Mahut Group : A Failed Case of Organizational Restructuring

Mahut Group (name disguised) is a family owned business group that operate two cement companies, Heera and Moti (name disguised), in Gujarat, the Western part of India. Heera Cement has been making substantial losses since its inception and is currently under the consideration of Board of Industrial & Financial Reconstruction (BIFR). Moti Cement is also a loss making company but the losses are not substantial as that of Heera. Each of the cement companies, Heera and Moti, have a production capacity of 1.2 million tons of cement per annum. The Mahut Cement Group has about 1000 employees, out of which about 30 personnel are in the top management. As of 1999, both the cement companies competed with each other in addition to competing with other cement players operating in Gujarat. The cement industry was deregulated in India in the late-eighties which resulted in fierce competition and price wars among the cement firms. In the face of this fierce competition, the Group decided on a restructuring process, and hired an American consulting firm, in 1998, to find a "synergy" between the two companies, Heera and Moti, and help the two companies to turnaround. This research case discusses the issues of the restructuring process and the various interventions undertaken by the top management of Mahut Group. The case discusses the recommendations of the consultant and the role of human resource management during the restructuring process