Page 200 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Unit 14: Future Trends in Organization Development

Notes
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Case Study Surya Chemical Company

The Company
The Surya Chemical Co. manufactured industrial chemicals for sale to other industrial
companies. The company was about 40 years old and had been run by a stable management
under only two presidents. Within the past few years, however, declining earnings and
sales had brought pressure from the board of directors, investment bankers, and stockholder
groups to name a new president. The company had grown increasingly stagnant - although
at Surya they refer to it as conservative – and had steadily lost market standing and
profitability. Finally, the Board decided to go outside the company to find a new CEO and
was able to recruit a dynamic manager from another major corporation, Ashok Verma.
Ashok is 47, an M.B.A. and had helped build his prior company into a leadership position.
However, when another executive was chosen for the top job, Ashok decided to accept the
position with Surya. Ashok was clear about what he needed to do. He knew that he needed
to develop a top management team that could provide the leadership to turn the company
around. Unfortunately, the situation at Surya was not very favourable.

Decisions were made by the book, or taken to the next higher level. Things were done
because “they have always been done this way,” and incompetent managers were often
promoted to high-level jobs.

The Meeting
In a meeting with three members of the Board, Chetan Gupta (Chairman), Amit Singh,
and Sanjay Rastogi each had a different bit of advice to offer.

Chetan said: “Look, Ashok, you can’t just get rid to the old organisation if you want to
maintain any semblance of morale. Your existing people are all fairly competent
technically, but it’s up to you to develop performance goals and motivate them to achieve
these standards. Make it clear that achievement will be rewarded and that those who can’t
hack it will have to go.”
Amit Singh, puffing on his pipe, noted : “Let’s face it, Ashok, you need to bring in a new
top management team. Probably only six or so, but people who know what top
performance means, people who are using innovative methods of managing and, above
all, people you trust. That means people whom you’ve worked with closely, from ABC or
other companies, but people you know. You can’t retread the old people and you don’t
have time to develop young MBAs so you need to bring in your own team even though it
might upset some of the old timers.”
Sanjay Rastogi smiled and said: “Sure, you’re going to have to bring in a new team from
the outside, but rather than bring in people you’ve worked with before, bring in only
managers with proven track records. People, who have proven their ability to lead,
motivate and perform, from different industries. This way, you will get a synergistic
effect from a number of successful organisations. And the old people will see that
favouritism is not the way to get ahead. So get a top performance team, and if you lose a
few old timers, so much the better.”

Question:
Discuss the above case and explain it in detail.

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