3. Review Chapter 6 - Entry and Contracting: Consulting at India Hygiene Products Limited and answer the following questions:

a. Did Binoy and Krish do enough to understand the organization and the requirements of the project before committing to it?

b. Should the consultants also have discussed their methodology, in addition to the deliverables, before drawing up a contract? If so with whom and how?

c. To what extent did the contract reflect the needs of the project? In hindsight, could the contract have been any different?

d. Should the consultants have agreed to the increased scope of the project by way of carrying out the survey and also delivering the "training program" after presenting the findings of their study? Was the consultants' response to the client's requests/demands to enlarge the scope of the project adequate? What dilemmas are associated with such responses?

e. Did the project fulfill the mandate set in the contract?

Binoy K. Bose and Krishnakanth Narasimhan, professors of organizational behavior and change management respectively at the Stellar Institute of Management Studies (SIMS) were in a pensive mood. They were meeting in Krishnakanth's (Krish, as his colleagues called him) oice in the late afternoon over a cup of coffee to discuss a phone call that Binoy had received that morning from Richa Gupta, vice president (human resources) at the Indian Hygiene Products Limited (IHPL). They had concluded a consulting assignment for the company about a month back, and she was asking for certain clarifications before her company could release the nal tranche of consulting fees.l 1. All names have been changed to ensure that the identities of the actors and the organization are not divulged. Although fictitious names have been used throughout, any resemblance to actual persons or organizations is completely unintentional. Her question had been simple. The consulting assignment had been titled \"A Benchmarking Study of the Performance Management System at IHPL,\" and she wanted to know the companies or organizations that had served as the benchmarks in the study. She had pointed out that there was no mention of this in the final report of the consultants, and without this information, her director (nance) was refusing to release the nal installment of the consultants' fees. Since Binoy was in a meeting when the call came, he had requested Richa to speak to Krish. However, in the few minutes that Binoy could spare, he had tried to explain that they were of the view that the study had not really been on benchmarking. Moreover, although they did use a few renowned organizations as reference points based on their prior experience, they had been reluctant to disclose their names in the report due to condentiality concerns. Similarly, Krish had also pointed out that the team had compared the practices at IHPL with worldwide best practices, and hence, benchmarking was implicit in the entire assignment. As they mulled over this issue, they both agreed that Richa had seemed far from convinced that their replies would satisfy her director (nance). They recalled how the assignment had taken shape over the past year, the many telephone conversations and e-mail exchanges that they had with Richa and Vishal Shrestha, senior vice president (human resources), and their visits and meetings with members of the top management team at IHPL before, during, and after the project. Could they have misunderstood the scope of the project all along, despite these numerous points of contact? Aware that their reputation was at stake here, and unable to make much sense out of the rumination, Binoy finally said, \"Krish, why don't we go through all our correspondence with them? You have all the e-mails in your inbox. And yes, the contract document as well, let's have a relook. What did we miss?\" Indian Hygiene Products Limited is a large diversified business group operating in the health care domain in the Indian market. The company operates in the Fast Moving Consumer Goods market offering several products related to health and hygiene in India. It currently operates as siX strategic business units (see Figure 6.1 for the organizational structure). It is owned by the government of India, with only a small percentage of shares held by other organizations and the general public. As a state-owned enterprise (SOE), the government of India has a signicant say in governance and policy-related matters of the company. SOEs form an important part of the Indian industry. After independence in 1947, the Indian government had adopted a state-led model of economic development, citing the weak nancial strength of most of the indigenous firms and the need to ensure speedy and equitable growth. Consequently, many industries, especially those considered to be strategic in nature for Indian national interests, were reserved only for SOEs, while the private sector was allowed to operate only in a few industries. The following decades had seen huge investments in SOEs by the federal and provincial governments. The original intent of having SOEs only in strategic and defense industries was diluted until SOEs were seen in most sectors, ranging from biscuits to automobiles. In all the SOEs, the respective governments at federal and provincial levels exercised considerable control and inuence. For example, as part of its oversight mechanism, IHPL is required to enter into a Memorandum of Understanding (MOU) each year with the government of India regarding key deliverables in the following year. Thus, the company's annual report for 201172012 highlights its adoption of the Guidelines on Corporate GovernanceiMay 2010 issued by the government of India. As part of these guidelines, the company was required to train its new board members on the company's business model. Again, the annual report for the following year, 201272013, mentions the emphasis of that year's MOU on targets to achieve during 201372014 related to higher turnover and gross margin, as well as inclusive growth through customer orientation, human resource management, R&D, adoption of innovative practices, corporate social responsibility, and sustainability. The report further highlighted its recognition by the government of India for excellent performance for the third year in a row. Binoy recalled his initial contact with this company. It had happened in an executive training program on leadership organized at SIMS in which he had taken a few sessions. Richa Gupta was one of the participants. She had been very active in class and had been impressed with the quality of training and infrastructure at SIMS. As it happened, Binoy entered into a conversation with her at the farewell dinner organized for the program participants. The conversation veered toward HR systems and processes related to transformational leadership in a company. It was toward the end of this discussion that Richa had broached the subject of undertaking a study on HR processes at IHPL. Binoy recalled having said that he would be open to such an assignment but would wait for more information from the company before making a commitment. After this preliminary conversation, there was silence from IHPL for a couple of months before the matter was revived through a phone call from Richa saying that Vishal wanted to have a talk with him to discuss the possibilities of a consulting assignment. During this conversation, Vishal had outlined their desire to have a thorough study of the executive performance appraisal system at IHPL at the earliest time. He invited Binoy to visit IHPL to meet Abhilash Jain, the president of the company, and have a detailed discussion regarding the assignment. Binoy and Krish made this visit on April 7, 2012, and met Abhilash Jain. Vishal was also present at this meeting, in which they discussed the need to revisit the performance appraisal system and to ensure its link to the incentive system. Subsequently, Binoy and Krish had another round of detailed meetings with Vishal and Richa to broadly understand the appraisal system (see Figure 6.2 for a brief note on the appraisal system). One important piece of information that Binoy and Krish gathered was that the proposed consulting assignment was part of the mandate given to IHPL through its MOU with the government of India. The relevant clause of this MOU obligated the company to spend a certain amount toward carrying out an assessment on various functions of the company, including human resource management. Although the MOU didn't detail the functions or processes that needed to be assessed, it had been the management's decision to study the executive performance appraisal system that year as part of its compliance with the MOU. Based on these meetings, a contract document was drawn up outlining the various deliverables of this project and the financial terms and conditions. The contract proposal indicated the following four objectives for the study: Validation of the current Performance Management System, Exploring the use of a 360 degree appraisal system,2 Simplication of the normalization process, and Potential and development plans. 2. Refer to Figure 6.2 for a brief note on this system. On checking his records, Krish pointed out that Binoy had sent the formal proposal to Vishal through a letter on June 12, 2012. Excerpts from this letter and the offer are reproduced as Figure 6.3. Over the next 6 weeks, there were several e-mail and telephone calls between Binoy, Richa, and Vishal to clarify the scope of the project, culminating in a formal letter on September 17, 2012 from Vishal confirming their acceptance of the proposal. Copies of the relevant portions of these e-mails are available as Figure 6.4. The study had started off as planned by Binoy and Krish, with initial discussions in Vishal's office, several meetings with the directors, and a group meeting with senior executives in which several general managers and associate vice presidents participated. However, the planned interview with James Jacob, the director (nance), could not take place as he had to rush to Delhi for an urgent meeting with income tax officials. Following these meetings, they were taken on a tour of two of the manufacturing facilities by an executive. At each of these facilities, there were focused group discussions with middle- and junior-level executives where inputs on organizational culture, the working of the existing performance appraisal system, and opinions regarding a 360 degree appraisal system were sought. As they looked over the records, Binoy and Krish realized an important aspect that had escaped their attention earlier. They noted that in most of their correspondence, Richa and Vishal had referred to the study as a \"benchmarking\" study, while neither the proposal nor any of the correspondence from the consultants mentioned this. Could this have been the root cause behind Richa's call that morning? They recalled the actual process through which they had handled the project and realized that there had been two occasions in which they had gone beyond the brief contained in the project proposal. First, the project proposal hadn't mentioned any deliverable other than the study report. Yet in her e-mail of June 29, 2012, Richa had sought to clarify whether it would be possible to conduct an awareness workshop for the senior management team and other role occupants on the 360 degree appraisal system. In a subsequent telephone conversation with Binoy, Vishal had claried that a \"short training program\" on human resource management was necessary so that the HR department could fulll its mandated \"quota\" of training programs for senior executives, as required in the MOU with the government of India. Vishal had said that it was important to reect this activity in the company's annual report for the next year, pointing out earlier reports in which leadership development, grooming employees for larger leadership roles, competency enhancement and capacity building, and various training programs invariably occupied an important part of the president's report to shareholders. Binoy and Krish had agreed to conduct this in combination with the meeting they had planned to present their report (Figure 6.4). Second, their proposal had only briefly indicated the methodology proposed to be used in the study. The proposal explicitly stated that their data collection could involve a series of interviews with senior executives in the company and focus group discussions with selected executives. Yet toward the end of this process, Vishal had contacted the consultants and suggested that they should also carry out a survey among the executives. While the consultants saw merit in the suggestion to conduct a survey, this was not planned initially and the survey had not been budgeted in the offer document. Nevertheless, the consultants agreed to carry out the survey as well and decided to meet the expenses by curtailing expenses on other budget items. After the study had been conducted and their report had been prepared, Binoy recalled a particularly surprising development in which Vishal expressed a desire to visit SIMS to have a look at the draft report and "suggest" changes/modifications before the report could be finalized and presented to the top management of the company. Binoy and Krish hadn't seen any harm in this, and so Vishal had visited them on the December 3, 2012. After a detailed scrutiny of the report, Vishal had advised to make certain minor modifications in a few places that did not contradict the findings from the study. Records indicated that Binoy had submitted the final report on December 20, 2012, in person to Vishal. Binoy and Krish recalled that subsequently, a short 3-hour workshop at IHPL head office was undertaken by Binoy and Krish. The entire top management team of the company was in attendance. Abhilash Jain was quite forthcoming about the usefulness of the study, while James Jacob, vice president (finance), had raised a few clarifying questions related to the recommendations. As they mulled over these records and their own recollections about the entire consulting project, Binoy and Krish were not sure exactly what the issue was. Was the study really about benchmarking? If so, why hadn't Richa or Vishal insisted on a correction to the proposal document? Should they have sought more clarifications? Were Richa and Vishal really competent to sign off on the proposal? Was Vishal's suggestion on methodology and his visit to SIMS to "certify" the report indicative of an anticipated apprehension? Should they have taken