Britannia Dismisses Over Forty Executives on a Single Day

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Britannia dismisses 42 executives

Britannia sacs 42 executives

Sacked 42 executives on a single day

Britannia Industries Ltd has dismissed 42 executives on a single day. The reason given by the company was poor performance by them. It is a very high handed action and unacceptable to anybody stressing for good managerial practices in an organization. Britannia Industries had stated that these 42 executives had failed to fulfil their quarterly targets on two occasions out of the three and hence the dismissal.

Indian economy has slowed down

It is not that the executives are a bunch of people and the company is quite another. Executives are part and parcel of the company. If the executives have failed to fulfil their quarterly performance target, the company should introspect why. Indian economy has slowed down. Even though it is not in recession or shrinking, its growth rate has petered out to less than 7%. Of course it is still a reasonable growth rate compared to European countries and USA. But one has to remember that in difficult times, sometimes the performance targets set are not fulfilled. For that you cannot hold the executives responsible. The company’s training method and management culture could also be equally responsible.

Was the target realistic to achieve?

Was the target given to the executives realistic? Who gave the target to them? Were they consulted by the company management while framing this target? Did the executives try their level best to reach the targets? If they have failed, what percentage of the targets could they achieve? If an executive had achieved 90% of the target, then it is not an utter failure. But if the executive could achieve only 20% target, then of course it can be stated to be a miserable performance.

Targets should be fixed in consultation with the executives

A good company will integrate the executives with its operations. The executives will become part of the decision making process. All decisions are taken in consultation with the executives. Targets are discussed threadbare in the meeting and worked out in resonance with the executives’ assessment of the market. If somebody from the top forces down these crucial decisions on the executives, then the company will decelerate.

M R Chhabria insulted his executives with abusive language

I can quote a real example for knowing what would be the fate of a company on alienation of its executives. Manohar Rajaram Chhabria (popularly called Manu Chhabria) used to insult his executives by using even abusive languages. In the executives’ meeting, the executives used to perspire even in an air-conditioned room. Adrenalin flowed and their bio-rhythm disturbed. Executives used to experience cold shiver down their spines when Chhabria takes the stage. He will call one by one and liberally give vent to his anger in the form of choicest abusive words. As a financial journalist, while analysing the company Shah Wallace, I had predicted that the end for the company was not far away. My prediction proved correct. Shah Wallace was never able to take on the competition posed by Vijay Mallya’s United Spirits. After Chhabria’s death, Shah Wallace was sold to its rival Mallya by Chhabria’s wife Vidhya.

Executives sacked while taking dinner

There was another incident in the nineties. Six young executives working in a reputed company were taken to a five star hotel for dinner one fine afternoon. Companies giving dinner to the executives in the evenings are not uncommon in India. But a dinner in the afternoon? The executives sensed something wrong. They were correct. While the dinner was being served, the senior officer who had accompanied them to the hotel revealed that the six executives had been sacked for their poor performance and it was their last dinner from the company. They were asked to go straight to the accounts department to collect their due and leave the company. Imagine, would the executives have enjoyed the dinner? I predicted that the company’s culture will pull it down and it happened.

Touch competition in biscuits segment

What has Britannia achieved by sacking the 42 executives from the company on a single day? It has only invited contempt from the employees and executives. There are 250 executives in Britannia. The company has a good brand image and is a market leader in some of the biscuits segment. But it is facing a tough competition in the market from Parle group and also from companies like ITC. Foreign companies like Kraft have also entered into India to grab their pie of share. New players can grab market share only at the cost of existing companies. Therefore existing companies and market leaders like Britannia have to be doubly careful in not only retaining their market share but on improving it if possible.

Focus on rural market is needed

For this, Britannia should have adopted innovative ways. It should have focussed on the vastly untapped rural markets and set the ball rolling. It should have changed the packaging and taste of some of the biscuits. It should have introduced new biscuits. I do not say that Britannia is not doing all these things. It is doing and should have patiently waited for its efforts to fructify. There is always a time gap between action and results. Britannia was impatient and vented its anger on the executives.

B-School graduates will dread to join Britannia

Now the remaining 250 executives will be living on a borrowed time with Britannia. They would have already looked up elsewhere for switching over their jobs. Some of them may get good offers also. Also new executives will fear to join Britannia. The company cannot get best of talents in future because of the fear psychosis it has set in the minds of management graduates emerging out of the creamiest of the creamy B-Schools.

Beginning of end of Britannia?

Britannia has written its own epitaph. Whether it will go Shah Wallace’s way or take a different path is not important. The important thing is that the beginning of the end of Britannia Industries has already begun. The company has itself to blame for it.

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