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Page 1: Pakistan Tobbacco

Chapter 1

Introduction

Overview

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About PTC

Smoking and Health

Corporate Social Responsibilities

Careers

Section 1

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About PTC

Overview The Company

History

Brands

Auditor’s Report

ABOUT PTC

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The Company

Pakistan Tobacco Company Limited was incorporated in 1947

immediately after partition, when it took over the business of the

Imperial Tobacco Company of India which had been operational in the

subcontinent since 1905.

PTC is a part of the trans-national British American Tobacco

Group, which employs some 90,000 people worldwide at its operations

in 180 countries. British American Tobacco has a position of market

leader in more than 50 countries selling over 300 brands there. In

2004, the Group sold and produced a nearly 16% share of the global

market of cigarettes.

PTC is the largest excise tax generator in the private sector in the

country. In 2004 alone, PTC paid the government close to Rs.16

Billion in excise and sales taxes. This amounts to over Rs. 50 million

per working day. Over one million people are economically dependent

on the industry in Pakistan.

History

From being the first multinational to set up its business in Pakistan

in 1947 and beginning operations out of a warehouse near Karachi

Port, PTC has come a long way.

From being just a single factory operation to a company which is

involved in every aspect of cigarette production, from tobacco

cultivation to packaging PTC has evolved and grown with Pakistan.

However, what is significant about these fifty-seven years is the effort

that PTC has demonstrated in the development of the country. By being

instrumental in the campaign for modern agricultural and industrial

practices, PTC has helped in the development and progress of the

agricultural & industrial sector in the country.

PTC has been supporting & contributing to various causes of

national interest. Educating growers in the latest techniques and

technology in agriculture, afforestation and free health care in

designated areas are few examples.

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Through these fifty-seven years, PTC’s continuous investment in

people, brands, technology, innovation and the communities in which

PTC operate has borne fruit in many ways and to mention just a few;

PTC are deemed as a partner of choice by many, its Environmental,

Health & Safety standards are a source of inspiration for local

companies, its Industrial Relations practices have led and influenced

local practices, and as a result of all these, its managers are highly

valued and sought after people in the Pakistani corporate world based

on the training and exposure which PTC give them from very early on

in their careers.

Brands

Pakistan Tobacco Company has the following renowned Brands:

Dunhill Filter 20 HL

Dunhill Lights 20 HL

Benson & Hedges 20HL

Benson & Hedges Lights 20HL

Gold Leaf 10HL

Gold Leaf 20HL

Pall Mall 10HL

Pall Mall 20HL

Pall Mall Menthol 20HL

Capstan International 10HL

Capstan International 20HL

Wills International 10HL

Wills International 20HL

Gold Flake 10HL

Gold Flake 20HL

Embassy 10SS

Embassy 20HL

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Auditors' report to the members

We have audited the annexed balance sheet of Pakistan Tobacco

Company Limited as at December 31, 2006 and the related profit and

loss account, cash flow statement and statement of changes in equity

together with the notes forming part thereof, for the year then ended

and we state that we have obtained all the information and explanations

which, to the best of our knowledge and belief, were necessary for the

purposes of our audit.

It is the responsibility of the Company's management to establish

and maintain a system of internal control, and prepare and present the

above said statements in conformity with the approved accounting

standards and the requirements of the Companies Ordinance, 1984. Our

responsibility is to express an opinion on these statements based on our

audit.

We conducted our audit in accordance with the auditing standards

as applicable in Pakistan. These standards require that we plan and

perform the audit to obtain reasonable assurance about whether the

above said statements are free of any material misstatement. An audit

includes examining on a test basis, evidence supporting the amounts

and disclosures in the above said statements. An audit also includes

assessing the accounting policies and significant estimates made by

management, as well as, evaluating the overall presentation of the

above said statements. We believe that our audit provides a reasonable

basis for our opinion and, after due verification, we report that:

(a) in our opinion, proper books of account have been kept by the

Company as required by the Companies Ordinance, 1984;

(b) in our opinion:

(i) the balance sheet and profit and loss account together with the

notes thereon has been drawn up in conformity with the Companies

Ordinance, 1984, and are in agreement with the books of account

and are further in accordance with accounting policies consistently

applied;

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(ii) the expenditure incurred during the year was for the purpose of the

Company's business; and

(iii) the business conducted, investments made and the expenditure

incurred during the year were in accordance with the objects of the

Company;

(c) in our opinion and to the best of our information and according to

the explanations given to us, the balance sheet, profit and loss

account, cash flow statement and statement of changes in equity

together with the notes forming part thereof conform with

approved accounting standards as applicable in Pakistan, and give

the information required by the Companies Ordinance, 1984, in the

manner so required and respectively give a true and fair view of

the state of the Company's affairs as at December 31, 2005 and of

the profit, i ts cash flows and changes in equity for the year then

ended; and

(d) in our opinion Zakat deductible at source under the Zakat and Ushr

Ordinance, 1980 (XVIII of 1980), was deducted by the Company

and deposited in the Central Zakat Fund established under Section

7 of the Ordinance.

A.F. Ferguson & Co.

Chartered Accountants

Islamabad

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Section 2

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Smoking and Health

Overview History of Tobacco

Health Risks

Environmental Tobacco Smoke (ETS)

Major Studies

Smoking and Health

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History of Tobacco

Ever since it arrived in Europe since the late 15th century,

tobacco has divided opinion, sparked controversy, and generated

substantial revenue through tax.

Health Risks

Pakistan Tobacco Company recognizes that along with the

pleasures of smoking there are real risks of serious diseases such

as lung cancer, respiratory disease and heart disease.

Environmental Tobacco Smoke (E.T.S)

The World Health Organization and various other public health

bodies have reported that exposure to environmental tobacco

smoke (ETS), sometimes called 'passive smoking', is a cause of

various diseases. The risks they report are far lower than those

associated with active smoking, but are said to be large enough to

make public smoking an important public health issue.

So while PTC understand and support measures to reduce

involuntary exposure to ETS, they do not believe that blanket bans

on public and workplace smoking are fair or necessary, as there are

more practical solutions based on air quality standards.

What is ETS?

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Technically, it is an 'aged', diluted mixture of side stream

smoke (from smoldering cigarettes) and exhaled mainstream smoke

(from smokers puffing).

Section 3

Corporate Social

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Responsibilities

Overview Afforestation

Mobile Doctors Programme

Youth Smoking Prevention

Corporate Social Responsibility

Afforestation

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Pakistan Tobacco Company is already recognized for its work

in afforestation and currently is planting four million trees per

year.

Under this programme, PTC has planted over 30 million trees

since the project started in 1981. PTC is also looking into the

possibility of expanding this activity in other parts of Pakistan.

Clearly, PTC’s agricultural infrastructure is strongest where it

works with their growers and therefore its focus on afforestation

will be where it has the appropriate resource to support them.

Considering the fact that only four percent of Pakistan's land

mass is covered by forest (whereas ideally it should be at least

twenty percent), PTC has instituted probably the largest private

sector reforestation program in Pakistan.

Mobile Doctors Programme

PTC’s dedicated Mobile Doctors team takes pride in providing

health care in areas where there are no medical facilities.

Youth Smoking Prevention

PTC strongly believes that children should not smoke, and

smoking should only be for adults who understand the risks

associated with it .

Section 4

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Careers

Overview Why Choose PTC

Employment Beliefs

Graduate Careers

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Careers

Why Choose PTC?

British American Tobacco is a truly global organization,

employing over 90,000 people around the world, over 2000 of them

in Pakistan, and most of whom stay with us for many years.

Employment Beliefs

Employment opportunities exist with a large number of

separate but affiliated companies within the British American

Tobacco Group of companies.

Graduate Careers

Pakistan Tobacco Company sees graduate trainee recruitment

and development as an important part of business strategy,

ensuring that the group’s management is equipped with leaders

who can plan and build the future of the organization. "We

Challenge you..." is a Pakistan Tobacco Company trainee

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programme that recruits and prepares high caliber youngsters to

achieve this goal, offering them the opportunity to carve out a

successful, international career. The programme extends over

approximately two years and is designed to prepare graduates to

become our next generation of leaders.

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Chapter 2

Management Function

Analysis

Overview

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Planning

Organizing

Controlling

Leading

Section 1

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Planning

Overview Planning

Mission

Environmental Analysis

Decision Making

Without a strategy the organization is like

a ship without a rudder, going around in circles. It’s like a tramp

that has no place to go to.

Joel Ross and Michael Kami

PLANNIN

G

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There will be hardly any exaggeration in it if we say that planning is the most important management function in contemporary organization. Without planning the rest of the management function can’t be performed. Planning refers to the practice and profession associated with deciding in advance what is to be done in the coming future and the profressionals who perform it are called planner’s.

Strategic planning, formulation and implementation are core management functions. Although strategic management has been in existence for only a few years its implications have been firmly and strongly rooted in organizations that want to stand in good stead. Among all the varied things that managers have to deal with and act upon, few affect an organization’s performance more lastingly than do the task of charting an organization’s future course, figuring out the what strategic moves and approaches to undertake, and then orchestrating execution of the chosen strategy as close to perfection as is managerially possible. One of the biggest factors in determining whether the organization performs up to its potential or not is the extent to which the management team performs the strategic making and strategic implementing functions. Indeed:

“Good strategy and good implementation are the

most trustworthy proof of good management”

A strategic plan, then, is the bridge to the future, which an organization uses to lead from what it is to what it envisions it can become..

Missions & Goals

“Transform Pakistan Tobacco Company to

perform with the speed, flexibilty and

enterprising of an innovative and

consumer-focus company.”

“First choice for every one.”

“Dare to be different”

These are stated goals of Pakistan Tobacco Company as found in its charter,annual reports Or in public statements made by the manager.these goals are often conflicting with the real goals of a company but the mangement of Pakistan Tobacco Company emphasized that there is no conflict between there stated and real goals.

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The goals of an organization provide the direction of all mangement decisions and actions and form the crietearia against which actual accomplishment’s of the organization are measured. Everey thing that employees of Pakistan Tobacco Company do is oreinented toward helping there work units and helpping the company achieve its goals.

The goals at Pakistan Tobacco Company are establish by the process of “management by objective”. In this system specific performance goals are jointly determinet by the managemnet and employees of Pakistan Tobacco Company. Progress towards accomplishing these goals is periodically reviewed and rewards to the employees are allocated on the basis of this progess. Pakistan Tobacco Company uses this system to motivated empoyees. The “management by objective” programme at Pakistan Tobacco Company consists of following elements:

Participative decision making

An explicit time period set for achieving a goal

Performance feed back

Pakistan Tobacco Company tries to involve more and more organizational member’s in then planning process in such an approach plans are not handed down from one level to the next, but instead are developed by organizational member at the varioues level’s and in the varioues work unit to meet the specific needs. For instance at a manufacturing facility employees from production, suplly management , and channel management meet weekly to make plansbased on current product demand and supply. By involving employees in the process of planning Pakistan Tobacco Company ensures that plans are more than just something written down on paper.

The external envoriment of organization is continuely channing. The power of the internet is used by organization in new and unique ways including product design or logistics. Because dynamic environments are more the norm than the exception for today’s manager’s, manager’s at Pakistan Tobacco Company need to plan effectively to meet the needs of it.So managers at Pakistan Tobacco Company develop plans that are specific, but flexible.

Although this may seem contradictory, its not. Managers Pakistan Tobacco Company recognize that planning is an ongoing process, the plans serve as a road map, although th edestination may be changing constantly due to dynamic market conditions. They are ready to change driection if the environmental conditions change. At the same time they also continue formal planning efforts because it’s the consistency in planning efforts that contribute to significants performance improvement. Managers at Pakistan Tobacco Company also train there emplyees in setting goals and establishing palns and then trust that they will do so. Doing so make the employee knowledgeable and skilled so that they can contribute to the organization in an effective manner.

Now we will look at various tools and techniques that managers at Pakistan Tobacco Company use for planning.

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Knowing about the competitors is immensely important for an organization because only then the organization can plan to gain competitve advantage. Organizations need to scan their environment for competitors and recent trends. Pakistan Tobacco Company has a “competitors intelligence” departement. This department gethers information about the competitors and gets answers to questions such as:

Who are competitors?

What are they doing?

How will what they are doing affect us?

This department does not spy on competitors, rahter it uses advertisement’s, promotional materials, press releases, annual reports ,newspaper reports, and industry studies as sources of information. Internet is also widely used by this department to gain substential information about competitors.

Pakistan Tobacco Company also buys competitors products, and supplies them to its engineers, who examin them thoroughly for new technical innovations. This process is widely used in contemporary organizations and is known as “ reverse engineering”. Pakistan Tobacco Company has formed a specific department for this purpose.

Managers at Pakistan Tobacco Company also assess the environment and effectively plan for the future. Enviromant analysis is an important part of planning at Pakistan Tobacco Company

Pakistan Tobacco Company like many contemporary organizations searches for the best practices among competitors or non competitors that lead to its supererior performance as described by the process of “benchmarking”. It has formed a bebchmarking planning team for this purpose. This benchmarking team has formed collaborations with other organization that regularly share benchmarked data with it.

Resources are the most important asset of an organization and include financial (debt, equity, retained earnings, and other financial holdings); physical (equipment, raw materials, buildings, or other tangible assets); human (experiences, skills, knowledge and competencies of people). Managers at Pakistan Tobacco Company make use of different techniques for effectively and efficiently allocating these resources. Some of which are as follows:

Regardless of the organizational level, all managers at Pakistan Tobacco Company use budget for revenues, expenses as well as for improving time, space and use of material resources.

Moreover scheduling is done at various organizational levels to explain what activities have to be done, the order in which they are to be completled, who is to do each, and men they are to be comlpeted.

Decision Making

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Competing in the market place is like a war. You have

injuries and casualties, and the best strategy wins.

John Collins

The decision-making process in PTC is centralized. The model used is classical, whereby the top management takes their time while making decisions and explore and evaluate all the possible alternatives before choosing the rationally economic and feasible solution.

Programmed decisions are made only by the top management with no consultation what so ever with the line managers while the daily and routine decisions are made by the line managers at the middle level with the prior permission or approval from the general manager.

Decisions, which are normally taken at the top management, are related to:

The package positioning

Trade discounts

Advertisements

Price reductions

Distribution

While recruiting new employees, the top management approves the vacancies and asks the Human Capital Department to conduct the written test and this test normally is conducted for the employees at the lower level. Then prospective applicants are short listed through the interview process. Then the Business and operations manager or general manager personally interviews the employees and then makes the final decision about the selection himself.

Hence, the style of decision-making followed by the PTC model, is AII. That is, the decisions are made on the basis of the inputs provided by the lower level employees and the managers at the middle management level. Top management asks for the suggestions and ideas of his subordinates and then takes the final decision himself.

However, the remaining decisions, which are mainly related to the daily operations, are made by the respective managers who are eventually made responsible for the results.

The management is very much cooperative and encourage its employees to come up with new ideas related to their duties and the work they do so as to increase the overall efficiency of the organization and eventually increasing the profits.

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Section 2

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Organizing

Overview Organizing

Work Specialization

Departments

Communication and Information Technology

Human Resource Management

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It is important for managers of a company to design an organizational structure that employees to effectively and efficiently do their work so that it can accomplish its organizational goals and objectives. Organizational structure is the formal arrangement of jobs within an organization. When we look into their organizational design, we can see different elements like work specialization, departmentalization, formal chain of command, mixture of centralization and decentralization.

Work SpecializationIn Pakistan Tobacco Company there is focus on work specialization to a large

extent. There is division of labor and entire job is not done by one individual but instead is divided into steps and completed by different persons. In Pakistan Tobacco Company more importance is given to individual responsibilities instead of teams as a whole. Tasks are assigned and responsibilities are associated with individual jobs.

DepartmentsThere is also departmentalization, which is the basis on which jobs are

grouped together. Basically Pakistan Tobacco Company has a functional structure. There is mostly functional departmentalization as the departments are divided on functions they perform. They have the following departments:

Marketing Department

Manufacturing Department

Human recourse Department,

Sales Department, and

Finance Department.

Each department is placed under the authority of its manager who is responsible for every function performed in that department. All these managers are accountable to one plant manager who keep track on the output of each

ORGANIZING

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department. Due to this there functions are performed more efficiently as people with similar specialties and common skills and knowledge will be grouped. There is also geographical departmentalization in which jobs are grouped together on basis of territory or region. Pakistan Tobacco Company is Pakistan’s first multinational company whose branches are in more than 160 countries. So it has divided its departments under different territories of countries, which has separate directors. Because of this there is more effective and efficient handling of specific territorial issues and serve needs of those unique markets. As it has penetrated in every segment of Pakistan.

Organizational Hierarchy The whole company has one president and one vice president. Each country

has its CEO at the upper organizational level and managers of each department are under him. At the lower levels there are workers who are accountable to those managers. This is the formal chain of command in PTC. There is also unity of command principal is also applied in this organization that helps to preserve the concept of continuous line of authority. It states that a person should report only one manager. Without unity of command conflicting demands and priorities for multiple bosses can create a problem. Span of control is also important because, to a large degree, it determines the number of levels and managers an organization has, Pakistan Tobacco Company has a wider span of control as it have less managerial levels. This is effective as it has cost efficient and has quick decision making because of these wider spans organizations invest heavily in employ training. There is mixture of centralization and decentralization. Pakistan Tobacco Company is humanized organization. As it is more flexible and responsive, there’s been a distinct trend toward decentralizing decision-making. As in large companies like Pakistan Tobacco Company, lower level managers are “closer to the action” and have more detailed knowledge about problems and how to solve them. There is more employee empowerment, which is increasing the decision-making discretion of employees.

C.E.O

Managing

Director

Business Support

Executive

Business Support

Executive

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Director

Procurement

Director

Finance

HR DirectorMarketing

Director

Marketing Director

Trade Marketing

Development Mgr.

Area Manager

Trade Marketing

Officer

Regional Manager

Director

Procurement

Direct & Indirect

Procurement Officers

Chief Engineer

Head of Planning

Procurement

HR Director

HR Officer

(Retirement Scheme)

Retirement Scheme

Manager

Organizational

Development Mgr.

Learning Manager Talent Manager

HR Officer

(Remuneration)

Remuneration

Manager

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There is less formalization in Pakistan Tobacco Company, which means that there is less standardization and employees are not strictly guided by rules and procedures. There is no formal dress code within the organization. Managers can also wear informal dresses like jeans. Job behaviors are relatively unstructured and employees have great deal of freedom in how they look and do their work. This clearly indicates that Pakistan Tobacco Company has an organic structure to some extent, as its organizational design is highly adaptive and flexible with free flow of control, wide span of control, decentralization and low formalization. Moreover their current strategy frameworks tend to focus upon three dimensions.

(1) Cost minimization, which reflects the organizations pursuit of tightly controlled costs;

(2) Innovation which reflects the organization’s pursuit of meaningful and unique innovations, to have something new so that it can compete with other tobacco companies;

Assistant Manager

(Talent)

Director

Finance

Posting Analyst

Business Excellence

Manager

Treasury Manager

Financial Auditor

Accounts Payable

Manager

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(3) Imitation, which reflects an organization seeking to minimize risk and maximize profit opportunities by copying other market leaders. The technology they mostly use is process production, which is the production of cigarettes in continuous process.

Pakistan Tobacco Company is, to some extent, a learning organization, which has developed the capacity to continuously learn, adapt, and change. Employees practice knowledge management by continually acquiring and sharing new knowledge and are willing o apply that knowledge in making decisions or performing their work and there is employee empowerment. There is open, timely and accurate information sharing. Company has its own shared vision and mission. Moreover Pakistan Tobacco Company has its own culture, which is highly convenient and friendly. There is more focus on strong mutual relationships. Company cares a lot about its people e.g. they have short courses for them, bonuses, appreciation etc. they have a bond of trust, loyalty and care with their employees.

Communication & Information Technology

CommunicationCommunication is the transfer and understanding of meaning. Perfect

communication means that a transmitted thought and idea is perceived by the receiver exactly as it was envisioned by sender.

Types of CommunicationCommunication encompasses two types of communication:

Interpersonal Communication

It is the communication between two or more people. It is very important in an organization.

Organizational Communication

All the patterns, networks and systems of communication within an organization are called Organizational Communication.

Functions of communicationIt serves four major functions:

Control

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Organizations have formal guidelines and communication is being used to control company policies.

Motivation

Communication encourages motivation by clarifying to employees what is to be done, how well they are doing and how to improve performance.

Emotional expression

Communication provides a release for emotional expression of feelings and for fulfilment of social needs.

Information

Individuals and groups need information to get things done in organizations. Communication provides that information.

Interpersonal communication in Pakistan Tobacco

Company The managers of Pakistan Tobacco Company have a wide variety of

communication methods. These include:

Face to face

Telephone

Group meetings

Formal presentations

Memos

Traditional mail

Fax machines

Employee publications

Bulletin boards

Other company publications

Audio and video tapes

Hotlines

Electronic mail

Computer conferencing

Voice mail

Teleconferencing

Video conferences

All of these communication channels include oral or written symbols.

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Information TechnologyInformation technology has significantly changed the way organizational

members communicate. It has radically improved a manager’s ability to monitor individual or team performance. It has allowed employees to have more information and has provided opportunity to collaborate and share information.

Use of Technology in Pakistan Tobacco Company The two developments in information technology that had most significant

impact on current managerial actions in Pakistan Tobacco Company’s communication are:

Networked computer systems

Pakistan Tobacco Company uses a networked computer system called “lotus node” which links its computers crating a computer network. Pakistan Tobacco Company’s members can communicate with each other.

Intranet

Pakistan Tobacco Company uses a communication network that uses internet technology and is accessible only by employees so they can share information and collaborate on documents and projects.

Human Resource Management

Human Resource Management ProcessHuman Resource Management Process is a process of activities necessary for

staffing the organization and sustaining high employee performance. It consists of eight activities which include recruitment, selection, orientation and training, performance management and compensation benefits.

Human Resource Planning at Pakistan Tobacco

Company

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Human Resource Planning is the process by which managers ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently performing assigned tasks.

HR planning at Pakistan Tobacco Company can be condensed in two

steps:

Assessing current human resources

Assessing future human resource needs and developing a program to

meet those future needs.

Current AssessmentManagers at Pakistan Tobacco Company begin HR planning by reviewing

their organization’s current human resource status.

RecruitmentIt is the process of locating, identifying and attracting capable applicants.

When the appropriate administrative officers determine that a position is vacant or needs to be created, the HR department selects a Search and Screening Committee that will carry a major responsibility for recruiting the new employee.

The Search and Screening Committee fulfils the following responsibilities:

Identify the qualificationsThe committee inn conjunction with the administration develops the selection

criteria and job description of the post if not already laid down by the Pakistan Tobacco Company.

Conduct the searchThe committee forwards the selection criteria to the HR department. The

company through HR office advertises the position and seek nominations of candidates from renowned institutions in Pakistan.

DecruitmentEmployees terminating employment process the exit procedures initiated at

the Human Resource Office. An exit card is issued which provides a record about the employee that whether the departing faculty has met all responsibilities.

Selection

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Once the recruiting effort has developed a pool of candidates, the next step in the HRM process is to determine who is best qualified for the job. This step is called Selection.

At Pakistan Tobacco Company, the Selection process is done by the Search and Screening Committee and HR department. It involves the following steps:

Initial screening

Job candidates are required to fill an application form which is a comprehensive personality profile detailing applicant’s name, address, telephone number, activities, skills, accomplishments and prior experience. The committee verifies the credentials submitted by applicants.

Short listing

The committee narrows the fields of qualified candidates and recommends to the HR manager a short list.

Job Information

Prior to the interview, the expectation of the organization, job requirements, and economic prospects of the position are set forth positively.

Interview

The Human Resource Office develops a work plan for evaluation and interview process, ensuring timely completion of the process. The Human Resource Office develops standard interview process for applicants on short list.

Selection

Selection is made by the Appointment Committee. After the interview has been completed, the committee recommends to the CEO if the candidate should be offered a position and if yes at what rank and salary.

OrientationOrientation is the introduction of new employee to his her job and the

organization.

The orientation program at Pakistan Tobacco Company goes through the following procedure:

A tour of the organization and the work facilities such as cafeteria,

conference room, rest room etc.

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A power point presentation describing the Pakistan Tobacco Company’s

history, values, objectives and general rules.

Addresses by the representatives from Human Resource Office

clarifying organization’s culture, policies and philosophy.

Employee TrainingEmployee training is an important part of HRM. As job demands change,

employee skills have to be altered and updated. The training techniques used at Pakistan Tobacco Company are:

On-the-job

Employees learn how to do tasks by performing them after an initial introduction. This type of training is used for product training and knowledge, sales process, information technology, security guard training and computer applications.

Coaching

Employees work with an experienced worker who provides information, support and encouragement. this kind of training is used for enhancement of interpersonal and business skills such as leadership, conflict resolution, and team building.

Workbooks/ manuals

Employees refer to training manuals and workbooks. This type of training is used for development of skills of problem solving, decision making mandatory and performance management.

Employee performance Management

Evaluating employee performance is part of a “performance management system” which is a process of establishing performance standards and evaluating performance in order to arrive at objective human resource decisions as well as to provide documentation to support for the decisions.

Performance appraisal methods used at Pakistan Tobacco Company are follows:

Written essays

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Managers at Pakistan Tobacco Company use the technique of written essay in which they write about their subordinates’ strengths, weaknesses, past performance and potential.

360 degree feedback

This method is also applied for performance appraisal of managers in which feedback from supervisors, employees and co-workers of managers is collected. This method works effectively for career coaching and helping managers realize their strengths and weaknesses.

Compensation and BenefitsCompensation and benefits program at Pakistan Tobacco Company endorses

the following:

Performance Bonus

Promotions

Salary add-ons

Festivals bonus

Health insurance & services

Awards and Recognition

Hajj Package

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Section 3

Leading

Overview

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Leading

Motivating Employees

Job Satisfaction

Groups & Teams

Every organization consists of people, and it is through people that the organization achieves its goals. Leading is the process of exhibiting skills in different areas of an organization for getting others to play an effective part in achieving organizational plans. These skills involve, motivating employees as they work, selecting the most effective channels for communication with employees and dealing with any conflict that may rise within the organization.

Leading also involves influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of leading is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives. The leading function gives the manager an active rather than a passive role in employee performance, conduct and accomplishments. It also gives managers a second responsibility: helping people in the organization accomplish their individual career goals. Organizations do not succeed while their people are failing. Helping people in the organization with career planning and professional development is an integral part of the leading function.

Motivating EmployeesPakistan Tobacco Company, like any other organization cannot ignore its

employee, as they are the most important asset for it. When we talk about employees

LEADING

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in an organization, we need to focus on their behavior in the organization, because it is only by doing so that we can influence and motivate them using the leading process of management. The field of study that is concerned wit behavior of employees at work is known as “Organizational Behavior”.

Groups & TeamsManagers at Pakistan Tobacco Company, not only focus on visible aspect of the

organization, like goals, policies, procedures, formal authority relationship and chain of command, but they realize that under the surface there are other elements that they should understand, the elements that influence how people work within the organization. So they pay special attention to these elements. Employees within Pakistan Tobacco Company work both individually and within a group, so their actions at both these levels are observed closely by the management. Doing so helps the managers to explain, predict and influence behavior of employees. This practice is immensely important for managers because they depend on employees for getting work done. Now there are specific employee behaviors that are important for managers at PTC. These include:

Employee Productivity

Turnover

Job satisfaction

Employee productivity is a performance measure of effectiveness and efficiency of an employee. This is very important for managers at PTC because they want to know which factors will influence the efficiency and effectiveness of an employee.

Turnover is the voluntary and involuntary permanent withdrawal from an organization. In the past it was a problem at PTC because of increased recur ting, selection training costs and work disruptions. It is a problem that cannot be eliminated but, managers at PTC have successfully minimized it to a certain extent.

Job satisfaction refers to an individual’s general attitude to his or her job. Managers at PTC are immensely concerned about it because satisfied employees are more likely to show up for work, stay with the organization, display loyalty and commitment to it and work passionately for it.

Managers at PTC also recognize the personality difference in their employees and try their level best to match their personality with their jobs there are many benefits of it like recognizing that different employees approach problem solving, decisions making and job interaction differently managers can better understand why, foe instance, an employees is uncomfortable with making quick decisions or why another employee insists on gathering as much information as possible before addressing a problem.

Inspiring Your Employees

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Getting people to accomplish something is much easier if they have the inspiration to do so. Inspire means "to breathe life into." And in order to perform that, managers need to have some life within them. Managers at Pakistan Tobacco Company conduct the following guidelines that help them in achieving this.

1. Be passionate: In organizations where there is a leader with great enthusiasm about a project, a trickle-down effect will occur. You must be committed to the work you are doing. If you do not communicate excitement, how can you expect your people to get worked up about it?

2. Get your employees involved in the decision making process: People who are involved in the decision making process participate much more enthusiastically than those who just carry out their boss's order. Help them contribute and tell them you value their opinions. Listen to them and incorporate their ideas when it makes sense to so.

3. Know what your organization is about:" Your organization may make a product or sell a service, but it is still people! A leader's primary responsibility is to develop people and enable them to reach their full potential. Your people may come from diverse backgrounds, but they all have goals they want to accomplish. Create a "people environment" where they truly can be all they can be.

Today organizations confront an environment in which change takes place at an unprecedented rate, as a consequence Pakistan Tobacco Company like any other organization has developed the capacity to continuously learn, adapt and change. But mere learning is not sufficient; you need to share your learning with your employees. The first condition of learning is that the person must be motivated to learn. You cannot teach knowledge or skills to someone who is not motivated to learn. He must feel the need to learn what you are teaching. Most employees are motivated to do a good job. They want to be able to perform their tasks correctly. Their motivation is being able to perform their job to standards in return for a paycheck, benefits, challenges, job satisfaction, etc.

The next condition of learning is to involve them in the process. Keep their attention by actively involving their minds and emotions in the learning process. Have them participate through active practice of the skill or through discussion. You cannot keep their attention with a long lecture. Normally, people pay attention for a short time - less than 30 minutes. They need to use what is being taught or their minds will wander. If you lecture for an hour, very little will be remembered. Instead, give a brief lecture (less than 10 minutes), demonstrate, and then have them practice. Provide feedback throughout the practice period until they can do it on their own. If it is a large complicated task, then break it down into short learning steps. Keeping all these facts under consideration Pakistan Tobacco Company has cultivated a strong learning culture within it and employees are motivated enough to be a part of this learning culture.

Selection, training, evaluation and discipline cannot guarantee a high level of employee performance. Motivation, the inner force that directs employee behavior, also plays an important role. Highly motivated employees perform better than unmotivated employee’s. Motivation covers up ability and skill deficiencies in employees.

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Managers at Pakistan Tobacco Company use three approaches for dealing with motivation that are: needs, rewards and effort. The needs approach stems from the notion that peoples' unsatisfied needs drive their behavior. Figure out a person's needs, satisfy the needs and the person will be motivated. For example, a person with a high need to satisfy goals is motivated by production targets. The rewards approach is based on the expectation that rewarded behavior is repeated. Giving a person a bonus for excellent performance during a difficult harvest period encourages the person to make a special effort during the next difficult harvest. The effort approach to motivation is based on the expectation that effort brings the worker what he or she wants. The thought that working hard leads to advancement and new career opportunities is consistent with the effort approach. The effort approach includes a presumption that the employer is fair, i.e., effort is recognized and rewarded. Managers cannot reduce motivation to a simple choice of one of these approaches. Each of the three approaches contributes to an understanding of motivation and how motivation varies person to person and over time.

Since motivation influences productivity, supervisors need to understand what motivates employees to reach peak performance. It is not an easy task to increase employee motivation because employees respond in different ways to their jobs and their organization's practices. Motivation is the set of processes that moves a person toward a goal. Thus, motivated behaviors are voluntary choices controlled by the individual employee. The supervisor (motivator) wants to influence the factors that motivate employees to higher levels of productivity.

Factors that affect work motivation include individual differences, job characteristics, and organizational practices. Individual differences are the personal needs, values, and attitudes, interests and abilities that people bring to their jobs. Job characteristics are the aspects of the position that determine its limitations and challenges. Organizational practices are the rules, human resources policies, managerial practices, and rewards systems of an organization. Supervisors must consider how these factors interact to affect employee job performance.

Pakistan Tobacco Company expect their worker to exhibits it worker to the

following behavior.

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Pakistan Tobacco Company designs its job as following as the jobs remain motivated and as well as workers remain motivated to:

Empowerment

process of sharing power with employees

enhances beliefs about being influential contributors

employees perceive meaning in work

employees feel competent

employees derive a sense of self-determination

employees believe they have an impact on important decisions

empowering environment

provides information required to perform at one’s best

knowledge available about how to use the information

employees have the power to make decisions

employees receive rewards for contributions

Come to

work

Regularly

Remain in

the

Organizatio

n

Achieve

high

Output

Exhibit

good

Citizenship

Join the

Organizatio

n

Company

must

Motivate

Workers

to:

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Section 4

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Controlling

Overview Controlling

Control Process

Corrective Actions

Benchmarking

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We can define controlling as a system of monitoring and checking progress against plans which need modification based on feedback. An effective control system ensures that activities are completed in the way that leads the attainment of the organizations goal. Controlling is important because there’s no assurance that activities are going as planed and the goals managers are seeking are, in fact, being attained. Control is important therefore, because it’s the final link in the management function. It is the only way manager knows whether organizational goals are being met and, if not, the reason why. The value of the control function lies in its relation to planning, empowering employees, and protecting workplace.

At least two perspectives on role of control exist:

1. Top management expects to control everything, making all decisions, while

middle and lower managers implement decisions, and production workers

operate only as instructed

2. Top management does not decide the "right" way to do something, and

lower-level staff become involved in decision-making processes.

Three different approaches to designing control system have been identified:

Market Control

Bureaucratic Control

Clan Control

In Market Control, organization uses external market mechanisms, such as price competition and relative market share to establish standards used in system. Typically used by organizations whose product or services are clearly specified and distinct and that face considerable marketplace competition.

Bureaucratic Control emphasizes organizations authority. Relies on administrative and hierarchical mechanism such as rules, regulation, procedures, and policies, standards of activities, well defined job descriptions, and budget to ensure that employees exhibits appropriate behaviors and meet performance standards.

CONTROLLING

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Clan Control regulates employee’s behaviors by the shared values, norms, traditions, rituals, beliefs, and other aspects of the organizations culture. Often used by organizations which teams are common and technology is changing rapidly.

Pakistan Tobacco Company uses all these three controlling approaches in their organization as most organizations don’t rely totally on just one of these approaches to designing an appropriate controlling system. For example they evaluate their performance according to the profit each division generates and also with bureaucratic control that managers and employees are expected to adhere the rules and regulations of their organization.

Now coming toward the controlling process, Control process is the three step process including measuring actual performance, comparing actual performance with the standard and taking managerial action to control deviations or inadequate standards. Now question arises that how Pakistan Tobacco Company measures the actual performance. They use personal observation and oral reports as well as computer generated reports. Actually these are the fast way to get

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feedback and measure what and how the workers are working.

In simple words first they measure the actual performance and then compare the actual performance with standard. The most important part is that controlling process in Pakistan Tobacco Company is based upon feed back. As previously stated, when launching a certain product in the market, certain targets are made or we can say that some sort of standards are made, after some period of time it is checked on the basis of feedback from other customers, that is done in the form of surveys, that those targets were achieved or not, if in case the desired goals are not achieved then certain modifications are made to the existing plans.

Now question arises that how managerial actions are taken. That is clear that managerial actions are taken when there is considerable amount of variation in the performance. Two types of actions can be taken:

Compare actual

with Standard

Take Managerial

Action

Measure

Actual Process

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Immediate Corrective Action

Basic Corrective Actions

Immediate corrective action correct problem at once to get performance back on track and Basic corrective action looks at how and why performance has deviated and then proceeds to correct the source of deviation. Effective managers, however, analyze deviation and when the benefits justify it, take time to pinpoint and correct the course of variance.

Sometime performance of Pakistan Tobacco Company has deviated because of unrealistic or unattainable targets have been given to the employees, so in the end managerial decisions is taken and they revise the targets in the organization.

Now coming towards the measurement of organizational performance, Pakistan Tobacco Company uses measure that are most frequently used:

Organizational Productivity and Quality

Industry Ranking

Productivity is the overall output of goods or services produced divided by the input needed to generate the output. Output is the measured by the sales revenue of an organization which it receives goods and services are sold. Input is measured by the cost of acquiring and transforming the organizational resources into the output. If the productivity of Pakistan Tobacco Company decreases it’s the management job to increase the ratio. Pakistan Tobacco Company productivity is the measure of how effectively and efficiently employees are doing their job.

The other important tool is the industry ranking. Pakistan Tobacco Company is the largest multinational company in Pakistan and it is working in more than 180 countries of the world.

Feed Forward ControlWhen making any plan for the future, Pakistan Tobacco Company anticipate

different problems like production, environment etc. this type of controlling is called Feed forward control. Feed forward control is a type of control that focuses on preventing anticipated problem since it takes place in advance of actual work activity.

Concurrent ControlThe problems which have not been identified in advance and occur during

the activity, they correct it during the process. This type of controlling is called concurrent control as it name implies, takes place while the activity is in progress. When control is enacted while work is being performed, management can correct problem before they become too costly.

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Feedback ControlFeedback control is the most popular control. Financial statement is an

example of feedback control. When all activities are completed then to make activity better. If financial statement is representing profit that mean activity is performed with effectiveness and if the statement representing loss then there is need of radical managerial decisions and Pakistan Tobacco Company is working accordingly.

BenchmarkingThe most important concept in controlling is the Benchmarking of best

practices. Benchmarking is the search for the best practice among competitors or the non competitors that lead to their superior performance and Benchmark is the standard of excellence against which to measure and compare. The step successfully implement an internal Benchmarking best practice program is as follows:

1. Connect best practices to strategies and goals. The organization’s strategies

and goals should dictate what type of the practice might be most valuable to

others in the organization.

2. Identify the best practice throughout the organization. Organizations must

have the way to find out what practices have been successful in different

work areas and units.

3. Develop best practices reward and recognition system. Individuals must be

given an incentive to share their knowledge. the reward system should be

built into the organizational culture.

4. Communicate best practices throughout the organization. Once best practice

have been identified, that information needs to be shared with others in the

organization.

5. Create best practice knowledge sharing system. There needs to be a formal

mechanism for organizational members to continue sharing their ideas and

best practices.

6. Nurture best practice on an ongoing basis. Create an organizational culture

that reinforces a “we can learn from everyone” attitude and emphasizes

sharing information.

Pakistan Tobacco Company has benchmarked certain organizational practices according to the principle above mentioned. They use them as “Standard of Excellence” against whom they measure their performance. For example if the competitor is launching any product, they brought that product and study what the competitor is doing i.e. what is the plan, study the product by “Reverse

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Engineering”, how others are making market strategy and what are they doing to make their product a successful product. By this they identify the bets practice. Afterwards they communicate that bes practice throughout organization.

If any training or education is required related to policies or new practice, they conduct “Inhouse training Program”. This may include administrative, managerial or technical courses.

Here the most important thing is that before making any organizational decision or before implementing the benchmarked policies or practices, they use feedback from their employees, because being the largest multinational company of Pakistan they cannot ignore the diversity of their workforce. So, each and every decision is made after having consensus from employees.

Now coming towards the controlling contemporary issues like cultural differences, workforce diversity etc. The units of Pakistan Tobacco Company are geographically separated and culturally distinct. So their method of controlling people and work are quite different in different countries as they are working in more than 180 countries of the world. As the concept of controlling states that distance creates a tendency to formalize control, the home office of Pakistan Tobacco Company often relies on extensive formal reports for control. Global managers of Pakistan Tobacco Company use indirect control devices especially computer generated reports and analyses in addition to standardized rules and direct supervision to ensure that work activities are going as planned. Now the question arises that how they cope with cultural differences in different countries. They make plans and strategy in order to emerge as a successful corporate citizen of that country in the world. They respect the multicultural differences across the globe as they are doing in Pakistan.

Management of Pakistan Tobacco Company monitor their employee in the work force through internet use as they have their own server and their own e mail facility called “LOTUS NOTE”. They also use telephone for that purpose. They also provide employees with privacy, the reason being that they don’t want to risk to create hostile workplace environment. If the workers privacy is disturbed then he will definitely try to something else and his productivity, effectiveness and efficiency will deteriorate and ultimately it will damage the goal attainment process of the company.

We have seen that workplace violence is quite common in any sort of company and it was also common in Pakistan Tobacco Company. Now they have created a system to control that. Management of Pakistan Tobacco Company says that “ This company is responsible for their employees and we create friendly environment as it is beneficial for the company and the employees too-----------we also believes that what is good for our employees is also best foe our company”. This is the policy of Pakistan Tobacco Company that after retirement or some sort of accident they are responsible as employees are the members of their winning combination. They treat employees with respect and dignity.

Pakistan Tobacco Company’s controlling system has these basic characteristics:

1. Control at all levels in the business

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2. Acceptability to those who will enforce decisions

3. Flexibility

4. Accuracy

5. Timeliness

6. Cost effectiveness

7. Understandability

8. Balance between objectivity and subjectivity

9. Coordinated with planning, organizing and leading

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Chapter 3

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Conclusion

Overview SWOT Analysis

CONCLUSION

“I think the most important CEO task is defining the course that the business will take over the next five or so years. You have to have the ability to see what the business environment might be like a long way out, not just over the coming months. You need to be able to both set a broad direction and also to take particular decisions along the way that make that broad direction unfold correctly”.

William Toh (C.E.O PTC)

Strategic planning is the most important type of planning in PTC. Strategies are the outcome of strategic planning. An organization's strategies define the business the firm is in, the criteria for entering the business, and the basic actions the organization will follow in conducting its business Strategies are major plans that commit large amounts of the organization's resources to proposed actions, designed to achieve its major objectives and goals. Strategic planning is the process by which the organization's strategies are determined. In the process, three basic questions are answered:

1. Where are we now?

2. Where do we want to be?

3. How do we get there?

The "where are we now?" question is answered through the first three steps of the strategy formulation process: (1) perform internal and external environmental analyses, (2) review vision, mission and objectives, and (3) determine SWOT: Strengths, Weaknesses, Opportunities and Threats. SWOT analysis requires

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managers to be honest, self-disciplined and thorough. Going on to strategy choices without a comprehensive SWOT analysis is risky.

Strengths and weaknesses come from the internal environment of the firm. Strengths can be exploited, built upon and made key to accomplishment of mission and objectives. Strengths reflect past accomplishments in production, financial, marketing and human resource management. Weaknesses are internal characteristics that have the potential to limit accomplishment of mission and objectives. Weaknesses may be so important that they need to be addressed before any further strategic planning steps are taken.

Opportunities and threats are uncontrollable by management because they are external to the firm. Opportunities provide the firm the possibility of a major improvement. Threats may stand in the way of a firm reaching its mission and objectives.

SWOT ANALYSIS

STRENGTHS

Strong Transnational CompanyPTC has a brand name that holds its own prestige in the world market. The

transnational entity of the PTC gives it an edge upon other competitors. The management of this tobacco company comprises of one of the most professional people and the strong financial firmness guarantees it a solid backing to sell its products.

Quality of ProductsThe product quality has improved due to upgraded quality of packaging and

the purified tobacco in comparison to its competitors. Our personal experience is that the product quality and taste is far better than any product of it’s kind and also the improvement in packaging has received a favorable response from the dealers and the loaders.

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Regular SupplyThe regular supply of the products is another strength of the company. The

products are regularly supplied to the dealers through proficient means of delivering and distribution has given PTC an added advantage.

Availability of ProductsIn the past product range was not available in abundance but now stiff

measures have been taken to increase its availability. The increase in the procurement of PTC brands has done through new supply and distribution measures and advertising campaigns

Aggressiveness in the MarketIts marketing strategy is very aggressive which aids it in further and incessant

production and distribution of its products. It gives trade offers to its dealers for storing more and more PTC products and the signage strategies and agglomeration of all the marketing strategies proves that it has a very aggressive marketing strategy. This will help PTC in strengthening its integrity in the market.

WEAKNESSES

Dissatisfaction among StaffOne of the major weaknesses as in majority of companies is the lack of co-

ordination between the management and the worker. In short there is a weak point in their Human Resource management. Workers feel that they are being exploited and are not given the remuneration that they deserve. The management fault is that they think that the worker is indefatigable and can work tirelessly. The tough schedule results into limited rest for them and there are no holidays.

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Motivational FactorsThe employees lack motivation simply because of the huge communication

gap between them and the management. Thus grievances reign high for they feel that their problems and recommendations are not being aired the top management. The workers expect to be adequately satisfied in terms of their salary and compensations

Centralized Decision MakingThe decision making process in the company is highly centralized and the

workers feel that there exists no proper authority existing in the firm. The salesmen feel dissatisfied for they are totally powerless to make any decisions themselves. In dealing with their buyers they have not the slightest authority to allow them any credit or discount.

Lack of PromotionPromotional activities have been greatly neglected in many areas.

Lack of CoordinationIn the factory there is a co-ordination lag between the activities of the

marketing, sales and repairing departments. The sales department complains that the marketing department does not pay any heed to their problems. Until or unless PTC restructures its co-coordinating activities the availability of its product would be always delayed.

OPPORTUNITIES

Introduction of Light cigaretteWe think that PTC can secure new dealers and buyers of its product by

introducing light cigarettes. It can promote its products in the younger generation by

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introducing light cigarette because youngsters who are not regular smoker are demanding light cigarettes as no competitors are offering such brand. So PTC can avail this great opportunity by introducing light cigarettes.

THREATS

Fake Products

Fake brands by the name of PTC are being supplied by unknown people. Such activities really hamper the company’s name and its brand originality. Above all the fake products supplied are almost similar to the taste of the original PTC’s brand and not everyone can decipher the difference between the original and the fake product. This is in fact a great threat to PTC for unworthy people is taking advantage of its brand name and spoiling its good name in the market.

Acknowledgments

This report cannot be solely attributed to our efforts but it is indeed the joint effort of all group members and well-wishers. There were times in the course of

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preparing this report when things were tough and the future seemed dark. It could not have been possible to write it, without the immense help of a few individuals to whom we would like to offer our gratitude.

In particular we would like to thank Mr. Jamil Iqbal (Front Desk Assistant), Mr. Ch Muhammad Irshad (Area Manager Lahore), Mr. Ali Ahmed (Assistant Manager Talent), Mr. Kamran Subhani (HR Officer), Mr. Adeel Irshad (Direct and Indirect Procurement Officer) of Pakistan Tobacco Company for their immense contribution towards this report Without their cooperation and the amount of time they gave us, this report would not have existed.

Thanks a lot!

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APPENDIX

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Questionnaire

Questions asked to evaluate different Management

Functions Performed in Pakistan Tobacco Company

Planning

Which thing you plan for different departments and for the whole organization that you think will

affect the future of your organization?

How do you set the financial plans of your company and how they are implemented?

Who are your competitors and how do you assess the market opportunities?

Do you set budgets according to the plans or plans according to the budgets?

How the budgets are set and what kinds of these budgets are?

Does your company appreciate new ideas by the employees?

Who are the responsible for decisions in your company and department as well?

Do you plan the things according to your objectives & in this process do you involve different

employees from different departments? If yes, then to how extent?

What type of decisions you normally used to solve problems? We mean you whether you used

routine patterns to solve problems or you used more creative ways to solve problems?

How the organizational plans are set and who are responsible for this?

How the performance of these financial plans is assessed?

Do you have any formal planning department which is sole responsible for writing the plans?

What kinds of the strategies are implemented in your company?

What is the normal procedure through which the decision is made in the company?

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Organizing

How many departments are in your company?

Please describe the hierarchy of each department.

How many employees are currently working in your company? What kind of the environment

they are provided?

Do you offer training for your employees for the improvement of their skills and what are the ways

for the training?

What kind of the communication channels does your company has?

What type of the information is usually share /communicated to your employees?

What is the main process for the selection of your employees? Is it same for all managerial levels?

When your company adapts changes how you normally convince your employees in adapting

these changes?

How a new employee is introduce in the company and how the culture and values are shared to the

new employee?

Leading

Managers from which departments serves as Leaders?

How do you resolve different conflicts, mean human relation conflicts, functional conflicts, task

conflicts and the process conflicts?

How do you develop the attitude of the employees towards the job and organization commitment?

How do you ensure that the employees are satisfied with their jobs? How do you get feedback for

this?

How do you motivate your employees to do their tasks and responsibilities assigned?

How groups and teams are formed in your company and how they are assigned the roles and

responsibilities?

What steps do you take in order to motivate groups and teams to share their interest towards the

organizational goals?

What steps you take to minimize the Employee turn over?

Do you think these groups and teams are helpful for the attainment of organizational goals?

How the interpersonal relationships are improved in the company?

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Controlling

Against which standards you compare the efficiency of your organization?

If your performance is not going according to your desired plans then how do you get back your

performance on the track?

How the efficiency of employees assessed and ensured that they are doing according the

company’s objective?

Do you follow any type of performance standards in order to evaluate the performance of the

employees? What kind of these standards are?

If you find that there is a discrepancy in the desired performance and actual performance, what steps

do you take in order to reduce this discrepancy?

How you perform the corrective actions in different departments?

Do you try to find out best performances around your organization and then use in your

management functions?

When you think that you have not made an affective decision then whether you try to correct the

mistake or revise the whole procedure?

How do you enforce the discipline in your company and asses that each employee is working

according to the company’s rules and regulations?