?
Then go and beat them!” Allen Burnes also spoke to them
and motivated them. They were encouraged to deliver
at any cost. The employees had unconstrained energy
that made them work for 24x7x365. Ed Zander had once
stated, “We don’t care about our titles; we don’t care
about our offices; we don’t care about entitlements; we
just care about winning. We laugh, we kid, we have fun,
and the people below us have fun and there are no se-
crets here.” This was true at MDB. This was the engage-
ment communication which moved the already present
excitement in the new team. “You are the best guys. Hai
dum?” (“Do you have it in you?”)
The Motorola culture and values were ingrained in
them through the iMOTO campaign which introduced
them to the qualities to be possessed by a Motorolan.
They were taught the values which defines their com-
pany. The campaign said, “Customers are first, last, and
everything in between. Customer delight starts here. We
were the original high-tech start-up. We’ve changed the
world before, and we will again. We operate ethically,
and there are no excuses for doing anything else. We
treat people with respect and seek out and promote di-
versity of every kind. We’re not settling for anything
except the #1 spot. We not only will excel, we will win.
We work for one company, with one vision, one brand,
one stock, and one exciting future.”(See Exhibit 4)
Anchoring the Passion of the Employees
The HR team had only two members — Raghuram
Reddam, the HR Director, who was with Motorola since
1996, and a fresh management recruit designated as the
HR Manager. Together they thought of innovative ways
to recognize the talent pool. Their focus was on how to
implement the HR Vision and Mission (Exhibit 5). The
strong focus was on employee growth, happiness, in-
volvement, and high energy. It was the trajectory of
growth that kept them motivated. The career prospects
122
attracted employees to Motorola. Recognition for their
efforts kept the employees further engaged and ener-
gized. The team was very lean with people having mul-
tiple accountability and responsibilities. It was the
richness of the job that drove them to perform against
deadlines. It was the challenges that carried them
through. The growth was happening exponentially. This
achievement was so exciting that it kept the employees
fully engaged.
Motorola had an enabling culture. It was one com-
pany which supported flexi-timing, telecommuting, and
fun at work. Working at Motorola meant a 24x7 job,
where speed and delivery at any cost were the biblical
words, to be honoured under any circumstances—a cul-
ture which motivated them to perform. Lack of formally
established systems was in fact a supporter instead of
being a barrier. An employee felt like a new entrepre-
neur— willing to work, willing to perform, full of zeal
and energy.
To further build the capability and the competency,
the HR team founded the Bravo Awards to recognize
and reward employees for their outstanding perform-
ance during each quarter (Exhibit 6). The rewards in-
cluded cash prizes, certificates of merit, and recognition
from the General Manager, etc. The identification of an
outstanding performer was based on performance and
behaviour like sheer hard work, high team collabora-
tion, and so on. The evaluation was done by the imme-
diate supervisor and vetted by the Business Head and
the HR Head. They were looking for a ‘wow’ perform-
ance, outstanding behavioural competency, and team
competency.
Raghuram Reddam, added, “Everyone works hard
here and does not want to go home early. No retooling
is required as the talent is fresh. They have an inbuilt
pressure and are hungry to work and win.” They had
many on-the-spot recognition awards which were won
by 60 per cent of the employees in the organization.
Quarterly ‘town hall’ meetings were initiated to com-
municate current and future business strategies and also
recognize top talent.
Learning and Development Interventions
With so much of action happening, there was no time
for growth and career planning of employees. The sys-
tems and processes were not clear. It was towards the
end of 2006 that MDB focused on capability building of
its employees. It established a Sales Academy to train
TURNAROUND @ MOTORALA INDIA
and hone their skills. Three-day workshops were con-
ducted for various functional areas like service, field
engineering, product marketing, marketing, sales, and
finance. OD-focused functional interventions were car-
ried out. Diagnostic exercises were conducted with lead-
ers to find out the vision they had for their team, the
various tools of engagement they need to employ, and
how they wanted the execution to happen. All this was
not forced upon the leader. If a particular function did
not desire or the leader was not ready, such measures
were pulled back. Reddam challenged them and incited
their vision, interaction, group dynamics, execution, etc.
(Tables 1, 2, and 3)
The first of its kind leadership meet was called Jaipur
Post. The leadership team with all the functional lead-
ers was taken away to Jaipur’s Sumodh Palace for a
three-day vision building exercise and to finalize the
business strategy for MDB. The Organization Develop-
ment diagnostics were probed into by a leading OD con-
sultant of India. It had to be followed up in March next
year. But HR failed to keep up the momentum. The HR
leader had to reorient the design of his workshop to sus-
tain the diagnostic.
Achievements
The achievements were many. Motorola developed an
innovative and rapidly expanding product portfolio
aimed at different categories of users, across Global Sys-
tem for Mobile Communications (GSM), Code Division
Multiple Access (CDMA) for the high growth markets.
The Marketing Team of MBD was known as one of the
best marketing teams in India. The Sales Team was ad-
judged as the Best Business Team in Motorola Global
Mobile Devices Sales Conference. MDB also got the
recognition for being the product champions, best
brands, etc. Till the beginning of 2005, brand Motorola
was nowhere. By 2006, it was known among the top 5
brands in India. By the end of 2006, MDB reflected a
dramatic eight-fold growth of about 14 per cent market
share5 which was truly remarkable.
The Road Ahead for HR
At the end of 2006, the HR function was under high pres-
sure to keep the employees engaged and sustain their
5 http://www.mobilepundit.com/2006/11/29/motorola-has-14-market-
share-in-india/ (last retrieved on 10.06.2007)
VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008
energy and excitement. The HR team was making ef-
forts to engage with all employees, keeping themselves
aware of the signs of breakdown and stress in the team
members. Every alternate Fridays, events like quiz, get-
togethers, etc., were arranged for the team to unwind.
The team also tried to keep track of those who were less
engaged or were likely to be poached by the competi-
tors. This they could find out by realizing a dip in their
performance and also with the help of unofficial grape-
vine. They would sound each other on the employees
and the team would go in for informal chat sessions with
such employees.
Retention of talent was a burning issue for HR since
they had poached aggressively when building the tal-
ent pool. Now, their pool was open to the market. A
talent pool with a killer attitude. The success story of
eight-fold growth added more fuel to the fire of reten-
tion. The competitors’ antennae were up; they were eye-
ing the capable passionate talent pool of Motorolans at
MDB. In a market where skill and the right attitude are
not in abundant supply, this was a major challenge for
HR. For this purpose, the whole organization was
mapped to identify the critical talent for MDB. The pro-
cess included a robust risk assessment model and a
robust risk analysis format which cannot be shared for
reasons of confidentiality. The attrition rate of MDB
employees was presently almost negligible but would
it continue to be so? Will MDB be able to provide the
same challenges that would keep its team members
hooked to it keeping in mind their hunger for challenges?
How can their passion and energy be sustained? How
could Reddam sustain the disruptive innovative com-
petency of the Team? Some other issues like career plan-
ning and management and capability building of the
employees were also bothering him. While Mr. Reddam
had enough reasons to be worried about, he was some-
how optimistic—optimistic for an even brighter future
for MDB, confident of a much better performance by his
able talent pool.
SUGGESTED QUESTIONS FOR ANALYSIS
1. a) What kind of competitive strategy (prospectors,
defenders or analysers) can be inferred from this
case?
b) What is the evolving role of the HR leader in the
turnaround strategy? (Refer to the Strategic Model
of Schuler and Jackson, 2000).
123
2. a) What kind of partnership do you find between
the line managers and the HR function?
b) How far do you think HR has played the role of a
strategic partner in this turnaround?
3. How is the high-performance, high-involvement
work culture a source of competitive advantage?
(with reference to Resource Based View theory of HR)
4. a) In what way did the HR function use talent man-
agement strategies to secure employee engage-
ment?
b) How to keep the employees engaged now when
the initial excitement is over? How to sustain their
energy?
5. Which paradigm of Strategic HRM does the case il-
lustrates—best fit or best practices?

Exhibit 1: Indian Scenario in the Telecommunications Sector

India is the fourth largest telecom market in Asia after China,
Japan, and South Korea. The Indian telecom network is the eighth
largest in the world and the second largest among the emerging
economies. At current levels, telecom intensiveness of the In-
dian economy measured as the ratio of telecom revenues to the
GDP is 2.1 per cent as compared to over 2.8 per cent in the
developed economies (CRISIL, www.ibef.com).
The Indian telecom sector has undergone a major process of
transformation through significant policy reforms. The reforms
began in 1980s with telecom equipment manufacturing being
opened for private sector and were later followed by the Na-
tional Telecom Policy (NTP) in 1994 and 1999.
Historically, the telecom network in India was owned and
managed by the Government considering it to be a natural mo-
nopoly and strategic service, best under the state’s control. How-
ever, in the 1990s, examples of telecom revolution in many other
countries, which resulted in a better quality of service and lower
tariffs, led Indian policy makers to initiate a change process fi-
nally resulting in the opening up of telecom services sector for
the private sector.

Source: http://www.iimahd.ernet.in/ctps/telecomsector.htm retrieved on 20.04.2007.

Exhibit 2: Team Structure at MDB Exhibit 3: Number of Basic and Mobile Phones in India

Number of Basic and Mobile Phones in India

GM and VP (1999 to 2006)
Year No. of Telephones (in Million)
(End of March) Fixed (Landline+WLL) Mobile
1999 21.61 1.20
Director Director
Sales Business Operations 2000 26.65 1.80
2001 32.70 3.58
2002 38.53 6.43
Director Head 2003 41.93 12.69
Marketing Product Marketing 2004 42.84 33.70
2005 46.85 51.53
2006 49.57 92.52
Finance Legal WLL : Wireless in Local Loop.
Controller Counsel
Source : Lok Sabha Starred Question No. 469 dated 17.05.2006. (As
given in Indiastat.com)

Specailist National
HR Service Manager

124 TURNAROUND @ MOTORALA INDIA

Exhibit 4: The iMOTO Campaign Exhibit 5: HR Vision and Mission

What Makes Me a MOTO VISION: Recruiting the best in the industry and
Customers creating a motivated, integrated, and skilled
I earn their businesses everyday organization to take the organization to a clear
# 2 position in the market.
Innovation
I celebrate the breakthrough idea MISSION: We are working together across our
Principles mobile devices, connected home and networks
I do the right thing and enterprise businesses to bring our custo-
mers closer to seamless mobility.
Performance
I’m here to win
One Motorola
I work for one company with a shared vision

Exhibit 6: BRAVO Recognition Award

BRAVO! Recognition Award

Main Menu Name - Commerce ID Local Job Title

EE Info
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Initiate:
My
Employees
Enter BRAVO! Recognition Award Information
Behavior Level: Choose One Result Level: Choose One
Initiate:
Other 3 - Outstanding 4,500 - 15,000 6,000 - 40,000 20,500 - 100,000
Employees
Behavior 2 - Significant 2,000 - 10,000 4,500 - 15,000 6,000 - 40,000
1 - Noteworthy 750 - 6,000 2,000 - 20,000 4,500 - 15,000
Initiate:
Multiple 1 - Noteworthy 2 - Significant 3 - Outstanding
Employees
Result
Inbox
1 - NOTEWORTHY : Demonstrated behaviour or accomplishment above and beyond normal
expectations
Status 2 - SIGNIFICANT : Reach-out performance or accomplishmnet that results in an identifiable and
measurable impact on Motorola goals.
3 - OUTSTANDING : Break-through perfromance reflecting recognizable impact on Motorola goals.
Help

INR - India (Enter amount in Employee’s Currency with

Amount:
no punctuation)

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Send Comments and Suggestions via Email to one of the following addresses:
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VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008 125

Table 1: Structured Interventions Used for People Development
Capability Building
Training in functional and behavioural skills/
competencies at all functions and levels
Multi-tier leadership development
(BDI, ELA/DLA)
Cross-functional and diverse business
skills (TRP)
Executive coaching and mentoring
Sales force effectiveness (sales academy)
Quality/ Six Sigma training
Organization Culture
Moto values (iMOTO campaign,
recognition of demonstrated values)
Ethics and compliance rigour
through education/ Training
Employee engagement actions
“Winning teams” (through facilitating
team dynamics, conflict resolution
and cross-functional synergy)
Motivation
MYMOTOLIFE
Team building initiatives
Coaching and mentoring for
high-potentials
Recognition mechanisms
Personal growth and development
(communications skills, interper-
sonal skills, and individual growth)

Table 2: MDB- A Progression from Current State to Future State (discovered in an organization diagonostic)

Current State Future State

Level of integration Individual businesses and functions A set of businesses which are individually optimized
with low level of integration and collectively integrated
Stage of life cycle Build-up state leading to early Maturity; being better armed with capabilities to sustain
stage of maturity the growth as dictated by financial and market opportunities
Drivers for A combination of market dynamics and Clear strategic moves with the skilled and capable
exponential growth renewed focus on growing the India team resource pool
Competency of A team not completely integrated A team which brings in market intelligence and is
the team towards shared goals and objectives equipped with the capability to create exponential growth
in market share

Table 3: Eleven Best-in-Class Organizational Levers to Drive Strategy and Execution Success*

Lever Description
Strategy The extent to which each business strategy is thought through, what strategic decisions are executed and then
how each business is aligned with these decisions both at business and at a country level.
Leaders The extent to which each business has the quantity and quality profile of leaders needed to define and achieve its
strategy. It also determines whether the business has an effective process for assessing the performance of current
leaders, along with identifying and developing future leadership talent aligned to critical roles.
Customers The extent to which each business focuses on its customers, how value is created and evaluated so that overall
profitable revenue stream is established to support business and brand equity.
Process The extent to which the core organization processes are understood and leveraged. It also determines how value
is created and to what extent Six Sigma principles help optimize operational performance.
Business results The extent to which the business achieves its goals on key financial and performance metrics.
Structure The extent to which the business has an optimized structure that is aligned with its strategy and contains clear
lines of authority, accountability, and responsibility in terms of collaboration and spans of control.
Technology The extent to which the underlying technologies within the business that directly or indirectly support strategic
and customer facing activities are realized and optimized.
Innovation The extent to which the business has a desire to build capabilities and practices that foster a climate of imagina-
tive ideas which are well-grounded against risk and judgement principles.
Talent The extent to which the business possesses talent with the critical skills, capabilities, and mindset it needs to
achieve the strategy.
Engagement The extent to which the management team fosters a sense of alignment and how the core values, beliefs, and
behaviours impact the organization’s ability to deploy its strategy.
HR Alignment The extent to which the key HR activity is aligned with the key strategies of each organization and how connec-
tions are made.
* Discovered in one of the Diagnostics carried out by MDB-HR in August 2006.

126 TURNAROUND @ MOTORALA INDIA

Table 4: The Timeline

January 2004 Edward J Zander became the Chairman and Chief Executive Officer of Motorola, Inc.
Second half of 2004 Motorola identified Africa, South West Asia, North Asia, and South East Asia as high growth markets
(HGM) for the company.
August 22, 2005 Zander, announced the establishment of India as the company’s headquarter for the High Growth Mar-
kets (HGM).
Nov 14, 2005 MDB announced joining forces with Bharti Teletech Ltd.
2005 Agarwal left local giant, Bharti Telecom, to run the sales for Motorola in India.
End of 2005 Motorola invited international consultants McKinsey to undertake a study to find India-specific features
for its mobile handsets.
March 10th, 2006 Announced an alliance with DCM Shriram Consolidated Ltd. (DSCL)’s Hariyali Kisaan Bazaar chain of
rural/semi-urban utility marts for sales and distribution of handsets.
March 13, 2006 Announced the establishment of a distribution agreement with ITC’s e-Choupal division for its Mobile
Devices business.
June 5, 2006 Bollywood star, Abhishek Bachchan, became the MOTOstar.
Second half of 2006 Slashed prices of its phones making them the cheapest.
End of 2006 The company was known among the top 5 brands in India; showed an eight-fold growth.

BACKGROUND NOTE
Policy Reforms in the Telecom Sector
Policy reforms in the Indian telecom sector can be broadly clas-
sified into three distinct phases:
Phase I: The Decade of 1980s saw private sector being allowed
in telecommunications equipment manufacturing. Mahanagar
Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam
Limited (VSNL) were formed and a Telecom Commission was
set up to give focus to telecommunications policy formation.
Phase II: In 1990s, the telecommunications sector also benefited
from the general opening up of the economy. NTP 1994 was the
first attempt to give a comprehensive roadmap for the Indian
telecommunications sector.
• Availability of telephones on demand (targeted by 1997)
• Universal service covering all villages and one PCO per 500
persons in urban areas at the earliest (targeted to be achieved
by 1997)
• Telecom services at affordable and reasonable prices
• World standard quality of services.
Phase III: NTP 1999 brought in the third generations of reforms
in the Indian telecommunications sector.
(Source: http://www.iimahd.ernet.in/ctps/telecomsector.htm retrieved on
20.04.2007).
Cellular Services
There are 25 private companies providing cellular services in
19 Telecom Circles and 4 metro cities, covering 1,500 towns
across the country. Presently, there are five private service op-
erators in each area, and an incumbent state operator. Almost
80 per cent of the cellular subscriber base belongs to the pre-
paid segment.
Several GSM cellular service companies are climbing the
EDGE bandwagon. Hutch has already started and Bharti has
made test calls on the EDGE platform and the company is in
talks with Siemens for EDGE-enabling some of its circles.
The DoT has allowed cellular companies to buy rivals within
the same operating circle provided their combined market share
did not exceed 67 per cent. Previously, they were only allowed
to buy companies outside their circle.
(Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on
20.04.2007).
Regulatory Structure
The lack of clarity in the regulatory structure has made it diffi-
cult to predict the prospects for this industry. This uncertainty
has best been typified by the issuance of a fourth license and the
controversies with reference to limited mobility players. The
cellular services was thrown open for third and fourth service
providers in 2002. The number of service providers increased
from 42 to 68 in the year 2002-03.
Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on
20.04.2007.
Growth Drivers
Opening up of international and domestic long distance te-
lephony services are growth drivers in the industry. Cellular op-
erators now get substantial revenue from these services, and
compensate them for reduction in tariffs on airtime, which along
with rental was the main source of revenue. The reduction in
tariffs for airtime, national long distance, international long dis-
tance, and handset prices has driven demand. India currently
has one of the lowest telecom tariffs in the world.
According to Telecom Regulatory Authority of India, the
number of mobile users in India is topping the charts and is
steadily increasing; 67 million mobile phone users have been
added to the list in the year 2007. There are now 207 million
phone connections in the country.
According to Mr. Dayanidhi Maran, Union Minister of Com-
munications and Information Technology, Government of In-
dia, “We have proved to the world that you don’t have to have
high tariffs to be profitable.” He refers to the surge in profits of
mobile phone companies that came alongside a sharp decline
in tariffs.

VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008 127

 Much of the expansion has been limited to urban areas. Now,
the government’s focus would be shifting to boosting phone
connections in villages, where two-thirds of India’s 1.1 billion
people live. According to the government plan, the rural areas
of the country will have a total of 50 million telecom subscrib-
ers by 2007 by setting up 8,000 transmitting towers in rural ar-
eas.
Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on
20.04.2007, http://www.dmaran.nic.in/presscoverage_all.php
retrieved on 23.05.2007.
Competition in the Mobile Handset Market
Data from the “Indian Mobile Market 2006” statistical hand-
book reveals that mobile ownership will pass 100 million in
2007 as ‘the largest middle class in the world’ takes up owner-
ship. With 115.3 million forecasted mobile owners in 2007, In-
dia ranks 3rd in the world behind only China and the U S.
The Indian mobile owners are becoming younger as a result
of cheaper calls, subsidized handsets, and widespread availability
of pre-pay, lowering the barriers to ownership. Hence selling
mobile phones to people in the poorest countries on earth has
become a major focus of the world’s largest mobile handset
manufacturers. Facing a slowdown in handset sales in the richer
markets because of saturation, they have turned their attention
to the three billion people who are living in areas where there
are wireless networks, but who cannot afford to use them.
As a result, market leaders Motorola, Nokia, LG, Samsung,
and Sony Ericsson are competing with each other to slash the
cost of making a mobile phone, in an effort to appeal to millions
of potential customers. They are also competing with the huge
market in cheap, illegal mobile phone imports as well as stolen
and second-hand phones.
Leading handset manufacturers like Nokia Corp., Motorola
Inc., and Samsung Electronics Co. have set up factories here in
recent years, while companies such as Vodafone PLC are ex-
panding by acquiring local service providers.
Source: http://www.researchandmarkets.com/
reportinfo.asp?report_id=312540 retrieved on 23.04.2007.
Motorola India- Mobile Devices Business (MDB)
Motorola is amongst the leading handset players in India. Its
office is based at its headquarters in Gurgaon. The company of
late has launched many phones in all segments - high-end, mid-
range, and low-cost. Its MotoRazr, introduced in India in 2006,
is a glitzy model and MotoRazr V3i followed it. This model is
dipped in gold and has a trinket designed by Dolce & Gabbana.
Its varied portfolio of products caters to every market segment.
From iconic products like the MOTOPEBL, MOTORAZR, and
SLVR series, its mass market products are known for their reli-
ability and economy, and include several models on the C 11x
and related platforms. And leading offerings in Linux based PDA
phones.
Motorola has a significant presence in the Indian handset
market. Most of the growth in the handset market is through
entry-level devices in India. The company has been drawing on
the technical skills of Indian engineers. The engineering centre
at Bangalore is the largest for Motorola in the world. The com-
pany has increased the number of its employees across the coun-
try. The Indian cellular industry, which operates on low average
revenues per user, is driving the company to innovate and offer
elegant and simple products.

Service Providers (Members)

Aircel Digilink India Limited Haryana, Rajasthan, UP ( East)

Aircel Limited Chennai, Tamil Nadu www.aircel.com
Bharti Cellular Limited Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai (Metro), www.airtelworld.com
Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,
Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh,
Maharashtra and Goa, Orissa, Punjab, Rajasthan, Tamil Nadu,
UP (West), UP (East), West Bengal
BPL Cellular Limited Mumbai (Metro), Kerala, Maharashtra and Goa, Tamil Nadu www.bplmobile.com
Hutch Group Mumbai, Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, www.hutch.co.in
Karnataka,Punjab www.orange.co.in
Idea Cellular Limited Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh, www.ideacellular.com
Kerala, Haryana, UP(W), Madhya Pradesh
Reliance Telecom Limited Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, www.ril.com
North East, Orissa, West Bengal
Spice Communications Limited Karnataka, Punjab www.spiceindia.com
www.spicetele.com
Source: http://www.coai.in/network-serviceproviders.htm retrieved on 27.04.2007.

128 TURNAROUND @ MOTORALA INDIA

Big Opportunities
According to the research firm, Strategy Analytics, the market of
ultra-low-cost handsets in India is growing at a phenomenal rate
- more than 14 times faster than the global handset market.
(Source: http://news.bbc.co.uk/2/hi/business/6339519.stm re-
trieved on 23.04.2007).
Analysts project that the mobile phone market in India will
continue to flourish. Recent estimates by iSuppli Corp. said that
it can triple by 2011. (Source: http://www.isaonline.org/docu-
ments/weeklyroundup_apr _13_20_07.pdf. retrieved on
20.04.2007). In India mobile phones are not just used as a com-
munication device for business or personal use but are also
viewed as status symbols. The average Indian mobile subscriber
is cost conscious. Although a majority of Indians use only voice
or SMS services, multifunctional cell phones are increasing in
demand which provide features like cameras, FM radio, internet
access, video recording, etc.

Pallavi Srivastava is a Doctoral Candidate (HRM) at the Man-
agement Development Institute, Gurgaon, India. She has pub-
lished paper at the 2nd World Conference on POM and 15th
Annual POM Conference¸ Cancun¸ Mexico¸ April 30 - May 3,
2002, and also presented a paper in APROS 12 Conference,
MDI, Gurgaon, December 9-12, 2007. Her papers are under
review/accepted for publication in reputed refereed interna-
tional journals. Her research interest lies in the areas of em-
ployer branding, succession management, and innovative
practices in HR.
e-mail: pallavisrivas@gmail.com
Jyotsna Bhatnagar, a Ph.D. from the Indian Institute of Tech-
nology (IIT), Delhi, is an Associate Professor in the HRM Area
at the Management Development Institute, India. With over
50 international and national level research writings to her
credit, she is to present her paper on ‘Strategic HRM –Media-
tor Variables in India” at the Academy of Management Con-
ference, USA, 2008. She is an Invited member of the Academy
Of Management 2007-Carolyn Dexter International Best Paper
Award Review Committee and the recipient of Excellence in
Teaching Award, 2007-08, MDI and the MDI Best Faculty
Award-PG Students’ Choice, 2006.
e-mail: jyotsnab@mdi.ac.in

You don’t have to be a fantastic hero to do certain things; to

compete. You can be just an ordinary person, sufficiently
motivated to reach challenging goals. The intense effort, the
giving of everything you’ve got, is a very pleasant bonus.

Edmund Hillary

VIKALPA • VOLUME 33 • NO 1 • JANUARY - MARCH 2008 129