Human Resources Management

Q. What was wrong with the management when they went for expansion and increase in workforce? Couldn’t they forecast the future demand and supply correctly? What do you think would have been appropriate action in this case?

Ans: This case refers to a scenario of an industry that was established in 1940; a time before the Second World War. The company was manufacturing armored vehicles at that time and later it started exporting their products to other parts of Europe and gathered huge response from its buyers all over Europe. If we go back at the time of Second World War, almost the entire Europe was engaged in war directly or indirectly. Countries that were engaged in the war directly had a huge demand for armored vehicles. On the other hand, countries that were not involved directly were also at the threat of being invaded; hence they had to protect themselves. These countries also had a demand for armored vehicles. It is very much apparent that there was a huge demand for armored vehicles at that point of time. This is the primary reason why the company took the decision of expansion.

Howeever, after the Second World War, many new laws and constitution were made that focused towards peace and prosperity among nations and strongly discouraged war and violence. Thus, countries no longer needed weapons and armored vehicles because the threat of war was no longer there. Therefore the demand of war equipments dropped gradually. The company on the other hand has already gone for expansion by now. It was not just a normal expansion, it was a massive expansion. I think the main problem lies here. The management of the company was too much focused on the short term goals and demands that actually made them make such a decision. They completely ignored considering any substitute or back up plan. If an organization has a profit oriented goal, it must sell its products in order to survive in the market. If there is no or very less demand for its product, the organization...