Question

(a) Find one example of a major managerial decision published in any of the recent newspapers or periodicals (e.g. Wall Street Journal, Business Week, etc.). Describe the decision and any other information, such as what led to the decision, and what happened as a result of the decision. What did you learn about the topic of decisionmaking from this example?reference link?

(b) Recently, an airline company had more customer complaints, such as late flights and mishandled baggage, than any other major carriers. If you were an operations manager at this airline company, how might you use MBO to solve these problems? Discuss.

Answer 1

(a) Recently, the MD & CEO of a large private sector bank in India was involved in a fraud. The CEO Mrs. Chanda Kochhar faced allegations for indulging in a scam by sanctioning a loan to Videocon in return for some personal favor to her husband’s company. As a result of these allegations on the top management of the bank, the stock prices of the bank plummeted. Moreover, the bank resulted in losses in the second quarter of the financial year. Witnessing all of this chaos, the board of directors of the bank took an agile decision to replace the alleged CEO. Mr. Sandeep Bakshi was appointed as the new CEO to takeover the operations and decision-making in the bank. This incident helped me realize the importance of agility and responsiveness in decision-making.

(b) Management by Objectives involves 5 major steps:

1. Revising and reviewing organizational objectives
2. Conveying the mission and vision to employees
3. Aid employees in setting their own objectives
4. Monitoring the progress
5. Evaluating and rewarding the progress

As an operations manager at an airline company, I would firstly review the objective of the organization and revise it to ‘reduce mishandled baggage to 5%’. An objective which is defined numerically is more impactful and easier to assess and monitor. Then, I’d convey the same to the employees involved in baggage handling and other ground team in operations. I will use SMART objective (Specific, Measurable, Acceptable, Realistic, Time-bound) to express the goal. The performance of each employee will be monitored and on the basis of such evaluation, rewards will be provided to best performers.