The HamdardCompany, makers of “79” brand insecticides andindustrial chemicals, had been run for many years by one man, Wajid Hussain, who was largelyresponsible for its steady growthduring the previous seventeen years. Hussainhad actually been theboss in all but title even before he had been made executive vicepresident in 1979. Since then, however, he had controlled everything in thecompany and made every important decision.The president had confined himself to handling a few old customers—who half acentury earlier had accounted for the bulk of thecompany’s sales and whose loyalty and, on one occasion, financial helphad pulled the company through the GreatDepression. By now, however, these customers accounted for only 10 percent or less ofthe company’s business—a result of the expansion since Hussainhad becomethe dominant force in the company. The president, in other words,was not much more than an assistant salesmanager except in title.The other officers of the company were all Hussain’s office boys andwere treated by him as such. The only one showing signs of independence was Abdul Hameed, the assistant controller, who had comein from the company’s public accounting firm four years earlier tohandle tax matters; but he was still very young and had had noexperience except in auditing and taxes.The chairman of the board—the last representative of the Hamdardfamily that had started the company and had originallyowned it entirely—had been worrying about the situation for quitesome time. But he consoled himself with the thought that there wasplenty of time, after all. Hussainwas a young man, barely fifty-five,and had at least another ten years to go. And there was no doubt thatthe company prospered under his reign. Also, secretly, the chairmanhad little stomach for a fight with Hussainand was even afraid thatin such a fight the other major stockholders, including various Hamdardwidows, nieces, and granddaughters, would side with Hussainagainst him. The bulk of the shares, by the way, were owned by smallshareholders outside. The shares had been fairly widely distributedwhen the company became publicly owned in 1928; and Hussaincontrolled the proxy machine.
Then suddenly, in early 1993, Hussaindied of a heart attack. Onpaper that should have made little difference; in fact the organization chart looked prettier without him and with the functional VPsreporting directly to the president. But actually the company waswithout a head.At the same time, Hussain’s death released an emotional stormthat had long been suppressed by his heavy hand. It became clear,even to the not-too-observant president and chairman, that Hussainhad governed through fear and intimidation, that he had systematically driven out or broken people of independence and spirit and hadreplaced them with yes-people, and that even his own creatures in thevice presidential seats would not accept another “one-person regime.”But, alas, it became also clear that not one of the VPs was able tostand on his own feet and to make his own decisions; they had allbeen too dependent on the strongman for too long
1. What do you think the company can do? Can you make any general conclusions and observations on management theory and management practice?
2. A company has retained you to study their existing structure and reporting relationships. The company believes that since they are operating with state-of-the-art technology and their core business is to extend technical support to telecom majors, there isno point in keeping their brick-andmortar organization structure in all the countries of their operation. They would, instead, prefer to follow a networked structure, with their controlling office in Dubai. Suggest the right course of action to them.
3. Ahmad Anwar, a production manager in a cement manufacturing unit, achieved the highest production target and even exceeded the level of expectation of thecompany. In a board meeting, Anwars’s performance was discussed at length and the company promoted him to the position of general manager (operations), creating a new position to bring all production shops under him. The post-promotion performance of Anwarwas also laudable. However, resentment against Anwarstarted increasing day by day. This aspect was not given much thought by the top management of the company. Finally, one day, Anwarwas physically assaulted by a group of workers who accused him of showing apathy to their problems. The incident persuaded the management to suspend 12 workmen who were found to be directly involved. This enraged the other workers of the company and they resorted to a total shutdown of production with the demand that their colleagues be reinstated and Anwarremoved from his charge. Identify Anwar’s leadership style and suggest how he can continue to be a good performer while remaining a favourite of the workers. You may cite actual examples from the corporate world to justify your answer.