Rejuvenation of Scooters India Ltd.

Abstract

Scooter India Ltd., a government of India owned enterprise, secured the license to produce two wheelers at a time when its demand far exceeded supply in the country. Government of India, the owner of the company, controlled the industry. Yet, the company could not report profits for nearly 25 years since its inception in 1971. Its accumulated losses stood at Rs. 6.55 billion at the end of the financial year 1995-96. There were intense efforts to sell off the company. Amidst these efforts, Dr. Arun Sahay took over the mettle to rejuvenate the company. Even under extremely hostile conditions he held strong belief that the company could be revived. The company reported profits for the first time at the end of the financial year 1996-97. The case describes the process and causes of organizational decline since its inception. It also describes the process and critical events to rejuvenate the declining organization despite several hurdles from the government bureaucrats, politicians, suppliers, employees and union leaders.