Case Study: Bajaj Auto

It is believed that "tomorrow's CEO must be today's empowered manager". This is reflected in the case of CEO of the two-wheeler brand Bajaj Auto - Mr. Rahul Bajaj, , wherein he delegated his responsibilities to a successor systematically. His two sons, Rajiv and Sanjiv were qualified enough to carry on the business. It was a bold decision on his part as he was used to taking charge of every critical area in the traditional family and managing the company. He had complete charge of production, finance, design changes, production systems and labour relations at the company, and personally oversaw all the operations for over two decades from1968 to 1990.

He never felt the need for delegation of authority and decentralisation of responsibilities. resulting which the company remained a fat, cost-callous, inflexible giant. Although there was rise in sales and increase in consumer demand, the company could not progress exponentially. The second line of executives were not groomed to manage day-to-day operations, nor they had required freedom to take even simple decisions independently.

Due to various additional responsibilities as the chairman of Indian Airlines, CII, AIAM, etc., he realized the need for creating a second line of command in his absence. To handle the onset of a recession and the advent of competition, the company quickly, combined delegation with succession planning. Both sons joined as apprentices initially, selected their respective areas and underwent training in those areas- Rajiv in manufacturing and Sanjiv in marketing.

Another cousin of Rahul Bajaj, Mathur was made the in charge of HR functions and began to represent Rahul in meetings. Responsibilities were delegated to Mathur slowly but steadily. Rahul Bajaj also started to distance himself from his followers, after his son Rajiv took charge of the Akrudi plant independently. As a result, the report card of the company became quite encouraging with sales picking up in motor cycle as well as scooter segments.

Question1 : Span of management is sometimes also referred to as span of..or..

Select one:

a.

Authority, Control

b.

Delegation, authority

c.

Supervision, authority or control

d.

Operations, supervision

2)

Decentralisation refers to the physical .................. of facilities and the extent of .................. of authority throughout an organisation.

Select one:

a.

location, dispersal

b.

layout, dispersal

c.

location, aggregation

d.

layout, aggregation

3)

Centralisation is the opposite of .................. and .................. of authority

Select one:

a.

aggregation, control

b.

dispersal, holding

c.

absorption, delegation

d.

dispersal, delegation

4)

_______ is the assignment of authority and responsibility to another person (normally from a _____) to carry out specific activities.

Select one:

a.

control, manager to a subordinate

b.

Delegation, manager to a subordinate

c.

Delegation, subordinate to manager

d.

Decentralization, subordinate to client

5)

If the span of management is large, levels would be needed in the organisation. If the organisation structure is the span of control is very large at the lowest level

Select one:

a.

Fewer, Flat

b.

more, flat

c.

fewer, tall

d.

higher, flat