Management Project On Pakwood

A Complete Managerial Analysis On

Pak Wood Furnishers G.T. Road Gujrat.

Table of Contents 1.Mission Statement.................................................................................................... .................1 2.Company Profile.................................................................................................. ......................2 4. Organizational Chart with Formal Lines of Authority........................................... .................4 5. Objectives of Pak Wood Furnishers..................................................................................... ...4

Short-term objectives...................................................................................4 Long-term objectives....................................................................................4 6. Planning of Pak Wood Furnishers........................................................................................ ...5 7. Decision Making in Pak Wood Furnishers........................................................................ ......6

Programmed decisions................................................................................6 Non-programmed decision..........................................................................7 14. Strategy Formulation, Implementation and Feedback.............................................. .........11 15. Organizing with the Management of Pak Wood Furnishes...............................................12 16. Departmentalization of Pak Wood Furnishers.................................................................. ..12 17. Authority, Responsibility and Delegation...................................................... .....................13 18. Managing Human Resource............................................................................................ .....14 19. Communication within Pak Wood Furnishers............................................................ ........16 20. Problems Faced and their Solutions Proposed by the Management...............................16

1. Mission Statement

“ Pak Wood Furnishers is committed to Producing high quality products and belie ve In customer 's s atisfaction ”

2. Company Profile Pak Wood Furnishers, a name synonymous with creating fine hand crafted furniture since 1989. PWF started of with only seven employees and is now successful business run by a great no of employees. Our teams of craftsmen have studied their art with master artisans and in many instances this art form has been part of the family’s heritage for generations. Our work is designed to last and is founded on the authenticity of traditional cabinet making and skilled craftsmanship, which we proudly uphold in our workshops. Our aim is to constantly exceed customer expectations on specification, delivery and price. PWF is one of Pakistan’s pioneers in cabinet making

and

produces

world

class

furniture;

this

has

been

acknowledged at international levels. Our product is produced to higher standards in the world we have been recreating classical design of French and English period furniture generations and also traditional designs. We also offer a range

of

contemporary

designs,

which

are

constantly

being

developed, by our design house. Every commission is individually designed and hand built to order in hardwood (Sheesham, Rosewood is used as the principal timber along with Ash, Acacia Deodar, Fir wood and Walnut) and shellac finishes. All of our wood is cured and kiln dried to ensure our product is of the highest standards and with proper care and can last for many generations. PWF is a company that truly values the environment so we have only wood from suitable sources for the last 25 years. For every tree we use, two are planted in its place.

DEPARTMENTS:Pak Wood Furnishers has grouped its functions into following departments: 1) Production Department 2) Finance & Administration Department 3) Sales & Marketing Department.

3. ENVIRONMENT: CUSTOMERS: Their intended customers are people belonging to upper and middle class. COMPETITORS:Because PWF is among the top 5 furniture manufacturers in Pakistan, it is facing a lot of competition. Its main competitors are: N.M. Furniture. National Furniture. Nizam Furniture. Sam Furniture. Decent Furnishers TECHNOLOGY: Technology is the factor which is distinguishing PWF from its competitors. They are using high tech machines for manufacturing purposes.

4. Organizational Chart with Formal Lines of Authority Chairman Iftikhar Ahmad

CEO ZAFAR IQBAL

PRODUCTION AMIR MEHMOOD

DIRECTOR MOEEN ZAFAR

FINANCE & ADMN ARSHAD MEHMOOD

SALES & MKTG RAEES AHMED

5. Objectives of Pak Wood Furnishers The objectives of Pak Wood Furnishers are set in productivity area. The reason being a manufacturing business whose objective is to provide best quality. Pak Wood furnishers believe that focusing on long-term objectives will help them achieve short-term objectives.

Short-term objectives •

These objectives mainly include the fulfillment of the daily orders of the customers.

Long-term objectives •

To achieve high premium quality products

•

Target high class society in targeted markets

•

Expansion of plant facilities

•

Target niche markets globally

6. Planning of Pak Wood Furnishers Planning is the procedure of shaping the path of where the organization wants to go and what will it do in order to achieve its objective. Pak Wood furnishers carry out the planning procedure just like every other manufacturing company. First of all, PWF states its objective. The objective is to export excellent quality furniture to Europe. After laying down the foundation of its objectives, it moves on to the second step of listing the alternative ways of reaching the objectives. Now what the management can do is that it can either open an outlet in the city it is exporting or it can find agents to sell its products. Opening an outlet and finding agents have their own advantages and disadvantages. Opening an outlet means investing huge amounts of cash as capital expenditures and revenue expenditures. But setting agents in the required cities will prevent PWF from spending that cash and thus investing it in other projects regarding the company. After

weighing

the

alternatives

with

the

objectives,

the

management of PWF decides to choose on setting agents for export. The reason why PWF chose this alternative was because the potential advantages of this alternative outweighed its drawbacks. Now finally PWF develops plans to reach its objective. The management of PWF tells its agents to look for clients in all areas

e.g. hotels, restaurants, markets and other walk-in clients. Once an order is given, the agent will send back a customer portfolio to the head office in Gujrat. The head office then sends a quotation to the agent. The agent then carries out negotiations with the head office. Once the negotiation is set, the client then sends the payment either in advance, post payment or as LC. As soon as the head office receives the payment from its client, it immediately starts off with the purchasing of raw materials and production of goods. Firstly, if the client makes an advance payment, it becomes beneficial for the company as they now only have to export the product and don’t have to worry about receiving any cash. Secondly if the client makes post payment, it becomes beneficial for the client because now he will only pay once for the products he ordered. Lastly, if the client makes payment through LC then it is beneficial for both the sides because only partial payment is made and the rest of the payment will be made only when the products are received. Because PWF receives the partial payment thus it doesn’t have to invest money from its own reserves. The delivery will be made through the State Bank of Pakistan (SBP) within thirty-two days from Sialkot. Incase of any damage during the way, the company deducts that amount of money from the payment or else resends the same items. The proposed plan is put into action and all actions are taken.

7. Decision Making in Pak Wood Furnishers Pak Wood furnishers face both programmed and non-programmed decisions during their daily running of the business.

Programmed decisions Handling daily orders of the customers using the OPF (Order Placement Form) are categorized as programmed decisions. The reasons why such decisions are programmed are because the orders

placed are delivered according to the date set by the management of PWF. The programmed decisions are the responsibility of middle level management which consists of supervisors. Such decisions lie in the complete certainty condition because the management is well aware of its resources which are needed for such type of decisions.

Non-programmed decision Recently, PWF was faced by a non-programmed challenging task. “Karakuram International University Gilgit” placed an immediate large order of office furniture to be delivered within 10 days of order. Sample OPF is placed in the following page. The reason why it is categorized as a non-programmed decision is because the company management sets the delivery date according to the quantity of the products ordered. But because “KIU” are regular customers of Pak Wood Furnishers, therefore their order was taken without hesitation and was delivered on the date set by the customer. Non-programmed decisions are the responsibly of the top level management which consists of Directors. Such decisions lie in the risk condition because of uncertainty of the availability of raw materials required for the order due to which the delivery might be delayed.

8. Recruiting, Selection, Orientation & Incentives: RECRUITING:PWF recruits their employees according to the needs of the departments for which they are hiring the new employees. The main thing which they analyze in candidates applying for job is their potential to work. PWF hires new employees through newspapers and e-recruiting. Recruitment decisions are not mutually taken. Normally the head of the particular department makes the decision of hiring the new employee. SELECTION:

Candidates are selected on the basis of their past experiences and whether they have the skills to perform their jobs efficiently and effectively. ORIENTATION:For the orientation and introduction of a new employee, the head of the department arranges a discussion session so that current employees can have a conversation with the new employee and start to know each other and their styles and the way they work. INCENTIVES:The employees are given many incentives by the organization. Along with the monthly salary, employees are given bonus so that they can perform their jobs efficiently and effectively. PWF also provides Medical facility to their employees. Employees are registered in social security through Pak Wood Furnishers.

9. Job Rotation, Evaluation & Motivation: JOB ROTATION:In PWF job rotation is done at department level. EVALUATION PROCESS:The evaluation process at PWF is not well defined. Evaluation is done on annually or semi-annually basis. MOTIVATION:Employees are motivated through incentives or increments in their salaries and promotion.

10. Promotion, Demotion & Centralization: PROMOTION:Employees are promoted if they are performing well according to the required standards.

DEMOTION:Employees are demoted only if they are not giving output according to the desired standards and second condition is that if behaviour of that person is not good with other people working in same organization. CENTRALIZATION:PWF carries out its internal functions on the basis of ‘Centralization’. Employees do not participate in the decision making process. All decisions are taken by the ‘high-level managers’.

11. Development: DEVELOPMENT PURPOSE:The skills of employees are developed in such a way that they can help PWF reach its goals and perform their jobs efficiently and effectively. ROLE OF ORGANIZATION:PWF plays a major role in enhancing the skills of its employees and develop their careers to get better opportunities in future.

12. BUSINESS UNIT MANAGERS: Following people are working as ‘Business Unit Managers’ in Pak Wood Furnishers: Moeen Zafar (Director) Amir Mehmood (Production) Zahid Bashir (Finance & Administration) Raees Ahmed (Sales & Marketing) Akhtar Mehmood (Director Welfare) EXAMPLE: Taking the example of production department of PWF:

WORK SPEACIALIZATION: Amir Mehmood is working as a production manager in PWF as he is specialized for this job. Span of Control:-

The people who are related to the production department report to Amir Mehmood. He has direct control over the employees of this particular department. Manager’s Tasks:His main task is to make sure that production department gives the required standards and amount of output to the organization. He has the responsibility of purchasing raw material and hiring or firing employees of this department. Chain of Command:Amir Mehmood reports to the CEO of their organization. PRODUCT AND SERVICES:The main product of PWF is furniture of various kinds. They make furniture from wood and some times from wrought iron too. PWF also provides interior decoration services to their customers. TARGET MARKET:PWF is mainly targeting the Upper and Upper-Middle class.

13. SWOT Analysis: STRENGTHS • • • •

Hi tech machines Company owned internally padded delivery trucks No labor unions Manufactured goods for: 1. Governor house Lhr 2. PMA Kakul 3. Army GHQ 4. Arid Agriculture University 5. Mobilink 6. Karakuram Int. University 7. Govt. of Punjab

WEAKNESSES • •

Weak marketing campaigns Decision making delays

OPORTUNITIES • • •

Internal source of finance through liquidation of assets Expansion due to increasing demand for Rose wood in European markets Higher revenues from exports due to lower labor, material and capital costs

THREATS • •

NM Furnishers (competitor) Decreased availability of Rosewood by 2010

14. Strategy Formulation, Implementation and Feedback Pak Wood furnishers formulate their strategies using a combination of:

•

Differentiation Strategy: PWF has their own plants which produce everything from the basic bolts to the giant chip boards. They use these items as raw materials as well as products for sale in the open market.

•

Focus Strategy: PWF focuses mainly on corporate clients. Corporate clients include Mobilink, NBP, and Army GHQ etc.

Growth Strategy: PWF wants to expand there business by installing more manufacturing plants & reduce the man power to save the time. The feedback regarding the modified assembly line was taken from the employees working on the line. Each was asked about their views during lunch breaks. The feedback was positive which was well and good. But incase the feedback had been negative; the company would have carried out a voting. If the majority voted negatively, the management of PWF would formulate ways to

change their attitudes towards the new line but wouldn’t have changed their strategy at all.

15. Organizing with the Management of Pak Wood Furnishes Organizing

creates

and

maintains

relationships

between

all

organizational resources by indicating which resources are to be used for specified activities, and when, where and how are they to be used. Pak Wood furnishers carry out its organizing process in the following way. PWF carries out its annual general meeting at the end of its fiscal year (December) and carries out its quarterly meeting after every 4 months. In every quarterly meeting, the CEO, the Directors and the managers of PWF sit down and check the net sales statistics

16. Departmentalization of Pak Wood Furnishers As PWF is a manufacturing company so its departmentalization is based upon manufacturing process. Following is a chart of the major phases of the process used to manufacture products.

PRODUCTION MANAGER

LOG YARD DEPT.

CUTTING DEPT.

ASSEMBLIN G DEPT.

FINISHING DEPT.

DELIVERY DEPT.

Division of the labor exists in every department of the company. The division of labor is set upon the level of specialization required for each job. E.g. in the showroom, each employee is required a different level of specialization for assistance of the customers.

17. Authority, Responsibility and Delegation Functional authority exists within the management of Pak Wood Furnishers. Following are some of the conflicts that take place due to functional authority:

•

Strategy formulation: Every time a strategy is to be formulated, several conflicts take place e.g. between the boss and the manager, which later gives birth to many other problems like the conflict turning into a father son from boss manager.

•

Urgency of products: For instance we get an order of 2, 3 products which have to be delivered within a week and all the departments are working on it. All of a sudden, we get another order of entirely different products, from another client, which has to be delivered urgently. This gives rise to conflict between the departments as they already have done all their paper work and have carried out all the related important transactions for the first order.

•

Work delayed on the assembly line: Due to the above mentioned conflicts everything gets messed up and the work is delayed on the assembly line. The workers don’t know what products to produce first until they have been informed about it by one of the managers.

The

management

of

Pak

Wood

Furnishers

is

completely

centralized. The main authority rests within the top management which consists of the directors and the managers. The directors first make a list of the jobs to be delegated. Then they appoint managers and delegate specific areas of authority and tasks to them for the completion of their jobs. Some of the managers are given very less authority, so they feel that they are being underestimated in the organization. This leads to demotivation. On the other hand some of the managers are given more authority than they can actually handle. They feel pressurized which creates hurdles in their delegated tasks and results in demotivation. This is why the directors should make sure

that

the

managers

understand

the

order

being

communicated, the purpose of the organization, and whether the supervisor is physically and mentally compatible for the level of delegated tasks.

18. Managing Human Resource Human resources are the employees or the personnel in a business that help it to achieve its objectives. Pak Wood furnishers hire individuals

according

to

its

managerial

and

non-managerial

openings. For the non-managerial openings, individuals are hired from the “WOOD WORKING SERVICE CENTER” which is a government agency. PWF visits this center every time human resource is required. Once these individuals are hired they go under own job training. For the managerial openings the individuals are hired in those areas where the management is required. Any managerial openings in the top level are filled by the family members. Middle level managerial

opening are in 2 sections, the 1st is in the showroom staff and the 2nd in the factory coordination staff. For such openings the staff required undergoes the following steps: •

The 1st step is the recruitment. Here the list of individuals who responded to the openings are short listed.

•

2nd step is known as the selection, here the top management chooses among individuals who have been recruited. This further narrows down the list to only those individual(s) who are actually required by the company.

•

Once hired these individuals go under the training process which develops their qualities and enables them to be more productive and thus contribute more to the organizational objectives.

•

The last step is the process of performance appraisal. In this step the management decides how appraisals are to be handled so they benefit the company. The appraisal for each employee hired is calculated according to what the top level management believes in.

•

Any one or more employees found disrupting the code of discipline are immediately fired. No consideration is given to the reasons of the disturbance created.

The company motivates its employees with fixed pay, yearly bonuses, respect and commission.

19. Communication within Pak Wood Furnishers Communication within PWF is done through four different channels: •

E-mail

•

Fax

•

Couriers

•

Telephone

The barrier to communication is that the factory is closed on Fridays & Showroom is also.

20. Problems Faced and their Solutions Proposed by the Management •

Sometimes containers reach the clients and the clients reject the whole order even though there are no faulty products. In such cases the clients are charged a percentage of the cost of the order.

•

Sometimes

personnel

from

abroad

come

to

check

the

factories located in Pakistan, the company immediately has to give leave to the child labor. This causes a decrease in the number of employees, therefore; causing a delay in the production of goods. •

The most sales of the type of wood of PWF is Rosewood. Each tree takes about 65-70 years to mature. The first problem is that every year a season comes when this tree becomes prone to Rosewood insects (Sheesham ka keera). The second

problem is that the forecasts show a decrease in the availability of Rosewood by 2010.