Kota Fibres Case Essays

The Indian textiles chart showed how India used machines to produce greater yarn and cloth amounts in 1914 as compared to the production in 1884. As well it demonstrated how the amount of people using machine made textiles had greatly increased opposed to hand made textiles (Doc 1). In 1916 Radhakamal Mukerjee, an Indian economist, explains how that handwoven textiles cannot keep up with the machine made textiles, and therefore is on a decline (Doc 6). This identifies how India is moving towards

* Employees might decrease rate of production as demand decreases to create an impression of need and to preserve jobs

High employee turnover, where workers frequently leave and must be replaced, leads to increased spending on recruitment and training and can indicate management problems. Employees often have good reasons for moving on but if too many are leaving an organisation, can be very disruptive.

Summary: The Company has a large amount of employees that stayed in their current position. Either people got demoted or choose to go to part-time positions. The small amount that was

Companies can just settle for fewer profits by absorbing the increase cost of their current labor supply instead of dismissing workers. This is one method might be the least popular method and the least used by firms. Using this approach decreases the company’s net profit. This method should only be used by firms in a strong financial position and there is no other approach that can be used.

Opposition from Unions in different subsidiaries against the layoff could cause serious problems like high severance package and possible strikes

The most effective ways of controlling and minimising labour turnover is to be able to review, improve, develop, and implement effective changes to:

It’s extremely costly to hire new staff. The money saved by keeping the staff you currently have reflects in the company’s profits.

Low morale among employees in any company eventually leads to decreased profits with other factors of the business decreasing along the way. “And US Airways employees, who have seen their pay cut by more than 20 percent and their health insurance and pension plans shrink, are certainly an unhappy lot” (Claudia H. Deutsch). In order to increase profits, the airline has decreased pay and took away some of the earned vacation. “Company executives say they are taking steps that will improve working conditions and profitability” (Claudia H. Deutsch). Many employees were calling in sick which the company believed would eventually lead to poor customer service.

The problem that the firm Guna Fibres is facing is that they lack sufficient cash flow from operations to meet their day-to-day financial obligations. Guna Fibres has become dependent on a revolving line of credit from the All-India Bank & Trust Company and due to increasing operating expenses and costs of good sold Guna Fibres is no longer able to remain solvent based on their current financial practices.

Guna Fibres, Ltd is a textile manufacturing company founded in 1972 and situated at Guna, India. Ms Surabhi Kumar is the managing director and principal owner while Mr Malik is the bookkeeper. This company utilizes the technology and domestic raw materials to expand its franchises. It supplies fibre yarns used to weave colourful cloth for saris, a traditional wear of Indian women. Guna Fibres usually utilized a line of credit from All India Bank & Trust to finance its business during its peak sale season which is usually on summer.

This approach is appropriate when employee is high or increasing or when employee morale is low or declining. In this approach resources should be relatively abundant; there should be relatively low conflict and low diversity.

This situation has impacted negatively on the company’s ability to repay its earlier loans and customers are upset because of delayed delivery. The third major problem relates to its distribution system. The company had two distribution warehouses. However, it suffered significant challenges in moving the yarn from the factory to the customers with a single trip taking between 10 to 15 days. The roads were impassable with only one lane. In addition, in 2001, a number of problems emerged that include: inability to pay excise tax before the yarns are transported, the company is not repaying its loans as scheduled, its request for a new loan may not be granted by the All-India Bank & Trust Company, and it projects that because of inflationary pressures, interest charged on its previous loans in the subsequent year may increase.

Technological advances during the past decade have opened many new doors for the Textile and Apparel industries, especially in the area of rapid prototyping and related activities.

In this paper we will discuss the Shui Fabrics Case Study and its implications on managing in a global environment. The research of case studies gives us the opportunity to understand and apply the lessons we have learned in the course.