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Flaxo Exports: Managing People in a Small- to-Medium-Sized Enterprise  
Product Ref: 07/354C Company: Flaxo Exports

Product Type: Case Industry: Consumer Goods

Related Product(s): Teaching Note
Authors: Debi S. Saini   
A very successful Indian SME manufactured furnishing textiles and was operating exclusively in the exports sector. The company had no formal human resource (HR) systems and procedures nor did it have an HR manager. The sole proprietor took his only young son, an MBA, as a partner; who had his fatheríŽs consent to his (soníŽs) ambitious plans of business expansion including manufacturing similar products to cater to the needs of the domestic market, and in this regard wanted to cash upon the Flaxo brand that the company had built over the years in the exports market by strengthening it in the domestic market as well. The case narrates the typical business strategy and people-management practices that are followed in SMEs in their working in the Indian context. So it helps understand managing people in SMEs, including the employee relations situation and the whole structural and processual dynamics that surrounds these activities in this case. These activities in Flaxo are marked by the practice of paternalism by a caring employer whose leadership style helps Flaxo in getting a competitive edge through a higher degree of employee commitment. In the course of this, the case highlights certain indigenous practices of employment and work organization that have become part of the culture of this industry. It focuses on the ways in which the owner gets greater advantage by building on these practices. In this background, the case raises the dilemma of the new partner (son of the earlier owner) as to whether he should establish formal HR systems and procedure in his attempt to build Flaxo brand and thus to professionalize people-management or should continue with the time-tested existing indigenous practices which are cost-effective and are presently working well.
Functional Area : Human Resource Management
Strategy & General Management

Issues: SME, human resource management, employee relations, indigenous practices, paternalism, formalism
Length: Text: 9 pages
Exhibits: 1 pages
Country: India

Pub. Year: 2007 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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