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Group11 Sharma Industries

Sharma Industries is a conglomerate facing structural issues as it has expanded internationally through acquisitions over decades. It currently has three major business lines spread across several regions managed autonomously by subsidiaries. This has led to a lack of collaboration, technology sharing, and difficulty consolidating financial reports. To address this, recommendations include adopting a hybrid global-local structure through an international department that coordinates subsidiaries but allows regional autonomy. The goals are improved information sharing, technology transfer between regions, and cost savings reinvested in R&D.

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683 views7 pages

Group11 Sharma Industries

Sharma Industries is a conglomerate facing structural issues as it has expanded internationally through acquisitions over decades. It currently has three major business lines spread across several regions managed autonomously by subsidiaries. This has led to a lack of collaboration, technology sharing, and difficulty consolidating financial reports. To address this, recommendations include adopting a hybrid global-local structure through an international department that coordinates subsidiaries but allows regional autonomy. The goals are improved information sharing, technology transfer between regions, and cost savings reinvested in R&D.

Uploaded by

Rohan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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1

Sharma Industries(SI):
Structural Dilemma
2
Case Overview
● The company was started in 1970 by Mr. Rammonahar Sharma
● Sharma Industries was first in the business of pipe and glass manufacturing for industrial
houses
● In 1990s after opening of Indian economy, SI started focusing on international expansion
and accquasition of small companies in various companies
● In 2000 Mr. Palkan Sharma was appointed as the chairman
● SI subsidiaries are autonomous in nature, controlled by central department Industrial
products
○ Corporate relations and public affairs
○ Finance and acquisitions
○ Legal and administration
● Currently it is in 3 major lines of business covering South- east Asia, Middle East, Europe
○ Industrial products
○ Consumer products
○ Electronics
3
Protagonist

● Mr. Rammonahar Sharma


○ Engineer from Glasgow
○ Was an entrepreneur by heart
○ Started with pipes and glasses for industrial houses
● Mr. Palkan Sharma (son of Mr. Sharma)
○ Took over as the chairman in early 2000
○ Chairman of Sharma Industries for over a decade
○ MBA graduate from Wharton
4
Situation Analysis

• Business line was divided into three focus areas


• Each of three divisions had manufacturing plants as well as marketing and
distribution units in India,South-east Asia,Middle-east and Europe
• The business included:
Industrial products: pipes, glass, industrial sealants, coatings, cleaning
equipment and parts
Customer products: light bulbs, switch boards, computer chips, resistors, and
capacitors
Electronics: dishes, glassware, paper, envelopes, pencils and pens
5
Problem Statement
• Collaboration, adaptability and decentralization of power were the main issues since
subsidiaries were working independently
• Problem rose in three areas:
Due to independence of various businesses worldwide it was difficult to make a
consolidated financial report in order to gain efficiencies of uniform information and
reporting system.
Each subsidiary's major decisions were concentrated in their regional area rather than
worldwide, most of time and resource spent on local projects.
There is no transfer of technology, ideas or innovation between different regional
subsidiaries around globe
• There is a constant increase in Materials & consumables, Salaries & wages and also others
costs which are driving profits down. Trend observed in sales is more cyclic in nature.
6
Recommendations
• A mixture of both global and local will be adopted so that the essence of
regional play is not reduced
• A combined to create a international department at headquarter, directors
and their respective teams will coordinate with business managers with
clearly defined duties, as per the need of department power distribution of
business managers will change
• Training and technology transfer will also take place at the international
department
• Saved cost through this measures will be used in research and
development to stay with updated technology.
7

Thank You

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