Decision Making - A Case Study
Sign in

Decision Making - A Case Study

print Print email Email
HR Professional USA
See interview of Joy  Leo
Company Policies Maual is the Bible for all Management professionals that helps in decision making. But at times the policy itself becomes a problem for them. Here is a case that will make you think.

AJ & Co is a tier 1 supplier for the automotive industry. Their knowledge bank is CAE and CAD. The company's financial bank has a tie-up to provide car loans to its employees on easy monthly installments.

The company has a auto loan policy which says that employee who completes 5 years of continious employment are eligible for car loan from their banker and the company will provide Rs 50,000 as incentive towards down payment. Being an automotive company the policy makers thought it would be good that all their loyal employees drive a car.

In the year 1990, AJ & Co. recruited 100 freshers from college due to the sudden development in their business and industry. In the year 1994 the company is not doing much of business and balance sheet is not that appreciative. In the midst of doing too many crises management activities the top executives failed to revise the auto loan policy. Among the 100 freshers who were recruited in 1990, 30 had resigned for various reasons. Among the remaining 70 employees 20 of them applied for the auto loan in the year 1995 as they have completed 5 years. These 20 engineers have different joining dates and 10 of them who completed 5 years service at early dates in 1995 got their car loan application approved and got their 50K check as incentive towards down payment. The remaining 10 applications are not approved due to shortage of funds.

The situation is that the compnay is not financially sound during the fical year 1994-95. The demand for CAE and CAD engineers are still great in the market. The company has already invested a lot on these engineers and cannot afford to loose them after 5 years. Moreover the company has already approved the incentive for some of their colleagues.

How will you as the VP Operations satisfy the demands of these 10 engineer's auto loan application and what will you do to the auto loan policy?