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A Paper Presented to Professor Deepa Mishra Tolani Institute of Management Studies

On 3 August 2010

IN Partial fulfilment of the Requirements For the written Analysis and communication Course in the PGDM proramme

By Rina prajapati (TMS- I) INDEX

1. Gist of the case 2. Content 2.1. 2.2. 2.3. 2.4. 2.5. 2.6.

Problem Criteria Options Evaluation Decision Action plan Contingency plan.


The case is about VOLTAMP ELECRICAL CORPORATION. Which was centralized structured in 1909. it was specialized in electric motors.

By the beginning of 1956, they implemented decentralization policy because of problems occurring in business expansion.

Under this policy, the organization divided in 14 divisions. Each division had been headed by an executive vice president and section manager.

The advanced development laboratory of company had developed the theoretical concept of a new kind of magnetic material. They offered that concept to magnetic material section, but they already engaged with other developmental research of magnetic products. So, the section refused that research.

Therefore, the laboratory offered that research to Audio production section and they agreed to accept that offer of laboratory.

The research was successful and given the registered trade mark of TGW with the development investment of at less cost than other existing magnets. $ 500,000. New magnet was in a smaller size, more strength and

The main problems in the organization were:

There were uncertainty between the manager of Audio product section and magnetic material section over deciding how best to exploit the newly discovered magnet.

Which section should produce the TGW. Long run profit and reputation in market. Because of the decentralized policy both sections take decision separately and some times its creating problems. Recovery the cost of new research $ 500,000

SWOT Analysis. Strength

Voltamp have 45 years experience in electrical industry. Voltamps operations had always been profitable. To maintain standards of quality and less cost and time, they produce components parts in their organization. Organization was aware of new research and development due to advanced development laboratory. Voltamp had sales outlets in all major cities and design, manufacturing, operation in 44 states. Voltamps innovation products increased its reputation with continuous profit. They take decision what was best for their section within the frame work of what was best for voltamp.


Authority, responsibility and accountability of the section manager had not clearly defined. Lack of understanding between section manager. Sections were not designed to diminish competition in such areas as product development, production, sales etc. They declare that either to purchase component from another section who responsible for it or to produce themselves. So, there was limited choice of purchasing components.

Voltamps general policy not to purchase component parts from outside the company.


TGW was much powerful and cheap then normal magnet so it could be proved economically beneficial. TGW can make product leadership in the market. Voltamp can get huge profit through licensing process. Create monopoly in the market and increase reputation.

Main threat from the outsiders competitors if they copy the TGW.


Manufacturing TGW by Audio product section. Manufacturing TGW by magnetic material Manufacturing TGW by both Audio product and magnetic material section. Manufacturing TGW by magnetic material section, Audio product section and give license to competing companies.



Weightag e Exploita tion Leaders hip Profit Total

A 10% 04% 04% 18%

Options B C 12% 07% 05% 24% 15% 07% 10% 32%

D 13% 07% 06% 26%

50% 25% 25% 100%

If we want more exploitation then normal magnet option C is best then other option. If we give leadership status effectively so option D give leadership both Audio product, magnetic material section and give license to competing companies is better than other option.

If we want profit maximization through TGW so we implemented option C manufacturing TGW by both Audio product and magnetic material section.

After evaluating all the options we can say that the best decision would be to implemented option we achieve more profit with fully exploitation.

After taking decision their action plan is that both section APS and MMS manufacture TGW and take suggestion and gives training to each other department so our research and development cost should be recovered.

In organization if we take any business decision in that involves risk. Here in voltamp case contingency plan would be the next best option after manufacturing new magnetic C , is option D product by Audio product

section , magnetic material section and give license to competing companies.