ANALYZING ALIMCO (NON-PROFIT ORGANIZATION)

Indian Institute of Technology Kanpur

Asmita Gupta 10168

Harsha Mulchandani 10285

Jaishri Rai 10309

Parth Arora 11489

Pranjal Singh 11516

1

Table of Contents

Foundation and Motivation ............................................................................... 2

Methodology ...................................................................................................... 4

Introduction to ALIMCO History and Evolution............................................... 6

Organisational Chart 11

Internal Context: How does ALIMCO function ................................................ 11

External Environment ....................................................................................... 21

Our analysis.. 27

Final Conclusion..35

References ........................................................................................................ 36

2

Foundation for the project

Learning from the course

If we are to pick up the most spectacular learning from the course, it has to be how we could

connect the theory to our own real-life world.

The course began with a two page case study on the Dashman company. Initially, it was

really difficult to really arrive at what was happening. We were all baffled and found it very

hard to connect with the case why would plant managers reply in affirmative to the letter

and still not abide by raw material management system proposed by the new vice president?

We held a very simplistic and linear view of organizations, with little regard for

organizational nuances. What Dashman helped us to do, in retrospect, is to make us think

harder, it made us want to delve deeper to find what the core issue was, to go back to basics

and understand how the nuts and bolts were operating to see what was wrong with the car.

Contrary to our earlier approach of getting caught up in superficial, often unnecessary details

which made us overlook the core issue, this course has taught us a bottom up approach to

look at real life problems. And this has helped a lot, not just for further cases in the course but

for life in general.

One of our group members, Harsha was discussing a live case with a partner at Boston

Consulting Group. The case was about an ITES company delivering services dealing

primarily with sales force psyche the sales representatives did not feel motivated to report

larger deals, reducing companys profits. She diagnosed the reason to be related to incentive

structure- incentives were not based on deal reporting but only deal conversion. She credits

this ability to diagnose incentive oriented problems to the group case analysis of Jacobs

Suchard where the primary problem was that of incentive misalignment.

Another of our group members, Parths father works in a departmental store. When he was at

home in the Dusshera holidays, his father talked at length about how the two tiered

departmental store run by two brothers and their sons respectively was going to be split into

halves because one son felt that the tier owned by his brother had started encroaching into his

sales by keeping the same products.

Although Parth had heard about a rift in brothers leading to split of business story earlier,

because of his family roots of business, for the first time he tried looking at the problem from

an organisational perspective. He discussed with his father how, even considering the split to

be certain, the two divisions could be structured so as to ensure maximum synergies.

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This perspective to look at real life problems came from the learnings in the course. Dr.

Varman has played a pivotal role in widening our view of things. He repeatedly talked about

how we need to learn to look beyond individuals when looking at organisations. It made us

rethink about ourselves.

All in all, we thoroughly enjoyed this course, and especially, the sense of humour Dr.

Varman carries. We really thank him and the course for opening up a totally new line of

thought for us. We would be more than glad to take up yet another course under him as our

open elective if our timetable permits.

Motivation for the project:

Our motivation to undertake this project has been quite simple it was required by the course

that we do a project on an organization of our choice. So the next question, as to why we

chose ALIMCO as our organization would rather be more interesting to answer.

ALIMCO is a nonprofit public sector manufacturing unit operating under the aegis of the

Ministry of Social Justice and Empowerment.

We would like to throw some light into the previous experiences and the future goals of our

group members here to show how that motivated our choice of organization. Three of our

group members Asmita, Jaishri and Pranjal are really motivated to go in the administrative

service and work in the public space. They have grown up hearing a lot about the kind of

problems public sector units are riddled with. Studying ALIMCO thus gave them a get hand

feel of a public sector organization working for social good.

The other two group members Harsha and Parth have worked with non-profits and social

businesses in the past as interns. Harsha had worked with Vatsalya, a NGO running skill

development programs in rural Rajasthan and Parth had worked with a social enterprise based

in a tribal village called Hurlung in Jharkhand. Both of them are incredibly motivated to more

about organizations working with a tangible social good and the sort of riders and inherent

conflicts they face while trying to scale their impact up.

ALIMCO thus was a perfect amalgamation of the interests of the members in the group.

Also, the very fact the course having touched a variety of organizations, did not give a chance

to look at nonprofits as a different class. Reading Annheir Helmuts paper on Managing Non

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Profits- A new approach, we came to know about the subtleties involved in applying

traditional organizational theory for manufacturing organizations in the nonprofit space.

Annheirs work thus, also serves as a motivation to study nonprofit organizations from a

different perspective.

METHODOLOGY

Our point of contact in the organization was Mrs. Neelu Dwivedi - Administration Head of

ALIMCO.

We were greeted by a smiling receptionist, who was physically handicapped. She had no

upper limbs, however had learnt to substitute her legs for doing most of the work, and she

was adept at it! We saw her painting with the brush held between her toe fingers. We were

enthused to begin our journey to explore ALIMCO.

Mr. M.S. Mishra, of the Hearing Aid Department, was the next employee we had a

conversation with, and had an insight into the culture of the the organization and

We proceeded to a visit to the Production Department where Mr. Jayant Singh, JM

Production, took us around the entire production plant and through various processes. Jayant

Sir was going to retire the next week.

Meanwhile we had a chance to interact with some shopfloor workers, half of whom were

casual workers and rest permanent.

Following that we visited the Hearing Aid department, where Mrs. Vibha Paul, who had been

working there for the past 15 years, explained the details of recruitment and product type etc.

The most interesting part of the study was a meeting with Mr. K.V. Rajesh, the MD

Marketing of ALIMCO. He introduced us to functioning of ALIMCO on the whole as well as

introduced us to the changing context of ALIMCO, and how the corporation is looking

forward to transform itself in alignment to this changing context.

Our second visit was focussed on meeting the Production Manager Mr. A.K. Shrivastava. We

had an hour long meeting with him, in which he throw some more light on the functioning

aspect of ALIMCO, the challenges that ALIMCO faces and how the political and social

scenario and interlinkages affect the working of the organization.

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In this visit, we also enjoyed a free lunch at the staff canteen, where we interacted with other

line and staff workers.

All the members of the organization were extremely friendly and welcoming. The visits to

ALIMCO, made each one of us a little more aware and a little more sensitive of the problems

of the less fortunate and differently abled people.

6

ALIMCO: Restoration of the dignity of the man

According to WHO 15 percent[1] of the world population lives with some kind of disability.

India is home of about 21 million[2] people suffering from disability of many kinds. Survival

with disability especially in underdeveloped and developed countries becomes daunting.

Infrastructure inefficiency discourages one to live with self-worth. ALIMCO works for

restoration of dignity of these kinds of people.

History

The continuous wars- Indo China war of 1962, Indo Pak war of 1965 and 1971 caused large

scale casualties in military personnel and civilians[3]. During that time India had only one

artificial limb making organisation at Pune. The sudden increase in disabled people and

worsened economic conditions compelled the government to set up an organisation which

could provide artificial limbs at affordable prices. In such circumstances government of India,

under Section 25 of Companies Act 1956, set up ALIMCO. It was incorporated in 1972 to

take up manufacturing and supply of artificial limb components and rehabilitation aids for the

benefit of the physically handicapped and started production in 1976. Its roots were laid

down under the Ministry of Defence as it was established mainly to cater people affected in

war casualties. The then Prime Minister Mrs. Indira Gandhi realised the need of countrymen

and broadened the goal of organisation to restore the dignity of every disabled person rather

than military personnel only. Later ALIMCO was shifted under Ministry of Social Justice and

Empowerment. The goal was to work for empowerment and welfare of disabled people.

Expanse across geographies: Currently, the organisation is catering to almost all the states

and Union territories expanding its services into 640 districts[4] of India. In addition to that its

export base is also expanding. During Afghan war and Iraq war government provided aid to

the affected people with the help of ALIMCO. ALIMCO has given a new lease of life to

amputees in war torn Afghanistan by providing artificial limbs to the land mine victims and

has planned to set up a limb fitting facility centre at Kabul[5] [6]. Also ALIMCO has extended

its facilities to other countries like Sri Lanka, Nepal, Bangladesh, United Arab Emirates,

Jordan, Iraq, Cambodia and Uzbekistan expanding its vision with the mission to restore

dignity to people with disabilities[5] [6].

In its journey of 42 years ALIMCO has faced many challenges; in fact it became a sick

organisation in 2000s. Since 1980s recruitment procedure was halted as the organisation

was facing losses. The average age of employees is 57 years[7]. But from May 2011,

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ALIMCO showed an annual growth of 54 per cent in business through a mix of execution of

pending orders, accepting new orders among others. This led to accumulation of general

reserve of Rs 62.03 crore and to create a net worth of Rs 63.99 crore as on March 31, 2013.

Market Network & Exports:The Corporation markets its products within the country

through its offices at Delhi, Kolkata, Bhubaneswar, Bangalore, Mumbai, Guwahati[8] and

with the help of an extensive dealer network to ensure availability near the important Limb

Fitting Centers and customers.

The major buyers of ALIMCO products can be categorized as [8]:

National Institutes

Dealer Networks

NGO Networks

State Government

Annual financial assistance from the Union government: The Corporation receives

financial assistance in the form of grant-in-aid to the extent of value of assistive devices

distributed under the government's Assistance to Disabled Persons (ADIP) scheme. The

dependency of working on government sponsored scheme ADIP, which in the ratio of 90:10

per cent in 2011, has now been brought down to 55:45. Its Initial reliance on government

fund has reduced and right now exploring other market opportunities.

ALIMCO is preparing itself to utilise the modernising fund provided under 12th Five year

plan, keeping in view the next 20 years. Further with upcoming of new Companies Bill,

ALIMCO is exploring the demand for devices from companies under the corporate social

responsibility (CSR) spending allocations. The management of Oil and Natural Gas

Corporation (ONGC) has recognised Alimco as it CSR implementation partner pan-India.

There are plans to introduce new products, new technologies, new processes, improvement in

quality of products and services, technological collaborations. Also, plans are to explore

exports. And now it is trying to become self-sustained and reduce the dependency from

government assistance to 50:50 in the current financial year.

Proper positioning of the product has a great impact at national and international level. Since

implementation of economic reform 1991(LPG-Liberalization Privatization and

Globalization), the corporation has opportunity to extend their products to the customers

around the globe.

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At present the corporation products are focused towards the poor and downtrodden masses,

now is the time of brainstorming of the corporation officials to re-position their products in

such a manner that their products has an equal demand for both the deprived and high class of

society. The re-positioning of the products is also required to enter the market of developed

nations.

Analyzing the national and international market, it is found that ALIMCO products are of

reasonable price and good quality when compared to that of developed nations. Thereby there

is a fair chance for the corporation to make its footing in the international market. Cost and

quality are in no case a hindrance for the corporation to compete with developed nations of

Europe and America. Re-positioning should be done in such a manner that it enhances the

customers delight and brand image.

Scale and Scope of ALIMCO: A recent census revealed that there are 2.68 crore disabled

population in India which makes up roughly about (2%) of the entire population. This

substantially adds up to 15% of global disabled population.

Alimco is the only manufacturing corporation which manufactures various types of assets and

devices required for basically four major disabilities- orthopedic, hearing disability, visual

impairment and mental retardation. ALIMCO manufactures 35 categories of products ranging

into 355 variants on a mass scale. These products are distributed across country under

Government of India Scheme covering a combined number of 35 states and union territories,

640 districts and 5547 blocks. Its distribution area sums up to 32.8 lakhs sq. km which is a

unique feature of ALIMCO.

ALIMCO has undergone a complete transformation in the past three years both in terms of

scale and scope.

Transformation from a sick unit to a Mini Ratna company

Past scenario: Till about three years back, ALIMCO was running losses and had a negative

net worth, and was thus effectively a sick unit. In the past scenario when ALIMCO was in a

struggling phase it suffered from many functional drawbacks. The biggest drawback being

that almost orders 15 crores worth orders lay unexecuted. The customers were unhappy due

to delays & quality issues.

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ALIMCO as a company had also been confronting various problems due to labor issues

because of the union conflicts - two separate unions existed which lead to strikes and

unethical practices.

There was dissatisfaction in staff due to following reasons:

1. No wage revision

2. No succession plan

3. Retiring only phase with no new filling up of vacancies thus creating a condition of

vacuum

4. No incentives for career growth

ALIMCO hardly any growth in turnover & production over the past years and the situation

was almost stagnant in terms of progress and stability.

Revival and growth: ALIMCO witnessed a complete revival with the joining of a new CMD

Shri Narayan Rao G. He undertook a series of multidimensional approaches towards

uplifting the drowning circumstances of ALIMCO. To begin with, the accumulated orders

upto 15 crore worth were executed initially.

In the recent years ALIMCO mainly focused on expanding the markets to uplift the scale &

scope of the organization as a whole. A clear cut comparison can be made with respect to the

scale on which ALIMCO had been working during its struggling phase and now after being

revived recently.

Previously ALIMCO covered 19 states serving around 80000 people only. In the current

situation with the assistance and collaboration of States Secretaries of Disabilities and

Commission of Disabilities ALIMCO has scaled up its production and distribution capacities.

It has now expanded its horizons covering a joint number of 34 out of 35 (states + union

territories) serving almost 2 lakh beneficiaries.

Within 1st year of his joining the company saw a remarkable growth of 42%. This was

followed by 83% growth in the 2nd year and total of 170 % by the end of 3 years. Thus

making up to a 54-59% growth on an average. With the market expansion provisions

ALIMCO was able to convert its negative net worth into positive net worth thereby

transforming from the status of a Sick unit to Mini Ratna company.

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Changes in Research & Development

In the past years the corporation was running under accumulated losses and its R&D grant

was suspended by the government due to it being a red flagged unit. Thus, initial

expenditure on R&D was extremely unsatisfactory. In the current scenario, RnD department

is still being formed and new investments need to be injected to achieve technological

innovation. ALIMCO has also sought assistance and carried out discussion with global

players in the field of artificial limbs manufacturing such as OttoBack of Germany which has

agreed to collaborate in the near future.

Effect of introduction of new welfare schemes and promotion incentives

In the past, a formal incentive structure was absent which led to complacency and lack of

interest among the workers. ALIMCO designed and implemented an incentive scheme which

focused on production target achievement on one hand and a sales target achievement

incentive on the other hand. The monthly and daily targets are put up on notice board

notifying the actual, delay, variance parameters of target completion in nearly real time. The

introduction of merit rated promotion schemes boosted the morale of the officers who started

working with a greater zeal and enthusiasm leading to greater outputs. This initiative worked

positively and increased the accountability in organization.

As a result, the production related incentive brought in surprisingly large changes over the

recent years. In 2001 the monthly production was worth 5 lakhs only whereas now the daily

production is worth 70 lakhs.

11

Organisational Chart

INTERNAL CONTEXT: How does ALIMCO function?

We would now attempt to show how the nuts and bolts of the organization are working in

detail. This section would thus, in chronological order, -

Give an overview of the demand of disability devices and how ALIMCO serves

people with disabilities.

Provide a glimpse of all the processes happening at ALIMCO sequentially.

Try to deep dive into each process, understanding its functionalities and dependencies

in great detail.

Highlight the pressure points of each process and understanding how the processes are

evolving/ need to evolve to respond to these pressure points.

ALIMCO, as we know already, is a Section 25, Nonprofit Manufacturing Public Sector Unit

which is operating under the aegis of Ministry of Social Welfare and Justice. This makes

ALIMCO, the only manufacturing PSU not under the Ministry of Industries. ALIMCO

manufactures aids and appliances for helping people suffering with the following disabilities-

Orthopedic

Audio

Visual

Mental

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They offer a range of more than 360 appliances- primarily to help with orthopedic and audio

disabilities. ALIMCO has started to venture into the visual and mental disability space and

has been sustaining Research and Development to manufacture devices for people with these

disabilities as well. ALIMCO happens to be worlds only firm manufacturing appliances

catering to all the 4 disabilities. In terms of number of disabled people benefitted, ALIMCO

has an 11% market share in India and no similar sized competitors. It also exports products to

countries like Afghanistan, Srilanka, Jordan, UAE, Iraq, Combodia etc through different

inter-government partnership channels and engagement platforms primarily. For example,

post the Iran Iraq war in 1988, the Government of Iran had reached out to the Government of

India for procuring prosthetic limbs which were manufactured by ALIMCO.

India, according to estimates, has roughly 2.5 crore disabled people and on a world level,

15% of the global population is suffering from 1 of the 4 disabilities mentioned above. A

large percentage of this population is still devoid of any equipment help- the primary reason

being that the disabled people largely belong to very poor families and cant afford to buy

these products. Clearly, the end customers ability to pay for these products is very restricted

and it thus validates the acceptance of a not for profit business approach by the organization.

Additionally, what this information tells us is that there is a lack of penetration of any

organization in this space, therefore there is a lot of scope for ALIMCO to scale up and grow.

Product Lines-

Orthopedically disabled-

Rehabilitation aids- Calipers, artificial legs, hands etc.

Mobility aids- Wheel chairs, tricycles, crutches, walking sticks

Visually handicapped- Braille Shorthand, Braille Slate, Walking stick

Hearing impaired- Pocket type hearing aid, Behind the ear digital

New products- Motorized wheelchairs, tricycles, MSIED kits, solar charged batteries.

These products can be majorly categorized into two categories- the first one being the ready

to use products like the wheelchairs, tricycles and crutches and the second one being artificial

prosthetic limbs which are custom made according to the level of disability a person has. All

of ALIMCO products are ISI certified and significantly cheaper than the existing products

imported from Chinese Manufacturers in the market.

Now, lets really try and understand what the processes are at ALIMCO and how are they

working.

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ALIMCO reaches out to disabled people through assessment camps it conducts regularly

across 28 out of 29 states and all the 6 union territories. Through assessment camps,

ALIMCO understands the demand of each product. Also, in these camps, measurements are

taken for custom manufacturing of limbs. Once the demand has been assessed the products

are manufactured at ALIMCO and then distributed to the disabled people who had registered

themselves in these camps.

So, the next question that automatically arises is who bears the cost of conduction of these

camps and manufacturing of products. The answer to the question is really simple. ALIMCO

conducts camps, manufactures products and distributes them among disabled people by

getting compensation from its partners- The Government and the Corporate Social

Responsibility arms of large public sector units.

REVENUE SOURCES AND RESOURCE MANAGEMENT

Any non profit organisation how much of its current assets it needs to invest in building

revenue- customer service capacity, and at what prices the services should be sold. In case of

ALIMCO, the dynamics is different. Being a central PSU, and with most of its products being

distributed under the Governments schemes, the price for its products is decided for it.

The organisation already has all the basic infrastructure already in place. It is old and needs

up gradation, but ALIMCO is functioning on a day to day basis and strategic investments in

infrastructure do not happen that often. Which shifts are focus to operational decisions. There

is no need to worry about the demand quotient of their product, for given that only around 1%

of the countrys disabled are assisted, it is reasonable to assume that even if this organisation

produces a reasonably large number of products, it will be demanded (and needed).

The various schemes under which ALIMCO is funded are as follows

1. Assistance for Disabled Person (ADIP)

Started in 1991 by the Ministry of Social Justice and Empowerment with an objective to

assist the needy disabled persons in procuring durable, sophisticated and scientifically

manufactured, modern, standard aids and appliances to promote physical, social,

psychological rehabilitation of Persons with Disabilities by reducing the effects of disabilities

and at the same time enhancing their economic potential.( ADIP scheme brochure, Ministry

of Social Justice and Empowerment)

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ALIMCO is one of the major implementing agencies for the scheme. It gets 20-25 crores

each year under this scheme.

ALIMCO conducts a camp, does an assessment survey, take fabrications for personalised

body parts and then distributes this order in 45-60 days.

2. ADIP-SSA (Sarv Shiksha Abhiyan)

Similar to ADIP, this is a government scheme under the Sarv Shiksha Abhiyan of the Ministry

of Human Resource Development (MHRD). This aims for targeted assistance to school

children below 14 years of age, with the aim of promoting inclusive education. ALIMCO is

the implementing agency of this combined program and when the procedure at the level of

the ALIMCO remains more of less the same as under ADIP, it is only at the reimbursement

level that the 40% expenditure in this regard is borne by the MHRD and 60% by the Ministry

through grants-in-aid under the ADIP scheme.

3. National Institutes (NI)

National Institute for the Orthopaedically Handicapped (NIOH),National Institute of

Mentally Handicapped (NIMH),National Institute of Visually Handicapped (NIVH) are some

national institutes for assisting people with various kinds of disabilities. These institutes are

also one of the implementing agency of the ADIP scheme of the government. The grant these

NI receive under this scheme bounds them with the condition that they can purchase products

only from ALIMCO. Thus they provide an indirect income source from ADIP for ALIMCO.

Under the above categories, we see that this represents the sheltered market of our

corporation. There is no uncertainty in this market, the demand is always more than the

supply, yet this corporation struggled in its operations. With ~85% of the revenue stream

coming from the ADIP and ADIP-SSA and 8-10% from the National institutes, up till the

2012 financial year, this organisation was mainly running with the governments money. This

imposes a huge constraint on the organisation and even though it is the biggest such

organisation in India, it is not a price maker, but a price taker. Interestingly, even though no

major competitive threat to the corporation exists, the market share of ALIMCO remains a

meagre 11%. Having evolved in under this sheltered framework and under governments

protection, an organisation working for empowering and enabling the disabled people, itself

seems to be moving on the government support. With accumulated losses and a negative net

worth, this unit was considered a sick unit and was in the list of being referring to the

BRPSE, i.e. it was in the red category.

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Besides these Government aided schemes, there are two more revenue sources for ALIMCO

4. Dealers

The firm sells to around 40 dealers presently, a minuscule number, which make these

products available on retail stores/ medicine shops. This constitutes a very small portion of

the total revenue - around 5-8%. Getting to know the limited availability of high quality,

cheap products in the market for direct sale was a surprise to us and our next question was to

really understand why this was the case. According to Shri Shrivastava, The basic problem

with our incapacity to make our products available in the market is the malpractice in the

medical devices segment. Doctors want commissions to refer any product to a patient.

ALIMCO being a nonprofit, making very little margin on each product cant afford to be even

pressured into giving commissions to doctors because there is no financial leverage to do so.

Consequently, the doctors keep receiving commissions from Chinese OEMs and gladly refer

their products to patients.

5. Ties with other corporations under the Corporate Social Responsibility (CSR)

scheme

This is the model which has been newly introduced in ALIMCO, in 2013.

Under the New Company Bill 2013 : With effect from April 1, 2014, every company, private

limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs

1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for

the immediately preceding three financial years on corporate social responsibility activities.

These activities needed to be different from the regular course of work of these companies

and provided for a great opportunity for ALIMCO to tap. In the 2013-14 financial year,

ALIMCO has ties with 20 public sector enterprises. ALIMCO reaches out to these large

public sector units and seeks partnership with them to utilize their Corporate Social

Responsibility commitments for conduction of camps and distribution of products. The CSR

partners in the past for the company have been firms like ONGC and ONGC Videsh, RECL (

a subsidiary of Indian Railways), Banks like UBI and SBI and other public sector units like

Coal India.

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The ADIP and ADIP-SSA contributed 85% in the 2012 financial year. Whereas, in 2013, a

major changed happened in the form that 30% of the revenue (to the tune of 40 crore) started

coming from this CSR division. Just as the Government used to release grants for conduction

of camp and assessment and the total cost of the aids distributed, even these companies do the

same, with the exception that there is no ceiling on the worth of the product that ALIMCO

needs to distribute under this model, as opposed to the 10k cap under ADIP.

This new revenue source has been an important factor in enabling the company to achieve

break-even and turn into a positive net worth company.

The companys Director of Marketing, Mr. K.V. Rajesh, was extremely enthusiastic about

this new model and mentioned that the company was at the cusp of a major change. CSR

model provided them with an opportunity to become less and less dependent on Government

aid for their functioning, and the company is in the mode of setting up a whole new

department to handle CSR related activities, so that it becomes a major source of revenue for

the company in the coming years. They look forward to increasing the contribution of this

model from 40 to 70 crores in the upcoming financial year.

Shifting to CSR Some advantages:

Reducing dependence on government: The firm gradually wants to reduce its dependence

on the government funding for its revenue and wants to focus more on the CSR channels. The

rationale behind this is that even if the central government, one day stops the ADIP and

ADIP-SSA scheme (with a pro-business government in power which has started cutting down

public funding on programs like MNREGA, this possibility is not very outstretched), lesser

dependence would mean financial sustainability.

There are other advantages as well in moving towards the CSR model. As stated earlier, the

Government of India mandates a cap of Rs 10000/- on the price of products sold to the

disabled people. Since the government at present is the primary compensation source it

severely restricts ALIMCO into manufacturing only those products costing below Rs

10,000/-. As a consequence, ALIMCO cant think about manufacturing costlier products like

a joystick wheelchair or other technologically advanced products for which there is a

demand and for which CSR partners would have lesser hesitation in compensation. Moving

towards the CSR model thus offers scope of technological advancement.

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Production perspective: There are other pressures on the product line that the production

division is facing on a running basis. There has been a change in the WHO guidelines for

manufacturing of equipment for disabled people. For example, new WHO guidelines for

wheelchairs mandates higher customization in terms of width, seat position, back rest and

footpush. These guidelines also mandate the equipment to be flexible and modifiable for

adjustment according to the needs of the disabled. The production division, hitherto

manufacturing fairly standard products so far has to adhere to the WHO guidelines and thus

alter production.

As mentioned earlier, the production has increased by more than 150% in the last 3 years,

thereby prompting ALIMCO to rethink about its earlier policy of manufacturing everything-

even a small castor in the wheel in-house to a model where there is outsourcing of equipment

manufacturing. We, therefore see Williamsons Make vs buy decision making strongly in

play here at multiple levels. This has also led to ALIMCO deciding to outsource the

management and conduction of camps to conserve manpower utilized for streamlining

production.

Upgradation of manufacturing facilities: A very strong pressure point on production is the

lack of replacement for old machines installed at birth and the severe lack in technical

expertise due to en masse retirement of workers who have been involved with the firm since

the very beginning.

Jayant Kumar, Assistant Manager, Production tells us, 80% of the machines we have in the

shop floor have been there since the beginning. We have been maintaining them

painstakingly so far. Beyond a point operational efficiency is bound to take a serious hit.

Maturing workforce: The firms biggest concern right now, is its maturing workforce, the

average age of permanent employees being 55 years. A lot of employees are retiring right

now and in light of increasing demand and less operational efficiency, this aggravates the

problem further. Let us just take a moment and analyze the workforce composition. At

present, a significant fraction of the workforce involved in production is contractual and not

on a permanent basis. This is across all the sub departments dealing with prosthetic limbs,

visual aids, audio and visual devices. A considerable portion of these employees begin as

apprentices after completing their education and training from Industrial Training Institutes

(ITIs). The job opportunities are notified through newspapers primarily- apart from that

sources within the organization come into play for helping people get jobs. Apart from this,

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what really surprised us no end is the number of years people stay in the organization as

contractual employees. Prakash, a contractual employee working in the production

department in ALIMCO since the last 12 years tells us I got a job here through a contact I

had the administrative staff. The babu was really kind to help me get one. On being asked

about differences he sees in the facilities he gets viz a viz permanent employees, he tells us,

I dont think there is a difference salary wise. I get health treatment benefits too through an

employee card which the firm has issued to me. I think the difference is in my say in the

organization. I cant vote in the Union Elections and therefore there is no avenue for voicing

my disagreement.

The firm is desperately seeking to chisel both these areas. A demand for a modernization

fund worth Rs 200 crore was made to the Ministry in 2009 which was granted this year. This

money is going to be utilized for replacing old laggard machines with new ones and also on

wages of new employees- a lot of them are going to be hired this year. The firm has tired up

with a consulting firm Deloitte to help them redesign the whole Human Capital engagement

process. Rs 1 crore out of the proposed modernization fund is going to be paid to Deloitte for

this process. This in many ways is similar to what happened in the Automajor case we have

done as part of the course. We feel that there are a lot of riders in this whole process that

should be taken care of to avoid what happened with the Anderson consultants in the

Automajor case.

What difference is CSR funding making to ALIMCOs camps? :

Before moving on, we would like to deep dive into how these camps are conducted

highlighting differences between the ones conducted in partnership with the government

through the ADIP and the ADIP-SSA scheme and the ones conducted in partnership with the

CSR divisions of PSUs. The process begins with first identifying the locations for camp

conduction. Under the ADIP and the ADIP-SSA scheme, ALIMCO tries to conduct camps in

635 districts across the whole of the country annually. Apart from this, a minister or member

of parliament might want to conduct a camp in his/her own constituency and reaches out to

ALIMCO for the same. Public sector units largely want to conduct camps in proximity of

their industrial townships. A significant difference between camps conducted in partnership

with the government and the ones conducted in partnership with the CSR divisions of PSUs

is the amount of overhead costs. For government camps, the overhead costs are significantly

lower. ALIMCO sends its own employees to oversee the administration in the camps and the

19

focus is to reach out to maximum beneficiaries instead of focusing on how the tent of the

camp looks. The CSR camps on the contrary involve a lot of overheads due to hiring of an

event management firm for camp conduction. According to Shri Shrivastava, CSR camps

are a lot about photo-ops. Consequently, event management firms are hired. Huge amount of

money is spent on tents etc. The focus gets shifted to getting good photos for the company

brochure instead of reaching out to more and more disabled people.

20

Organigraph- Showing the way ALIMCO really works

Now lets have a look at the processes happening in ALIMCO sequentially. We borrow from

Mintzberg and Heydens paper1 to draw an organigraph of ALIMCO that would give us a

clear understanding of how the processes in ALIMCO happen and how are they interlinked

with each other.

ALIMCO could be treated as a big hub as is shown in the organigraph which connects with

different funding agencies like the Ministry of Social Justice and Welfare (ADIP, ADIP-SSA

and Modernization funding), CSR partnerships, National Institutes and dealers selling

product in the free market.

The process begins with first understanding the demand through camp conduction. Business

administration involves both the conduction of the camp and forecasting of sales. As we see

in the organigraph, a chain exists here. After forecasting sales, the process flow comes to

marketing which is a loosely coupled combination of multiple processes. Post sales

forecasting, marketing communicates its funding needs to its funding partners which is

followed by fund allocation which is then followed by utilization of these funds for raw

material procurement. As we see, there exists a chain within this loosely coupled domain.

Raw material procurement process is linearly linked to R&D process, where post raw

material procurement, the design of products and technology development for manufacturing

21

part takes place.

There exists a chain between R&D and Production department which is also a loosely

coupled domain as shown in the organigraph. There exist web like interactions between the

production planning, materials processing and R&D processes as there is continuous

communication back and forth on how much material is to be procured, what sort of a design

fits the cap that government places on the price of the product etc.

Within the production process again exists a chain of planning production inspection.

Distribution to end users take place when the production has been completed.

EXTERNAL ENVIRONMENT

Given the history of ALIMCOs incorporation and development, we can see that it has grown

in a very sheltered environment. Governments support was a necessity in the scenario when

the organisation was set up. However, the fact that it never could grow out its shelter can also

be seen as a big reason as to why, for most parts of its operations, this organisation has stayed

an underperforming unit. According to the financial year 2012 report it was a negative net

worth company, and had remained thus for a long time. It was on the list of PSUs which were

to be referred to the Board for Reconstruction of Public Sector Enterprises (BRPSE). We can

see uncertainty emerging as it was needed for the organisation to adapt to the changing

context, however it was consistently failing in doing so, or one can argue, was not doing

anything to handle the situation. Only in the last financial year, i.e the 2013 financial year,

has it shown a turnaround and became a positive net worth unit, and its status being upgraded

from a sick unit to that of a Mini Ratna.

COMPETITORS AND OTHER MARKET PLAYERS

The market for ALIMCOs products can be divided into two parts

1. People who are eligible for governments assistance and do not have the resources to

buy products on their own

2. People who are either not eligible for aid or, even if with difficulty, can purchase

devices from the market

Besides some NGOs who receive grants and distribute assistive devices to the disabled,

ALIMCO is the only such major implementation agency under ADIP. There is no other

22

similar agency, which manufactures products, conducts camps and distribute such devices

amongst the poor.

When there is no other organisation with such a diverse portfolio as ALIMCO, there are

various others small organisations which do produce assistance aides for a specific type of

disability. These competitors come in picture for the market constituted by the people falling

in category 2. Most of these are for profit commercial organisations with products priced at a

higher range. ALIMCO has very less visibility in this market. A variety of factors contribute

to it

1. ALIMCO, being a non profit organisation, cannot give commission to retailers and

other agents involved in such a channel. These other players control the market

channel and ALIMCOs competitors are able to tap them.

2. When retailers and doctors, endorse a particular product, it becomes imperative for

the patient to buy that particular product, and purchasing a particular cheaper product

such as that of ALIMCO would result in the doctor dismissing the device and blaming

the ineffectiveness of the treatment on the device, or likewise.

3. Even though the ALIMCO products are ISO certified, for the past 35 years, the

machines processes and the technology has not been upgraded. Also, the average age

of the workforce is 57 years. All these factors have led to the quality of ALIMCO

products to suffer.

The lack of visibility and endorsement combined with the perception of an inferior quality,

limits the market of ALIMCO, amongst the people who can afford to buy the devices.

This in turn is a direct cause why the organisation has not been able to become self

sustainable till now. Usually non profit corporations engage in a mix of activities, where they

generate revenues from one activity to pool in this money into another for the purpose of

achieving their social mission. However, it becomes a tricky balance to maintain. To achieve

economies of scale, corporations decisions may get too coloured by the means-rationality

principle and the value-rationality might get subdued along the way. As Max Weber

explains the former is related to the expectations about the behaviour of other human beings

or objects in the environment. These expectations serve as means for a particular actor to

attain ends, ends which Weber noted were "rationally pursued and calculated." In value-

rationality principal the action is undertaken for what one might call reasons intrinsic to the

23

actor: some ethical, aesthetic, religious or other motive, independent of whether it will lead to

success.

Chairman & Managing Director (CMD) ALIMCO, Mr Nararayana G. Rao, mentions in his

interview the conditions that prevailed when he joined the institution. There were 15 crore

worth order unexecuted. The customers were unhappy with the huge delay in the products

and their quality. Only 75-80k beneficiaries were served each year, when the capacity was

much more. It was proved when in an year of Mr. Raos joining, the number of beneficiaries

increased to 2lakh p.a.. In a country where 2.68 million people are disabled and only around

1% of those receive assistance, this kind of inefficiency in operations take more than

economic forms, it also has serious social costs.

ALIMCO is incorporated under Section 25, which implies that ALIMCO shall remain not for

profit. That being said, being a non-profit organisation doesnt imply that the organisation

cant make money. All it implies is that the organisation is not a profit distributing firm, and

all the surplus that it makes shall be pooled back into the system. With the aim of Restoring

the dignity of man, the organisation needs to reinvent its approach. Treating one section with

a means-based aimed, providing them with technologically advanced and better quality

products, would enable the organisation to function effectively and serve its mission with a

better, more impactful approach.

GOVERNMENT CONTROL

Being a Public Sector Undertaking, and a non-profit as well, working towards a social goal

and dealing with a vulnerable section of the society induces a multitude of constraints in the

working of the organization.

The first level of control starts with the Board of Directors, which is a government appointed

body. The CMD and other executives of the Board are appointed by GoI, whose motivation,

vision and competence can play a huge role in the functioning of the organization. This Board

and the CMD in particular plays a huge role in setting certain forces in motion, which will

eventually make the company move in a certain direction, for it is the one approving almost

anything in the company. For instance, the recent CMD of ALIMCO, Mr. G. Narayana Rao,

came from a financial background. He had 36 years of Central PSUs experience, and he was

able to see the huge problem in the functioning of the organisation. Incorporating more

transparency into the system, following an approach to not only wipe out accumulated losses

24

but also raise the quality of the organisation, and having the approach and the connectivity to

push for funds amongst other stuff, contributed to the turnaround of the corporation.

However, each proposal or new activity within the organisation need such a long drawn out

bureaucratic approval which makes the system rigid.

Initially incorporated under the Ministry of Defence and then shifted to the Ministry of Social

Justice and Empowerment, the organisational goals are influenced and modulated by the

Governments policies. If for instance, the Government aids only a certain type of products,

then consequently, those will be the one, the organisation will make. When the governments

limit on the ADIP scheme was for devices up to 6k, the pricing of all products was done

accordingly. To maintain this price, the production process had to be adjusted and the quality

is determined accordingly. Even though, the knowledge for a better product is available,

neither the process not the product can be updated, if there is no market for it within the

limited framework it operated. When the cap was raised to 10k, certainly there were

improvements that can be incorporated, but that has mostly been regarding the aesthetic

appeal till date.

One other implication was highlighted in terms of hiring procedures. When the Government

stopped hiring, there was no internal strategy to fill the vacuum of the people who were

retiring. The average workforce age steadily increased, and in the fast few years, it reached

above 55 years, when people were only retiring, and no one joined.

EXTERNAL NORMS, REGULATIONS AND DEVELOPMENT

Like most big organizations, and especially those linked to a social objective, various polices

of the government and other national and international bodies have an impact on the

functioning of the organisation.

For instance, when the government started recognising Intellectual Development impairment

as a type of disability, products related to the same were incorporated in ALIMCO.

The interlinkages are many, the Government is in turn affected by International rules and

regulations. For instance, the World Health Organization (WHO) prescribed a certain

standard for the assistive devices for the handicapped, and India is then needed to comply

with international standards. Enforcement becomes the Governments prerogative and the

organisation is then needed to follow certain standards.

25

RESEARCH AND DEVELOPMENT

A Sivathanu Pillai, an Indian scientist who formerly served as Chief Controller of Research

and Development from year 1996 to 2014, mentioned ALIMCO in his talk at the India

Inspired event at the cultural festival of IIT Kanpur, 2014. He wanted to point out the diverse

research his institution does and talked about the callipers technology, which is used in

ALIMCO for the artificial limbs prepared to assist polio patients.

A faculty member of IIT Kanpur, then stood up. He had had a very different experience.

Being a polio patient, he had visited the institution. There was some small glitch in his

artificial limb, which the organisation couldnt fix. He had to then take the help of a local

repairman!

These incidents point out the lack of technical expertise in the institution.

In the words of Mr. G. Narayana Rao, CMD ALIMCO, R&D should be the brain of such an

organisation, but unfortunately because of the accumulated losses, the Ministry had

dismantled the grants for R&D department.

In the dismal affairs of things, even with the presence of huge think tanks in the country -

with IITK in the neighbourhood where a student designed a stair climbing wheel chair

Vardaan which has won National innovation awards, and various other think tanks and

institutions as well as technological solutions abound all over the world, the institution

continues to live several years in the past.

SOCIAL COSTS

The organisation employs 8-9% of disabled people in its workforce. The beneficiaries for

these camps are mandated to have a proof of address and two photographs showing the extent

of disability. We explored the rationale behind this restriction a little further, given that in

India, a large number of people with physical disabilities are the homeless who survive on

open roads and railway platforms and have no address to show for. We felt that this would

severely restrict the number of potential beneficiaries of these products. Shri A.K

Shrivastava, D.G.M. Production gave us the rationale behind this decision by explaining to us

how, with no address proof requirement, one person could source multiple limbs and

appliances and start selling them in the open market. On being asked about the existence of

entities working to provide some kind of identity to the homeless which could be utilized to

26

serve them, he said that there was no consolidated action on this front and a lot was needed

to be done.

Also, when incorporation of CSR provides an alternate model, to make it a success, the entire

organisation needs to work together. At present, there were what looked like silos, where

marketing has a positive view of the CSR opportunity and they see it as the next big thing,

whereas the production people dismisses it as showbaazi by the corporates.

And to make it a success, we need to manage our external environment well. Doing it for

attention sake, if a company spends a substantial amount in marketing and publicity, it indeed

does become showbaazi, and the impact that resource could have otherwise created is

limited. This requires a transparent and accountable system by the GoI, where they can

objectively assess whether the money corporations spent, in the name of CSR, was actually

spent on the intended purpose.

CONTINGENCIES WITHIN AND BEYOND INDIA

Unfortunate external conditions like war, natural disasters, which may leave thousands of

people wounded and physically handicapped increase the demand on the organization.

If any external or internal contingency arrives, the internal structure of this is not sturdy

enough to handle this pressure. As we have mentioned about the Iran Iraq war in 1988 after

which Iraq requested the Indian government for its prosthetic limbs, GoI had also setup a

centre at Kabul, where ALIMCO officials have also spend some time training the people in

developing disability aids. With the CSR initiative of ONGC, ALIMCO has also established

a centre in Sudan. Already ALIMCO has trade relations with various countries especially in

the Middle east and African region. In the light of being the biggest such organisation in

South East Asia, the population it needs to serve is huge, and yet it remains incompetent to

meet all these expectations. With the approval of the Modernization fund, it is expected that

the machines and systems will be upgraded to the needed quality, but this is only a one time

solution.

27

OUR ANALYSIS:

Viewing non-profit organizations from a new lens

Our study of ALIMCO led to two major observations of its organizational features:

1. Dual Management Structure[9]

ALIMCO, being largely dependent on government funding (and newer public

corporations having recently entered the funding scene through CSR initiatives)

presents a dual management structure: the organizations operational/production

decisions were largely internal, taken by the executive staff, while government majorly

controlled financial decisions being the single largest funder through its huge variety of

schemes. The mandate to emphasize the mission of the organization (Restoring the

dignity of man) rested largely on the organization itself and not in governments ambit.

Within the internal organization, we observed differences in perspectives on

ALIMCOs major purpose. This also led to varied responses to the increased CSR

funding coming into the organization. Here are the two broad opinions we came across:

Perspective 1 (from the Production/Shopfloor head):

Our main aim should be to reach out to more people, expand our reach and make our

product more accessible. Our market share is still only 11% despite ALIMCO being the

largest such organization in the world with the largest product portfolio for different

kinds of disabilities. We are multiple times subsidized than other players who

manufacture the same product, but we lag in quality a little. We cannot afford to offer

commissions and that makes our visibility very little, but the key issue is that the

formalism and procedures required for say a disabled person (who has no stable

accommodation or income proof) are highly convoluted. CSR funding may change the

face of our camps, but cannot impact this broader issue of reach.

Perspective 2 (from Marketing head):

With increased CSR funding coming in, we can soon hope to become sustainable.

Getting funds from the Modernization Fund will bring in a great change in quality of

our camps which is our strongest channel to reach disabled people- terms of

28

conduction and publicity. We can earn more profits, which can then be put back into the

organization itself.

These two different perspectives clearly show that within the same organization, people

at executive positions are working towards different goals. To put it broadly, ALIMCO,

like most non profits, is working with multiple bottom lines. These may be

sustainability, increasing scale, maximizing profits which can be put back into the

organization and so forth.

The important thing to understand here is that no price mechanisms are at play. This

idea bears a crucial link to transaction cost economization introduced by Williamson

in his thesis on Modern Corporation. His basic framework looks at transaction cost as

the basic unit of analysis and minimizing transaction cost as the basic principle to

explain why organizations comes into existence. However, transaction costs must

encompass a large variety of costs. Usually, the prices that are in place determine

transaction costs and hence govern the activities that lead to minimization. However,

the dynamics change entirely for ALIMCO since it must look at social impact related

costs on a priority basis. As is evident, minimizing these social impact costs, although a

natural extension of Williamsons thesis, is not always what a nonprofit organization

looks to do. Such an organization in fact clearly looks to enhance social impact and

economic considerations take a backseat. The people involved in these processes, and

the organization as a whole, is no more simply opportunistic in its orientation; its goals

extend beyond again owing to multiple bottom lines.

This brings us to a second important observation which we made through our field

visits and also studied from existing literature -

1. Complex motivational structure: The existence of multiple bottom lines in a non-

profit organization often creates a complex motivational matrix in which individuals

are motivated by different goals. These goals may or may not align with the larger

organizational goal. As we saw from the two perspectives outlined above in

ALIMCOs context, while one motive may be altruistic or impact oriented, the

other one may be oriented towards more tangible goals such as achieving larger

29

visibility/publicity and enhancing scale. While two are definitely not independent of

each other and do intersect paths, but priorities function separately with both these

motivations.

At this point, it seems reasonable to raise another question with regard to how non-

profits must be structured

Given the widely different recruitment policies, practices and goals that exist across

various divisions of a non-profit organization (here ALIMCO), does a holistic

conception of non-profit organizations imply that it be structured and treated as a

conglomerate of several separate parts with a diverse set of goals?

Lets back this up with a look at the textile industry in Prato. Massimo set up an

example of a textile company whose parts were highly independent and functionally

specialized, excelling in whatever it did best, unencumbered by functional handicaps of

other parts should there be any. Not only did it lead to lower inventory losses, but it also

led to a huge jump in production alongside global dominance of fashion segments.

Clearly, this is an example from manufacturing sector, and it worked primarily because

different specializing firms could create their own market, and functioned in a

cooperative network where firms pooled in their research and development efforts to

invest in networking and computer aided technology leading to innovation and

improved quality.[10]

Since different divisions in a non-profit work with a different compass and are hence

directed differently, at this point we would like to evaluate the costs and benefits of

viewing non-profit organizations as a conglomerate of independent units

Costs :

1. An appropriate metric must be defined based on which organizations can be

characterized should the division be process oriented, goal oriented or any third

metric must be established?

2. Clear cut distinctions in units based on one parameter may be insufficient from a

holistic perspective. For example, the views of production head on impact orientation

30

were not matched with equal passion and enthusiasm from contractual workers in

production unit. Quoting one of them:

Worker Sometimes we feel happy that we can create impact. But on most days,

its about the work only. It is difficult to always be motivated given the kind of work

and pay scale. The larger goal often gets obscured in the daily scheme of things.

1. It may become difficult to align various divisions on operational grounds if their

practices be separated. The organization at hand is not just producing these

equipments, but is also conducting camps to provide them to the disabled. This is

where comparison with Prato doesnt hold, since Prato was primarily focused at

creation of a finished product, here the finished product needs to be delivered

effectively for the real impact to be created. This is because of the nature of customer

and the product here affordability, the need for empowerment, customizing the

equipment according to size and fixing it up all become a crucial part of impact

creation. To put together these activities together with independent units may become

a messy task.

Benefits :

1. Classifying and separating into independently functional units helps increase unit

efficiency as a unit is now independent of the handicaps or bottlenecks of other units.

2. It helps people see their direct impact better, which often obscured in a larger

organization. Thus, it helps the worker at ground level to remain more focused and

motivated.

3. It may also help to resolve the conflicts that otherwise arise out of different

goals/motivations by bringing together similarly oriented people.

Whether this transition may lead to conversion of ALIMCO into a hybrid of profit

and not-for-profit organizations is a matter of organizational decision. An important

aspect of organizational decision is power and how it is distributed among various

stakeholders. It must, therefore, be evaluated in this regard how power structure

affects the functioning of ALIMCO as an organization.

31

Power Structure:

The power structure at ALIMCO bears semblance to a Political Model of power

distribution. Being a non-profit organization, there are several actors with different goals

volunteers, staff, workers, organizational heads, funders (here Government and some public

enterprises). As observed from above, these actors pursue several different goals rather than

one common goal because of a blurred bottom line. We see here that two important power

holders exist because they control the scarce resource (financial means) here [An important

caveat here is that even though other power holders exist at organizational decision level, we

are evaluating only the role of stakeholders external to the organization that largely control

the most scarce financial means) :

1. Government the single largest funder controlling about 85% of ALIMCOs funding

through various schemes

2. Various public corporations such as ONGC which have recently entered the

aiding picture through CSR initiatives

Government is a very important stakeholder in the power matrix of ALIMCO. While

existence of ALIMCO is unimaginable without government funding, it helps to analyze how

the power wielded by this stakeholder affects ALIMCO. Being so highly dependent on

Government aid is, at the very first look, a scary proposition given the current scenario where

Government is focusing highly on disinvestments and cuts in public welfare funding. This

necessitates the presence of a sustainable source of funding. Lets look at the amount of

control government can exercise on the organization.

Through its various schemes, Government contributes a fixed amount for production,

marketing and conduction of camps. But the pricing of products is done in a very interesting

way here. Any product up to Rs. 10,000 is distributed free of cost to the eligible disabled

people. There is thus a natural organizational tendency to reduce production costs, since the

overheads for camps are to be managed from this fixed amount of funding. While the

government is not party to any internal organizational decisions, it exercises a stronger form

of control on this organizations production decisions by inducing an urge to reduce prices

which is then extrapolated to reducing production costs. This resembles normative control

subtler and yet more impactful in affecting the controlled. This then manifests as follows:

32

1. The questions of cost cutting become more important than the actual mission

dictates. Before the organization realizes, a large number of decisions begin to be

affected by this cost-controlling. This results in means-based rationality an

approach frequently adopted by businesses (which focuses on minimization of costs

associated with means for production) taking dominance over value based

rationality which focuses on maximizing value to the consumer/customer.

2. Complacency towards technological advancement In the current scenario,

ALIMCOs product portfolio is the most diverse and exhaustive compared with

products of other organizations which manufacture such equipment. Yet, when

compared with for-profit players, the product lags in quality. Research and

development is the soul in this industry and technological innovation carries a strong

bearing on the amount of impact created. Yet, the funding from government has

remained fixed, discouraging any technological innovation, despite independence in

internal decisions.

Thus, while the government is the most important funder for ALIMCO, being entirely

dependent on government does put certain restraints on the functioning of the organization. It

reduces the adaptability of ALIMCO to changing times where it must continuously innovate

and become more accessible and user-friendly. This moves us to explore flexibility and

adaptability as characteristics of an organization.

ALIMCO currents has a palace like structure[11] which values predictability over

improvisation, focuses on constraints rather than opportunities, borrows solutions rather than

inventing them, defends past action rather than devising new ones, favors accounting over

goal flexibility, searches for final solutions, and discourages contradictions and

experiments. Clearly in this case, innovation is subordinate to authority and formalism, which

is evident as ALIMCO continues to use outdated technology and rely on procedures and

formalities of the past. This resembles the case of Acme which had a mechanistic structure

making it impossible to deal with contingencies through collective effort. This classification

may not be neat or perfectly fitted to ALIMCO but the various handles of organization theory

allow us to understand different aspects of this organization better.

A tent like organization, on the other hand, places emphasis on creativity, immediacy and

initiative, rather than authority, clarity and decisiveness. An example of this type of

organization is Omega which had an organic structure, which did not have neatly defined

plans or charts, and was still more efficient in its functioning owing to a culture of collective

33

effort in contingency management which sprang from giving employees great latitude in their

jobs and allowing cross-divisional project involvements. The latest plans of ALIMCO

(establishment of a CSR wing, engaging in a contract with Deloitte to restructure recruitment

etc ) do give a hint of a positive future change.

The final debate we wish to bring out through this analysis is that of scale v/s impact.

One of the greatest dilemmas that a non-profit organization has to deal with is balancing scale

with impact. We must proceed with a clear definition of scale and impact here. Achieving

scale implies expanding operations to widen scope and reach and leverage economies of

scale. While greater reach may be an outcome of greater scale owing to larger production

possibilities, whether that really amounts to greater impact is dependent on a lot of factors

customers and channels being the two important ones here.

1. Customers: In the context of ALIMCO, disabled people are the customers who need

to be empowered, thus rather than the customer reaching out for the product, the

product must reach out to the customers. For this purpose, the methods for obtaining

the product become important. It must be noted in this regard that formalism such as

income proof, residence proof may become the largest hindrance for disabled people

to obtain these products. Say for instance, a disabled person below poverty line by

income categorization who lives on the road it is clear how unreasonable it is to

expect him to present the requisite documentation. This blurs the connection of scale

with its real ground level impact.

2. Channels: ALIMCO doesnt have any commercial distribution channels. This is

because most channel partners work on a commission basis, and ALIMCO being a

non-profit organization cannot afford to give commissions. Thus, it either sells

through its own camps, or through its network partners such as National Health

Institutes. It also directly sells through retail stores in its own distribution facility i.e.

the equipment is purchasable from its factory directly. This absence of channels once

again brings to doubt whether enhancing scale can really impact the needy given the

limited distribution channels (also verified by the fact that despite being the largest

producer of such equipment, its market share is only 11% and it currently serves a

meagre 2 lakhs of the crores of disabled people in India).

34

Moreover, the experiences of the group members in social space also raise several questions

on whether scale is directly proportional to impact. One of the group members worked in the

social space in herbal soaps manufacturing industry. In his detailed discussion with the head

of the organization, the head clearly articulated

When we start thinking of expanding, our first question is can we break even with the

greater investment. That often colors the altruistic motive; there is always a thin line and

crossing over to for-profit structure is often very tempting.

Final word:

CSR An opportunity?

We will try to evaluate the benefits that CSR funding is likely to bring with it and whether it

is really as promising a solution as it looks to be.

Why is CSR needed?[12]

Going forward, company has some promising future plans which would require financing

through CSR initiatives

1. Modernization and upgradation of companys 39 year old manufacturing and

infrastructure facilities with State of the Art technology for manufacture of State of

the Art aids and appliances.

2. Expansion of existing production base by setting up additional production centers and

dedicated production lines

3. Widening existent product range

4. Training, research and development through collaboration with institutes at

national/international level

Funding these activities would need additional funds through ways such as CSR.

What we need to question here is whether CSR funding is all that it looks from the face of it.

This would require understanding the main aims of CSR. As we gathered from our interviews

with heads (who did not wish to be named), CSR has a completely different motivation:

When a company funds a social impact activity, its primary aim is to highlight its own

involvement with the cause; furthering the cause itself is not a primary aim of the funding

organization. We can expect posters and banners to be better, or better facilities at the camp,

35

but this showbaazi doesnt really add to impact. You do what the neta or the

businessman says, and he will often only talk about publicity.

CSR funding is primarily based on a reimbursement system; a camp is first conducted and

then the spent amount is reimbursed to the organization. Yes, it does mean more cash. But

does it really mean more reach or impact is the real question? The cash that is being directed

for better publicity campaigns of the concerned funder needs to directed towards

improvement on infrastructure and product portfolio and establishing channels for better

reach. Unless the organization understands how it really wants to channelize funding, the

question of real impact creation and serving greater number of disabled people will remain

effectively unaddressed.

36

REFERENCES

1. World Report 2011

http://www.who.int/disabilities/world_report/2011/report/en/

2. Indian census, 2001

3. National Institute of Rehabilitation Training and Research

http://nirtar.nic.in/history.htm

4. Business Standard: Rs 50 cr-interest waiver will boost Alimco's financials: G Narayan

Rao

http://www.business-standard.com/article/companies/rs-50-cr-interest-waiver-will-

boost-alimco-s-financials-g-narayan-rao-114050601043_1.html

5. Yahoo News: Prosthetics by ALIMCO offers hope to amputees in Afghanistan

https://in.news.yahoo.com/prosthetics-alimco-offers-hope-amputees-afghanistan-

121755931.html

6. ANI News: Prosthetics by Alimco offers hope to amputees

http://aninews.in/newsdetail2/story180079/prosthetics-by-alimco-offers-hope-to-

amputees-in-afghanistan.html

7. Interview of CMD G. Narayan Rao with Prasar Bharti

https://www.youtube.com/watch?v=bGm9qs-5rLg

8. Alimco official site and Brochure:

http://www.alimco.in/

9. Managing non-profit organizations Towards a new approach (Helmut K. Anheier)

10. The Architect's Handbook of Professional Practice Update 2004

11. Hedberg, Nyston and Starbuck, 1976; and Weick, 1977

12. http://www.alimco.in/WriteReadData/UserFiles/file/csr%5B1%5D.pdf