Product details

Nishotech Systems Private Limited is a small organisation located at Navi Mumbai. The company designs, manufacturers and installs water treatment systems for pharmaceutical plants (including biopharma) and is planning to enter the automobile sector. The company has been sourcing technologies from across the globe to integrate in the form of water treatment systems. The company was established in 1989 by two entrepreneurs Nilesh and Shoeb, both Chemical Engineers. Sanjay, bother of Nilesh joined in 1992. Nilesh and Shoeb were colleagues in Chemsworth, sole representative of Millipore, one of the best companies in water treatment systems. They felt that the piping used in the systems could be procured from the Indian market and a combination of Indian piping and imported filters could substantially reduce the price of the total system. They were aware that many pharmaceutical companies were improving their research and development base and these companies would also need additional water treatment systems for their pilot plants. The water used in manufacturing of drugs or food items which are used for human and animal consumption, either orally or through injection, is required to be free from bacteria or any harmful micro organisms. The pharmaceutical plants use water for cleaning the processing vessels and pipes and to dissolve raw materials as a part of the processing. They need water in large quantities. Part (A) of the case describes the process of organisation structuring in order to facilitate growth. In 2001 the entrepreneurs decided to create an organisational structure to formalise the operations and appointed Nilesh as the Managing Director. They decided to create three functional groups and divide the responsibilities among themselves. The groups were customer support, operations and resource. Although the sales turnover had increased since 2001?2002 they were not satisfied with the growth. The employees were also not satisfied with the new organisation structure. A high attrition rate was creating problems. The entrepreneurs decide to rework on the growth planning. Part (B) describes the developments after the restructuring attempt of 2001. The entrepreneurs analyse the results and decide to work more intensely on growth planning. In 2003 the entrepreneurs took a major decision and divided the business into three independent units, namely project execution and separation technology, storage and distribution system, and water system unit. Each unit was to be lead by one of them. They felt that the change was necessitated as each business being different in nature needed different treatment, and each had potential to grow independently. Nishotech also launched a joint venture with Christ, Switzerland to manufacture water systems. The entrepreneurs were cautious about high attrition of employees. Employees'' salaries were revised and efforts were made to retain them. Meanwhile, they consulted a management consultant to seek advice on organisational growth planning. The consultant advised them to recruit professionals and hand over the business operations to them. The consultant advised them to come out of executive responsibilities and act as facilitators providing policy guidelines. But they decided to ignore the advice and took over the executive responsibilities. Considering one such unsuccessful attempt in the past, the entrepreneurs are eager to know whether the new structure and the plans would lead the company to a growth path. The case was written for the Case Chase Competition 2005 organised by the Society of Entrepreneurship Educators (SEE) and sponsored by The Case Centre.