INTERNATIONAL BUSINESS ASSIGNMENT

Silvio Napoli at Shindler India

SUBMITTED BY: LOKESH SINGH PGP/14/279 SECTION E IIM KOZHIKODE

Silvio Napoli at Shindler India

Was Silvio the right person for the job in India? Be sure to comment on his skill sets, industry knowledge, personality traits etc. and how they might or might not match the assignment he will be responsible for executing. Silvio was a strong-headed and single-minded manager which was a huge impediment in getting work done in India. His Indian staff describes him as driving very hard , impulsive , impatient and over-communicative which also presented hurdles in handling the workforce and also to manage the relationship with the various parties involved. With a background of MBA from Harvard Business School and corporate planning in Shindler where he was responsible for coordinating the annual strategic review process and undertaking external benchmarking and competitor analysis, he was well equipped with dealing with the business issues involved in the elevator industry. But he had never worked in operations and did not fully understand the workings at the operational level. Being a staff to the corporate executive committee, the Verwaltungsrat Ausschuss (VRA) which was composed of Alfred Schindler, Luc Bonnard, and Alfred Spoerri, the CFO and directly reporting to the CEO, he was trusted by the top management and knew a lot of people which helped him to unders tand the Shindler organization better and could do his work more independently without hurdles. Having very little knowledge about the way of doing business and almost no knowledge about Indian culture was a big hindrance in getting work done in India. Silvio had worked on the Swatch Project, which was a project to get the costs down and outsourcing core tasks. He thought that this same strategy would work for a market like India, what he did not take into account was that it was relatively easy to do it in Europe due to the existing relationships with the suppliers which did not existed in India and were difficult without the understanding of the Indian culture and way of doing business in India, in w hich he was so ill equipped. If you were Luc Bonnard, how would you evaluate Silvio s first seven months on the job? What advice if any would you give Silvio? The first seven months of Silvio s assignment were good from the perspective of building the organization and recruitment of competent personnel. From the point of view of building the supplier network for the manufacture of components, this period was not good as the supplier network was still not in place for the assembling of the elevators which was due to the lackadaisical response from the European plants to provide the design details and production specifications . This showed the inability of Silvio to get assistance from the European plants to set up local sources of suppliers. These problems were further compounded by the increase in the

import duties from 22% to 56% on specific noncore goods including elevators by the Indian Government and now the transfer prices on the basic S001 elevators were above the costs he had used to prepare his original plans as a new transfer costing system had been introduced. On the sales front, Napoli had fared very badly as he was not able to install even a single elevator and had no maintenance portfolio in the past seven months. The Indian management and the sales force had started questioning the feasibility of his business plan; their major concern was how was the company to survive by selling only standard elevators. There were also issues of diverting from the plan and management taking an order for an expensive custom glass pod elevator that was to be imported from Europe. He was clearly not able to understand how things worked in India and had charted out a very ambitious plan for him. The advice I would give him would be to try to be in sync with how things work in India and to modify his plans to suit the specific conditions of India. Silvio seems to have a range of issues that he needs to tackle in moving forward. Prioritize the issues in order of importance for Silvio and discuss how you would handle each of them. Also comment on whether you would address all the issues in parallel or in sequence. Why or why not? 1. The supplier network was still not in place for the assembling of the e levators which was due to the lackadaisical response from the European plants to provide the design details and production specifications. To solve this problem, Silvio should leverage his network in Shindler to get design details and production specific ations from the European plants as soon as possible. 2. The import duties had been increased from 22% to 56% on specific noncore goods including elevators by the Indian Government and now the transfer prices on the basic S001 elevators were above the costs he had used to prepare his original plans as a new transfer costing system had been introduced. Silvio should handle this issue by developing the supplier network when the design details and production specifications are got from the European plants. 3. Generating sales. To solve this problem, Silvio should take the Indian management and the sales force in confidence and leverage their understanding of the Indian market. He should heed

to their request for having some customized elevators also in the offering, this would help in getting the much needed sales and would also gain the confidence of the Indian management and the sales force. These steps should be taken in parallel as these can be done in parallel and he is already pressed for time. Based on this initial experience should Silvio change the strategy for Schindler India as developed by HQ? What lessons has he learnt? Based on the initial experiences Silvio should not change but should incorporate some modifications in the strategy for Schindler India. These modifications might include introducing some customized offerings which might help in getting the much needed sales. The lessons learnt would be: 1. Never underestimate the resistance which might come by enforcing your ways of working on people in a foreign country, as it might be at odds with the already prevalent systems and ways of working of those people. Always try to first learn about the culture and get acquainted with the way things work there. 2. Always heed to the suggestions of your local management when establishing a new business in a foreign country. Local management has a better understanding of the local market and would be of a great help when dealing with other stakeholders. 3. To have a good understanding of the culture and way things work in a country before developing a plan to expand or establish a new business in a foreign country. Plans might not proceed as intended if don t have a proper understanding of the market. 4. Always have some leeway for unexpected thing which might happen due to government regulations or changes in the existing system. There should also be a plan to deal with such exigencies .