By Suneetha Deb & Harish Raichandani*
UPCOM Cables was the largest producer of jelly filled cables used by Telecom Industry. It supplied its cables to state owned telecom monopolies MTNL, BSNL for their land line telephones. The company was considered blue-chip on stock markets. It did very well, financially – healthy bottom-line, no dearth of market (whatever quantity they could produce was sold without effort), cost plus pricing mechanism, 25% gross margin, long term supply contracts. This was till mid-90s.
Gradually, things began to change. By 2000 mobile telephony boomed. The demand for land lines started diminishing. Technology had changed, there was more demand for fibre than jelly-filled cables – limited demand for jelly-filled cables was drying up.
UPCOM Cables was not ready for change. They had never prepared for such a tomorrow. Most managers never visualised that there could be days when their produce could be without market. In the year 2000-01 their product sold 50% of the previous year.
April 2001, the management had an off-site strategy meeting to weigh their options. Should they
- Close down the unit
- Reduce manpower
- Wait and watch for one year before initiating appropriate strategic steps
- Diversify
While management team came back without any concrete strategic plan, Prabhu the head of HR for UPCOM kept thinking of the role that HR could play in this scenario, proactively. What initiatives could he take to prepare the workforce and opinion-makers for the future? How could he involve the employees in process of change? Could he drive the cost cutting measures? What implications his plans will have for the various options before management?
Any suggestions for Prabhu?
*Case conceptualized based on inputs by Satish Anand, GM – HR, Tata Chemicals
*Suneetha Deb, Consultant Potentia
*Harish Raichandani, CEO Potentia
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