Case Study on

Procter & Gamble India Ltd.(HRM Intervention)

Presented By :Arpit Goel (09)Keyul Joshi (13)Abhishek Singh (44)

About Company

• Richardson Marell Inc. USA set up Vicks Products Inc. India as a branch in 1951, Later Richardson Hindustan Limited (RHL) was registered as an Indian Company on July1, 1966, and went public with a share. In 1985 Procter & Gamble Company acquired Richardson Vicks Inclusive and as a result RHK became the Indian affiliate of P&G.

• RHL began with a wide product range. In 1983 RHL set up a plant of Herbal products in A.P manned by 50 employees most of them were women.

• By 1986-87 the company also manufactured basic drugs, chemicals & ayurvedic products. RHS also entered the export market by exported to Russia first time, it had earlier exported to Sri Lanka, France. In 1986-87 it started exporting bulk drugs to U.S.A.

Problems faced by RHL

RHL achievements were not without problems. As a low technology, high return, foreign owned consumer product company, RHL was particularly vulnerable to government restrictions and controls. Company faced many challenges during 1979 to 1981 like:

– Their sales of agrochemicals and bulk drugs were adversely affected.– Boycott of chemist posed a stiff challenge.– Export to Sri Lanka suffered setback due to disturbances there.

Problems at Kalwe Plant

• RHL hired large number of temporary workers during the peak season and laid them off for the remaining 9 months.

• These temporary workers paid lower wages and were not entitled to other benefits, such as subsidized lunch and transport facilities.

• Union was also impervious to there worker problems.• As a result group of young temporary workers grew militant

and challenged their existing union leadership. It also created permanent rift between younger and older workforce.

continued……

• These problems led to a strike continued for 77 days and an agreement was reached which resulted in the absorption of 34 temporary workers as permanent staff on probation.

• Also the practice of not fulfilling the big promises made, resulted in a total lack of credibility of personal department with the workers.

• Line Executives treating day to day worker issues as the problems of personnel department, resulting in absolute loss of control at shop floor level.

• Due to this one way system of communication, changes were thrust upon the labour force without any prior consultation.

Problems at Hyderabad Plant

• There was disillusionment among the supervisory cadres and executive staff. Large number of women employees recruited thought to be less susceptible to union activities. However the employee turnover became very high since many of these girls left their jobs for many reasons either for studies, married and heavy work load.

• The line executive in staff did not make any effort in maintain good relationship. Moreover personal department played one department with other and then jumped into fray to resolve the problem for gain power in the organisation.

• Inter departmental conflict - Marketing department dominant position which resulted in higher status for marketing executives had created dissensions in other departments.

• Lack of performance appraisal and promotion which caused low morale among sales force, alienation between field staff and rest of the company.

• Sales representatives were under tremendous pressure to push sales and increase turnover. Moreover Fixed prices and rising cost constantly cut down sales margin. In order to push sales, all sales were made on credit.

• The top level management team had slowly disintegrated, and the head office had become the battle ground for empire building activities. People tried to gain power by withholding information and top executives tend to be authoritarian and highly resistant to delegating authority.

• All these problems created such pressures on RVI that they was almost considering closure of its operation in India.

Initiatives taken by RHL• In order to tackle these problems, RVI appointed Mr. Gurcharan Das as

the new president of RHL on 1st Jan, 1981.• After taking over position Das impression about company was cash

poor, morale was low, labour was hostile, labour management relation were adversarial and turnover in management ranks was very high.

• Mr Gurcharan Das took a humane approach to the problem. His main thrust was to build a climate of trust by encouraging members of organisation to communicate freely. Das was looking for a people who shared his commitment to the value system as a result RVI had a new personal manager Mr. Ginil Shirodkar who shared Das views.

• In 1981 when Das and Shirodkar set out to work on renewed business strategy, internal culture change in the organisation was the first step they took, which they termed People Excellence Culture.