Organization Structure Of Kohinoor Textile Mills Limited example essay topic

The study is focused on the analysis of the work behavior of Kohinoor Textile Mills (KTML), Rawalpindi. The study also encompasses major forces of external environment that significantly influence the products of Kohinoor. The report will address various factors of task environment like customers, competitors, suppliers, labor supply and the role of Government Agencies. The Technological Element, Economic Factor, Legal-political Element, Sociocultural and International Element will also be taken into account. The focus of the study is to access the environmental dynamism and complexity. INTRODUCTION Kohinoor Textile Mills Limited, a division of Kohinoor Maple Leaf Group (KMLG), was established in 1953, initially with 25,000 spindles and 600 looms with further expansion in 1955.

The company embarked upon a program of modernization and in the last decade, replacement and refurbishment has seen the installation of high technology processing, printing and finishing facilities. The company deals with three major processes of textile i.e. spinning, processing and stitching. Commercial processing for customers, which was not originally envisioned, has also begun at KTML. Presently, the unit comprises 73,000 spindle, 672 rotors along-with complete processing capabilities for scouring and bleaching, mercerizing, dyeing, printing and stitching. Weaving no longer exists at the plant which has since been relocated to two sister companies, Kohinoor Weaving Mills Limited and Kohinoor Rai wind Mills Limited. The company plant has been equipped from Cros rol U.K. and Toyoda, Japan and is located at Peshawar road Rawalpindi.

The company's products are sold in both local and foreign markets. More than 80% of products are targeting the major markets in United States, United Kingdom / Europe, South Africa, South East Asia, Hong Kong, Australia and Japan. A regular export to these countries is a testimony to an ever-growing list of satisfied customers, who perceive KTML as a manufacturer of quality textiles. Kohinoor Textile Mills Limited was certified to ISO 9001 by Lloyds Register Quality Assurance, UK on December 16, 1998. OBJECTIVES The main objectives of the study are listed as under: . To study the work behavior at Kohinoor Textile Mills.

To analyze the internal and external environment and its impact upon export... To evaluate the environmental uncertainty in the light of SWOT Analysis. LITERATURE REVIEW The study is focused to access the work behavior, internal and external environment and environmental uncertainty. The external environment comprises of Task and Mega environments. The customers, competitors, suppliers, labor supply and government agencies are parts of Task environment whereas the Mega environment comprises of technological, economic, legal-political, sociocultural and international elements. TASK ENVIRONMENT The specific outside elements with which an organization interfaces in the course of conducting its business.

The major elements of task environment are as under: Customers and Clients Those individuals and organizations that purchase an organization's products and / or services are called customers. The firms are making efforts to meet the customer demands. Competitors Other organizations that either offer or have a high potential of offering rival products or services. Organizations need to be concerned about their known as well as potential competitors. Suppliers Those organizations and individuals that supply the recourses an organization needs to conduct its operations. The organizations may have a single supplier or multiple suppliers.

Labor Supply Those individuals who are potentially employed by an organization. The ability to attract, motivate and retain the human resources is necessary for organizations to provide competitive products and services. Government Agencies These are various agencies that provide services and monitor compliance with laws and regulations at local, state or regional, and national levels. MEGA ENVIRONMENT The broad conditions and trends in the societies in which an organization operates is called mega environment. The elements of mega environment are described as under: Technological Element The current state of knowledge regarding the production of products and services.

In order to remain competitive, organizations must stay abreast of current technological developments. Economic Element The system of producing, distributing and consuming wealth. The organizations are influenced by a variety of economic factor over which they have little independent control such as interest rates and recessions. Legal-political Element The legal and governmental systems within which an organization must function.

Trends in politics and government regulations influence the operations of the company. Sociocultural Element The attitudes, values, norms, beliefs, behaviors and associated demographic trends those are characteristic of a given geographic area. The company faces the challenge of understanding various sociocultural differences among countries that may influence the competitive success. International Element The developments in countries outside an organization's home country that have the potential to influence the organization. International development can affect the ability of an organization to conduct business abroad. ENVIRONMENTAL UNCERTAINTY It is a condition in which the future environmental circumstances affecting an organization cannot be accurately accessed and predicted.

The environmental uncertainty is a function of complexity and dynamism. Environmental Complexity The number of elements in an organization's environment and their degree of similarity is called Environmental Complexity. Environments having small number of similar external elements are homogenous and environments having large number of dissimilar items are heterogeneous. Environmental Dynamism It is the rate and predictability of change in the elements of an organization's environment.

Environments having predictable and low rate of change are considered to be stable whereas the environments in which rate of change is slow and relatively unpredictable are said to be unstable. LOW UNCERTAINTY 1. Small number of similar external elements. 2. Elements stay the same or change slowly. 3.

Example: Funeral Homes MODERATELY LOW UNCERTAINTY 1. Large number of dissimilar external elements. 2. Example: Insurance Companies MODERATELY HIGH UNCERTAINTY 1. Small number of similar external environmental elements. 2.

Elements change rapidly and unpredictably. 3. Example: Women's Apparel HIGH UNCERTAINTY 1. Example: Software Companies MISSION The mission of KTML is, "To dynamically participate in nation's economic well-being through providing high standard yarn, fabulous prints and made ups by maintaining high quality standards, utmost customer satisfaction and perfect working conditions for employees". VISION 2000 In the line with the corporate mission, KMLG launched its vision 2000 program in January 1997 to equip its companies with requisite strength to compete effectively well into the next millennium. The primary focus being human resource development, information technology, superior quality and enhanced productivity; enabling the group to better serve the needs of its stake holders.

CERTIFICATION OF ISO 9001-2000 One of the KMLG's achievements has been the certification of all group companies to ISO 9001-2000 "Quality Management Systems' by Lloyd's Register Quality Assurance, UK. WORK BEHAVIOUR The company has a Managing Director and three General Managers for Marketing, Processing and Spinning. The Organization Structure of Kohinoor Textile Mills Limited is attached as annex "B" Kohinoor Textile Mills Limited (KTML) runs 24 hours a day, 364 days a year. The exception of one day is that they observe holiday on Yum m-e-A shura (10th Muharram only) KTML has infallible inventory system; each item is identified and numbered. CUSTOMERS KTML have very few local customers, their international customers include Chain of stores, Marks & Spencer UK, Woolworths South Africa, Netherlands, Parsons Australia, Target Australia and Theist Point of UK and USA. KTML's main products are Yarn, Dyed, bleached and printed fabrics and home furnishing (made ups like bed sheets, curtains, pillows and quilt covers etc).

COMPETITORS KTML is among the pioneers in textile industry. They have total export oriented production. Their local competitors who are competing with them abroad also are Al-abid Silk Mills, Muhammad Farooq Textile Mills, Chana b Textiles, Nish at Textiles, Al-Karam Textiles etc. Some prominent international competitors are China and India. SUPPLIERS Mostly the raw material used in production is imported. KTML gets its raw material from China, Europe and America.

They are quality conscious so they do not restrict themselves to any single supplier. They purchase from where they get best quality on cheaper rate. LABOR KTML have skilled as well as unskilled manpower. The labour class consists of all the locals form the country.

The ratio between white collar and blue collar is 1 & 9. They have around 10% white-collar employees and 90% work force. Workers have two unions in this organization. The relations between the union and the management are very cordial. The total amount paid to the employees of KTML per month in terms of salaries and wages are equal to approximately 10 millions rupees. The management seeks the opinions of the employees through a form, the copy is attached as annex "C" GOVERNMENT POLICIES KTML strictly adheres to the policies of Government of Pakistan regarding the exports.

In the federal budget for the year 2002-2003, though the import duty on the raw materials used by textile industry has been slashed by 5 percent, the import duty on the product manufactured by the industry has also been reduced by 10 percent. This has created a fiscal anomaly. In addition, the import duty on textile machinery has been enhanced. This factor has adversely affected the expansion, growth and on-going measures of Balancing, Modernization and Replacement (BMR) in the industry. TECHNOLOGICAL ELEMENT KTML was established in 1953 and its major machinery was installed. At present its 80% machinery is BMR (Balancing, Modernizing and Rehabilitation).

The list of machinery is attached as Annex "D" ECONOMIC ELEMENT KTML is listed on all the Stock Exchanges of Pakistan. The fluctuations in the currency and interest rates greatly affect the exports. LEGAL POLITICAL ELEMENT Political stability definitely has influence on the business. In case of political instability in the country, they get less export orders. The political instability causes discontinuation in the policies, hence the customer feels insecure while placing orders. INTERNATIONAL ELEMENT International peace and harmony is also very much related to export orders.

For example due to the prevailing situation of Iraq, their 40% orders have been delayed. The fluctuation of currency also affects the exports. In totality, Kohinoor Textile Mills Limited has about 256 standard operating procedures SOPs. The organization's Production Management Committee meets weekly, Production Planning and Control Meeting is held weekly, internal audit Committee meeting is held quarterly and annual Management Conference is organized annually. CHAPTER- 4 ANALYSIS Kohinoor Textile Mills Limited is keen to participate in the economic stability of the country through its share in Pakistani Exports throughout the world. The company aims at the customer satisfaction and to provide excellent working conditions to the workers.

KMLG launched its vision 2000 program in January 1997 to equip its companies with requisite strength to compete effectively well in the 21st century. Textile is the core of KMLG. With fifty years of manufacturing experience, KTML has developed technical and marketing expertise to cater to the ever-changing needs of the customers. Adapting the vision of the parent group, KTML focuses on human resource development, information technology, superior quality and enhanced productivity; enabling the group to better serve the needs of its stake holders as well as the economic stability of the nation. Being the vertically integrated textile manufacturer, the combined synergy of the companies permits a far greater control over quality and consistency as compared to competition.

Having all three units of spinning, processing and stitching at one premise gives an advantage to KTML to have one administrative management for all the three units thereby saving on the expenditure, time and having uniform and better administrative arrangement for all the units. In order to meet the demand and the shipment schedule, the company runs round the clock and there are four shifts, out of which three shifts are production shifts. Each of these shifts works on eight hourly basis. The fourth one is a general shift, which is relating to maintenance. The maintenance shift is operated to address the unforeseen as a contingency plan and it overlaps with the production shifts. This system of shifts enables maximum capacity utilization.

Some of the skilled workers are on duty during all the production shifts. They are there to fix up any problem arising during the production timings. Moreover, the senior staff of maintenance shifts lives in the colony provided by the management on the mills premises. In case of a problem which needs immediate attention of the senior staff of the maintenance shift, they are called to solve the problem. KTML exports its products (usually made ups) to countries like United Kingdom (UK), Australia, Germany, South Africa, Dubai, Italy and USA.

Mostly the customers are the same but variation is also there. Some of the customers are with the organization for the past many years. This speaks of their satisfaction with the standards the company meets. In addition, some of the customers return to KTML after using the services of other companies for a certain period of time. The company faces moderately high uncertainty as it encounters unstable environmental dynamism and homogenous market segments. In the field of production, the competitors like India and China are more comfortable in the terms of cheap labor; cheap power (electricity) and they are less influenced by the financial changes.

In Pakistan, the labor is not as cheap as it is in those countries. Our rates of per unit consumption of power are the highest among these competitors. The company has to reduce its profit margins in order to compete in the international market with its competitors. KTML gets its raw material in the form of cotton, dyes, pigments and chemicals both imported and from within the country but the company is mainly dependent on the imports. The raw material is mainly imported from China, Europe and America. KTML imports PEMA cotton from USA, which is termed as the finest cotton in the world.

KTML imports the material on the basis of high quality and reasonable price from various suppliers. This aspect puts the company into moderately high uncertainty block. For the reason, that for its imports, the company faces uncertainty of currency fluctuation, inflation and policies of the country from where the raw material is to be imported. In KTML there are two labour unions. All the rights of the labourers are well guarded under social security acts and company is satisfied with the performance of the associations. KTML comply with all applicable labour laws such as: Factories Act-1934, Law relating to industrial and commercial employment, Law relating to the formation of Trade Unions; regulating of relations between employers and workmen and avoidance and settlement of any differences or disputes arising between them and the scheme for providing benefits to employees or their dependent under Provincial Employees Social Security Ordinance 1965.

KTML have skilled as well as unskilled manpower. The labor class comprises of the locals form the country. 90% employees work on machines, hence training and development of employees is a core value at KTML Management supports training and development programs to ensure motivated and professionally competent people available within the organization. A corporate training department also provides extensive in-house training and consultancy for the development of employees.

The organization has a comprehensive Training and Development Policy, which focuses on the following training aspects: "u Induction training "u Internal Training courses "u External training "u Apprenticeship training Social responsibility is one of the central values of Kohinoor Textile Mills Limited. It is the first textile industry of Pakistan, which is SA-8000 certified. The workers also have 5% participation in the net profit of the organization, which is contributed towards their fund. The organization follows and meets all the social requirements of SA-8000 standards and believes in social responsibility trading like: "u Child Labour "u Forced labour "u Health and safety "u Discrimination "u Working Hours "u Compensation "u Management system The company continuously remains in contact with its labor force through the unions i.e. representatives of the workers which enable it to solve their problems and to execute its own policies smoothly. The company invests in the training of its labor to win their loyalties besides imparting the skills to the labor.

Company involves the workers in decision making through seeking their suggestions in various matters. The suggestion form for the workers is attached as Annex C. Fulfilling its social responsibilities towards the workers like educating their children and provision of health care etc enables the company to win the hearts of the labor force and keep them morally obliged. KTML's major machinery was installed when it was established in 1953. At present its 80% machinery has undergone BMR. Moreover, the organization is also expanding its stitching and printing units.

With this expansion its production capacity would be almost the double. Recently, a 16-screen rotary has been installed which is the most modern machinery available for printing the fabrics in the world. This machine can handle up to 16 colors at a time and its output is approximately 1,600,000-meters / month. This is a clear reflection of the company's over expanding business and the confidence of its customers on the quality of its products BMR (Balancing, Modernization and Rehabilitation) is done to make the plant more balance and modernized. Because of BMR one gets the best possible efficiency from the machinery with less input cost.

BMR also helps in getting the best latest quality goods from the machines. BMR increases the life of the machines, makes the machinery more economical. Because of the BMR one can compete with international competitors who have the latest machinery installed on their projects. The most advanced machinery is one of the major strengths of KTML. The details of machinery are attached as annex D. Government of Pakistan is trying to bring the interest rates to single digit. This will result in 80 - 90 percent reduction in the payable interest rates and the profitability of Kohinoor Textile Mills will increase after negotiating with the banks.

Political stability plays a definite role on business. Under the politically stable conditions the policies of a country do not change rapidly. All the stake holders benefit from the politically stable conditions. In political stability, businesses flourish and when there is instability, there is a downturn or recession. In case of political stability, the confidence of importers increases and they place more and more orders. In our country political conditions do not remain stable and therefore all kinds of businesses are confronted with greater uncertainties.

This also has an effect on the export performance of KTML. Buyers are encouraged to visit KTML for the negotiations and placing orders. Because of these frequent visits KTML have a definite edge as the confidence of buyers is increased as they witness the working environment and manufacturing facilities. Due to the prevailing situation after 11th September incident and the possible attack on Iraq, 40% export orders of KTML have been delayed. On the contrary, in the case of stability, the input cost does not escalate all of a sudden and the export orders remain stable. The constant input cost helps in timely delivery of export orders.

The company is keeping pace with changing trends in fashion to be competitive in the market. Though changes in fashion do not affect KTML's sales directly as their sales are based on advance orders. The major success of Kohinoor is retention of customers through quality goods and services according to the latest trends. KTML has a continuous focus on cost cutting because to stay in business and compete with the competitors the company has cut down the overheads. For the cost cutting KTML is giving additional responsibilities to its employees as well as applying the technique of job enrichment as far as their management is concerned. One of the strengths of KTML is that it has its own power generation unit.

Hence its production is not directly affected with the load shedding in the country and it can fulfill all its orders on time. Though the fluctuating fuel prices do affect to some extent. In totality, KTML have about 256 Standard Operating Procedures (SOPs). KTML follows a set program of meetings. Some of the scheduled meetings held at KTML are: "u Daily meeting at each department level "u Daily generation of data and reports "u Weekly Production Management Committee meeting. "u Weekly Project Management Committee Meeting. "u Six monthly Management Review Meeting "u Annual Financial & Management Conference In these meetings various goals are established at each level and the performance of various departments is reviewed. KTML is a very active member of All Pakistan Textile Mills Association (APTMA).

APTMA plays a major role in solving problems of textile industry. APTMA solves day-to-day problems of its members. It is also actively involved in the policy formulation and policy changes of the Government of Pakistan regarding the textile industry. Mr Tariq Saeed Saigon, the Chairman of the KTML group is one of the most important leaders of APTMA. He has remained President of APTMA a number of times.

He is a very important member of the top policy making bodies of the government of Pakistan on Textile Industry. He has also prepared a report for the government of Pakistan for the improvement of the textile after 2005. This report is known as "Vision 2005". By the analysis of external environment, it is evident that KTML is operating in moderately high uncertainty. KTML is coping with the situation of rising taxes, changes in fashion, increased prices of raw material etc with its strengths like latest machinery, famous brand name and loyal workforce.