Page 22 - Cost

Cost Competitiveness

promotions of the people of the organizations company only in paper and it lacks initiative in
in general. Te HR Directorate functions and translating vision into action and action into
monitors the HR Budget as is framed by the result. Te leadership of the company is found
company. Tere is centralization of HR Policy. to bureaucratic and sometimes it is autocratic.
It is the responsibility of the GM (HR) at Chain of command and control is centralized
corporate level to act as the chief coordinator at corporate level. Tere is mounting court
among the SBU level HR Managers. Te SBU cases between the unhappy workforce and the
HR Managers prepare HR Budgets annually frm. Te company is functioning in a closed
and the same is incorporated in the Master ended system.
Budget of the Company. It is has been
observed that a substantial portion of the HR Conclusion:
budget remained unutilized during the panned
period and the GM (HR) could not justify It is evident from the above that the frm in
the non-utilization of the HR Budget. Budget our Case is ambitious for expansion of the
proposal is placed by SBU HR Managers and business in one hand and on the other hand
the same is forwarded by the GM (Operations) it is not in a position to manage the existing
to Headquarters of the company located at business in cost efective manner. It fails to
Mumbai, India for adoption. Moreover GM generate reasonable rate of return on capital
(HR) takes lot of time to communicate the employed, could not pay good dividend,
approved HR budget to the SBU HR Managers working capital fnancing is weak as a result
and SBU In-charges. Te world is changing of feeble cash fow, burdened with inefcient
very fast keeping pace with advancement of workforce and attributed with alarming rise
science and technology. Staf cost is 30% of in cost of production and attributed with
the cost of sales in general and every employee declining trend of earning revenue. Te cost
has to contribute positively to growth and of inefciency is yet to be worked out. Te
prosperity of the company. Te people of the Total Quality Management (TQM) hardly
organization have to work keeping in view works. Internal failure cost, external failure
of importance and signifcance of economy, cost, appraisal cost and correcting costs are
efciency and efectiveness. Non performers major components of TQM but they remain
have to be identifed and the company does unreported in most of the time. Tere is huge
not have a time-honoured mechanism and gap between contemplation and action. An
parameters for measuring the efciency of organization means people and it fails to deal
the people. Te company HR Policy is back with its people in time-honoured conducive
dated. It is observed that a person who joined manner that can inspire and motivate the
as Foreman/supervisor remained in the workforce of the company. Te CMA has been
same position during last twenty or more giving continuously alarming bell but the
years. Te employees at all levels are found management does not give due attention to it. It
demoralized and de-motivated. Te cost of is now high time to draw the existing balanced
inefciency burdens the pricing of the product scorecard and the budgeted one for the given
in particular and the frm in general. Te frm. Both the principles of management by
people of the organization are concerned with objectives and management by exception need
mission, vision, objectives and goal of the to be made workable in cohesive manner. Te

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