A00404

April 28, 2021

Medplus Ltd. (A), (B), (C)1

Medplus (A)—Ram Kumar’s Perspective
Medplus Manufacturing Ltd. was a global outsourcing partner for pharmaceutical companies. It
provided services ranging from products and development to scaling-up and manufacturing of
bulk drugs. The company was incorporated in 1995 and had its headquarters in Pune. Its
manufacturing business units were spread across two locations in Maharashtra in India and
multiple sites in Switzerland, Belgium, the United Kingdom, China, and the Netherlands. The
company was traditionally a relationship-based family-run business; however, the last 10 years
had been a step towards professionalising, especially after the initial public offering (IPO) in 2015.
In one of its plants in Pune in Nigdi, of 250 employees (comprising doctors, engineers, scientists
and blue-collar workers), 50 had resigned. Dissatisfaction was brewing in the employees at the
Pimpri plant as well.

FROM RAM KUMAR’S VIEWPOINT

It was the winter of 2018—I still remember those dreadful days. I was doing my work as usual in
the afternoon when an email hit my inbox. Who knew the email would give me a humiliating
experience of so many hours in the future! I opened the email, and to my surprise, it read I had
been given a punishment. But punishment for what?

I have been a dedicated employee at Medplus for the past 10 years. Other pharmaceutical
organisations approached me when they established business in the neighbouring area. They had
offered me much higher wages, but I had stayed on because I felt my loyalty would be rewarded.
I had neither complained nor shirked my work, although I had not received my well-deserved
salary increments for almost two years. I had accepted that the industry was going through a
rough patch, and my other colleagues were in the same boat.

Three months ago, we had all put in over 18 hours of work to ensure that a very important audit
by the United States Food and Drug Administration (USFDA) was successful. The head of
department (HOD) had promised us our long pending bonuses once the USFDA audit was
through! Other HODs had also made similar promises to their respective subordinates. I had
thought to myself, “Finally!”

1
The names of the company and characters have been disguised, but the key relationships have been preserved. The
case is based on an actual situation.

Prepared by Professor Neharika Vohra and Chayanika Bhayana, Harnain Arora, and Kashika Sud,
Doctoral Scholars, Indian Institute of Management Ahmedabad.
Cases of the Indian Institute of Management Ahmedabad are prepared as a basis for class discussion.
Cases are not designed to present illustrations of either correct or incorrect handling of administrative
problems.
© 2021 by the Indian Institute of Management Ahmedabad.
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My colleagues and I started working day and night. I compromised on my personal and familial
needs for two months. We used to stay up all night working to ensure we lived up to expectations
and did all that we could. When the auditors finally arrived, everything went on smoothly, and
the audit was a huge success. We ultimately sailed through it!

Many days passed, but there was no news of the bonus we were supposed to get. Apprehensions
and anxiety were building up at the Nigdi plant. The only question everyone had was, “Where
were the monetary rewards?” More days passed by, but we were clueless. When we could not
wait any more, we approached our HOD to inquire about the matter.

To my surprise, the HOD replied:

The company may not give you the bonuses now; they have dropped the plan. I tried my
best to do whatever I could for all of you, but HR has stepped back and does not seem to
be willing to give monetary incentives as they had committed. This situation is not under
my control, and I cannot do anything about it.

“Unfair” was the first thought that came to my mind. While returning home that evening in the
company bus, employees from other departments narrated similar incidents—their HODs had
asked them to set aside any kind of expectations regarding this issue. So, I understood this was
happening in all the departments. All over the plant, the initial anxiety started turning into
extreme dissatisfaction.

However, we still had hope. The situation was ambiguous; we were bewildered and needed some
clarity on it. Hence, some of us decided to gather on a particular date and time to demand
something rightfully ours. On October 24, at around 3 pm, about a hundred of us peacefully
gathered at the lawns of the Nigdi plant. Almost an hour later, Joseph, the human resources (HR)
head of Medplus, arrived. We pleaded with him to grant us the promised bonuses.

To our disappointment, instead of comforting and assuring us of the payments, he started

threatening us. He warned us to return to our workstations and resume work in 15 minutes, and
if we decided to stay there, we would be fired. Scared and disillusioned, we started walking back
to our workstations. As we were going back, a colleague whispered in my ears, “He is a villain”.

It was November 3 when I read the email from HR that I had been given a punishment of 100
hours. I was supposed to sweep the floors and clean the toilets. Really? 100 hours of sweeping
floors and cleaning the toilets? Just after a few seconds, one of my colleagues came to me crying
and said that she had been given 60 hours of cooking, along with going to a nearby
nongovernmental organisation (NGO) and teaching underprivileged kids there. She was upset
and said:

I was not even a part of the meeting. I saw a large crowd walking towards the lawns, and
I was wondering what was happening, so I just stood there to see what was going on, that’s
all. Is this what I deserve?

I was a qualified engineer with 15 years of work experience. I did not study much and worked
very hard for this organisation only to see this day! We had not received any salary increments
for the last two years. The promises made to us remained unfulfilled, and we had not even been
paid the “overtime” dues for working longer hours than usual during the audit. We were unsure

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what would happen; hence, we peacefully gathered to seek answers. What had we done that
deserved such harsh and humiliating punishment?

Although we are subordinates, we employees have self-respect. The management has been really
unfair to us. The senior Gokhle (the company’s founder) would never behave this way.

Medplus (B)—Joseph’s Perspective

Medplus Manufacturing Ltd. was a global outsourcing partner for pharmaceutical companies. It
provided services ranging from products and development to scaling-up and manufacturing of
bulk drugs. 2 The company was incorporated in 1995 and had its headquarters in Pune. Its
manufacturing business units were spread across two locations in Maharashtra in India and
multiple sites in Switzerland, Belgium, the United Kingdom, China, and the Netherlands. The
company was traditionally a relationship-based family-run business; however, the last 10 years
had been a step towards professionalising, especially after the initial public offering (IPO) in 2015.
In one of its plants in Pune in Nigdi, of 250 employees (comprising doctors, engineers, scientists
and blue-collar workers), 50 had resigned. Dissatisfaction was brewing in the employees at the
Pimpri plant as well.

FROM JOSEPH’S VIEWPOINT

On October 24, I received a call from the Nigdi office at 3 pm, well after lunchtime. The HR team
there told me that over 100 employees had gathered in the lawns of the Nigdi plant and were
demanding their bonuses. They had clearly left their job responsibilities at their workstations. A
third of the employees leaving their assigned work in a continuous process plant was a disaster.

I realised the HR team there could not handle the situation. Therefore, as the HR head, I had to
reach the Nigdi plant—45 km away—at the earliest. I reached there in 50 minutes; I saw a huge
gathering in the lawn and several employees watching the gathering.

When I approached them and asked why they were protesting, leaving behind their machines,
they told me they wanted their bonuses. I was aghast and thought, “Well, what were they
thinking! Did they think their protest would scare me and I would come to hand them their
bonuses?!” I announced loudly, “You could either choose to leave the premises or go back to your
respective units in the next 15 minutes. But remember, once you are out, you are out of the
company! The choice is yours.” The situation settled, and all of them went back to their units.

The matter was settled for then. However, how could they get away with protesting like that?
Did they think they could threaten the management? In the coming days, in consultation with
the company’s MD, Satish Gokhle, it was decided that they would be punished for this act. Well,
it was not a punishment exactly! Satish called it their chance for atonement. If we were to go by
what used to happen in the past under senior Gokhle’s (the Chairman) leadership, we would
have simply terminated their employment. But since Satish was more into social causes and
believed in giving back to society, he decided to engage these people in corporate social
responsibility activities or social service – like cleaning the premises, cooking in the kitchen, and

2
The names of the company and characters have been disguised, but the key relationships have been preserved. The
case is based on an actual situation.

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teaching underprivileged kids in a nearby NGO. Those directly responsible for the protest had to
complete 100 hours of social work. Their seniors (since they could not control them or stop them
from doing it) had to complete 80 hours of social work, and those who were observing the
protest—leaving behind their work for some “entertainment”—had to complete 60 hours.

I knew the employees blamed HR for whatever happened. But we did not make any promises to
pay bonuses, the HODs did. Because of some constraints, the top management had ordered us to
hold their bonuses. We got the whole senior management team and the HODs together and
decided on a script the HODs could use to convey to their subordinates the reason for the delay
in the bonuses. What could I do if these HODs failed to convey the message correctly? If they
could not do a good job of convincing their subordinates, at least they could have stopped them
from going on this silly protest. So, I knew this was somewhere a failure on the part of the HODs,
because of which this incident took place. The employees’ protest hurt the management. The
management felt that they had been giving increments to the employees for so many years; if the
increments got delayed once, employees should have had faith in them. It was disappointing!

It has been two months since this incident happened. I am aware of the dissatisfaction a lot of
people have with the company, especially after the incident. I also know that a lot of them see me
as their enemy. But what can I do? It has not been easy for me to gain their trust in the past because
of the way this company has been functioning for the last few years. I joined this company almost
a year ago, and I have faced a lot of roadblocks and resistance to any initiative I wished to
introduce. People here are not quite open to new ideas, new suggestions or any kind of change.
Everybody is selfish, enjoying their comfort zone and not wanting to step out of it for the sake of
the company. The environment, overall, is very restrictive. There is so much distrust and
suspicion around that nobody feels free to express their views. I believe the previous HR team is
to be blamed for this environment. From what I know, the earlier HR department was
manipulative. Because of their unprofessional approach, the employees take things for granted
now and cannot tolerate any denial of their demands. When I joined the organisation, I made
everything very transparent—which is probably why I am inviting their hatred—because I am
ethical. Recently, there was an audit in the Pimpri plant, and the quality control (QC) department
asked us to create “fake documents” for good management practice (GMP) training, and I refused
outright! While it would have been in the company’s interest, it was unethical.

Well, it is not just the previous HR. The senior employees and the HODs, who have been here for
the past 12–15 years, are the company’s weakest links. To be honest, I know that these HODs
instigated the protest; under the garb of the junior employees, they wanted to get their own
demands fulfilled. I know they work for their self-interest, because of which the organisation also
suffers. The juniors keep suspecting their bosses, who never become their friends. These senior
employees have become so rigid in all these years—neither do they want to change nor do they
allow processes to change. They have become bottlenecks for the organisation. I generally joke
that people here have a “private government job”!

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Medplus (C)—Satish’s Perspective

Medplus Manufacturing Ltd. was a global outsourcing partner for pharmaceutical companies. It
provided services ranging from products and development to scaling-up and manufacturing of
bulk drugs. 3 The company was incorporated in 1995 and had its headquarters in Pune. Its
manufacturing business units were spread across two locations in Maharashtra in India and
multiple sites in Switzerland, Belgium, the United Kingdom, China, and the Netherlands. The
company was traditionally a relationship-based family-run business; however, the last 10 years
had been a step towards professionalising, especially after the initial public offering (IPO) in 2015.
In one of its plants in Pune in Nigdi, of 250 employees (comprising doctors, engineers, scientists
and blue-collar workers), 50 had resigned. Dissatisfaction was brewing in the employees at the
Pimpri plant as well.

FROM THE MANAGING DIRECTOR’S VIEWPOINT

My father (referred to as senior Gokhle) had started this company, but he had been keeping quite
unwell recently. I joined the company in 2009 after completing my education in manufacturing
technology in Ohio; it was the year of the recession, and pink slips were given all across the globe.
We were no better, but my father was a compassionate man. We decided not to fire people or
deduct salaries. We retained each one of our employees and endured the loss ourselves. We
worked as a family on principles of trust and respect for all, and we cared for our people—that
was my first lesson at Medplus.

To be at par with the global competition, we established China operations in 2011. Contrary to
our expectations, incorporating and running the business in Chengdu, China, was not easy.
However, in 2015, we had a turnaround, and we grew exponentially. Our international sales
business expanded as we acquired plants in Switzerland and Belgium. Our China operations
stabilised, and we had a very successful IPO and a market capitalisation of INR 3,626.53 crores. 4

In my 10 years at Medplus, I handled marketing and established and led the venture in
Switzerland. Now, I am managing the entire operations from Pune. My father’s wish was that I
rise through the ranks and understand the nerve of Medplus. I built a rapport with the staff and
clients under his tutelage. I believe respect is mutual, and mutual respect between management
and employees laid the foundation of trust in the system.

I felt that despite the rising demand for our products and the adoption of newer technology, we
were still not exploiting our potential. Our old employees were unwilling to change. Laxity and
negligence had crept into the system, and our senior management was not ready to take
responsibility for the company’s growth. I convinced my father to hire new people and retired
15% of our older staff. I hired Joseph as the HR head in early 2018 and asked him to streamline
the HR processes.

3
The names of the company and characters have been disguised, but the key relationships have been preserved. The
case is based on an actual situation.
4 1 crore = 10 million. 1 million = 10 lakh.

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In 2018, we had an important audit coming up—the USFDA audit. Ideally, we should be audit-
ready 24/7, 365 days a year. However, I realised this was not the case, for which I was quite
disappointed with the HODs and the employees. I made my unhappiness clear to the senior
management and told them that their jobs would be at risk if the audit were unsuccessful. I told
them that no bonus or overtime would be given to the staff and that they had to manage the
employees’ work and morale. For weeks, the entire staff at the factory worked long hours and
completed double shifts.

The USFDA audit was successful, and we were given a green flag. It was time for celebrations,
and we organised lunch for the entire staff. I told them that the next time we have an audit, we
should be able to get ready in a day. I ignored the murmurs about Diwali 5 being around the
corner and employees expecting a big bonus, given the festivity and the efforts they had put in
for the audit. However, I was not going to reward poor behaviour. Joseph informed me of some
delay in paying incentives because of the chaos in the system, which I told him to get fixed. I
asked the HODs to communicate to their teams that increments had been delayed but not
withheld.

Shortly after the festivities, I received a call one day informing me of a strike at the Nigdi plant.
The employees had stopped production and gathered at the gate, asking for the increment that
had been overdue for the year. This came as a blow, and I instructed the HR head to control the
situation at the plant. Joseph is an efficient man; he managed the situation immediately, and
production was resumed. He also recorded videos of the employees’ conduct and approached
me for an appropriate decision to be taken.

Senior Gokhle would have fired these employees for creating a situation like this. But I decided
to take the compassionate route. I understand the company had delayed the increment, but we
did not deny it. Protests like these did not strike the right chord. We had never been a company
working on the basis of fear and force.

In the light of our ideology and the gravity of the matter, I convinced Joseph to assign them social
service as a form of atonement. I was being kind enough not to punish them. Cleanliness was a
national agenda under the Swachh Bharat Mission, 6 so all the agitating employees were asked to
take up cleaning work. Everyone was assigned specific hours of cleaning activities in the plant
(clean toilets, premises, kitchens, etc.) and teaching students in a nearby NGO-run school. Female
employees were given the option to choose kitchen/cooking work instead of cleaning the plant
premises. The hours of social service were assigned on the basis of the severity of the employees’
participation in the strike. Employees who had actively participated had to devote more hours
than observers.

I know the employees were quite unhappy. Strong sentiments such as, “This is an insult, and I
refuse to participate”, were shared. I intended to build mutual respect among everyone, from the
person who cleans the toilet to the head of the organisation. If they labelled the work as menial,
they considered other humans unequal, showing a lack of respect. I wanted to build a culture of

5Diwali is a festival of lights that symbolises the victory of good over evil. It is one of the most popular festivals in
India.
6 It is a country-wide initiative by the Government of India to maintain cleanliness and improve waste management

in India.

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respect, trust and camaraderie. Since I did not hesitate to clean their toilets, why would they step
back from cleaning their workspaces and toilets? I even offered to clean the toilets myself. I failed
to understand their reasons for resistance. Why could they not keep their workspaces clean if they
could keep their houses clean? What was the shame in this work? I wondered why they were not
taking responsibility? What was making them so stubborn? I was very disturbed by the whole
event.

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