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Executive Summary
The purpose of this report is to identify the external and internal challenges which Bajaj Auto ltd faces currently faces. The report used various models such as PEST, SWOT and Porters five forces in analysing the external environment. Recommendations were made based on Mckinseys 7s,John Addair model and Kotters model of change. The research identified Internal People Management, leadership styles, organizational structure and some other factors as the major driver to address Bajaj Auto ltds internal issues. Some of the major internal issues identified are the chairman of Bajaj Auto ltd, organizational structure and culture and low employee morale, lack of empowerment and involvement and external issues are increase competition, customer dissatisfaction. Main areas impacting internal people management at Bajaj were strategy, structure, system, skills and style, identified using Mckinsey's 7s model and scholes models. At the end of the research, it proposes five main recommendations to address current problem faced by Bajaj Auto Ltd. Bajaj needs to: Align job roles with employee career aspiration Create a continuous learning culture To adopt a action-centred leadership style by Adair (1979) Restructuring Employee involvement and engagement

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1.Introduction
This report aims at applying appropriate models and theories to identify the external and internal challenges Bajaj Auto Ltd currently faces and relating the internal issues contribution to external challenges the company is facing. The report first analyse the external challenges through PEST, Porters five Forces and identify the opportunities and threat using SWOT analysis. The analysis of these models will be used to identify key issue(s) pertaining to Bajaj Auto Ltd with appropriate recommendation. Bajaj Auto ltd came into existence in 1929. Jamnalal Bajaj was its original founder. Bajaj was started with a different name called Bachraj trading company and later became Bajaj. Bajaj used to sell imported scooters till 1960. In 1960, Rahul Bajaj became the licensee for Vespa scooters in India and started manufacturing in their first plant set up at pune with technological deal with Piaggio. The company had an annual turnover of Rs 72 million at the time. By 1970, the company had produced 100,000 vehicles. The technological deal with Piaggio was ended in 1977. With increase in demand for their vehicles they opened the second plant at Waluj, Aurangabad in 1984. In 1998, Bajaj setup its third plant at chakan, Pune and another in Pantnagar. Bajaj downsized its work force from 23,000 to 17,000 workers following which it faced a 2 months strike from its workers in Waluj plant. It laid off 2,000 workers in short term and another 3,000 workers in following three to four years time. Bajaj is Indias second largest two wheeler and three wheeler manufacturing company and fourth largest in the world. Bajaj is also in other businesses such
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as finance, insurance, electrical etc.(http://www.fundinguniverse.com/company-

histories/Bajaj-Auto-Limited-Company-History.html)

2. Macro-Environment Analysis 2.1 Pest Analysis:

Political Factor
Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automotive industry.
Allowing automatic approval for foreign equity investment up to 100 per cent, with

no minimum investment criteria.

Establish an international hub for manufacturing small, affordable

passenger cars as well as tractors and two wheelers.

Ensure a balanced transition to open trade at minimal risk to the Indian economy

and local industry.

Assist development of vehicles propelled by alternate energy sources. Laying emphasis on R&D activities carried out by companies in India by giving a

weighted tax deduction of up to 150 per cent for in-house research and R&D weighted tax deduction of up to 150 per cent for in - house research and R&D activities.
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Plan to have a terminal life policy for CV along with incentives for replacement for

such vehicles.
Promoting multi-modal transportation and the implementation of mass rapid

transport systems. (http://www.fadaweb.com/indian_auto_scenario.htm) (http://ezinearticles.com/?Automobile-Sector---The-Indian-Scenario!&id=772205)

Economical Factory
The Indian economy has grown at 8.5 per cent per annum. The manufacturing sector has grown at 810 per cent per annum in the last few years. More than 90 per cent of the CV purchase is on credit. Finance availability to CV buyers has grown in scope during the last few years. The increased enforcement of overloading restrictions has also contributed to an

increase in the number of CVs plying on Indian roads.

Several Indian firms have partnered with global players. While some have formed

joint ventures with equity participation, others have entered into technology tie-ups.
Establishment of India as a Manufacturing hub, for mini, compact cars, OEMs, and

for auto components. (http://www.fadaweb.com/indian_auto_scenario.htm) (http://ezinearticles.com/?Automobile-Sector---The-Indian-Scenario!&id=772205)

Social/Cultural Factors
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Upward migration of household income levels. For eg: rise in per-capita income.

Most of Cars are financed in India-because not many people can manage to buy a car from their savings in one single shot.

Indian customers are highly discerning, educated and well informed. They are

price sensitive and put a lot of emphasis on value for money. Preference for small and compact cars. They are socially acceptable, even amongst the well off.
Preference for fuel efficient cars with low running costs.

Technological Factor
With the entry of global companies into the Indian market, advanced technologies

,both in product and production processes have developed.

With the development or evolution of alternate fuels, hybrid cars have made entry

into the market. Few global companies have setup their R&D centres in India.
Major global players like Audi, BMW, Hyundai etc have setup their manufacturing

units in India. (http://www.fadaweb.com/indian_auto_scenario.htm) (http://news.bbc.co.uk/1/hi/business/6505987.stm) (http://www.worldcarfans.com/10801032737/audi-starts-production-in-india)

3. Micro Environment Analysis:

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3.1 Porters Five Forces:
This model was originated in 1979 by Michael Porter in his book, Competitive Advantage. Michael Porters five forces framework is used to analyse the challenges that Bajaj is facing within the competitive environment. According to Johnson et al (2008) it is very important for management in any organisation to understand the competitive forces in their industry as it will determine the likely success or failure of that particular organisation within it. According to Johnson et al (2008:60) this is a vital tool as it can help set an agenda for action on various 'pinch-points' that are identified.

P rt o

Fig-1 This model was originated in 1979 by Michael Porter in his book, Competitive Advantage. Michael Porters five forces framework is used to analyse the challenges that Bajaj is facing within the competitive environment. According to Johnson et al (2008) it is very important
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for management in any organisation to understand the competitive forces in their industry as it will determine the likely success or failure of that particular organisation within it. According to Johnson et al (2008:60) this is a vital tool as it can help set an agenda for action on various 'pinch-points' that are identified.

Existing Rivalry
Bajaj Auto ltd faces an extreme competitions as a result of presence of other giants such as TVS, Honda, Kinetic Motors, Yamaha, Suzuki, Royal Enfield and Hero Honda which is the most fiercest competitor as it is the market leader in Indian two-wheeler market.

Bargaining Power Of Suppliers

Bargaining power of suppliers is low as suppliers in automobile industry in India are found abundantly. So, the suppliers cant bargain much with Bajaj as it is second largest twowheeler manufacturer in the country.

Bargaining Power Of Customers

Customers have high bargaining power as they have a wide range of selection from different manufacturers in the market. Customer can choose a different bike in the same segment from any other competitor in the market so they have high bargaining power.

Threat Of New Entrants

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The threat of new entrants is very low as it requires a heavy investments to set foot in two wheeler market and low chances of survival for new comers as a result of immense competition they would face from automobile giants who are already dominating the market. Even then the threat cant be considered as non-existent. For instance, Mahindra and Mahindra ltd which is in four wheeler commercial vehicles and passenger cars manufacturing has surprisingly entered the two-wheeler market.

Threat Of Substitutes
Threat of substitutes is also low for any two-wheeler manufacturer in India because of various reasons such as economy, most of the population in India is Middle-class and not many can afford cars, cant rely too much on public transport like buses and trains. But there are certain substitutes such as electric mopeds and cheap cars like TATA Nano.

3.2 SWOT Analysis:

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Fig -2 SWOT analysis is used to identify both external challenges and internal challenges which Bajaj Auto ltd is facing. The SWOT model works well with PESTLE as it enables the user to spot business opportunities and exploit them fully. It is a helpful tool in matching an organisations' goals, strategy and capabilities to the environment in which it operates in (CIPD, 2008).

Strengths
Brand Name- Bajaj has a good brand image and also has become a big brand from a

long period of time. Bajaj is known for producing affordable, low maintenance and durable vehicles from decades. This is one of the reasons it has managed to get a good brand image over a period of time.
Strong Hold In Premium Segment- Bajaj holds a loin share of more than 50%

market share in this segment with the help of their bike called Pulsar DTS-I and recently another bike called Discover.
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Reputation For Technological Innovation- Bajaj, from past two decades has gained

a reputation for its technological innovations it has come up with. DTS-i was a state of the art technology that Bajaj came up with for Pulsar. It has also come up with many other good technologies with the help of Kawasaki, its partner and some on its own like DTS-i.

Weaknesses
Lack Of Focus On Market Segment- although Bajaj has a strong control over

market share in premium segment bikes, it has a very small market share in entry segment which commands a lion share of 74% in total bike market. This clearly indicates the lack of focus on the entry segment in two-wheeler. This is the reason Bajaj is second next to market leader Hero Honda. Bajaj has so far clearly failed to establish strong brand in entry segment like Splendour and Passion from Hero Honda. Figure 3 below illustrates the market share of different companies in entry segment:

Fig-3
Underutilized work force- Bajaj has a weak marketing as well as marketing strategy

compared to its competitors . For instance, Hero Honda and Yamaha have got brand ambassadors who are very popular movie stars and Bajaj has never taken anyone as their brand ambassador for their vehicles. This is the direct effect of underutilized work force which operates in front line of the business.
Low Employee Morale- there seems to be a very low employee morale in Bajaj in

managers and service station staffs.

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Poor Communication System- the communication flow is mostly top to bottom and

the other way around is significantly less causing lot of problems in day to day business operations in service stations especially.
Customer Dissatisfaction- even though Bajaj has good service response to the

customers and quality.

also timely service, customers are not satisfied with the service

Power Culture- is currently prevailing in Bajaj Auto ltd. When the top management

is observed it is found that top four positions such as chairman, vice chairman, managing director and executive director positions are occupied by the family members of Bajaj family.

Opportunities
Exploring International Markets- Bajaj should utilize the partnerships it has

with Kawasaki and KTM to enter into new markets where there is a potential market for their vehicles. Bajaj should also concentrate on increasing sales in existing markets. For instance, Bajaj Pulsar and scooters has a great demand in Latin America which is again an opportunity to capture another market.
Entering Sports Bike Segments- Bajaj should now consider entering sport bike

market with the help of Kawasaki and KTM both internationally and domestically.
Producing Four-Wheelers- Bajaj has also taken initiative in producing cheap

priced car. This is an opportunity not to be ignored. It should concentrate on bringing more cars into the market.

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Threats
New Competitors- like Mahindra and Mahindra ltd entering two wheeler market is

a serious threat to Bajaj. There are also some other Chinese firms like Kanda Motors which are slowly sneaking into Indian market. But these firms cant pose that big a threat when compared to Mahindra and Mahindra ltd.
Extremely Low Priced Cars- like TATA Nano is a considerable threat. After

TATA was successful with Nano, there are companies like Mahindra and Mahindra ltd and many more are also planning to launch a low priced cars in the market. These days Bajaj itself is planning to launch a small price tag car in near future.
Electric Mopeds- are rapidly becoming a threat to all the regular two-wheelers as

they are low priced and cheap on maintenance. It also a trend now in the market to have a electric moped as they pollution free and easy to ride. Government provides tax reductions for firms which are manufacturing these electric vehicles to encourage firms to produce more and more eco-friendly vehicles.
Growing Market For Used Cars- is a major threat to all two-wheeler

manufacturers in the country. Used cars are available at attractive prices and customers can even avail finance to buy these cars. The automobile giants like Maruti Udyog ltd themselves are running used cars sales and services as they are highly profitable and are in high demand.

4. Key Issues & Challenges Bajaj Faces:

Lack of focus on entry segment

Low employee morale

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Poor communication system within the organization Customer dissatisfaction Weak marketing Power culture Organizational structure Skills underutilized Not utilizing information from front line workers

5. Analysis Of Current Issues & Challenges Using McKinseys 7S Model

The McKinseys 7S model was developed by Peter and Waterman in 1982, which is mainly used to analyse the current internal issues such as low employee morale and communication issues Bajaj faces. McKinseys 7S will be use to understand how structure can affect other business elements of the company, elements such as low market share, customer dissatisfaction and weak marketing in Bajaj.

McKinseys 7S Model

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Fig-4 Strategy - Strategy plays an important role in any organization to achieve its aims, goals and objectives. In a developing country where public transport systems are inadequate, a motorcycle is the most preferred and affordable form for mobility. A rugged, fuel-efficient two wheeler also has a popular acceptance in rural India. Bajajs main strategy which helped to become so big was its low cost vehicles. The design solution made the new values and brand essence visible. Bajaj used a low cost and low maintenance model called Boxer CT100 to capture rural market but didnt succeed completely as it aimed. It has failed in its strategy to capture entry segment as it lacks in its focus in entry segment which is more popular in rural parts of India. This lack of focus is caused by some of the issues related to structure and leadership styles which is discussed in the later parts of this model. (http://www.rebrand.com/page279.html) Structure- Bajaj has tall structure i.e., vertical organization structure. Bajaj revamped its organization structure on July 5th 2007. There will be five pillars of this new structure
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(Strategic units) are R&D, Engineering, Two Wheeler Business Unit, and Commercial Vehicles Business Unit & International Business Unit. These pillars will be supported by functions of Finance, MIS, HR, Business Development and

Commercial(http://www.moneycontrol.com/news/business/bajaj-auto-revampsorganisational-structure_290462.html). By analysing this structure it can be clearly identified that functional units such as finance, HR, business development and marketing department wont be working in partnership in decision making process but, would be in partnership in implementation process. This factor has definitely affected the overall business operations from lack of focus to customer dissatisfaction. For instance, even after Bajaj provides good response and timely service to customers, customers are not happy with the quality of service. This is an indication that either workers in the service stations are not properly trained or are not skilled or not motivated enough to align the organizational goals over their personal goals. This calls for HR interventions. HRs should be consulted and corrective actions should be taken instead of managers in the service station taking disciplinary action on workers which would in-turn lead to low employee morale, high employee turn-over rate and customer dissatisfaction. Another good example would be weak marketing. People in marketing, sales and service departments would be working in the front line of the day to day business operations of the company. So, people from these departments would know exactly what customers expectations are and what customers are disappointed about. But when the structure is analysed, there seems to be no participation of marketing or sales or service personnel in the decision making process. This might one of the major reason

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for lack of focus on market segments especially in entry segment and also for weak marketing strategy. Systems- Bajaj has maintained a good and timely supply chain and also good inventory control in all the service stations across the country. Because of this, new vehicle delivery to the customers is on time most of the time even after so much demand exists for their vehicles in the market. This is the proof of good demand supply chain management system. But, there is a bad communication system in the organization. As a result of top to bottom communication flow most of the time, Bajaj has not able to utilize the information available from its front line workers such as marketing staff and service technicians. The information plays a vital role in decision making process for new product lines. Because the staff in the front line are the ones who actually the connection between organization, customer and outside world and they would exactly know what customer expectations are and the reason they are not satisfied and they would also know the attitudes of customers towards the organization and its product. This information can be used in making several strategies, plans and decision making process on certain key issues such as development of new product line. This has result in customer dissatisfaction finally. Customer dissatisfaction is already stated in SWOT analysis. Style- Leadership style of Rahul Bajaj is autocratic. His son Rajiv Bajaj is following his fathers footsteps. Rajiv Bajaj is the current managing director of Bajaj Auto ltd. Rajiv Bajaj is considered to be a person with less words for his employees as he doesnt communicate or interact much with his employees and highly tasked. Most decision making is the reserved of management without little to none input from lower staff. This is supported a survey by

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Purcell et al (2003) which describes the leadership style as the focus of power is with the manager and all interactions within the group move towards the manager. The manager alone exercises decision-making and authority for determining policy, procedures for achieving goals, work tasks and relationships control of rewards or punishments (Mullins,2007:371.). Although there is a lot of freedom given to employees at R&D and re-engineering units, there is a less amount of freedom for employees and managers at lower level. Many critics often say that he sees employees as tools to business. Rahul Bajaj listens to all the suggestions but finally decides on his own regardless of what people think or say. For instance, recently in April 2010, when Rajiv Bajaj proposed to keep only five brands and phase out rest of the bikes, Rahul Bajaj strongly opposed it and there were a lot of controversy going on about it. Rajiv Bajaj is still not convinced with the idea of phasing out Bajaj scooters even after its been a long time the scooter production is stopped now in Bajaj. Scooters were stopped because the market for Bajaj scooters were falling down rapidly with presence of new attractive bikes from other manufacturers. (http://epaper.timesofindia.com/Repository/ml.asp? Ref=RVRELzIwMTAvMDQvMTYjQXIwMDUwMQ==&Mode=HTML&Locale=englishskin-custom). It is clear from these kind of attitudes and leadership styles Bajaj has failed in its strategy to capture entry segment successfully. Autocratic leadership styles of Rahul Bajaj has also created low employee morale as there is less appreciation to his employees. Rahul Bajaj does not consider his employees much while making decisions. His leadership probably has influenced the organization structure, communication flow and lack of focus on market segments. This indicates clearly that Rahul Bajaj is more task oriented.
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Staff- Staff in R&D are highly qualified and skilled. They are well motivated as they enjoy a great deal of freedom and pay scales. But workers at lower levels in factory and service stations dont enjoy these privileges. Workers in service station are paid very less when compared to other staff. Technicians in the service station are not motivated and have low morale as they feel they are undervalued which is seen in SWOT analysis. Skills- Skills of employees working in Bajaj are highly skilled and efficient. Technological innovation is a proof for their skills. But as discussed earlier in the system, skills and information from front line workers are underutilized. It is found that technicians at service stations are not so skilled. Proper training and development should be given to them in order to achieve customer satisfaction. Shared Value- The main values in Bajaj are speed, accuracy, perfection and customer satisfaction. It aims to Distinctly Ahead. But main focus is on customer as Bajaj believes customer is king and especially Rahul Bajaj. But not many employees share the same value as there is a presence of power culture and autocratic leadership style in the organization. Employees are not motivated enough to have the same value as the organization. Another main goal is to be the market leader in Indian market.

6. Recommendations:
6.1 Restructuring- Bajaj auto ltd needs to change its organization structure from its
current tall structure to horizontal structure. Changing from tall structure to horizontal structure would help in decentralising decision making and giving more freedom to the line managers. This will also help the top management in employee involvement and engagement which would in-turn help to make new strategy to solve the current issues such as low
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employee morale, customer dissatisfaction, low market share etc. Changing organization structure to horizontal structure will also address the issue of communication channel and flow which is currently of great importance as the front line staff can help organization be aware of current market conditions and customer preferences which are vital information to form a new strategy to capture market share. Adopting Organic structure would also be helpful as it creates communication and interaction horizontal and provides decentralised decision authority as well.(http://www.businessdictionary.com/definition/organic-

organization.html) By adopting either of these structures, the organization can make employees feel more valued and the organization would be successful in achieving shared value successfully which currently absent at many parts of the organization.

6.2 Alignment of Career to Job role- Bajaj Auto ltd should encourage their staff to
develop and align personal goal in line with overall strategy. According to Mullins ( 2007:720), when Individuals' personal goals are integrate with those of the organisation, it encourages employees to take responsibility for their own learning and development. Line managers could from time to time meet with subordinates to find out and discuss job roles so as to ensure alignment of roles and career desire, since people work best when they have job satisfaction. This will result in eliminating the low employee morale and in-turn will also decrease the customer dissatisfaction.

6.3 Employee Involvement and Empowerment- Front line staff like marketing
staff should be involved while making decisions on developing new strategies to increase market share as they provide vital information such as market condition, customer behaviour, preferences etc. These information are of great important as such strategies should be based totally on customers like and dislikes. Employee empowerment to line managers and
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technicians at service stations will give them more freedom to take certain decisions. Empowerment will also improve the employee morale and feel they are more valued. This will create a healthy working atmosphere resulting in better working conditions and better customer satisfaction. Employee engagement will help the organizations in maximum utilization of skills of employees to improve overall performance of the organization.

6.4 Change In Leadership Style- Current leadership style at Bajaj Auto ltd is
autocratic which is leading to a lot of issues and challenges that the company is facing. Bajaj Auto ltd needs to change its leadership styles from autocratic to democratic leadership style if it intends to address those issues and challenges and achieve its main aim of being the market leader in Indian two wheeler market. The current leadership is too much of task oriented which is demotivating employees in lot of departments and feels they are undervalued. Bajaj needs to embrace democratic leadership as it is balanced as it is action centred leadership. This gives a lot of advantages to the organization in realizing its aims and objectives in an effective manner. The John Addair model below would explains it better why democratic leadership style is important.

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Fig-5 According to John Adair (1979), when managers and leaders adopt an Action-centred leadership approach, it helps in reducing labour turnover, as everyone feels part of the organisation. The ideal leadership would be one which focuses on achieving complete integration of the three areas of needs.

6.5 Learning Culture- Bajaj Auto ltd should build a learning culture through its
recruitment and selection process. Job analysis and specification should be effective enough to attract new candidates as well as retain candidates who are highly skilled, willing to learn, motivated and reduce training cost. A learning culture is one of the most important and vital sources of sustainable competitive advantage, because of the knowledge learnt from staffs are transferred to the organisation which in turn improves innovation within the organization. Training is a key element in the business strategy of any organisation dedicated to continuous learning.
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Through learning, individuals can re-interpret their world and their relationship to it. A true learning culture continuously challenges its own methods and ways of doing things. This ensures continuous improvement and the capacity to change. Leading management thinker, Peter Senge, has identified five disciplines of a learning culture that contribute to building a robust learning organisation. These elements are: Personal Mastery create an environment that encourages personal and organisational goals to be developed and realised in partnership Mental Models know that a persons 'internal' picture of their environment will shape their decisions and behaviour Shared Vision build a sense of group commitment by developing shared images of the future Team Learning transform conversational and collective thinking skills, so that a groups capacity to reliably develop intelligence and ability is greater than the sum of its individual member's talents System Thinking develop the ability to see the 'big picture' within an organisation and understand how changes in one area affect the whole system (http://www.training.com.au/pages/menuitemfa8c35992f940190f9fa5a1017a62dbc.aspx) Once a good culture is successfully established, managers turn to manpower planners because they will be capable enough to identify key potentials and skills of their subordinates who work with them every day and also can recommend appropriate training needs or advice especially to technicians working in service stations.

7. Implementation Of Recommendations:
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All the recommendations given above can be implemented with the help of John Kotters change management model within Bajaj Auto ltd. In this model, there will be emphasis mainly on change of leadership style and organizational structure. (Kotter, J.P. (1996)

Leading Change)

7.1 Establish A Sense Of Urgency- change is a vital need for organizations from time to
time and Implementing change in any organisation is extremely important and requires a lot of skills and acceptance or else the whole idea of change may turn into a bigger failure. John Kotter [1995] suggested that at least about 70% of management must buy into the idea of change so that they can be the change leaders. In Bajaj Auto ltd there is the need to train managers on interpersonal skills to motivate their subordinates, they must be made to understand the need to have the skills and how to apply it to ensure performing staff. To do so, Bajaj can create urgency by consulting with line managers and other senior managers on how it would beneficial to them personally through identification of most suitable leadership style to be followed in future. They should also discuss the threats related
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with issues such as retention, increase competition, and interpersonal skills. Bajaj needs to convince these key managers that good employee relationship is essential to addressing people issues.

7.2 Forming A Powerful Coalition-Is difficult to achieve but not impossible though
as it evolves largely around managers. Managers tend to create a barrier between them and other employees creating a gap between the top and the bottom, making employees feel they must just do as they are instructed, finish the work and go home. To address this issue, Bajaj must identify leaders and key staff members who are people oriented and popular among them and also use team building exercises.

7.3 Create a Vision for change- Bajaj Auto ltd will need to create a vision and a
strategy that will help to implement the change. To ensure its success, the strategies of Bajaj for change must be educated and clearly state to help all employees involved to understand the vision and the change.

7.4 Communicate The Vision- At this stage, Bajaj should discuss how leadership style
will successfully affect the overall business. This must be done using appropriate reinforcement technique and with the help of proper communication channel. Procedures laid-out must all be clearly communicated and understood by all the employees. This can be communicated during training, daily interactions and views from individuals.

7.5 Remove Obstacles-

HR must monitor progress and at the same time eliminate gaps that

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7.6 Create Short-Term wins- It is importance at this stage that Bajaj create short term wins
using rewards and recognition policies in order to complete development plans and modules. This must also include focus on entry segment and establish a strong brand in this segment.

7.7 Build on the change- SMART goals must set to keep improving the democratic leadership
style. This can be done using feedback from their performance.

7.8 Anchor The Changes In Corporate Culture-

Success achieved must be

incorporated into the companys core value so as to ensure style is build into a new brand and value. In total, the report proposes a training to make improve their communication and interpersonal skill at each level of the organization and managers should motivate employees with focus on all the three intersections of John Adairs model Task, Team and Individual.

Conclusion

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In summary, Bajaj Auto ltd must concentrate mostly on changing its leadership styles and concentrate on action centred leadership i.e., democratic leadership style. Bajaj Auto ltd should also concentrate on moving from its present tall structure to more horizontal structure and improve it communication channel for better communication flow. By changing organizational structure, it will automatically enable decentralised decision making which is very vital for Bajaj to deal with its current challenges such as customer dissatisfaction and low employee morale. By employee involvement it helps in employee engagement. Employee empowerment would address the issue of low employee morale and they feel more valued when they are provided with employee empowerment and involvement. This will also help employees to align business goals over their personal goals. Once all the recommendations given in this report are implemented, Bajaj would be able to develop new strategies to achieve its main aim which is to be market leader. The new strategy would definitely help them achieve success because it will utilize the skills of all the staffs and also information from them as they are vital to these strategies. By this way there wont be the issue of underutilized skills.

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References
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http://economictimes.indiatimes.com/news/news-by-industry/auto/two-wheelers/Bajaj-givesHero-Honda-tough-ride-on-100cc/articleshow/5842635.cms (accessed on 26-05-2010)

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Economic Environment

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