ANALYZING ALIMCO

(NON-PROFIT ORGANIZATION)
Indian Institute of Technology Kanpur

Asmita Gupta
Harsha Mulchandani
Jaishri Rai
Parth Arora
Pranjal Singh

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Table of Contents

Foundation and Motivation ............................................................................... 2

Methodology ...................................................................................................... 4

Introduction to ALIMCO History and Evolution............................................... 6

Organisational Chart 11

Internal Context: How does ALIMCO function ................................................ 11

External Environment ....................................................................................... 21

Our analysis.. 27

Final Conclusion..35

References ........................................................................................................ 36

Foundation for the project

Learning from the course
If we are to pick up the most spectacular learning from the course, it has to be how we could
connect the theory to our own real-life world.
The course began with a two page case study on the Dashman company. Initially, it was
really difficult to really arrive at what was happening. We were all baffled and found it very
hard to connect with the case why would plant managers reply in affirmative to the letter
and still not abide by raw material management system proposed by the new vice president?
We held a very simplistic and linear view of organizations, with little regard for
organizational nuances. What Dashman helped us to do, in retrospect, is to make us think
harder, it made us want to delve deeper to find what the core issue was, to go back to basics
and understand how the nuts and bolts were operating to see what was wrong with the car.
Contrary to our earlier approach of getting caught up in superficial, often unnecessary details
which made us overlook the core issue, this course has taught us a bottom up approach to
look at real life problems. And this has helped a lot, not just for further cases in the course but
for life in general.
One of our group members, Harsha was discussing a live case with a partner at Boston
Consulting Group. The case was about an ITES company delivering services dealing
primarily with sales force psyche the sales representatives did not feel motivated to report
larger deals, reducing companys profits. She diagnosed the reason to be related to incentive
structure- incentives were not based on deal reporting but only deal conversion. She credits
this ability to diagnose incentive oriented problems to the group case analysis of Jacobs
Suchard where the primary problem was that of incentive misalignment.
Another of our group members, Parths father works in a departmental store. When he was at
home in the Dusshera holidays, his father talked at length about how the two tiered
departmental store run by two brothers and their sons respectively was going to be split into
halves because one son felt that the tier owned by his brother had started encroaching into his
sales by keeping the same products.
Although Parth had heard about a rift in brothers leading to split of business story earlier,
because of his family roots of business, for the first time he tried looking at the problem from
an organisational perspective. He discussed with his father how, even considering the split to
be certain, the two divisions could be structured so as to ensure maximum synergies.
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This perspective to look at real life problems came from the learnings in the course. Dr.
Varman has played a pivotal role in widening our view of things. He repeatedly talked about
how we need to learn to look beyond individuals when looking at organisations. It made us
rethink about ourselves.
All in all, we thoroughly enjoyed this course, and especially, the sense of humour Dr.
Varman carries. We really thank him and the course for opening up a totally new line of
thought for us. We would be more than glad to take up yet another course under him as our
open elective if our timetable permits.

Motivation for the project:

Our motivation to undertake this project has been quite simple it was required by the course
that we do a project on an organization of our choice. So the next question, as to why we
chose ALIMCO as our organization would rather be more interesting to answer.
ALIMCO is a nonprofit public sector manufacturing unit operating under the aegis of the
Ministry of Social Justice and Empowerment.
We would like to throw some light into the previous experiences and the future goals of our
group members here to show how that motivated our choice of organization. Three of our
group members Asmita, Jaishri and Pranjal are really motivated to go in the administrative
service and work in the public space. They have grown up hearing a lot about the kind of
problems public sector units are riddled with. Studying ALIMCO thus gave them a get hand
feel of a public sector organization working for social good.
The other two group members Harsha and Parth have worked with non-profits and social
businesses in the past as interns. Harsha had worked with Vatsalya, a NGO running skill
development programs in rural Rajasthan and Parth had worked with a social enterprise based
in a tribal village called Hurlung in Jharkhand. Both of them are incredibly motivated to more
about organizations working with a tangible social good and the sort of riders and inherent
conflicts they face while trying to scale their impact up.
ALIMCO thus was a perfect amalgamation of the interests of the members in the group.
Also, the very fact the course having touched a variety of organizations, did not give a chance
to look at nonprofits as a different class. Reading Annheir Helmuts paper on Managing Non
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Profits- A new approach, we came to know about the subtleties involved in applying
traditional organizational theory for manufacturing organizations in the nonprofit space.
Annheirs work thus, also serves as a motivation to study nonprofit organizations from a
different perspective.

METHODOLOGY
Our point of contact in the organization was Mrs. Neelu Dwivedi - Administration Head of
ALIMCO.
We were greeted by a smiling receptionist, who was physically handicapped. She had no
upper limbs, however had learnt to substitute her legs for doing most of the work, and she
was adept at it! We saw her painting with the brush held between her toe fingers. We were
enthused to begin our journey to explore ALIMCO.
Mr. M.S. Mishra, of the Hearing Aid Department, was the next employee we had a
conversation with, and had an insight into the culture of the the organization and
We proceeded to a visit to the Production Department where Mr. Jayant Singh, JM
Production, took us around the entire production plant and through various processes. Jayant
Sir was going to retire the next week.
Meanwhile we had a chance to interact with some shopfloor workers, half of whom were
casual workers and rest permanent.
Following that we visited the Hearing Aid department, where Mrs. Vibha Paul, who had been
working there for the past 15 years, explained the details of recruitment and product type etc.
The most interesting part of the study was a meeting with Mr. K.V. Rajesh, the MD
Marketing of ALIMCO. He introduced us to functioning of ALIMCO on the whole as well as
introduced us to the changing context of ALIMCO, and how the corporation is looking
forward to transform itself in alignment to this changing context.
Our second visit was focussed on meeting the Production Manager Mr. A.K. Shrivastava. We
had an hour long meeting with him, in which he throw some more light on the functioning
aspect of ALIMCO, the challenges that ALIMCO faces and how the political and social
scenario and interlinkages affect the working of the organization.

In this visit, we also enjoyed a free lunch at the staff canteen, where we interacted with other
line and staff workers.
All the members of the organization were extremely friendly and welcoming. The visits to
ALIMCO, made each one of us a little more aware and a little more sensitive of the problems
of the less fortunate and differently abled people.

ALIMCO: Restoration of the dignity of the man

According to WHO 15 percent[1] of the world population lives with some kind of disability.
India is home of about 21 million[2] people suffering from disability of many kinds. Survival
with disability especially in underdeveloped and developed countries becomes daunting.
Infrastructure inefficiency discourages one to live with self-worth. ALIMCO works for
restoration of dignity of these kinds of people.
History
The continuous wars- Indo China war of 1962, Indo Pak war of 1965 and 1971 caused large
scale casualties in military personnel and civilians[3]. During that time India had only one
artificial limb making organisation at Pune. The sudden increase in disabled people and
worsened economic conditions compelled the government to set up an organisation which
could provide artificial limbs at affordable prices. In such circumstances government of India,
under Section 25 of Companies Act 1956, set up ALIMCO. It was incorporated in 1972 to
take up manufacturing and supply of artificial limb components and rehabilitation aids for the
benefit of the physically handicapped and started production in 1976. Its roots were laid
down under the Ministry of Defence as it was established mainly to cater people affected in
war casualties. The then Prime Minister Mrs. Indira Gandhi realised the need of countrymen
and broadened the goal of organisation to restore the dignity of every disabled person rather
than military personnel only. Later ALIMCO was shifted under Ministry of Social Justice and
Empowerment. The goal was to work for empowerment and welfare of disabled people.
Expanse across geographies: Currently, the organisation is catering to almost all the states
and Union territories expanding its services into 640 districts[4] of India. In addition to that its
export base is also expanding. During Afghan war and Iraq war government provided aid to
the affected people with the help of ALIMCO. ALIMCO has given a new lease of life to
amputees in war torn Afghanistan by providing artificial limbs to the land mine victims and
has planned to set up a limb fitting facility centre at Kabul[5] [6]. Also ALIMCO has extended
its facilities to other countries like Sri Lanka, Nepal, Bangladesh, United Arab Emirates,
Jordan, Iraq, Cambodia and Uzbekistan expanding its vision with the mission to restore
dignity to people with disabilities[5] [6].
In its journey of 42 years ALIMCO has faced many challenges; in fact it became a sick
organisation in 2000s. Since 1980s recruitment procedure was halted as the organisation
was facing losses. The average age of employees is 57 years[7]. But from May 2011,
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ALIMCO showed an annual growth of 54 per cent in business through a mix of execution of
pending orders, accepting new orders among others. This led to accumulation of general
reserve of Rs 62.03 crore and to create a net worth of Rs 63.99 crore as on March 31, 2013.
Market Network & Exports:The Corporation markets its products within the country
through its offices at Delhi, Kolkata, Bhubaneswar, Bangalore, Mumbai, Guwahati[8] and
with the help of an extensive dealer network to ensure availability near the important Limb
Fitting Centers and customers.
The major buyers of ALIMCO products can be categorized as [8]:
National Institutes
Dealer Networks
NGO Networks
State Government
Annual financial assistance from the Union government: The Corporation receives
financial assistance in the form of grant-in-aid to the extent of value of assistive devices
distributed under the government's Assistance to Disabled Persons (ADIP) scheme. The
dependency of working on government sponsored scheme ADIP, which in the ratio of 90:10
per cent in 2011, has now been brought down to 55:45. Its Initial reliance on government
fund has reduced and right now exploring other market opportunities.
ALIMCO is preparing itself to utilise the modernising fund provided under 12th Five year
plan, keeping in view the next 20 years. Further with upcoming of new Companies Bill,
ALIMCO is exploring the demand for devices from companies under the corporate social
responsibility (CSR) spending allocations. The management of Oil and Natural Gas
Corporation (ONGC) has recognised Alimco as it CSR implementation partner pan-India.
There are plans to introduce new products, new technologies, new processes, improvement in
quality of products and services, technological collaborations. Also, plans are to explore
exports. And now it is trying to become self-sustained and reduce the dependency from
government assistance to 50:50 in the current financial year.
Proper positioning of the product has a great impact at national and international level. Since
implementation of economic reform 1991(LPG-Liberalization Privatization and
Globalization), the corporation has opportunity to extend their products to the customers
around the globe.

At present the corporation products are focused towards the poor and downtrodden masses,
now is the time of brainstorming of the corporation officials to re-position their products in
such a manner that their products has an equal demand for both the deprived and high class of
society. The re-positioning of the products is also required to enter the market of developed
nations.
Analyzing the national and international market, it is found that ALIMCO products are of
reasonable price and good quality when compared to that of developed nations. Thereby there
is a fair chance for the corporation to make its footing in the international market. Cost and
quality are in no case a hindrance for the corporation to compete with developed nations of
Europe and America. Re-positioning should be done in such a manner that it enhances the
customers delight and brand image.
Scale and Scope of ALIMCO: A recent census revealed that there are 2.68 crore disabled
population in India which makes up roughly about (2%) of the entire population. This
substantially adds up to 15% of global disabled population.
Alimco is the only manufacturing corporation which manufactures various types of assets and
devices required for basically four major disabilities- orthopedic, hearing disability, visual
impairment and mental retardation. ALIMCO manufactures 35 categories of products ranging
into 355 variants on a mass scale. These products are distributed across country under
Government of India Scheme covering a combined number of 35 states and union territories,
640 districts and 5547 blocks. Its distribution area sums up to 32.8 lakhs sq. km which is a
unique feature of ALIMCO.
ALIMCO has undergone a complete transformation in the past three years both in terms of
scale and scope.
Transformation from a sick unit to a Mini Ratna company
Past scenario: Till about three years back, ALIMCO was running losses and had a negative
net worth, and was thus effectively a sick unit. In the past scenario when ALIMCO was in a
struggling phase it suffered from many functional drawbacks. The biggest drawback being
that almost orders 15 crores worth orders lay unexecuted. The customers were unhappy due
to delays & quality issues.

ALIMCO as a company had also been confronting various problems due to labor issues
because of the union conflicts - two separate unions existed which lead to strikes and
unethical practices.
There was dissatisfaction in staff due to following reasons:
1. No wage revision
2. No succession plan
3. Retiring only phase with no new filling up of vacancies thus creating a condition of
vacuum
4. No incentives for career growth
ALIMCO hardly any growth in turnover & production over the past years and the situation
was almost stagnant in terms of progress and stability.
Revival and growth: ALIMCO witnessed a complete revival with the joining of a new CMD
Shri Narayan Rao G. He undertook a series of multidimensional approaches towards
uplifting the drowning circumstances of ALIMCO. To begin with, the accumulated orders
upto 15 crore worth were executed initially.
In the recent years ALIMCO mainly focused on expanding the markets to uplift the scale &
scope of the organization as a whole. A clear cut comparison can be made with respect to the
scale on which ALIMCO had been working during its struggling phase and now after being
revived recently.
Previously ALIMCO covered 19 states serving around 80000 people only. In the current
situation with the assistance and collaboration of States Secretaries of Disabilities and
Commission of Disabilities ALIMCO has scaled up its production and distribution capacities.
It has now expanded its horizons covering a joint number of 34 out of 35 (states + union
territories) serving almost 2 lakh beneficiaries.
Within 1st year of his joining the company saw a remarkable growth of 42%. This was
followed by 83% growth in the 2nd year and total of 170 % by the end of 3 years. Thus
making up to a 54-59% growth on an average. With the market expansion provisions
ALIMCO was able to convert its negative net worth into positive net worth thereby
transforming from the status of a Sick unit to Mini Ratna company.

Changes in Research & Development

In the past years the corporation was running under accumulated losses and its R&D grant
was suspended by the government due to it being a red flagged unit. Thus, initial
expenditure on R&D was extremely unsatisfactory. In the current scenario, RnD department
is still being formed and new investments need to be injected to achieve technological
innovation. ALIMCO has also sought assistance and carried out discussion with global
players in the field of artificial limbs manufacturing such as OttoBack of Germany which has
agreed to collaborate in the near future.
Effect of introduction of new welfare schemes and promotion incentives
In the past, a formal incentive structure was absent which led to complacency and lack of
interest among the workers. ALIMCO designed and implemented an incentive scheme which
focused on production target achievement on one hand and a sales target achievement
incentive on the other hand. The monthly and daily targets are put up on notice board
notifying the actual, delay, variance parameters of target completion in nearly real time. The
introduction of merit rated promotion schemes boosted the morale of the officers who started
working with a greater zeal and enthusiasm leading to greater outputs. This initiative worked
positively and increased the accountability in organization.
As a result, the production related incentive brought in surprisingly large changes over the
recent years. In 2001 the monthly production was worth 5 lakhs only whereas now the daily
production is worth 70 lakhs.

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Organisational Chart

INTERNAL CONTEXT: How does ALIMCO function?

We would now attempt to show how the nuts and bolts of the organization are working in
detail. This section would thus, in chronological order, Give an overview of the demand of disability devices and how ALIMCO serves
people with disabilities.
Provide a glimpse of all the processes happening at ALIMCO sequentially.
Try to deep dive into each process, understanding its functionalities and dependencies
in great detail.
Highlight the pressure points of each process and understanding how the processes are
evolving/ need to evolve to respond to these pressure points.
ALIMCO, as we know already, is a Section 25, Nonprofit Manufacturing Public Sector Unit
which is operating under the aegis of Ministry of Social Welfare and Justice. This makes
ALIMCO, the only manufacturing PSU not under the Ministry of Industries. ALIMCO
manufactures aids and appliances for helping people suffering with the following disabilities Orthopedic
Audio
Visual
Mental
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They offer a range of more than 360 appliances- primarily to help with orthopedic and audio
disabilities. ALIMCO has started to venture into the visual and mental disability space and
has been sustaining Research and Development to manufacture devices for people with these
disabilities as well. ALIMCO happens to be worlds only firm manufacturing appliances
catering to all the 4 disabilities. In terms of number of disabled people benefitted, ALIMCO
has an 11% market share in India and no similar sized competitors. It also exports products to
countries like Afghanistan, Srilanka, Jordan, UAE, Iraq, Combodia etc through different
inter-government partnership channels and engagement platforms primarily. For example,
post the Iran Iraq war in 1988, the Government of Iran had reached out to the Government of
India for procuring prosthetic limbs which were manufactured by ALIMCO.
India, according to estimates, has roughly 2.5 crore disabled people and on a world level,
15% of the global population is suffering from 1 of the 4 disabilities mentioned above. A
large percentage of this population is still devoid of any equipment help- the primary reason
being that the disabled people largely belong to very poor families and cant afford to buy
these products. Clearly, the end customers ability to pay for these products is very restricted
and it thus validates the acceptance of a not for profit business approach by the organization.
Additionally, what this information tells us is that there is a lack of penetration of any
organization in this space, therefore there is a lot of scope for ALIMCO to scale up and grow.
Product Lines Orthopedically disabled Rehabilitation aids- Calipers, artificial legs, hands etc.
Mobility aids- Wheel chairs, tricycles, crutches, walking sticks
Visually handicapped- Braille Shorthand, Braille Slate, Walking stick
Hearing impaired- Pocket type hearing aid, Behind the ear digital
New products- Motorized wheelchairs, tricycles, MSIED kits, solar charged batteries.
These products can be majorly categorized into two categories- the first one being the ready
to use products like the wheelchairs, tricycles and crutches and the second one being artificial
prosthetic limbs which are custom made according to the level of disability a person has. All
of ALIMCO products are ISI certified and significantly cheaper than the existing products
imported from Chinese Manufacturers in the market.
Now, lets really try and understand what the processes are at ALIMCO and how are they
working.
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ALIMCO reaches out to disabled people through assessment camps it conducts regularly
across 28 out of 29 states and all the 6 union territories. Through assessment camps,
ALIMCO understands the demand of each product. Also, in these camps, measurements are
taken for custom manufacturing of limbs. Once the demand has been assessed the products
are manufactured at ALIMCO and then distributed to the disabled people who had registered
themselves in these camps.
So, the next question that automatically arises is who bears the cost of conduction of these
camps and manufacturing of products. The answer to the question is really simple. ALIMCO
conducts camps, manufactures products and distributes them among disabled people by
getting compensation from its partners- The Government and the Corporate Social
Responsibility arms of large public sector units.
REVENUE SOURCES AND RESOURCE MANAGEMENT
Any non profit organisation how much of its current assets it needs to invest in building
revenue- customer service capacity, and at what prices the services should be sold. In case of
ALIMCO, the dynamics is different. Being a central PSU, and with most of its products being
distributed under the Governments schemes, the price for its products is decided for it.
The organisation already has all the basic infrastructure already in place. It is old and needs
up gradation, but ALIMCO is functioning on a day to day basis and strategic investments in
infrastructure do not happen that often. Which shifts are focus to operational decisions. There
is no need to worry about the demand quotient of their product, for given that only around 1%
of the countrys disabled are assisted, it is reasonable to assume that even if this organisation
produces a reasonably large number of products, it will be demanded (and needed).
The various schemes under which ALIMCO is funded are as follows
1. Assistance for Disabled Person (ADIP)
Started in 1991 by the Ministry of Social Justice and Empowerment with an objective to
assist the needy disabled persons in procuring durable, sophisticated and scientifically
manufactured, modern, standard aids and appliances to promote physical, social,
psychological rehabilitation of Persons with Disabilities by reducing the effects of disabilities
and at the same time enhancing their economic potential.( ADIP scheme brochure, Ministry
of Social Justice and Empowerment)

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ALIMCO is one of the major implementing agencies for the scheme. It gets 20-25 crores
each year under this scheme.
ALIMCO conducts a camp, does an assessment survey, take fabrications for personalised
body parts and then distributes this order in 45-60 days.
2.

ADIP-SSA (Sarv Shiksha Abhiyan)

Similar to ADIP, this is a government scheme under the Sarv Shiksha Abhiyan of the Ministry
of Human Resource Development (MHRD). This aims for targeted assistance to school
children below 14 years of age, with the aim of promoting inclusive education. ALIMCO is
the implementing agency of this combined program and when the procedure at the level of
the ALIMCO remains more of less the same as under ADIP, it is only at the reimbursement
level that the 40% expenditure in this regard is borne by the MHRD and 60% by the Ministry
through grants-in-aid under the ADIP scheme.
3.

National Institutes (NI)

National Institute for the Orthopaedically Handicapped (NIOH),National Institute of

Mentally Handicapped (NIMH),National Institute of Visually Handicapped (NIVH) are some
national institutes for assisting people with various kinds of disabilities. These institutes are
also one of the implementing agency of the ADIP scheme of the government. The grant these
NI receive under this scheme bounds them with the condition that they can purchase products
only from ALIMCO. Thus they provide an indirect income source from ADIP for ALIMCO.
Under the above categories, we see that this represents the sheltered market of our
corporation. There is no uncertainty in this market, the demand is always more than the
supply, yet this corporation struggled in its operations. With ~85% of the revenue stream
coming from the ADIP and ADIP-SSA and 8-10% from the National institutes, up till the
2012 financial year, this organisation was mainly running with the governments money. This
imposes a huge constraint on the organisation and even though it is the biggest such
organisation in India, it is not a price maker, but a price taker. Interestingly, even though no
major competitive threat to the corporation exists, the market share of ALIMCO remains a
meagre 11%. Having evolved in under this sheltered framework and under governments
protection, an organisation working for empowering and enabling the disabled people, itself
seems to be moving on the government support. With accumulated losses and a negative net
worth, this unit was considered a sick unit and was in the list of being referring to the
BRPSE, i.e. it was in the red category.
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Besides these Government aided schemes, there are two more revenue sources for ALIMCO
4.

Dealers

The firm sells to around 40 dealers presently, a minuscule number, which make these
products available on retail stores/ medicine shops. This constitutes a very small portion of
the total revenue - around 5-8%. Getting to know the limited availability of high quality,
cheap products in the market for direct sale was a surprise to us and our next question was to
really understand why this was the case. According to Shri Shrivastava, The basic problem
with our incapacity to make our products available in the market is the malpractice in the
medical devices segment. Doctors want commissions to refer any product to a patient.
ALIMCO being a nonprofit, making very little margin on each product cant afford to be even
pressured into giving commissions to doctors because there is no financial leverage to do so.
Consequently, the doctors keep receiving commissions from Chinese OEMs and gladly refer
their products to patients.
5. Ties with other corporations under the Corporate Social Responsibility (CSR)
scheme
This is the model which has been newly introduced in ALIMCO, in 2013.
Under the New Company Bill 2013 : With effect from April 1, 2014, every company, private
limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs
1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for
the immediately preceding three financial years on corporate social responsibility activities.
These activities needed to be different from the regular course of work of these companies
and provided for a great opportunity for ALIMCO to tap. In the 2013-14 financial year,
ALIMCO has ties with 20 public sector enterprises. ALIMCO reaches out to these large
public sector units and seeks partnership with them to utilize their Corporate Social
Responsibility commitments for conduction of camps and distribution of products. The CSR
partners in the past for the company have been firms like ONGC and ONGC Videsh, RECL (
a subsidiary of Indian Railways), Banks like UBI and SBI and other public sector units like
Coal India.

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The ADIP and ADIP-SSA contributed 85% in the 2012 financial year. Whereas, in 2013, a
major changed happened in the form that 30% of the revenue (to the tune of 40 crore) started
coming from this CSR division. Just as the Government used to release grants for conduction
of camp and assessment and the total cost of the aids distributed, even these companies do the
same, with the exception that there is no ceiling on the worth of the product that ALIMCO
needs to distribute under this model, as opposed to the 10k cap under ADIP.
This new revenue source has been an important factor in enabling the company to achieve
break-even and turn into a positive net worth company.
The companys Director of Marketing, Mr. K.V. Rajesh, was extremely enthusiastic about
this new model and mentioned that the company was at the cusp of a major change. CSR
model provided them with an opportunity to become less and less dependent on Government
aid for their functioning, and the company is in the mode of setting up a whole new
department to handle CSR related activities, so that it becomes a major source of revenue for
the company in the coming years. They look forward to increasing the contribution of this
model from 40 to 70 crores in the upcoming financial year.
Shifting to CSR Some advantages:
Reducing dependence on government: The firm gradually wants to reduce its dependence
on the government funding for its revenue and wants to focus more on the CSR channels. The
rationale behind this is that even if the central government, one day stops the ADIP and
ADIP-SSA scheme (with a pro-business government in power which has started cutting down
public funding on programs like MNREGA, this possibility is not very outstretched), lesser
dependence would mean financial sustainability.
There are other advantages as well in moving towards the CSR model. As stated earlier, the
Government of India mandates a cap of Rs 10000/- on the price of products sold to the
disabled people. Since the government at present is the primary compensation source it
severely restricts ALIMCO into manufacturing only those products costing below Rs
10,000/-. As a consequence, ALIMCO cant think about manufacturing costlier products like
a joystick wheelchair or other technologically advanced products for which there is a
demand and for which CSR partners would have lesser hesitation in compensation. Moving
towards the CSR model thus offers scope of technological advancement.

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Production perspective: There are other pressures on the product line that the production
division is facing on a running basis. There has been a change in the WHO guidelines for
manufacturing of equipment for disabled people. For example, new WHO guidelines for
wheelchairs mandates higher customization in terms of width, seat position, back rest and
footpush. These guidelines also mandate the equipment to be flexible and modifiable for
adjustment according to the needs of the disabled. The production division, hitherto
manufacturing fairly standard products so far has to adhere to the WHO guidelines and thus
alter production.
As mentioned earlier, the production has increased by more than 150% in the last 3 years,
thereby prompting ALIMCO to rethink about its earlier policy of manufacturing everythingeven a small castor in the wheel in-house to a model where there is outsourcing of equipment
manufacturing. We, therefore see Williamsons Make vs buy decision making strongly in
play here at multiple levels. This has also led to ALIMCO deciding to outsource the
management and conduction of camps to conserve manpower utilized for streamlining
production.
Upgradation of manufacturing facilities: A very strong pressure point on production is the
lack of replacement for old machines installed at birth and the severe lack in technical
expertise due to en masse retirement of workers who have been involved with the firm since
the very beginning.
Jayant Kumar, Assistant Manager, Production tells us, 80% of the machines we have in the
shop floor have been there since the beginning. We have been maintaining them
painstakingly so far. Beyond a point operational efficiency is bound to take a serious hit.
Maturing workforce: The firms biggest concern right now, is its maturing workforce, the
average age of permanent employees being 55 years. A lot of employees are retiring right
now and in light of increasing demand and less operational efficiency, this aggravates the
problem further. Let us just take a moment and analyze the workforce composition. At
present, a significant fraction of the workforce involved in production is contractual and not
on a permanent basis. This is across all the sub departments dealing with prosthetic limbs,
visual aids, audio and visual devices. A considerable portion of these employees begin as
apprentices after completing their education and training from Industrial Training Institutes
(ITIs). The job opportunities are notified through newspapers primarily- apart from that
sources within the organization come into play for helping people get jobs. Apart from this,
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what really surprised us no end is the number of years people stay in the organization as
contractual employees. Prakash, a contractual employee working in the production
department in ALIMCO since the last 12 years tells us I got a job here through a contact I
had the administrative staff. The babu was really kind to help me get one. On being asked
about differences he sees in the facilities he gets viz a viz permanent employees, he tells us,
I dont think there is a difference salary wise. I get health treatment benefits too through an
employee card which the firm has issued to me. I think the difference is in my say in the
organization. I cant vote in the Union Elections and therefore there is no avenue for voicing
my disagreement.
The firm is desperately seeking to chisel both these areas. A demand for a modernization
fund worth Rs 200 crore was made to the Ministry in 2009 which was granted this year. This
money is going to be utilized for replacing old laggard machines with new ones and also on
wages of new employees- a lot of them are going to be hired this year. The firm has tired up
with a consulting firm Deloitte to help them redesign the whole Human Capital engagement
process. Rs 1 crore out of the proposed modernization fund is going to be paid to Deloitte for
this process. This in many ways is similar to what happened in the Automajor case we have
done as part of the course. We feel that there are a lot of riders in this whole process that
should be taken care of to avoid what happened with the Anderson consultants in the
Automajor case.
What difference is CSR funding making to ALIMCOs camps? :
Before moving on, we would like to deep dive into how these camps are conducted
highlighting differences between the ones conducted in partnership with the government
through the ADIP and the ADIP-SSA scheme and the ones conducted in partnership with the
CSR divisions of PSUs. The process begins with first identifying the locations for camp
conduction. Under the ADIP and the ADIP-SSA scheme, ALIMCO tries to conduct camps in
635 districts across the whole of the country annually. Apart from this, a minister or member
of parliament might want to conduct a camp in his/her own constituency and reaches out to
ALIMCO for the same. Public sector units largely want to conduct camps in proximity of
their industrial townships. A significant difference between camps conducted in partnership
with the government and the ones conducted in partnership with the CSR divisions of PSUs
is the amount of overhead costs. For government camps, the overhead costs are significantly
lower. ALIMCO sends its own employees to oversee the administration in the camps and the

18

focus is to reach out to maximum beneficiaries instead of focusing on how the tent of the
camp looks. The CSR camps on the contrary involve a lot of overheads due to hiring of an
event management firm for camp conduction. According to Shri Shrivastava, CSR camps
are a lot about photo-ops. Consequently, event management firms are hired. Huge amount of
money is spent on tents etc. The focus gets shifted to getting good photos for the company
brochure instead of reaching out to more and more disabled people.

19

Organigraph- Showing the way ALIMCO really works

Now lets have a look at the processes happening in ALIMCO sequentially. We borrow from
Mintzberg and Heydens paper1 to draw an organigraph of ALIMCO that would give us a
clear understanding of how the processes in ALIMCO happen and how are they interlinked
with each other.
ALIMCO could be treated as a big hub as is shown in the organigraph which connects with
different funding agencies like the Ministry of Social Justice and Welfare (ADIP, ADIP-SSA
and Modernization funding), CSR partnerships, National Institutes and dealers selling
product in the free market.
The process begins with first understanding the demand through camp conduction. Business
administration involves both the conduction of the camp and forecasting of sales. As we see
in the organigraph, a chain exists here. After forecasting sales, the process flow comes to
marketing which is a loosely coupled combination of multiple processes. Post sales
forecasting, marketing communicates its funding needs to its funding partners which is
followed by fund allocation which is then followed by utilization of these funds for raw
material procurement. As we see, there exists a chain within this loosely coupled domain.
Raw material procurement process is linearly linked to R&D process, where post raw
material procurement, the design of products and technology development for manufacturing
20

part takes place.

There exists a chain between R&D and Production department which is also a loosely
coupled domain as shown in the organigraph. There exist web like interactions between the
production planning, materials processing and R&D processes as there is continuous
communication back and forth on how much material is to be procured, what sort of a design
fits the cap that government places on the price of the product etc.
Within the production process again exists a chain of planning production inspection.
Distribution to end users take place when the production has been completed.

EXTERNAL ENVIRONMENT
Given the history of ALIMCOs incorporation and development, we can see that it has grown
in a very sheltered environment. Governments support was a necessity in the scenario when
the organisation was set up. However, the fact that it never could grow out its shelter can also
be seen as a big reason as to why, for most parts of its operations, this organisation has stayed
an underperforming unit. According to the financial year 2012 report it was a negative net
worth company, and had remained thus for a long time. It was on the list of PSUs which were
to be referred to the Board for Reconstruction of Public Sector Enterprises (BRPSE). We can
see uncertainty emerging as it was needed for the organisation to adapt to the changing
context, however it was consistently failing in doing so, or one can argue, was not doing
anything to handle the situation. Only in the last financial year, i.e the 2013 financial year,
has it shown a turnaround and became a positive net worth unit, and its status being upgraded
from a sick unit to that of a Mini Ratna.
COMPETITORS AND OTHER MARKET PLAYERS
The market for ALIMCOs products can be divided into two parts
1. People who are eligible for governments assistance and do not have the resources to
buy products on their own
2. People who are either not eligible for aid or, even if with difficulty, can purchase
devices from the market
Besides some NGOs who receive grants and distribute assistive devices to the disabled,
ALIMCO is the only such major implementation agency under ADIP. There is no other

21

similar agency, which manufactures products, conducts camps and distribute such devices
amongst the poor.
When there is no other organisation with such a diverse portfolio as ALIMCO, there are
various others small organisations which do produce assistance aides for a specific type of
disability. These competitors come in picture for the market constituted by the people falling
in category 2. Most of these are for profit commercial organisations with products priced at a
higher range. ALIMCO has very less visibility in this market. A variety of factors contribute
to it
1. ALIMCO, being a non profit organisation, cannot give commission to retailers and
other agents involved in such a channel. These other players control the market
channel and ALIMCOs competitors are able to tap them.
2. When retailers and doctors, endorse a particular product, it becomes imperative for
the patient to buy that particular product, and purchasing a particular cheaper product
such as that of ALIMCO would result in the doctor dismissing the device and blaming
the ineffectiveness of the treatment on the device, or likewise.
3. Even though the ALIMCO products are ISO certified, for the past 35 years, the
machines processes and the technology has not been upgraded. Also, the average age
of the workforce is 57 years. All these factors have led to the quality of ALIMCO
products to suffer.
The lack of visibility and endorsement combined with the perception of an inferior quality,
limits the market of ALIMCO, amongst the people who can afford to buy the devices.
This in turn is a direct cause why the organisation has not been able to become self
sustainable till now. Usually non profit corporations engage in a mix of activities, where they
generate revenues from one activity to pool in this money into another for the purpose of
achieving their social mission. However, it becomes a tricky balance to maintain. To achieve
economies of scale, corporations decisions may get too coloured by the means-rationality
principle and the value-rationality might get subdued along the way. As Max Weber
explains the former is related to the expectations about the behaviour of other human beings
or objects in the environment. These expectations serve as means for a particular actor to
attain ends, ends which Weber noted were "rationally pursued and calculated." In valuerationality principal the action is undertaken for what one might call reasons intrinsic to the

22

actor: some ethical, aesthetic, religious or other motive, independent of whether it will lead to
success.
Chairman & Managing Director (CMD) ALIMCO, Mr Nararayana G. Rao, mentions in his
interview the conditions that prevailed when he joined the institution. There were 15 crore
worth order unexecuted. The customers were unhappy with the huge delay in the products
and their quality. Only 75-80k beneficiaries were served each year, when the capacity was
much more. It was proved when in an year of Mr. Raos joining, the number of beneficiaries
increased to 2lakh p.a.. In a country where 2.68 million people are disabled and only around
1% of those receive assistance, this kind of inefficiency in operations take more than
economic forms, it also has serious social costs.
ALIMCO is incorporated under Section 25, which implies that ALIMCO shall remain not for
profit. That being said, being a non-profit organisation doesnt imply that the organisation
cant make money. All it implies is that the organisation is not a profit distributing firm, and
all the surplus that it makes shall be pooled back into the system. With the aim of Restoring
the dignity of man, the organisation needs to reinvent its approach. Treating one section with
a means-based aimed, providing them with technologically advanced and better quality
products, would enable the organisation to function effectively and serve its mission with a
better, more impactful approach.
GOVERNMENT CONTROL
Being a Public Sector Undertaking, and a non-profit as well, working towards a social goal
and dealing with a vulnerable section of the society induces a multitude of constraints in the
working of the organization.
The first level of control starts with the Board of Directors, which is a government appointed
body. The CMD and other executives of the Board are appointed by GoI, whose motivation,
vision and competence can play a huge role in the functioning of the organization. This Board
and the CMD in particular plays a huge role in setting certain forces in motion, which will
eventually make the company move in a certain direction, for it is the one approving almost
anything in the company. For instance, the recent CMD of ALIMCO, Mr. G. Narayana Rao,
came from a financial background. He had 36 years of Central PSUs experience, and he was
able to see the huge problem in the functioning of the organisation. Incorporating more
transparency into the system, following an approach to not only wipe out accumulated losses
23

but also raise the quality of the organisation, and having the approach and the connectivity to
push for funds amongst other stuff, contributed to the turnaround of the corporation.
However, each proposal or new activity within the organisation need such a long drawn out
bureaucratic approval which makes the system rigid.
Initially incorporated under the Ministry of Defence and then shifted to the Ministry of Social
Justice and Empowerment, the organisational goals are influenced and modulated by the
Governments policies. If for instance, the Government aids only a certain type of products,
then consequently, those will be the one, the organisation will make. When the governments
limit on the ADIP scheme was for devices up to 6k, the pricing of all products was done
accordingly. To maintain this price, the production process had to be adjusted and the quality
is determined accordingly. Even though, the knowledge for a better product is available,
neither the process not the product can be updated, if there is no market for it within the
limited framework it operated. When the cap was raised to 10k, certainly there were
improvements that can be incorporated, but that has mostly been regarding the aesthetic
appeal till date.
One other implication was highlighted in terms of hiring procedures. When the Government
stopped hiring, there was no internal strategy to fill the vacuum of the people who were
retiring. The average workforce age steadily increased, and in the fast few years, it reached
above 55 years, when people were only retiring, and no one joined.
EXTERNAL NORMS, REGULATIONS AND DEVELOPMENT
Like most big organizations, and especially those linked to a social objective, various polices
of the government and other national and international bodies have an impact on the
functioning of the organisation.
For instance, when the government started recognising Intellectual Development impairment
as a type of disability, products related to the same were incorporated in ALIMCO.
The interlinkages are many, the Government is in turn affected by International rules and
regulations. For instance, the World Health Organization (WHO) prescribed a certain
standard for the assistive devices for the handicapped, and India is then needed to comply
with international standards. Enforcement becomes the Governments prerogative and the
organisation is then needed to follow certain standards.
24

RESEARCH AND DEVELOPMENT

A Sivathanu Pillai, an Indian scientist who formerly served as Chief Controller of Research
and Development from year 1996 to 2014, mentioned ALIMCO in his talk at the India
Inspired event at the cultural festival of IIT Kanpur, 2014. He wanted to point out the diverse
research his institution does and talked about the callipers technology, which is used in
ALIMCO for the artificial limbs prepared to assist polio patients.
A faculty member of IIT Kanpur, then stood up. He had had a very different experience.
Being a polio patient, he had visited the institution. There was some small glitch in his
artificial limb, which the organisation couldnt fix. He had to then take the help of a local
repairman!
These incidents point out the lack of technical expertise in the institution.
In the words of Mr. G. Narayana Rao, CMD ALIMCO, R&D should be the brain of such an
organisation, but unfortunately because of the accumulated losses, the Ministry had
dismantled the grants for R&D department.
In the dismal affairs of things, even with the presence of huge think tanks in the country with IITK in the neighbourhood where a student designed a stair climbing wheel chair
Vardaan which has won National innovation awards, and various other think tanks and
institutions as well as technological solutions abound all over the world, the institution
continues to live several years in the past.
SOCIAL COSTS
The organisation employs 8-9% of disabled people in its workforce. The beneficiaries for
these camps are mandated to have a proof of address and two photographs showing the extent
of disability. We explored the rationale behind this restriction a little further, given that in
India, a large number of people with physical disabilities are the homeless who survive on
open roads and railway platforms and have no address to show for. We felt that this would
severely restrict the number of potential beneficiaries of these products. Shri A.K
Shrivastava, D.G.M. Production gave us the rationale behind this decision by explaining to us
how, with no address proof requirement, one person could source multiple limbs and
appliances and start selling them in the open market. On being asked about the existence of
entities working to provide some kind of identity to the homeless which could be utilized to
25

serve them, he said that there was no consolidated action on this front and a lot was needed
to be done.
Also, when incorporation of CSR provides an alternate model, to make it a success, the entire
organisation needs to work together. At present, there were what looked like silos, where
marketing has a positive view of the CSR opportunity and they see it as the next big thing,
whereas the production people dismisses it as showbaazi by the corporates.
And to make it a success, we need to manage our external environment well. Doing it for
attention sake, if a company spends a substantial amount in marketing and publicity, it indeed
does become showbaazi, and the impact that resource could have otherwise created is
limited. This requires a transparent and accountable system by the GoI, where they can
objectively assess whether the money corporations spent, in the name of CSR, was actually
spent on the intended purpose.
CONTINGENCIES WITHIN AND BEYOND INDIA
Unfortunate external conditions like war, natural disasters, which may leave thousands of
people wounded and physically handicapped increase the demand on the organization.
If any external or internal contingency arrives, the internal structure of this is not sturdy
enough to handle this pressure. As we have mentioned about the Iran Iraq war in 1988 after
which Iraq requested the Indian government for its prosthetic limbs, GoI had also setup a
centre at Kabul, where ALIMCO officials have also spend some time training the people in
developing disability aids. With the CSR initiative of ONGC, ALIMCO has also established
a centre in Sudan. Already ALIMCO has trade relations with various countries especially in
the Middle east and African region. In the light of being the biggest such organisation in
South East Asia, the population it needs to serve is huge, and yet it remains incompetent to
meet all these expectations. With the approval of the Modernization fund, it is expected that
the machines and systems will be upgraded to the needed quality, but this is only a one time
solution.

26

OUR ANALYSIS:
Viewing non-profit organizations from a new lens
Our study of ALIMCO led to two major observations of its organizational features:
1. Dual Management Structure[9]
ALIMCO, being largely dependent on government funding (and newer public
corporations having recently entered the funding scene through CSR initiatives)
presents a dual management structure: the organizations operational/production
decisions were largely internal, taken by the executive staff, while government majorly
controlled financial decisions being the single largest funder through its huge variety of
schemes. The mandate to emphasize the mission of the organization (Restoring the
dignity of man) rested largely on the organization itself and not in governments ambit.
Within the internal organization, we observed differences in perspectives on
ALIMCOs major purpose. This also led to varied responses to the increased CSR
funding coming into the organization. Here are the two broad opinions we came across:
Perspective 1 (from the Production/Shopfloor head):
Our main aim should be to reach out to more people, expand our reach and make our
product more accessible. Our market share is still only 11% despite ALIMCO being the
largest such organization in the world with the largest product portfolio for different
kinds of disabilities. We are multiple times subsidized than other players who
manufacture the same product, but we lag in quality a little. We cannot afford to offer
commissions and that makes our visibility very little, but the key issue is that the
formalism and procedures required for say a disabled person (who has no stable
accommodation or income proof) are highly convoluted. CSR funding may change the
face of our camps, but cannot impact this broader issue of reach.

Perspective 2 (from Marketing head):

With increased CSR funding coming in, we can soon hope to become sustainable.
Getting funds from the Modernization Fund will bring in a great change in quality of
our camps which is our strongest channel to reach disabled people- terms of

27

conduction and publicity. We can earn more profits, which can then be put back into the
organization itself.

These two different perspectives clearly show that within the same organization, people
at executive positions are working towards different goals. To put it broadly, ALIMCO,
like most non profits, is working with multiple bottom lines. These may be
sustainability, increasing scale, maximizing profits which can be put back into the
organization and so forth.
The important thing to understand here is that no price mechanisms are at play. This
idea bears a crucial link to transaction cost economization introduced by Williamson
in his thesis on Modern Corporation. His basic framework looks at transaction cost as
the basic unit of analysis and minimizing transaction cost as the basic principle to
explain why organizations comes into existence. However, transaction costs must
encompass a large variety of costs. Usually, the prices that are in place determine
transaction costs and hence govern the activities that lead to minimization. However,
the dynamics change entirely for ALIMCO since it must look at social impact related
costs on a priority basis. As is evident, minimizing these social impact costs, although a
natural extension of Williamsons thesis, is not always what a nonprofit organization
looks to do. Such an organization in fact clearly looks to enhance social impact and
economic considerations take a backseat. The people involved in these processes, and
the organization as a whole, is no more simply opportunistic in its orientation; its goals
extend beyond again owing to multiple bottom lines.
This brings us to a second important observation which we made through our field
visits and also studied from existing literature -

1. Complex motivational structure: The existence of multiple bottom lines in a nonprofit organization often creates a complex motivational matrix in which individuals
are motivated by different goals. These goals may or may not align with the larger
organizational goal. As we saw from the two perspectives outlined above in
ALIMCOs context, while one motive may be altruistic or impact oriented, the
other one may be oriented towards more tangible goals such as achieving larger
28

visibility/publicity and enhancing scale. While two are definitely not independent of
each other and do intersect paths, but priorities function separately with both these
motivations.
At this point, it seems reasonable to raise another question with regard to how nonprofits must be structured
Given the widely different recruitment policies, practices and goals that exist across
various divisions of a non-profit organization (here ALIMCO), does a holistic
conception of non-profit organizations imply that it be structured and treated as a
conglomerate of several separate parts with a diverse set of goals?
Lets back this up with a look at the textile industry in Prato. Massimo set up an
example of a textile company whose parts were highly independent and functionally
specialized, excelling in whatever it did best, unencumbered by functional handicaps of
other parts should there be any. Not only did it lead to lower inventory losses, but it also
led to a huge jump in production alongside global dominance of fashion segments.
Clearly, this is an example from manufacturing sector, and it worked primarily because
different specializing firms could create their own market, and functioned in a
cooperative network where firms pooled in their research and development efforts to
invest in networking and computer aided technology leading to innovation and
improved quality.[10]

Since different divisions in a non-profit work with a different compass and are hence
directed differently, at this point we would like to evaluate the costs and benefits of
viewing non-profit organizations as a conglomerate of independent units

Costs :
1. An appropriate metric must be defined based on which organizations can be
characterized should the division be process oriented, goal oriented or any third
metric must be established?
2. Clear cut distinctions in units based on one parameter may be insufficient from a
holistic perspective. For example, the views of production head on impact orientation
29

were not matched with equal passion and enthusiasm from contractual workers in
production unit. Quoting one of them:
Worker Sometimes we feel happy that we can create impact. But on most days,
its about the work only. It is difficult to always be motivated given the kind of work
and pay scale. The larger goal often gets obscured in the daily scheme of things.
1. It may become difficult to align various divisions on operational grounds if their
practices be separated. The organization at hand is not just producing these
equipments, but is also conducting camps to provide them to the disabled. This is
where comparison with Prato doesnt hold, since Prato was primarily focused at
creation of a finished product, here the finished product needs to be delivered
effectively for the real impact to be created. This is because of the nature of customer
and the product here affordability, the need for empowerment, customizing the
equipment according to size and fixing it up all become a crucial part of impact
creation. To put together these activities together with independent units may become
a messy task.

Benefits :
1. Classifying and separating into independently functional units helps increase unit
efficiency as a unit is now independent of the handicaps or bottlenecks of other units.
2. It helps people see their direct impact better, which often obscured in a larger
organization. Thus, it helps the worker at ground level to remain more focused and
motivated.
3. It may also help to resolve the conflicts that otherwise arise out of different
goals/motivations by bringing together similarly oriented people.
Whether this transition may lead to conversion of ALIMCO into a hybrid of profit
and not-for-profit organizations is a matter of organizational decision. An important
aspect of organizational decision is power and how it is distributed among various
stakeholders. It must, therefore, be evaluated in this regard how power structure
affects the functioning of ALIMCO as an organization.

30

Power Structure:
The power structure at ALIMCO bears semblance to a Political Model of power
distribution. Being a non-profit organization, there are several actors with different goals
volunteers, staff, workers, organizational heads, funders (here Government and some public
enterprises). As observed from above, these actors pursue several different goals rather than
one common goal because of a blurred bottom line. We see here that two important power
holders exist because they control the scarce resource (financial means) here [An important
caveat here is that even though other power holders exist at organizational decision level, we
are evaluating only the role of stakeholders external to the organization that largely control
the most scarce financial means) :
1. Government the single largest funder controlling about 85% of ALIMCOs funding
through various schemes
2. Various public corporations such as ONGC which have recently entered the
aiding picture through CSR initiatives
Government is a very important stakeholder in the power matrix of ALIMCO. While
existence of ALIMCO is unimaginable without government funding, it helps to analyze how
the power wielded by this stakeholder affects ALIMCO. Being so highly dependent on
Government aid is, at the very first look, a scary proposition given the current scenario where
Government is focusing highly on disinvestments and cuts in public welfare funding. This
necessitates the presence of a sustainable source of funding. Lets look at the amount of
control government can exercise on the organization.
Through its various schemes, Government contributes a fixed amount for production,
marketing and conduction of camps. But the pricing of products is done in a very interesting
way here. Any product up to Rs. 10,000 is distributed free of cost to the eligible disabled
people. There is thus a natural organizational tendency to reduce production costs, since the
overheads for camps are to be managed from this fixed amount of funding. While the
government is not party to any internal organizational decisions, it exercises a stronger form
of control on this organizations production decisions by inducing an urge to reduce prices
which is then extrapolated to reducing production costs. This resembles normative control
subtler and yet more impactful in affecting the controlled. This then manifests as follows:

31

1. The questions of cost cutting become more important than the actual mission
dictates. Before the organization realizes, a large number of decisions begin to be
affected by this cost-controlling. This results in means-based rationality an
approach frequently adopted by businesses (which focuses on minimization of costs
associated with means for production) taking dominance over value based
rationality which focuses on maximizing value to the consumer/customer.
2. Complacency towards technological advancement In the current scenario,
ALIMCOs product portfolio is the most diverse and exhaustive compared with
products of other organizations which manufacture such equipment. Yet, when
compared with for-profit players, the product lags in quality. Research and
development is the soul in this industry and technological innovation carries a strong
bearing on the amount of impact created. Yet, the funding from government has
remained fixed, discouraging any technological innovation, despite independence in
internal decisions.
Thus, while the government is the most important funder for ALIMCO, being entirely
dependent on government does put certain restraints on the functioning of the organization. It
reduces the adaptability of ALIMCO to changing times where it must continuously innovate
and become more accessible and user-friendly. This moves us to explore flexibility and
adaptability as characteristics of an organization.
ALIMCO currents has a palace like structure[11] which values predictability over
improvisation, focuses on constraints rather than opportunities, borrows solutions rather than
inventing them, defends past action rather than devising new ones, favors accounting over
goal flexibility, searches for final solutions, and discourages contradictions and
experiments. Clearly in this case, innovation is subordinate to authority and formalism, which
is evident as ALIMCO continues to use outdated technology and rely on procedures and
formalities of the past. This resembles the case of Acme which had a mechanistic structure
making it impossible to deal with contingencies through collective effort. This classification
may not be neat or perfectly fitted to ALIMCO but the various handles of organization theory
allow us to understand different aspects of this organization better.
A tent like organization, on the other hand, places emphasis on creativity, immediacy and
initiative, rather than authority, clarity and decisiveness. An example of this type of
organization is Omega which had an organic structure, which did not have neatly defined
plans or charts, and was still more efficient in its functioning owing to a culture of collective
32

effort in contingency management which sprang from giving employees great latitude in their
jobs and allowing cross-divisional project involvements. The latest plans of ALIMCO
(establishment of a CSR wing, engaging in a contract with Deloitte to restructure recruitment
etc ) do give a hint of a positive future change.
The final debate we wish to bring out through this analysis is that of scale v/s impact.
One of the greatest dilemmas that a non-profit organization has to deal with is balancing scale
with impact. We must proceed with a clear definition of scale and impact here. Achieving
scale implies expanding operations to widen scope and reach and leverage economies of
scale. While greater reach may be an outcome of greater scale owing to larger production
possibilities, whether that really amounts to greater impact is dependent on a lot of factors
customers and channels being the two important ones here.
1. Customers: In the context of ALIMCO, disabled people are the customers who need
to be empowered, thus rather than the customer reaching out for the product, the
product must reach out to the customers. For this purpose, the methods for obtaining
the product become important. It must be noted in this regard that formalism such as
income proof, residence proof may become the largest hindrance for disabled people
to obtain these products. Say for instance, a disabled person below poverty line by
income categorization who lives on the road it is clear how unreasonable it is to
expect him to present the requisite documentation. This blurs the connection of scale
with its real ground level impact.
2. Channels: ALIMCO doesnt have any commercial distribution channels. This is
because most channel partners work on a commission basis, and ALIMCO being a
non-profit organization cannot afford to give commissions. Thus, it either sells
through its own camps, or through its network partners such as National Health
Institutes. It also directly sells through retail stores in its own distribution facility i.e.
the equipment is purchasable from its factory directly. This absence of channels once
again brings to doubt whether enhancing scale can really impact the needy given the
limited distribution channels (also verified by the fact that despite being the largest
producer of such equipment, its market share is only 11% and it currently serves a
meagre 2 lakhs of the crores of disabled people in India).

33

Moreover, the experiences of the group members in social space also raise several questions
on whether scale is directly proportional to impact. One of the group members worked in the
social space in herbal soaps manufacturing industry. In his detailed discussion with the head
of the organization, the head clearly articulated
When we start thinking of expanding, our first question is can we break even with the
greater investment. That often colors the altruistic motive; there is always a thin line and
crossing over to for-profit structure is often very tempting.
Final word:
CSR An opportunity?
We will try to evaluate the benefits that CSR funding is likely to bring with it and whether it
is really as promising a solution as it looks to be.
Why is CSR needed?[12]
Going forward, company has some promising future plans which would require financing
through CSR initiatives
1. Modernization and upgradation of companys 39 year old manufacturing and
infrastructure facilities with State of the Art technology for manufacture of State of
the Art aids and appliances.
2. Expansion of existing production base by setting up additional production centers and
dedicated production lines
3. Widening existent product range
4. Training, research and development through collaboration with institutes at
national/international level
Funding these activities would need additional funds through ways such as CSR.
What we need to question here is whether CSR funding is all that it looks from the face of it.
This would require understanding the main aims of CSR. As we gathered from our interviews
with heads (who did not wish to be named), CSR has a completely different motivation:
When a company funds a social impact activity, its primary aim is to highlight its own
involvement with the cause; furthering the cause itself is not a primary aim of the funding
organization. We can expect posters and banners to be better, or better facilities at the camp,
34

but this showbaazi doesnt really add to impact. You do what the neta or the
businessman says, and he will often only talk about publicity.
CSR funding is primarily based on a reimbursement system; a camp is first conducted and
then the spent amount is reimbursed to the organization. Yes, it does mean more cash. But
does it really mean more reach or impact is the real question? The cash that is being directed
for better publicity campaigns of the concerned funder needs to directed towards
improvement on infrastructure and product portfolio and establishing channels for better
reach. Unless the organization understands how it really wants to channelize funding, the
question of real impact creation and serving greater number of disabled people will remain
effectively unaddressed.

35

REFERENCES
1. World Report 2011
http://www.who.int/disabilities/world_report/2011/report/en/
2. Indian census, 2001
3. National Institute of Rehabilitation Training and Research
http://nirtar.nic.in/history.htm
4. Business Standard: Rs 50 cr-interest waiver will boost Alimco's financials: G Narayan
Rao
http://www.business-standard.com/article/companies/rs-50-cr-interest-waiver-willboost-alimco-s-financials-g-narayan-rao-114050601043_1.html
5. Yahoo News: Prosthetics by ALIMCO offers hope to amputees in Afghanistan
https://in.news.yahoo.com/prosthetics-alimco-offers-hope-amputees-afghanistan121755931.html
6. ANI News: Prosthetics by Alimco offers hope to amputees
http://aninews.in/newsdetail2/story180079/prosthetics-by-alimco-offers-hope-toamputees-in-afghanistan.html
7. Interview of CMD G. Narayan Rao with Prasar Bharti
https://www.youtube.com/watch?v=bGm9qs-5rLg
8. Alimco official site and Brochure:
http://www.alimco.in/
9. Managing non-profit organizations Towards a new approach (Helmut K. Anheier)
10. The Architect's Handbook of Professional Practice Update 2004
11. Hedberg, Nyston and Starbuck, 1976; and Weick, 1977
12. http://www.alimco.in/WriteReadData/UserFiles/file/csr%5B1%5D.pdf

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