Read the case study below and answer the questions that follow. Makar - A tale of textiles. Makar is a textile manufacturing unit located in the city of Jaipur, the capital of the State of Rajastan (India). The organisation specializes in making shirts and suits, presently the company is only supplying Rajastan State, but there are opportunities to grow their business abroad. The organisation is run by the CEO who is known for being well educated, experienced, and a businessman with a people-centered approach. Mr Mukund, the CEO of Makar, considers the employees of his organisation as a competitive advantage. Currently, Makar is one of the top three textile manufacturers in their State and important strategic decisions need to be made for the future. Importantly, the company needs to defend its current market share against competitors. Another strategic imperative is deciding how and where the company can grow their operations abroad. The Status Quo at Makar Mr Mukund, who heads the production himself, has developed an efficient top management team which includes Mr Prem, heading marketing, Mrs Mrunal leading Human Resources (HR) and Training and Development (T & D), and Mr Vaidya leading finance. All these department heads have always been supportive of the ideas that Mr Mukund has in terms of handling the workforce. Mr. Mukund likes to say, "I believe that a satisfied, educated, dedicated workforce will be the key to success in any circumstances for any organisation. Money spent on employees will always be an investment for my organisation." The perspective of investing in Human Resources is shared by the existing top management team, who have invested time in understanding how Human Resources as a function adds value to the business. Makar has an opportunity to grow as a company beyond just serving the market in Rajastan State. Through market research, the Top Management team has identified that their well- made shirts and suits would also be appealing to customers in East Asia and the Middle East. To pursue these strategic opportunities there are operational and of course Human Resource implications. Makar will need to decide how to enter and compete in different markets and they will need to ensure the right employees are in the right positions in order to compete successfully. Satisfied Employees Training and development at Makar plays a key role in developing a career path for employees. Employees are being trained by well-versed trainers in areas which range from the operating the latest textile manufacturing machinery, to designing fashionable patterns for suits, to name a few aspects. The organisation also encourages their employees to do further studies as part of their career development program and they get a helping hand from the organisation. The employees of Makar are satisfied with the kind of support they receive from the organisation and they realise that in working for Makar, their personal growth will be assured. As a result Makar offers many advantages, such as a highly trained and qualified workforce, the highest quality of supplies are assured, a lower rate of employee attrition, a dedicated workforce, meeting targets on time and a satisfied workforce, to name a few. The announcement One day the employees of Makar were greeted with an announcement from Mr. Mukund; "Dear employees. You all are my colleagues rather than my employees. I always feel that I am one of you, only with more responsibility. Now that my age is not allowing me to shoulder that responsibility, I wish to give way to the younger generation. So I have decided to hand over the charge to Mr Mithun, my only son, who has completed his studies and returned to India. I know you all will be with him as a pillar and extend your support in the same manner that you supported me. Without you people, this organisation would not have reached these heights. I am sure you all will support him." The employees were grief stricken that Mr. Mukund would be retiring and unsure about what changes the future would hold. In the first three months of Mr Mithun taking over employees could sense a change, he started an intensive audit of all departments looking for opportunities to reduce costs. As the findings of the audit started coming into focus it became clear that employee compensation is in fact the highest cost borne by the company. Winds of change Mr. Mithun called in Mrs Mrunal, the head of HR, and told her, "Mrs Mrunal, I need an immediate action plan to reduce the labour force by 30% by way of layoffs". He continued: "Mrunal, I hope you are getting my point and I want it to happen soon", his explanation supported his view that the best way for Makar to be competitive is to aggressively manage their labour costs. Mrs Mrunal was shocked listening to this decision and replied, "Sir, it is my responsibility to tell you that the workforce we have is an excellent, well trained, loyal and self-motivated workforce. In case of layoffs, the competitors will take advantage of that. We can think of other options rather than layoffs". Mr Mithun did not want to listen to her advice; "Sorry, Mrs Mrunal, I am not ready to review my decision and don't require any alternatives, I want this work to be done within a week". As Mrs. Mrunal wrestled with the task she had been given, she could not help but think what a difference it would make if Mr. Mithun recognised their employees as human capital and had insights into the Human Resource Management process! Finally, with much regret, Mrs Mrunal reduced the workforce by 30%. Most of the employees who were laid off, joined Makar's competitors, taking their skills and knowledge with them. One day in his office Mr Mithun was discussing with Mrs Mrunal that the cost of labour in the organisation had been reduced as he intended, which increased their net profit. After listening to this Mrs Mrunal commented, "It is true sir, but we have also missed a great opportunity to grow and pursue other strategies, by losing our competitive advantage (which lay in our employees) to our competitors". Adapted from: https://www.speakhr.com/case-study-on-td-with-solution/ 4. Answer the following questions from the perspective of Strategic Human Capital Management: 4.1 Makar experienced a transition of leadership with Mr. Mukund, the CEO announcing his retirement and handing the reigns of the company over to Mr. Mithun. Critically discuss succession planning in the context of the case study by considering how the change impacted the company (4 marks). 4.2 Discuss THREE (3 marks) approaches to forecasting human resource requirements for an organisation. In your answer, also advise Mr. Mithun on what Makar's Human Resource forecast should take into consideration beyond wage costs, which weigh so heavily on his mind (2 marks). (9 Marks)