TableNo. Of Content e 1.1 1.2 1.3 1.4 1.5 1.5.0 1.5.1 1.5.2
1.5.3 1.5.4 1.6 2.1 2.1.1 2.2 2.3 2.4 2.5 2.6 2.6.1 2.6.2 2.6.3
2.6.4 2.6.5 2.6.6 2.7 2.8 2.9 2.10 2.11 2.12
ofContentes
ContentPage No. 09 09 11 13 15 16 17 17 17 17 18 19 19 20 22 22
24 24 25 25 25 25 26 26 26 26 27 27 27 28
Introduction of Organization SWOT Analysis for LOPSPL
Understanding of Strategic Frame Work Business Pressures Strategic
Response HRM Factors Restructuring Of Organization Organize
Training And Development Formulate HR Policies For R & D
Improve Employee Brand Image Conclusion Introduction Little About
TOC & Why The Area Of Teamwork Is Important For LOPSPL Team,
Group & Teamwork Benefits Of Team Understanding Dynamics Of
Team Teamwork Development Process Preparation To Form A Team Team
Leader Selection Of Team Member Establish Purpose & Mission
Statement Of Team Link The Purpose Of Team To Business Focus
Prepare Project Plan & Define Team Members Role Establish The
Process For Conducting The Meeting & Review Mechanism Threats
Of Team Group Decision-Making Method Advantages & Disadvantages
Of Group Decision Making Process Group Cohesiveness Trends In
Industries Conclusion
Page 1
List of Tables, Figures & Annexure[A] List of Tables :Sr. 1
2 3 4 5 6 Table No. 1.1 1.2 1.3 2.1 2.2 2.3 Title of Table SWOT
Analysis For LOPSPLFrame work for linking of Business Pressure to
HRM factors through Strategic Response Export of Engineering Goods
& Services During 2008-09 To 2009-10 Characteristics Of An
Effective Team
Page No. 10-11 13 14 21 22 27
Actions From One Stage To Another Advantages & Disadvantages
Of Group DecisionMaking Process
[B] List of Figures :Sr. 1 2 3 4 5 6 7 8 Fig. No. 1.1 1.2 1.3
1.4 1.5 2.1 2.2 2.3 Title of Figure Sales Growth Achieved Strategic
FrameworkIndustrial Raw Material Index Export Market To Developed
Country From China Increased The Framework of Strategic HRD
Tuckmans Team Development Model Model For Group Development
Process Forming A Team
Page No. 09 12 13 14 16 23 24 25
[C] List of Annexures :Sr. 1 Annex. No. 1 Title of Annexure
Annexure 1 (Organization Chart) Page No. 29
Page 2
Answer to question no. 1
1.1
Introduction of organization:- Laxmi Oil Pumps & Systems Pvt
Ltd (henceforth referred as LOPSPL) is selected for the study which
is a medium scale industry located in private industrial estate,
having 15000 sq meter area within the Solapur city Municipal
corporation limit. Earlier this unite was know as Laxmi Engineering
works and was manufacturing centrifugal water pumps. In 2002 this
partnership company was converted to private limited company
(LOPSPL). LOPSPL is presently manufacturing Lubricating Oil Pumps
& assemblies required for Diesel engine and compressor for
circulating of lubricating oil. Since from the inception aggressive
marketing and fast product development of new models kept the
organization on increasing sales growth. Fig 1.1 gives the details
of sales growth achieved over last few years.
Page 3
Fig. 1.1 : Sales Growth Achieved
1.2
SWOT analysis for LOPSPL was done in last year and submitted for
the PMA (Business Strategy & Strategic Management) is given
below in the Table no 1.1
External Factor Evaluation Matrix for LOPSPLOpportunities Sr Key
Factors N o 1 Major customers are increasing their product range
& market penetration 2 European manufacturers are looking for
low cost manufacturing base Weigh t 0.06 0.08 Ratin g 3 4 Weighte d
score 0.18 0.32
Page 4
Abolition of Octroi tax will reduce the cost Manufacturer other
than automobile are looking for supplier for low volumes 5 New
international Air port at Solapur is announced by Govt 6 New
reforms were announced in labour laws, boost the contract workers 7
Increased budget allocation for infrastructure will boost the
construction machinery 8 Estimated power generation shortage leads
to increase demand of gen sets in local market 9 Reduction in
average tariff rate will reduce the import cost of raw material 10
Indian currency becoming strong against $ makes import viable for
machinery 11 low cost technology transfers are available Threats Sr
Key Factors N o 1 Withdrawal of stimulation package by Central
government 2 Abolition of octroi will take long time to actual
implementation 3 Difficulty in getting quality casting supplier for
low qty and desired price 4 Difficulty in getting quality gear
supplier for low qty and desired price 5 China has low cost
alternative for oil pumps 6 Increase in overall package of middle
managers due to IT sector 7 Overall global recession affected
Indian economy 8 Increased in minimum wages because of inflation 9
Power shortage will increase the cost op operation 10 Strong Indian
currency reduces the cash realization 11 High rate of octroi tax on
imported goods Total
3 4
0.02 0.04 0.02 0.02 0.06 0.06 0.02 0.02 0.08 Weigh t 0.02 0.04
0.1 0.08 0.06 0.04 0.04 0.06 0.04 0.02 0.02 1.00
2 1 1 1 4 2 2 2 4 Ratin g 2 1 4 4 2 3 4 2 2 1 2
0.04 0.04 0.02 0.02 0.24 0.12 0.04 0.04 0.32 Weighte d score
0.04 0.04 0.4 0.32 0.12 0.12 0.16 0.12 0.08 0.02 0.04 2.84
Internal Factor Evaluation Matrix for LOPSPL StrengthsPage 5
Sr N o
Key Factors
Weigh t
Ratin g
Weighte d score
Organisation has got vast experience in manufacturing 2
Expertise in quick product development Have "TOC" based strong
culture adaptable to 3 any change Skilled work force available at
reasonable good 4 price 5 Facilities are "Marin classification"
approved Modern management techniques (lean 6 manufacturing , Six
sigma etc) are well practiced Good vendor base is available to
support 7 subcontracting activity 8 Being OE supplier marketing
cost is less 9 Group company supports in case of emergencies 10
Established ERP supports strong MIS Weakness 1Sr N o Key
Factors
0.1 0.08 0.08 0.04 0.03 0.04 0.04 0.06 0.02 0.04Weigh t
4 4 4 3 3 4 3 4 3 3Ratin g
0.4 0.32 0.32 0.12 0.09 0.16 0.12 0.24 0.06 0.12Weighte d
score
Dose not have internal design department Facilities are suitable
for batch production & 2 have limited capability to cope mass
production 3 Old infrastructure gives bad first impression
Conservative management view of family owned 4 business 5 Internal
fund generation is limited 6 Material to sale ratio is increasing 7
Product realisation cycle is very high 8 Less inventory turns
increases inventory cost Old workers not having modern skills are
not 9 easily replaceable 10 Logistics is always problem due to low
batch qty.Total Table 1.1 : SWOT Analysis For LOPSPL
1
0.1 0.05 0.07 0.06 0.04 0.04 0.02 0.03 0.02 0.041.00
1 1 1 1 2 2 2 2 2 2
0.1 0.05 0.07 0.06 0.08 0.08 0.04 0.06 0.04 0.082.61
(Source : From PMA Business Strategy & Strategy
management)
1.3
Understanding of Strategic frame work:- Strategic planning plays
an important role in the modern management of organization. In
order to cope up with internal and external forces influencing the
business, needs to be addressed thoroughly. According to Pawan
Budhwar and Samuel Aryee [1], A classical strategic management
process consists of a series of steps, starting from
establishing
Page 6
a mission statement and key objectives for the organization;
analyzing the external environment (to identify possible
opportunities and threats); conducting an internal organizational
analysis (to examine its strengths and weaknesses and the nature of
current management systems, competencies and capabilities); setting
specific goals; examining possible strategic choices / alternatives
to achieve organizational objectives and goals; adoption /
implementation of chosen choices; and regular evaluation of all the
above. The first five steps consist of strategic planning and last
two steps address implementation of strategic implementation
process. It is always stated that organizations human resource
development activities should be in line with the strategy of the
organization. While defining the strategic human resource
development (SHRM) Wright and McMahan [2] argue, We define
strategic human resource management as the pattern of planned human
resource deployments and activities intended to enable an
organization to achieve its goals. Hence the linkage between the
organizational goal and the activity in HRM has to be established
through strategic HRM. While emphasizing this importance, Devanna,
M.A., Fombrun, C. & Tichy, N., [3] states that, Organizations
are increasingly looking at human resources as a unique asset that
can provide sustained competitive advantage. The changes in the
business environment with increasing globalization, changing
demographics of the workforce, increased focus on profitability
through growth, technological changes, intellectual capital and the
never-ending changes that organizations are undergoing have led to
increased importance of managing human resources The external
forces like technology, economic & market forces are causing
organizations to make the changes in their strategy as well as
human resources management. Paul R Sparrow and Andrew M Pettigrew
[4] had given frame work for establishing this relation ship and
given in the fig 1.2
Page 7
Fig 1.2 : Strategic FrameworkSource : Adopted from Strategic
Human Resource Management in the UK computer supplier industry
(Sparrow & Pettigrew, 1998)
1.4
Business Pressures:- External business pressures influencing the
present and future business of LOPSPL are listed in the first
column of Table 1.2. Since last ten years increasing trend of raw
material prices is playing the biggest role. Cast iron casting and
steels are the major contributors.
Page 8
Table 1.2 : Frame work for linking of Business Pressure to HRM
factors through Strategic Response
Fig 1.3 shows the increase in the raw material price index. This
increase is not fully compensated by the customer and ultimately
putting pressure on the bottom line with increase in the material
to sale ratio. R/M INDEX
Fig 1.3 : Industrial Raw Material Index Reserve Bank Of India,
which is government, regulated bank increased interest rate 11
times in last one-year period in order to control the inflation.
This has put the cap on new capital investments. Every large engine
manufacturer had put the plant in China in order to exploit its low
cost base. Local sourcing of all the parts and assemblies is
lucrative alternative for engine manufacturer. Export market to
developed country from China had increased significantly. Fig 1.4
shows the trend.
Page 9
Source : China National Bureau of Statistics. Note : Labour
Productivity=GDP/No. of employees.
Source : UN Comtrade; The Beijing Axis Analysis
Fig 1.4 Export Market To Developed Country From China
Increased
Due to global recession the export from the India has reduced.
Table 1.3 shows the reduction in the export from India in the year
2008-09 and 2009-10. [5](Source from Export statistics EEPC
www.eepc.org/export -data/ ) LOPSPL has also badly hit by this.
Total per annum export was 40% of total sale in the year 2007-08
which has significantly reduced to 18% in the year 2009-10. Value
In CRORE Rupees SL. GROUP-WISE EXPORT A CAPITAL GOODS B CONSUMER
DURABLES C NON-FERROUS METALS & PRODUCTS THEREOF D PRIMARY IRON
& STEEL & ITEMS THEREOF TOTAL 2008-09 2009-10 Growth %
83362.88 76113.46 -8.70 28912.99 26619.70 15936.75 16330.94
60797.94 40871.80 189010.56 159935.91 -7.93 2.47 -32.77 -15.38
Table 1.3 : Export of Engineering Goods & Services During
2008-09 To 2009-10Source : From Export Statistics EEPC
www.eepc.org/export-data/
Earlier LOPSPLs scope was limited only to develop and supply of
Lube oil pumps, but the customer focus has changed. In order to
comply with increased pollution norms engine manufactures are
compelled to change the design of the engine. Instead of giving the
drawings and specification for the pump development, now customer
is expecting the complete solution for lubrication circuit. In such
a situation it is become mandatory for LOPSPL to build the internal
capacity for design and
Page 10
development of the pump as per required specifications of the
customer. Engine manufacturer will plan to meet Pollution norms in
phased manner it affected with shortening the life cycle of the
engine and subsequently pump required for it. LOPSPL has biggest
location disadvantage. Being located in the municipal limit it
attract local tax (named Octroi) which is 3.2 % for the parts
purchased from Indian market and almost 10% on Imported goods.
Labor rates are higher by 20% than the wages in the other area of
the states. Due to poor infrastructure and under developed city,
attracting and retaining the talent is the biggest challenge.
required for operating of CNC machines.1.5
As
organization is pretty old some of senior workmen dose not have
the modern skill like
Strategic response: - According to Peter Drucker [6], strategy
can also be described as a sum of three components. First, there
are assumptions about the environment of the organization: society
and its structure, the market, the customer, and technology.
Second, there are assumptions about the specific mission -expressed
as a far-reaching vision or more exact objectives - of the
organization. And third, there are assumptions about the internal
resourcestangible and intangible-of the organization. Seen this
way, strategy is about making the internal resources meet the
external environment so that the future goals can be achieved. In
order to cope up the internal and external business pressures
LOPSPL needs to redefine the strategy with covering these points.
Mainly it require to form strategic sourcing team to locate and
develop alternate sources for low cost material. The focus area
should be in plant efficiency increase and west reduction program.
Presently domestic market share is only 12%, which can be further
explored for increased business. To support the changing market
needs, establishing design house and strengthening the development
department would be added advantage. Though the relocation of the
plant is not so easy but the cost benefit due to reduction in tax
and reduced labor rates will definitely compensate the cost
incurred for relocation. Particularly for SME sector, sourcing and
retention is big problem, strategy to improve the brand image will
help to attract new talent and upgrading the existing one.
1.5.0
HRM Factors:While linking the strategy with HRM, Mikko Luoma [7]
states that, one can identify the need-driven, the
opportunity-driven, and the capability-driven approaches.
Page 11
Likewise, one can see the framework consisting of elements
internal to the organization, elements external to the
organization, and a process that binds the two parts together. The
need-driven approach is particularly connected to the developmental
needs that are internal to the organization, the opportunitydriven
approach originates from the opportunities external to the
organization, and the capability-driven approach plays itself out
starting from strategy that emphasizes capabilities, progressing
through the organizational setting that is created or modified to
go together with the capabilities, and ending in the actions of
HRD. Further he suggests the framework to link the strategy to HRM
factors shown in Fig 1.5.
Fig. 1.5 : The Framework of Strategic HRDSource : Mikko Luoma,
Investigating the link between strategy and HRD, University of
Vaasa, Vasa, Finland
1.5.1 Restructuring of organization:- Development department
considering the initial volumes while product is in development
stage does currently sourcing and then product is handed over to
routine purchase department. Organization restructure for the
purchase department with separating the routine activity than the
initial sourcing will help the team to concentrate on to achieve
the targeted saving with taking the quantity discount, considering
the full production volume.
Page 12
Also in the marketing department thrust has to be given for
development of customer for indigenous market rather than export
market. Considering this point the restructuring of marketing
department should be done. For developing the indigenous market,
zone wise responsibility to be fixed for individual. 1.5.2 Organize
training and development:- Apart from strategic sourcing to be cost
competitive internal efficiency also needs to be increased. Company
wide initiatives for six sigma and lean manufacturing will help to
reduce the wastages and also to optimize the process
characteristics. Rigorous training for all department heads as a
core team and for implementers on supervisor level needs to chock
out with the help of external consultant. 1.5.3 Formulate HR
policies for R & D: - Considering the customer need for
complete design solution, LOPSPL needs to put up separate Design
department. But attracting and retaining talent required for this
department at remote location like Solapur would not be feasible.
Hence putting up development centre at Pune and giving support to
manufacturing unite would be more practical solution. Relocation of
manufacturing plant to nearest industrial area but out side the
Octroi limit will save on the tax front and labor cost but logistic
cost will increase, hence cost benefit analysis needs to worked out
on which decision would be made. But it is big task and project
from the HR angle and more detailing is required. 1.5.4 Improve
Employee brand image: - Working in LOPSPL or that matter in any
engineering manufacturing organization is not white-collar job.
Also the lucrative work environment in IT industry influencing the
new generation engineers to give the preference to
non-manufacturing jobs. Campus selection at higher secondary school
level and fostering them for higher education would help to get the
good people. Industry institute interaction, which LOPSPL had
already started, needs to further explored for this purpose. With
the help of technology allowing senior team to work from virtual
office also a good alternative. Flexible shift timing, five days a
week would help employee to keep better work life balance.
1.6 Conclusion: - While advocating the importance of linking the
HR factors with strategy, Ed van Sluijs & Frits Kluytmans [8]
state that, Increased integration between human resource management
and business strategy is one of the most important demands that are
placed upon modern strategic human resource management. In both the
management and the academic literature, it is generally
acknowledged that the strategic deployment and management of
personnel can contribute to the success
Page 13
and continuity of the firm. Some go even further by stating that
a firms human resources form the basis of the firms competitive
advantage. In this view, the human resources are the most important
assets of an organization. At the same time, in addition to the
importance of the human resources as such, it is believed to be
important that the management of the human resources should be in
perfect fit with the management of the organization as a whole and
its strategic plans. Model suggested by Paul R. Sparrow and Andrew
M. Pettigrew, for integrating the business pressures to HRM factors
through business strategy is vital important in order to get the
competitive advantage. Purchase engineer Tech Assistant Engineer
(RQA) Sr. Engine er (QA) In-charge Calibratio In-charge n
(Inprocess QA) Job Inspectors Calibration Assistant Purchas e Asst.
Ass t.
Manager (Purchase)
Job Inspectors SQI engineer (01)
Marketing Consultant
Manager (process Development) Administrativ e Officer
CEO (Chief Executive Officer) (Marketing & HRD)
Technical Assistant Store Supervisor Accountant Store Asst Store
Asst. Direct Workmen Indirect Workmen Trainees
Senior Manager
M. R & Training
Assistant (Productio n Planning)
Production Engineer
Shift Supervisor Direct Workmen Indirect Workmen Trainees
EDP(System Co-ordinator)
Annexure - 1 Maintenance Supervisor
Page 14
Organisation Chart
References
Page 15
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