TAKING OVER DAD‘S BUSINESS
The Indore ice Company had been in operation for over 50 years manufacturing ice for all purposes,
ranging from crushed ice for sale in convenience stores to 300 pound block ice for industrial use. As
with all seasonal industries, the company's daily operations were in a state of flux, with long hours of
work required during the busy season. The company employed anywhere from 75 to 125 people ranging
from unskilled labour to sales and supervisory personnel.
Mr. Ajit had managed the plant for the past 30 years. He had purchased it from an old friend. He
performed all of the jobs in the plant. Working right along with the workers spending very little time in
the office looking at "those figures and crazy ideas that have no business in an ice plant. Mr. Ajit's
philosophy was aptly described by this frequently made observation that "this is an old -fashioned
business and we’re going to run it in an old fashioned way". Mr. Ajit's words were law. That he knew
everything there was to know about making ice could not be disputed. He used his expertise and
position to run all aspects of the operation, trusting few if any of the other employees. Recently he had
fired Prakash on the spot for "laying out." On Independence Day. Prakash tried to explain he had
worked 33 days straight with no time off and, further that his supervisor had given him permission to
take the day off. But his explanation was to on avail. Mr. Ajit simply stated that no supervisor had the
authority to give him the day off.
Two months ago, Mr.Ajit suffered heart attack and died while loading a truck with ice His son, Brij, who
had been living In Bombay, had been considering going into business for himself for sometime and was
now considering the possibility of replacing his father. He hadn't been home much during the past few
years as he had been busy pursuing his own career in advertising. But he remembered how much the
company had meant to his father and felt somewhat obliged to carry on and expand hi s organization.
In October, Brij arrived at the Indore Ice Company, walked in the door and saw a sign pasted on the wall
directly in front of him:
"We have got one rule - do what you are told". It had been long time since he'd walked through that
door, but he knew he‘d never seen the sign before. Tearing it down, he proceeded to walk through the
plant talking to the employees and supervisors.
The situation was bordering on chaos; nobody seemed to be working. As the day progressed, he
learned that nobody rea lly knew what they were supposed to do. "Mr. Ajit had always Assigned the jobs
first thing each morning" was the most common answer he received when asking what was going on.
Absenteeism and tardiness were major problems; there were no policies, procedures, or rules for him to
refer to and when he tried to get information from the supervisors, he learned that his father hadn't
really used supervisors as subordinates who directed the work force.
Brij retreated to the office for the rest of the day to study the records regarding company operations.
The Investigation proved even more alarming than his conversation with the employees. His father had
kept all the books with the help of an old friend who was CA. It took some time to decipher the meaning
behind the figures he found.
The annual staff turnover rate averaged about 75 percent over the past five years, which explained why
the daily work log revealed new employees. The financial statements revealed that the company had
lost a considerable amount of money due to decreasing sales over the past two years. In fact, sales for
last year were down by Rs.27 lacs from the previous year. On the other hand, Brij know that Indore
Ice·Company was the only large icecompanv in the major metropolitan area. He later learned that many
vendors, dissatisfied with late deliveries and even forgotten deliveries discontinued buying ice from
Indore Ice Company and purchased ice machines. Further, one employee - revealed to Brij that during
the July 4 ice shortage last year, Indore Ice Company's prices rose 100 percent for a two-week period
because Mr. Ajit believed "if they want it bad enough, they'd pay ,for it". This, the employee suggested,
resulted in even more vendors discontinuing use of the company's services.
The records also revealed a significant problem existing in the industrial market for ice Indore Ice
Company once served a large number of industrial users : in fact, over half of the customers used to be
industrial users had gradually dwindled over the years. Today, industrial ice services comprised a little
fewer than 12 percent of the total business.
Brij set back in the leather chair, resting his feet on the desk. His father had been so proud of the Indore
Ice Company. None of this made any sense--how could he have let things get into such a state? But
more importantly what could he do to get things moving again?
Answer the fol lowing questions.
1. Analyse the situation existing in the company.
2. What can Brij do to straighten things out?
