Koudran Engineering Company is a multinational company that manufactures automotive and hydraulic parts. It has manufacturing locations in Nasik, Nagar, Pondicherry, and Hyderabad. The company gives more importance to production expenses. The budget is allocated to every manufacturing operations based on the analysis done on production facilities and operation. The manufacturing locations at Nasik, Nagar, and Pondicherry are working properly and are on the right track of the budget. However, the Hyderabad location was not able to maintain its budget target.
Mr. Anderson was transferred from the Nagar location to Hyderabad as plant manager. Mr. Anderson did a preliminary investigation into the Hyderabad plant and made some changes to the plant’s working. He instructed all the departments to strictly follow the budget allocated and adhere to it so that profits could be achieved. He monitored the operations of the plant after implementing the changes. There were a few supervisor terminations during this time for not adhering to the budget targets.
With all the efforts, the Hyderabad location was back on track. Within the next six months, he found that profit then increased by 10 percent. After setting the Hyderabad plant right, the management decided to call Mr. Anderson back to the Nagar location. However, shortly after Mr. Anderson left, the productivity of the Hyderabad location fell below the earlier level, and the budget was again in trouble.
Questions
1. Analyze the organizational climate created by Mr. Anderson at the Hyderabad plant.
2. Why was there a drop in budget level after Mr. Anderson left?
3. Did Mr. Anderson have an autocratic style of directing?