Results Of Forcing The Pace : REM

Team : 5

Introduction :

Mr Mohit Taneja – XLRI (MBA ) Joins REW as cost accountant REW ( heavy engineering fabricator and specialist in

manufacturing machinery for sugar and cement industry ) Challenging job ( no cost accounting system in REW) Chief accountant – “ measure your steps and don’t be over

enthusiastic” ( LEGITIMATE POWER , EXPERT POWER ) Plant manager - suggests to study the manufacturing operations

and their internal problems to introduce cost accounting (EXPERT POWER)

DGM – tells mohit to study the work done by all the personnel but don’t need any recommendations . ( legitimate power )

Later the CA makes mohit as his personal assistant ( Expert power )

Later DGM during the year ending wants mohit to make a physical verification of store accounts.

Mohits find large discrepancies ( and starts investigating ) He also made arrangements to set up the cost accounting

department. ( Information power )

CA takes offence (exhibiting legitimate power ) , sends all the reports to mohit with a note that the CA must approve anything that “goes forward” .

Mohit contemplates resigning

The experts from the case are described from the diary kept by mohit making work related entries .

From the diary

May 6 , 2004 He attended convocation , received his MBA degree (Informative power) May 7 , 2004 He Reached Delhi , took complete rest May 8 , 2004 He is not a qualified cost accountant Challenging assignment , Immediate boss – Chief accountant He wasn’t able to meet the GM and DGM Gm – production and technical matters DGM – all administrative works , purchases , stores and technical matters Generally neither of them interferes in each other’s works (Equal legitimate power ) .

May 9 – 2004 CA – Practical man with lot of experience ( Expert power ) . Assistant secretary ( accounts & finance ) HEC ( 2000-2004 ) Not professionally qualified accountant . About the various areas in the industry .

SALES AND PROFIT FIGURES

Year Sales Profit Before tax in millions

2001 – 2002 58.64 3.302002-2003 48.61 2.522003-2004 35.31 1.50

May 9 – 2004

CA remarked Mohit, you will be advised not to be over enthusiastic . The production manager is bit allergic to controls ( low

legitimate power , low coercive power , high expert power ) .

Better be off to suggest off any kind of control system gradually .

Don’t try to force the pace . ( coercive power by the CA ) .

May 10 – June 7After the introduction to various staffs in all departments , he spent two weeks in the plant . They did not have a recruitment department ( lacked expert power ). Production and technical sides – PLANT MANGER All commercial departments – CA

June 18 GM – person in sixties , wished me best of luck DGM – To study about all the work done by the personnel in the stores

department (He did not want him to give any recommendations , but to just give him the factual report )

June 22 , 23 Submitted the full report to DGM as well as the CA . None called him to discuss about the report . CA advised to spend the next two months assisting for him . ( exhibiting

legitimate power ) July 15 , 28 ( year ending – July 30 ) Year ending preparation of Income statement . DGM called Mohit and the CA to do physical verification on the book of

accounts . He also told every departments to provide every assistance to Mohit He was given referent power of the DGM

August 3 Mohit found large discrepancies between physical and Book stocksREASONS : Accounts of store items are in terms of weight No discrepancy was found in the transport company except for the timings. Materials were stored outside as well as inside the store were found discrepancies Stores ledger clerk ( Mohit had legitimate power on the clerk alone ) . They maintained only one copy of the stores indent . Lethargy at various stages Some old used store indents fully destroyed ( not identified ) August 4

Final conclusion made was that they did not have proper storing arrangements for all the materials . The CA gave mohit the reward power of putting forth any concrete decision which the DGM did not give mohit .

August 5 - 13 Prepared a note and submitted it to the DGM and the CA . No response in return from either of them . (Discrepancy in the stores ) Did not like to work as a staff assistant to the CA Planned to usher in the establishment of Cost accounts department . Labour booking system – he suggested each departments head to utilize

their legitimate power and compile daily job cards to send it to the cost accounting system .

He submitted copies to both DGM and the CA regarding this and again he did not get any response ( NO reward power , charismatic power was exhibited by the DGM as well the CA ) .

August 14 – 2004 Prepared a report on production reporting Considering the overall resistance by different levels of organization he

decided to bring in a system slow and steadily . Production reporting can be a indirect way of introducing a cost accounting

system later Legitimate power consequences : As Mohit wasn’t given any legitimate power he was not even able to do the

job he came for . Both the DGM and CA started exhibiting coercive power .

Aug 16 , 17 , 18 Mr ROY ( chief metallurgist , foundry ) liked his idea and they prepared a Production reporting system . He too had his own boss who vested Legitimate powers on ROY . August 19 He saw every copies of all the notes to the DGM , he referred back to the CA ( The CA had very high influence power by the DGM ) . The CA too did not give any comments , instead a note saying ,

“SUCH NOTES ARE TO BE SUBMITTED TO ME FIRST AND ONLY AFTER I GIVE MY APPROVAL THEY HAVE TO GO FORWARD”

The CA exhibited coercive power , legitimate power , and partially expert power .

He finally resigned .

Ways by which he would have greater influence in the organization ? He must have choose the job which he was studied for , he went in the

wrong field of cost accounting , his superior who had high coercive as well as legitimate power .

He could have contacted MR. Roy in the beginning itself who though did not have legitimate power in the hierarchy , but he possessed reward power which might have helped Mohit be a little influence to the organization .

He could also got suggestions from the GM as well as he too vested legitimate power equal to that of the DGM

Sources of power available to him ? He gained Information power after two months on the flaws and other

issues in the company . He vested legitimate power over the clerk in the Accounts department

.

Which of these powers did he utilize effectively and ineffectively ?

Legitimate power : He had legitimate power only to a single person in the company and he did utilize it effectively to understand the problems in the store in the company Information power : He gained information power in the two months period he started working for the company Expert power : He did not choose the correct job , so he did not have any expert power on any filed in that company . ( Ineffective Usage Of Expert Power ) Referent power : He had his referent power from the DGM for the job he proposed mohit to do , he utilized it effectively and gathered all the required information needed

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