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The auto ancillary industry in India has witnessed huge capacity expansion and modernization due to entry of foreign automobile manufacturers in the post liberalization era. In spite of potential benefits, the adoption of advanced IT among small to medium‐sized enterprises (SMEs) is low in India. There are several technological, economical and organizational factors that enable or inhibit the adoption of advanced IT. The primary objective of this research is to identify and evaluate the key factors that are enabling or inhibiting adoption of advanced IT in the Indian auto ancillary SMEs.

In order to identify and evaluate the enablers and inhibitors, a detailed survey was carried out among registered Indian auto ancillary SMEs during 2010. Out of 584 registered SMEs, 110 owners/top managers of the SMEs responded to the survey. The data collected through the survey were analyzed using confirmatory factor analysis and multivariate regression to evaluate the influence of enablers and inhibitors of advanced IT adoption by the auto ancillary SMEs.

The survey findings show that the level of advanced IT adoption in auto ancillaries is low with only 17 per cent of SMEs having adopted technologies. This study reveals that “perceived benefits” and “perceived competitive pressure” enable advanced IT adoption among auto ancillary SMEs in India. However, “lack of financial capacity”, “small scale operation and “lack of in‐house IT manpower” inhibit the adoption. It is also found that enablers such as “changes in business environment”, “IT experience of CEO/owner” and “increased information linkage with OEM/customer” do not have any influence on the adoption. Similarly in the case of inhibitors, “lack of IT Infrastructure” and “lack of information security” do not have significant association with IT adoption. Despite the positive external IT environment and recognition of benefits, advanced IT adoption by SMEs in the auto ancillaries is limited by lack of financial capabilities and in‐house IT human resources.

This is one of the early papers that brings out the enablers and inhibitors of advanced IT adoption by auto ancillaries in India. Further, these factors are systematically analyzed to assess the relative importance with reference to the SMEs. The findings contribute to theory of IT adoption among SMEs, but more importantly to the SMEs in the auto ancillary, and policy makers and IT service providers who are likely to facilitate increased adoption.

How do energy consumption, efficiency and economic performance vary between small enterprises belonging to two different product clusters whose production process and technologies differ?

The objectives are analyzed based on empirical data gathered from a field survey of small enterprises with reference to auto ancillaries in Shimoga and brick‐making enterprises in Malur of Karnataka State in India. Simple averages, correlation and multiple‐regression techniques are used for the analysis.

The study brought out that higher energy intensity results in higher share of energy cost in total variable cost. Energy intensity had a negative relationship with value of output. Energy makes a statistically significant contribution to returns to scale. The classification of small enterprises into two groups based on above average energy intensity and below average energy intensity, and the subsequent regression analysis brought out that energy intensity had a positive influence on returns to scale in auto ancillaries whereas a negative influence on returns to scale in bricks enterprises.

The sample‐size formulation could not be done on a scientific basis due to the absence of comprehensive data on all small enterprises operating in the respective clusters and therefore, the findings may not be generalized.

Industry specific characteristics must be taken into account while introducing “energy efficiency improvement” programmes as a means of enhancing competitiveness in “energy intensive” small enterprises.

The paper illustrates the scope for energy conservation and efficiency improvement in Indian small enterprises.

Lean manufacturing (LM) plays a major role in eliminating wastes (activities/resources) in a manufacturing organization. Value stream mapping (VSM) is one of the critical tools in LM which will help in identifying wastes in materials and information flow in a specific product family. The purpose of this paper is to illustrate the significance of VSM in the auto-ancillary industry in enhancing the productivity and the quality.

A case study approach is followed to demonstrate the significance of VSM in identifying various wastes in the auto-ancillary industry. The study has been performed by implementing seven critical steps. A product family is identified based on the customer demand and a cross functional team with specialized experts was formed. The overall processes with sequence are mapped using process flowchart. A cross functional team has been formed to develop the current state of VSM and perform a critical analysis to identify shortcomings. An investigation was performed to overcome the existing shortcomings by identifying opportunities. The relevant kaizens to improve the current state have been proposed. The cross functional team of experts have performed a feasibility study on implementation of proposed kaizens. Finally, a future state of VSM after implementation of feasible kaizens has been reported.

The results show that future state of VSM brings out the positive impact with respect to process ratio, TAKT time, process inventory level, total lead time and bottleneck time. The proposed improvement also helped to achieve higher customer satisfaction in terms of increased quality, reduced cost and on time delivery.

Present study is focussed on a single product family cell in one of the auto-component organization.

Helps practitioners in the auto-component industry to implement the VSM effectively in their organization.

The purpose of this paper is to explore different drivers and volume flexibility strategies employed in manufacturing firms. It also examines contingent factors, which determine volume flexibility requirement in manufacturing firms.

Using a multi-case study approach, the study examines and analyses drivers, strategies and contingent factors that affect volume flexibility in four Indian manufacturing plants belonging to automobiles, auto ancillary, fashion apparel and electrical industry.

The empirical analysis suggests various drivers of volume flexibility and different strategies employed by firms to enhance flexibility. The study also illustrates various contingent factors that determine the need of volume flexibility in firms.

The sample of the study is majorly confined to the northern region of India. Methodologically, the analysis is solely based on the qualitative data.

The study suggests practitioners to consider a range of contingent factors, while evaluating the need of volume flexibility in manufacturing plants. Rather than relying on a single strategy, a mix of strategies should be used to develop volume flexibility in firms.

The identification of a range of strategies employed by volume flexible firms as well as contingent factors that need to be evaluated before employing volume flexibility are the major contributions of this study.

This research study identifies the factors influencing innovation and technology management in Indian manufacturing small- and medium -sized enterprises (SMEs) with a focus on the auto-ancillary sector. The study further investigates the impact of types of innovation on business performance. The purpose of this paper is to come up with a flexible strategic framework for managing innovation and technology in SMEs from a perspective of continuity and change.

The data on which this study is based were generated through secondary research using published sources and primary research. The study was done through group discussions with industry experts and personally focused interviews with 88 entrepreneurs from SMEs selected using a structured questionnaire.

The study shows SMEs pursuing more types of innovations display higher performance levels when compared to those pursuing fewer types of innovations. SMEs pursuing more types of innovations are significantly different from less innovating firms from the perspective of underlying change forces.

This research paper represents one of the few efforts to study innovation and technology management in SMEs and come up with a flexible strategic framework for managing forces of continuity and change for guiding this sector for long-term survival and growth. The flexible framework suggested, and the continuity and change matrix (C-C matrix), can be of interest to researchers and practising managers to validate the applicability for other sectors. The framework suggested can be adapted for application in a global context.

Leadership development for strategic impact in high growth export driven organization.

The case is suitable for second and final year students of a two year post graduate management programme (Master's level) on the following courses: leadership – on development of organization wide leadership processes; talent management – for identifying, nurturing and retaining talent in an organization and for developing leadership capabilities in managers; and strategic human resources (HR) – regarding building leadership development and talent management initiatives for creating a strategic level impact in the organization and its joint ventures.

In about 45 years since its inception Anand Automotive Limited (AAL) has established itself as one of the premium firms in auto ancillary manufacturing and export. This case demonstrates how AAL built its leadership development programme. Further, the case elaborates on the coach/coachee mentorship programme at AAL. The case further explores the various initiatives under the broad umbrella of the Anand Leadership Development Programme (ALDP). The ALDP process has been woven into the fabric of HR practices of the organization. AAL sales turnover was USD1.2 billion in 2012 and it has a goal to achieve a turnover of USD2 billion by 2015. Mr K.C. Bhullar, the group head HR, had to plan an HR system which will embed leadership in the tapestry of AAL as an organization. The amalgamation of ALDP in AAL has to be disseminated across all levels at the 19 plants spread across different locations in India. The ALDP is expected to sprout a large number of leaders in AAL who can usher in an extremely quality focused and conscious organization. Such leaders would in their day-to-day demonstration of leadership at AAL help AAL to become an excellent manufacturing organization. This would help AAL to have a leadership position in the global automobile market. ALDP is also expected to create a band of leaders who would help the organization from very senior level strategic management positions and play leadership roles in its joint ventures.

This case can help students to understand how HR practices integrate leadership development programme for the strategic gains of an organization. Students would also understand the role of mentorship in coach/coachee processes.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Does target firm shareholders excessively paid or adequately rewarded or stumpy compensated? To address this query, the study aims to remix valuation parameters for better combination of mixture so that it represents fair deal value in merger and acquisition (M&A) negotiation process. The purpose of the study is to redesign the existing valuation methods, craft new models and compare them to suggest perceptive guidelines for “valuation governance”.

This research reconstructs discounted cash flows (DCF) and net asset valuations (NAV), originate NRR‐APB approach, MCF‐RS and MCF‐ES and finally compare all seven methods for each select company in the respective industry/sector. Exclusively, estimating the forecasting hurdle rate (FHR) is a core competence of valuation process.

Among the valuation models, all seven methods for select companies have been reported diverse values, however NRR‐APB approach describe factual enterprise value for bargaining the value of target firm in structuring M&A deals.

Due to petite sample, study has limited scope to validate the proposed conceptual models for valuation governance. Particularly, models have developed under the Indian accounting regulations, standards and reporting mechanism. Though, it can be practiced in other accounting standards on trail and error basis.

Valuation practitioners, governments, consultants, M&A advisory, market research and academia may implement these business valuation techniques, guidelines and implications in particular sector/industry to protect the interest of target firm shareholders and justify the consistent value for acquirer/bidding firm. Accordingly, stakeholders' interest could also be sheltered.

The paper intends to introduce NRR‐APB approach, MCF‐RS and MCF‐ES, reengineering DCF and NAV and compare these valuation methods on three companies each in select two industries, auto ancillary and hotels and resorts. Further, it would be adding a token of contribution to the notable area corporate finance. Hence, this article is the first study to argue on valuation governance and recommend state to enact immediately in India.

The purpose of this paper is to identify, analyze and orient the enablers of Six Sigma to enhance supplier capability for an Indian manufacturing supply chain (SC).

In total, nine enablers of Six Sigma were identified through an extensive literature review and discussion held with managers/senior managers in different Indian manufacturing companies. The interpretative structural modeling (ISM) approach is applied to the Indian auto ancillary company for developing and analyzing the structural framework of enablers to enhance the supplier capability.

The enablers such as top management commitment and leadership, supply chain management, standardization, training and education, human resource management and project selection and execution methodology of Six Sigma related to supplier capability have emerged as the prominent enablers, which are driving force in the system for the Indian manufacturing SC.

This study is restricted to only one Indian manufacturing company. Therefore, the outcomes of the study should not be generalized. Further studies may be carried out for several Indian manufacturing industries to get a more comprehensive implementation approach, their validity and their variation across the different industries.

The simplicity and clarity of the proposed structural framework of Six Sigma helps in the identification and orientation of enablers for the successful implementation of Six Sigma in the SC. The proposed structural framework can be applied to different manufacturing SCs by allowing managers to structure the enablers considering their unique implementation constraints, which can reflect their priority considerations.

The study goes beyond the conceptual discussion of supplier capability issues. The supplier capability cannot be seen as a standalone approach irrespective of the constraints from the supplier domain as it is in synchronization with the entire SC performance. The enablers and their orientation with respect to the SC are providing a unique contribution toward supplier management planning. The outcomes from the proposed structural framework are used for developing action plans for organization “A” or other organizations to build suitable supplier capability in the SC.

After completion of the case study, the students will be able to understand the calculation of cost of individual sources of funds and cost of capital, examine various tools such as economic value added and cash value added analyses which help determining whether a company has added value to its shareholders or not and explore the application of Benford’s law and the Beneish M-score in detecting manipulation of numbers in financial statements.

Nimmy Jacob, a newly recruited research analyst with an equity research firm, was entrusted with tracking the “auto ancillary industry”, specifically “Minda Corporation Ltd” (MIL). MIL was a leading diversified auto components manufacturing companies in India. The company’s share price meteorically rose during February 2021–2022 (Figure 1). The company’s turnover over the past few years had grown at a compounded annual growth rate of 15% during the three preceding years. The company had in the recent past bought a 15% stake in another competitor, Pricol Ltd, for a consideration of INR 400 crores and previously had used joint ventures and acquisitions to scale up its operations. Jacob, apart from the conventional financial analysis, had to ascertain whether all the strategic decisions were adding value to the shareholders’ investments by exploring the various tools available for the same and also calculate the minimum expected rate of return for MIL. Jacob was apprehensive about the financial statements, although the numbers for the company were good. Jacob was skeptical about a high-growth company having the incentive to manipulate its earnings. Manipulations could be in the form of abnormal increase in accruals, inconsistency in expenses and high days of receivables. Therefore, Jacobs used certain analytics/statistical tools to detect any manipulation of numbers in the financial statements of the company and to ascertain apt findings about the company.

This case study is intended for discussion in corporate finance, financial reporting and analysis and financial analytics at Master of Business Administration/undergraduate level.

Teaching notes are available for educators only.

CSS1: Accounting and finance