Problem or issues:

TexItalia (company in Italy) gives order to Buying house in Pakistan named as CCT which get
their woven garments from AZ Textiles (company in Lahore). This case stated about the problem
as they faced an impasse situation between three parties because of the faulty orders received by
the TexItalia from a manufacturing firm AZ Textile. Firstly, their first few orders are according
to the specification and highly appreciateable from TexItalia. Then the order of children jeans
has quality concerns and Chiara communicated to both CCT and AZ Textile as the size
specification which was updated last time has not been followed. Chiara rejected the shipment of
AZ textile.

AZ textile has already a high-volume business in the other countries so they didn’t give them the
serious response and when the Chiara rejected the shipment at that time Baresi and his assistant
Andenna was in Pakistan for the future orders so they called to Chiara and after a conversation
they accepted the shipment. All the three parties were happy that their order has accepted.

But then the things are getting worse as next couple of orders had minor complaints. At that time
CCT was the one who passes the shipment to dispatch after the quality check. They didn’t
identify the problem and recommends the shipment to dispatch.

TexItalia this time was stuck with 2500 garments which was odd according to their specification.
This worth’s US $ 10,000 to $ 12,000 that they could not sell. They had received 90 per cent of
the placed order form AZ Textile. In summer TexItalia employee had gone off on long holidays
so they didn’t communicate with CCT about the orders. In September 2001, after two months
Baresi called Khurshid and got straight to the point that the quality of the children’s jeans order
was completely unacceptable and it’s difficult to defend AZ textile with this order.

The children jeans were worth approximately US $ 25,000 and the payment was given to AZ
textile through the LC. And they stated that AZ textile has to refund the US $ 30,000 to
compensate the loss. They include the shipment charges, import duties and custom clearance that
they incurred on that order.

From our group discussion we all find that there were number of reasons that have created
problems among the CCT, TexItalia and AZ Textile. The most important reason was
communication gap. They all failed to communicate effectively that leads to problem and the
specifications was not stated clearly and to which they can harm relationship between these three
companies. This is what happened to the parties involved.

In this Case Khurshid at CCT was waiting for a Chiara at TexItalia to give the key information
so he can complete the order on time. When Chiara didn’t respond to the Khurshid's request for a
status report and when she neglected to keep the work. Due to this the problem between the two
occurred.
There is also a poor teamwork by CCT. This was what happened with CCT. It was the
responsibility of CCT to conduct quality audit of the AZ textiles before dispatching the
shipment. As AZ textiles rely on CCT team to complete the audit even to carry out the routine
activity. The CCT members of the team did not identify the problem that is why they didn’t
communicate with each other. So the problem was overlooked completely by both CCT and AZ
textile by depending on each other and leading to problem between the companies and the
eventual failure to achieve objectives.

There is also a misunderstanding among them. A lack of communication can lead to

misunderstanding, which in turn can lead to mistakes, that leads to missed deadlines and altered
project directions. AZ textiles blamed Chiara for not conveying the proper information in a
timely manner where as TexItalia felt that their work and time has been wasted that resulted in
frustration. The instructions were not clearly communicated with latest updates. This is why the
order was misinterpreted and details were not according to the demand.

Possible Solutions:
- Imran saeed gives them the discounts of 10% on future orders till they have achieved
their entire claim amount. It was immediately rejected by Baresi and he wanted to have
full claim amount before any future order.
- TexItalia counter offer was that AZ textile had to claim their entire amount. And they will
help AZ textile to sell that rejected garment at US $ 2.5-3 for each garment
- After some delay AZ textiles came up with the same type of negotiations and gives them
the same discounts of 10% on future orders till they have achieved their entire claim
amount. It shows lack of professionalism from AZ textile and rejected by newly
appointed Andenna.
- After the meeting of Niaz owner of AZ textile with Khurshid, He offered 15% discount
on all future order. Andenna was not impressed with this and want entire claim before
any future order.
- Once again Imran Saeed was willing to pay 20% discount on all future order until the
claim is fulfilled.
- But the final solution is that the AZ pay the full claim