Action Technology Limited (ATL), a software development company, was promoted by its present managing director G.R. Vikas.
Vikas almost hates bureaucracy and believes in the autonomy of people at the workplace. There are about 450 employees with the company. All leave the office at any time and can work up to any time including past mid-night. The idea is that an employee should work only at that time when he feels that he is the most productive. Workplace remains open for twenty four hours. There are no set policies regarding various types of leave like sick leave, paid holidays, or any other leave. Vikas believes that fixing a fixed number of days for sick leave is arbitrary because an employee may require more number of days or not a single day as sick leave. While hours of work and leave policies are quite flexible, employees frequently put in at least 50 hours of work and leave policies are quiet flexible, employees frequently in at least 50 hours a week. In addition, regardless of number of hours worked, every employee is required to be accessible via e-mail, cell phone, instant messaging, or laptop. Every employee sets his weekly and monthly production target in consultation with management. Every employee is given plenty of autonomy to achieve the target and his performance is measured in terms of this target. Those who are on target achievers are terminated. In one year, about 6 percent of non-improvement, services of non-achievers are terminated. In one year, about 6 percent of non-achievers are fired. ATL is doing quite well with about 33 percent annual growth rate with commensurate profitability. In the process of selecting employees, care is taken that only those candidates arte selected who believe in autonomy and have sufficient internal motivation to get the things done. They
are trained to imbibe companys work culture. At the interview level, applicants are encouraged to ask any question about the company and its work pattern. Farm Equipment Limited (FEL) is engaged in manufacturing farm equipment of different types. It markets its equipment through a network of distributors located nation-wide. Besides, it also exports its equipment to different countries. The chairman of the company is quite satisfied with performance of the company. One day, a meeting of distributors held at the companys headquarters. In the meeting, the Chairman also participated. After some discussion about the distribution strategy, almost all distributors urged the Chairman to introduce some new moles to satisfy the changing demands of customers. The Chairman who had engineering background recognized the implications of distributors suggestions but suggested that introduction of the new models would require heavy investment in research and development. Further charges in the highly automated production line would be very costly. His argument was, The company has been quite successful even with a limited number of models. Therefore, instead of introducing new models, it would be more appropriate to cut the cost of production of the existing models and reduce their price. After all what customers want is value for their money. With this argument, the Chairman decided not to introduce new models but insisted to cut the cost and price of the existing models. However, he agreed to seek the opinion of a consultant to test the validity of his decision.
