MICROMAX: SCALING THE LARGEST INDIAN MOBILE HANDSET COMPANY Harvard Case Solution & Analysis

MICROMAX: SCALING THE LARGEST INDIAN MOBILE HANDSET COMPANY Case Solution

STATEMENT OF PROBLEM:

“The primary problem for the founders and the equity owners of the Micromax organization is to adopt the most feasible business management strategy and structure for the business in order to improve the decreasing revenues and operating margins of the company along with efficiency and effectiveness of the operations of the organization.”

ROOT CAUSES OF THE PROBLEM:

There are several root causes and contributors to the primary problem of the management of the organization as they act as barriers and hurdles in the improvement of the day to day operations of the organization and on its performances overall in terms of revenues and operating margins that the business generates from the markets of the country where it operates.
The most critical root causes and the problem at hand are the voids in the processes and systems of the management of the organization and the owner centric culture of the business. However; there are several other problems with in the business culture that also hamper the effective running of the business and they are illustrated below.

• Lack of trust between the owners and the hired professionals of the company.
• Absence of accountability and performance appraisal of the employees of the company.
• Giving priority to affiliation over talent and merit in the hiring process of employees.

The short-term problem for the owners and the equity holders of the organization is to revive the falling sales and revenues of the organization. Due to the declining sales and revenues, the operating margins of the organization is also getting affected as the multi-national competitors of the business are taking advantage of the crises that the company is going through.

The short-term problem of the business is to revive its monetary performances in terms of profits and revenues of the company, while also sustaining the market share of the organization in wake of increased competition from the rivals in the industry.
It is necessary for the founders and the equity owners of the organization to decide that whether they should continue with the founder only management of the business or should they look for professionals for the role of running the business and let them run the business with greater liberty.

PROBLEM ANALYSIS:

The problem analysis of the case study will require a complete and comprehensive study of the problem at hand along with the business structure and culture of the day to day operations of the business. The theories and concepts involved will look into the governance and leadership aspects of the organization in order to determine their root causes as well as to advice feasible solutions for the owners and equity holders of the organization.

CORPORATE GOVERNANCE INSIDER MODEL:

The insider model of the corporate governance in the organizations is based on constructive and positive involvement of the owners and shareholders of the company in the day to day businesses and operations in the organizations.
The organizations that follow the insider model culture of the corporate governance, are predominantly in the control of the shareholders and the owners of the organization and they show much more interests and excursive a greater feedback on the workings and short-term management decisions of the company.(Schnyder, 2010)

In the insider model of the corporate governance the shareholders and owners of the organization mostly hold key management decisions however; they do not have any conflicts of interests with the management and the CEO of the organization. The management and the employees of the company are allowed to contribute in the key decision matters of the business and due to this the relationship between them is stable and positive.................

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