Case Study: MBO In Glaxo India Ltd.

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• Glaxo India Ltd • Madura Coats Let us first discuss MBO in Glaxo India Ltd 1. Glaxo India Limited Glaxo India Limited (now GlaxoSmithKline Pharmaceuticals Limited) was one of the leading healthcare and pharmaceutical company in India. The company experienced problems because of government’s policy towards multi-nationals, inflationary pressures and internal organizational issues. In 1973, a new managing director was appointed who took the decision to implement Management by Objective (MBO). MBO was introduced with the classification of corporate objectives and Key Result Areas (KRAs). The company followed a group approach to objective setting at the corporate, divisional and departmental levels. Initially, there were 48 work groups which…show more content…
This was done before the implementation of MBO. It was recognized that the existing structure of Glaxo on functional basis had several problems related to co-ordination, conflict management and accountability. Therefore, with effect from January 1974, Glaxo was reorganized into three profit centres/ operating divisions-pharmaceuticals, foods and chemicals, besides a number of corporate departments. The new structure made a positive impact on the morale and performance of the human resources in Glaxo by providing clarity in roles and objectives. This also facilitated the implementation of MBO. The initial process of MBO implementation was slow and encountered several problems. Initially, the senior managers were reluctant and unhappy of the new management style. However, because of the managing director’s personal commitment and contributions MBO was successfully implemented in Glaxo India Limited and indicated improvements in the following…show more content…
Madura Coats: Among the Indian companies Madura coats has the longest experience with MBO. It applied MBO in 1971 and since then MBO has become an established way of management in this company. To begin with, a comprehensive training programme was organised. An outside consultant was engaged and two MBO advisors were appointed from the management team of the company. The company identified eleven Key Result Areas: profitability, cost reduction, financial resources, expansion, modernisation, product development, planning, labour relations, management development, organisation development, public image and external

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