THE GENERAL TYRE AND RUBBER COMPANY OF PAKISTAN.

Principles Of Management Report

Presented To:Fauzia Kanwar Section:E Made By:Khushnam Jamshed Karanjia (12076) M. Ali Polani (11390) Syeda Madiha Ali (11659) Kamran Qureshi (11631) Mashkoor Husain Zaidi

Introduction:
General Tire is part of Continental Tire North America, Inc. CTNA, based in Fort Mill, South Carolina, is a company of Germany-based Continental AG the Corporation is one of the top automotive suppliers worldwide today, the corporation employs approximately 150000 people at nearly 200 locations in 36. The General Tyre and Rubber Company of Pakistan Limited was established in 1963 by general tyre USA.

The General Tyre and Rubber Company of Pakistan Limited:

(Gentipak) is Pakistans premier industry. The awareness of the GENERAL brand name is very high. It has been constantly upgraded and boasts the latest equipment in tyre manufacturing Gentipak has also launched a new line of passenger car tyres of latest European designs under the brand name EURO. All t he radial tyres are tubeless and steel belted and have a full cap ply for safety and durability. Gentipak produces radial tyres for passenger cars and light trucks in rim sizes ranging from 12 to 16. It also produces bias (cross ply) tyres for light trucks, trucks/buses and farm (agricultural) tractors. Gentipak is the major supplier of tyres to the local automotive and tractor assembly plants. It is currently exploring other markets as well for export. Gentipak employs directly and indirectly approx. 1800 persons all over the country. It has offices in three other cities of Pakistan besides having its Head Offices in Karachi. It is selling its products in the replacement (after) market through a network of more than 100 dealers and has a backup in the shape of sales and technical force covering the entire territory. Gentipak is a public limited listed company with majority shares held by the following companies; Bibojee Services Ltd.,Pak Kuwait Investment Company (Pvt) Ltd. National Investment Trust. CONTINENTAL AG (Germanys # 1 tyre manufacturer).

Organization Life Cycle:

Established in 1963 by an American company GENERAL TIRE INTERNATIONAL COMPANY.(GTIC) Production commenced in 1964. Capacity was 120,000 tyres per annum later on raised to 240,000 per annum. GTIC sold all their shares in 1977 to Bibojee Services Ltd but, retained 10%. Technical assistance agreement was signed as well as permission was given to continue with the Company name and use the brand name General. An amount of royalty had to be paid annually. Project was undertaken in 1983 to increase capacity to 600,000 tyres. New capacity was unveiled in 1985 by the then President of Pakistan.

 1987 GTIC was purchased by Continental AG of Germany. Conti became 10% owners of GTR. During the period up to 2001 the capacity was increased to 800,000 tyres p.a. More equipment was added to produce radial passenger car tyres as well as rear tyres for tractors. New equipment for quality control was also added. Equipment for producing steel belted tyres was also added. Plant is continuously upgraded to maintain high quality and high output. During the last three years more equipment has been added to enhance capacity to produce new sizes and increase production and improve quality. The annual production capacity is now 2 million tyres. Equipment like new F270 mixer, second steel belt line, triplex extruder and presses. A second tyre uniformity optimizer will soon be made available. Talks are going on to add another F270 mixer as well as more presses. GTR has been giving them for 2008 models.

Collaboration with Continental AG:

Continental AG is also providing Gentipak all the technology needed for production under a long term Technical Service Agreement (TSA) as well. Continental AG collaborates in following ways; Product development Process improvement Bench marking with other affiliates products Testing new products at Conti drome in hanover Selection of new designs Visit of continental experts to train and educate our employees Help with oe development process Training of employees in continental plants Assist in procurement of raw materials and equipment Assigned a full time senior executive for our production and projects.

Relations With Main Oems:

GTR is meeting 95% of the OE demand for passenger car radials, light truck, truck/bus and farm bias tyres. GTR has a reduced share in the replacement market as the priority is OE at the moment Gentipak is the major supplier of tyres to the local automotive and tractor assembly plants. It has contracts to supply car tyres to the following companies;

Honda Atlas Cars (Pvt )Ltd Lahore:

GTR has been meeting 100% of their demand GTR has been their major supplier since 1994 when they commenced operations. Only local manufacturer that has developed tyres for Honda as per their international specifications and standards This tyre was checked against the tyre of a leading international brand that they used previously and this tyre turned out to be better than that.

Indus Motor Co. Ltd Karachi:

GTR established relationship with them since 1993 when GTR gave the first radial tyre for their very first production car. GTR are meeting 100% of their demand and have developed new sizes in the past.

Pak Suzuki Motor Co. Ltd Karachi:

GTR has been giving them tyres since 1987. GTR supplies them 100% of their demand. GTR has developed a new LT radial for them for 2008 models

Millat Tractors Ltd Lahore:

GTR is meeting about 100% of their requirements of front tyres and 100% of the rear tyres. GTRs association dates back two decades.

Al-Ghazi Tractor Limited:

GTR established relationship in mid-80s and supply 80% of their requirements of front and rear tractor tyres.

(2012-2013) OEM Share:

Distinguish Features:
Technological affiliation with No.1 European tyre manufacturer Only local company with a full range of tyres for all category of vehicles Comprehensive warranty policy Field force all over the country provides warranty claim Dealer network spreads all across the country Tyres developed as per local road conditions First tyre manufacturing plan First and only to produce FORMULA III racing car tyres First and only one to produce a million tyres annually. First and only one to have sophisticated equipment First to export automotive tyres.

Vision:
To be the leader in tyre technology by building the Companys image through quality improvement, competitive prices, customers satisfaction and meeting social obligations

Mission:
To offer quality products at competitive prices to our customers. To endeavor to be the market leader by enhancing market share, consistently improving efficiency and the quality of our products. To improve performance in all operating areas, so that profitability increases thereby ensuring growth for the company and increasing return to the stakeholders. To create a conducive working environment leading to enhanced productivity, job satisfaction and personal development of our employees. To discharge its obligation to society and environment by contributing to social welfare and adopting environmental friendly practices and processes.

Lt. Gen (Retd) Ali Kuli Khan Khattak CHAIRMAN

Mohammad Shahid Hussain Chief Executive Officer Husain Khan Kuli

Nasser Kamal

Asif Jameel

Ashraf Teli

Executive Director Marketing Sales

Chief Executive Director Corporate Financial & Affairs / HR Officer

Chief Operating Officer (Plant & Projects)

Sarfraz A. Zahid

Muhammad Amin Khan

Jeelani Baig

Brig (Retd) Najam uz Zafar

Group Resident General General Manager - O.E & General Manager Manager Government Sales / CS Islamabad Works

General Manager Corporate Services

Rashid I. Malik

Zubair Mussarat Ahmed A. Mufti General Manager Finance

Muhammad Ansari

Arshad

General Sales

Manager

Head Internal Audit

Div. Manager Industrial Engineering

Objectives At GT:To be the leader in making tyres by through high quality tyres,satisfactory prices within social restrictions. Long-term Objectives : To maintain more than 95% of Original Equipment manufacturer i.e. Toyota,Honda,Suzuki sales share in market. To capture almost 40% share of replacement market (currently 25%) To be a Global Player. Intermediate term Objectives: To double the export with in 2 years. Short-term Objectives: To increase share by 5% annually in replacement market.

Hierarchy of objectives at GT:Areas to Focus on: Profitability: To increase the profit of overall Organization. Market Standing: To maintain a good rank in the Market. Productivity: To raise the productivity without sacrificing On quality standards. Endorsing New Ideas: To appreciate new innovatives to boost the moral of the subordinates. Employee Performance: To receive a good performance from employees to increase overall probability of goal attainment. Planning as an important Part in reaching Objectives:GT believes planning as an important part in overall management process by getting the most experienced employees to plan to organize, influence and control well and so that to make both the long and short term objectives viable. The Overall planning Process at GT:-

The manager delegates responsibility among his subordinate staff and defines standards and what is expected of the staff and then analyzes performance as per these standards if the performance up to the mark the employees are rewarded and these rewards in turn work as incentives for the employees to work better and have an increased morale. MBO;As an important part in planning process at GT:GT uses Management By Objectives (MBO) as an essential aspect regarding the planning process. How GT uses MBO? GT uses MBO by assigning different tasks to every single department and subordinates and evaluates the performance of each department and employee in a periodic way and offer incentives such as salary increment and other non-monetary incentives as a reward for the completion of the task given to them. Planning and CEO at GT:As all the planning process is done,the CEO,Mr Mohammad Shahid Hussain checks the every single aspect regarding the planning process and then it is further organized. Decision Making at GT:GT gives huge importance to decision makers and strongly believes in having Market oriented decision makers,so that they could raise their productivity and moreover their profit by taking corrective decisions. Group Decision Making at GT:GT often involves Group decision making in making decisions when the scope of the decision is quite broad. They uses Group decision making and only top managers are involved in making decisions so that they could create a high quality decision that could be advantageous for the organization in every aspect. Tools that lead to make good decisions at in Groups at GT:At times, GT uses Nominal group technique inorder to make decisions in groups. By doing this,they believe that every individual owns the decisions being made as everyone equally participates in making decision and so as to avoid the Groupthink. Organizing:-

The second function of the management is getting prepared, getting organized. Organizing is the managerial function of arranging people and resources to work toward a goal. Organizing plays a central role in the management process. Once plans are created the manager's task is to see that they are carried out. Given a clear mission, core values, objectives, and strategy, the role of organizing is to begin the process of implementation by clarifying jobs and working relationships. It identifies who is to do what, who is in charge of whom, and how different people and parts of the organization relate to and work with one another.

Importance of Organizing:-

It helps an individual develop a clear picture of the tasks he or she is expected to accomplish.

It supports planning and control activities by establishing accountability and an appropriate line of authority.

It creates channels of communication and thus supports decision-making and control.

It helps managers to focus task efforts such that they are logically and efficiently related to a common goal.

Organizing at General Tyres:As we discussed above, the importance of organizing function can not be ignored in any organization. In General Tyres, each of the management function has its own significance like in any good organization. To attain organizational objectives, plans are made, organized, influenced and controlled. In this organization as well, plans are implemented and organized through a proper channel. Theres a proper organizing process, by following which, the company organizes its routine as well as one shot tasks.

The Organizing Process at General Tyres:-

Reflect on companys plans and objectives

Tasks established by managers

Major tasks will be divided into subtasks.

Reviewing results of the implemented strategy

Directing subtasks to employees.

The above process is referred to as The Organizing Process. It is cycle with which General Tyres organizes its tasks and strategies among employees. On the completion of this cycle, the managers receive feedback from their employees on how well the tasks were organized and further any improvement is required.

The first step is to reflect on the companys plans and objectives. It explains the fact that the managers, before organizing tasks, consider the companys objectives and policies and then take the initiative.

The second and third steps of the process are the establishment of major tasks and the division of major tasks into subtasks. In this organization, the manager sets major tasks for different departments of the company and then the managers of respective departments divide those major tasks into subtasks in their departments.

The fourth step is to direct the subtasks to the employees. After managers of different departments have divided the tasks into subtasks, they allot each employee of their department with its share of work to be done.

The fifth and the final step of the organizing process of General Tyres is to review the results developed from the implemented strategy. The top level managers, examine the results of a specific major task and gather feedback from the employees in case of any enhancement required in the process.

Organization Chart of General Tyres:-

Departmentalization and Formal Structure in General Tyres:-

The above chart is the combined organization chart of the General Tyres. It explains the hierarchy of different departments in the General Tyres. From the Chairman to the Division Manager, different departmentalizations are found.

Functional Departmentalization:-

Chief Executive Officer

Executive Director Sales and Marketing

Executive Director Corporate Affairs/HR

Chief Operating Officer (Plant and Projects)

Below the Chief Executive Officer (CEO), we can observe different departmentalizations such as Functional Departmentalization among the CEO and Executive Director Sales and Marketing, Executive Director Corporate Affairs/HR and Chief Operating Officer (Plant and Projects).

Customer Departmentalization:-

Group Resident General Manager Islamabad General Manager Governmental Sales General Manager Corporate Services

General Manager Works

Furthermore, we can see Customer Departmentalization among Group Resident General Manager, General Manager O.E and Governmental Sales, General Manager Works and General Manager Corporate Services. All-in-All, this combined organized chart depicts different departmentalizations prevailing in General Tyres.

Scalar Relationships or Gangplank in General Tyres:-

In General Tyres, the chain of command or scalar relationships is not practiced. Instead, the organization uses gangplank or organizational bridges for collaboration. Likewise, if in this organization, General Manager Sales need information from General Manager Finance, he can directly approach him. He doesnt have to follow the chain of command.

Span of Management:-

General Tyres enjoys smaller Span of Management. Due to the tall organization chart, its span of management is relatively small than other organizations. Small spans of management are usually more successful that those having larger spans of management.

Authority and Responsibility:-

The above organizational chart depicts authority and responsibility in General Tyres. The Chairman holds most authority and responsibility in General Tyres whereas; the CEO and Executive Directors that are close to the chairman possess relatively less authority and responsibility. The lower the position of the personnel in the organization chart, the lower is the authority and responsibility of that designation in General Tyres.

Delegation in General Tyres:-

In General Tyres, the main authority of delegation holds with the CEO. The Chief Executive Officer (CEO) assigns duties to the Executive Directors and General Managers and provides them the authority to delegate those tasks to their subordinates and make provisions for carrying out those tasks successfully. After delegating tasks to their subordinates, the managers in General Tyres focus on the following points: The managers trust their employees and make sure they carry out their tasks in the best interest of the organization

They make sure that the employees personal interests do not overcome the organizations interests. They provide their subordinates with little authority so that they can feel confident and secure about their task accomplishment.

Centralization or Decentralization:-

According to our survey, there neither exists complete Centralization nor Decentralization in General Tyres. It has decentralization in certain departments and centralization on others depending upon the department.

VARIOUS DEGREES OF DELEGATION

Decentralized Organization.

Centralized Organization.

GENERAL TYRE and Rubber Company strives to deliver results, perform to the highest standards, develop people, provide quality customer service and actively pursue consistent improvements. A firm foundation based on performance enables them to deliver strong returns and value growth for their shareholders, greater and better choices for their customers and improvements and opportunities for their employees, their commitment to performance at every level continues to be both the challenge and aspiration.

COMPANY VALUES General Business Principles

1. Business Integrity. General Tyre insists on honesty, integrity and fairness in all aspects of its business and expects the same in its relationships with all those with whom it does business. The direct or indirect offer, payment, soliciting and acceptance of bribes in any form are unacceptable practices. Employees must avoid conflicts of interest between their private financial activities and their part in the conduct of company business. All business transactions on behalf of the company must be reflected accurately and fairly in the accounts of the company in accordance with established procedures and be subject to audit. 2. Health, Safety and the Environment Consistent with its commitment to contribute to sustainable development, General Tyre has a systematic approach to health, safety and environmental management in order to achieve continuous performance improvement. 3. Competition. General Tyre supports free enterprise. It seeks to compete fairly and ethically and within the framework of applicable competition laws; the company will not prevent others from competing freely with it.

4. Communication General Tyre has comprehensive corporate information programs and provides full relevant information about its activities to legitimately interested parties, subject to any overriding considerations of business confidentiality and cost.

FOCUSING ON SERVICE AND QUALITY General Tyre is committed to the delivery of top quality rubber and tyre , right quantity and superior service wherever it operates IMPROVING PEOPLE SKILLS

Evaluation of employees is performed through an evaluation record of all the employees and is maintained throughout the time they work for GT. Thus the company tends to have staff of a good standard. Structured Training Programs have been rolled out to improve the skill and knowledge level of employees so that they are able to work effectively in their assignments. These include personal development course so that employees can get the best out of their professional and personal lives. The company believes in stimulating innovation and change. General Tyre fosters innovation and masters the art of innovation. The company maintains flexibility, continually improves quality. This is the reason that the company has proved itself as successful.

WORKING ENVIRONMENT

Friendly atmosphere

It is believed that commercial success depends on the full commitment of employees. General Tyre is successful in maintaining a friendly and comfortable environment for its employees. For example there is no discrimination between top line managers and first line managers they call each other by their first names. Interaction on a personal level

General Tyre recognizes that open communication is essential. As in General Tyre the cafeterias are merged where interaction on a more personal level is easy. Employees get the chance to know each other better. Even with customers they have arranged two customer interaction days, which were recently organized to promote the development of a friendly relation between the company and its customers by mutual discussion of business issues.

Employees at GT also have the opportunity to have a senior leader as their Mentor. The mentor can be any one at a top level of the hierarchy and the employee has the right to choose their own mentor. A Mentor serves as an idealistic figure to the employee and informal relationship with the mentor is initiated. The job of the mentor is to help the employees with all their situations based on their experience and achievements.

Discipline

Discipline is same for all levels of management. They have fixed amount of leaves, employees attendance are recorded and maintained. Respect for top level management is there, middle managers for example dont leave before their top level. They have found success lies in pulling together teams of people with different perspectives and different ways of approaching problems, people who nevertheless

share a set of core values about how to deliver results today that will endure tomorrow.

Learning & Development

At General Tyre, they help their people realize their potential and fulfill their ambitions by helping them shape their own, individual career paths. From crossbusiness assignments to structured learning courses, they provide the tools needed for their people to develop world-class analytical, leadership, management and relationship-building skills Work-Life-Balance Because they believe that professional and personal success needn't be mutually exclusive, they provide programs that help their employees to strike a balance between the demands of work and life outside the office. They seek to build and maintain a culture of learning and innovations in which employees can fulfill their potential whilst meeting the most challenging targets - and have fun at the same time! It is a culture where they encourage their leaders to inspire others through personal example, and where the Company core values can prosper.

BASIC MOTIVATIONAL CONCEPTS

Leadership, Commitment, and Accountability for Change Business leaders, down to first line supervisors, demonstrate active leadership, Knowledge of business imperative, desired behaviors, is routinely involved in the creation of an environment that inherently promotes and encourages inclusion. Leaders are accountable for achievement of goals and results. Standard Development and Governance

The Group has a written Standard, which speaks to intent, business rationale, expected outcomes and behaviors. Their aim is to monitor, and ensure aggressive action towards achievement of stated goals and targets. Standard and process are widely understood by all employees. This also focuses on the development of the employees and aims at maintaining the quality of their employees for which various courses of actions are taken.

Supporting Systems and Resources General Tyre believes in providing support and adequate resources (time, people, and money) and systems in order to accelerate and support progress through individual, behavioral and systemic change. Linkage and sharing of resources across the business is encouraged for purposes of realizing greatest efficiency, value, and quality HR Systems Integration Key HR processes and plans incorporate principles and objectives, which encourage and support broader diversity and inclusion. Examples of process and plans include talent review, Performance Management and Ranking, employee benefits, data gathering and reporting, etc. Monitoring Performance, Communicating Results, and Continuous Learning Business and Group performance is monitored, measured and honestly communicated quarterly to all the employees.

INCENTIVES & REWARDS

Facilities to Employees The companies always tries to promote the talent and knowledge its employees pertain, the salary schedule is basically 90% fixed and has a 10% variable ratio as well. The hierarchical grade matters in determining the pay scale. At a certain higher level company maintained cars and medical facilities are also provided. Increased productivity Employees who feel respected, valued and connected develop stronger relationships and become more involved in their work. This in turn leads to enhanced teamwork,

increased innovation and productivity, lower staff turnover, lower absenteeism and reduced costs

The company has concentrated lot of efforts in quality improvement and customer service and has consistently strived to satisfy employees by providing them tremendous incentives and giving them enabling working environment

Controlling Controlling means managers develop standards, compare performance against them and ensure corrective actions are taken. The controlling function is the regulatory element, allowing managers to use various ways to monitor performance and take corrective actions. Steps in Control Process: Determine Areas Of Control: Managers must first determine which areas to control. As it is not possible to control every aspect of the organization and if the manager keeps a check on the employees all the time, this might de moralize and underestimate them, make them feel that their managers do not trust them. The General Tyre Companys main areas of control are the production line. They have various check points of quality at specific intervals along the entire production line.

Establish Standards: In Control process, standards are essential as they set out specific criteria for evaluating performance and employee behavior. In General Tyre Company, the General Manager of the Sales Department, has to maintain 95% of the OEM (Original Equipment Manufacturer) market so he assigns different percentage of sales figure to his subordinates and they have to reach the standard set by The General Manager in time.

Measuring Performance: Once the standards are set, the next step is measuring performance. The General Tyre Company, measures the performance of the employees with the help of Key Performance Indicators which are made for departments and for individuals separately.

Key Performance Indicators Include: Jobs/ objectives assigned to each employee or department. The time employee or department takes to complete the job/ task.

Time and motion studies take place- measurement of work done in relation to time taken to achieve a goal or complete a task. The time employee or department checked in to work (what time he comes, leaves, overtime etc.)

Compare Performance against Standards: After the performance is measured, they compare the performance against standards. In General Tyre Company, the comparison of performance against standard is done by a practice called wandering around, the manager walks around work areas, observing conditions and ranking the performance of the employees.

Recognize Positive Performance: In General Tyre, when the performance of an employee meets or exceeds standards, managers acknowledge the performance and incentives are given as rewards for performing well and reaching the set goals by the managers, which might be reaching particular sales figure or production department or reaching a particular production level.

Take Corrective Action as Needed: When standards are not met by the employees, managers asses the reason behind it and take corrective actions by checking the standards if they are in accordance to the conditions and measure performance to see if they are realistic. For example, if the standards are not met they might higher more skilled employees to meet the standards.

Q- Why Controlling is essential? Control can help managers avoid certain problems which might include;

Coping with Uncertainty: There might arise a time, when a company, has to face certain unpredictable situations and they might not go as planned. In General Tyre, if certain OEM (Honda, Suzuki etc.) suddenly stop or reduce their production for that unpredictable situation, they have an alternative market i.e replacement market/ after sales, they divert their production towards the after sales market by focusing on dealer network and coming out with various schemes.

Detecting Irregularities: Control helps delegating irregularities such as poor quality, staff turn over etc. In General Tyre Company, manager keeps quality check in production line at various intervals by enforcing strict quality standards and ensuring inspections.

Handling Complex Situations: Recently, people started preferring Chinese tyres as they cost less as compared to the original tyres. The General Tyre Company, to get back their customers and market control, started with a process called the positioning matrix i.e price on Y- axis and Quality on X-axis and the equilibrium of the two is the price they set. With various services they find out their position in the market as comparison to the competition to know where they stand on quality and customer perception and then set prices of product.

Excess of Demand: Another uncertainty that may arise is excess of demand. In the case that General Tyre does a proper forecasting which is carried out by the marketing department and sent to production department to avoid shortage and excess inventory.

Major Issues Faced By General Tyres Ltd.

Smuggling: Tyres from other countries are smuggled into Pakistan. The t axes arent paid on the smuggled tyres because they are brought into Pakistan illegally due to which these tyres are cheap as compared to General Tyres.

Under-Invoicing: The bills of the imported tyres are made at a lower rate so that the taxes are imposed or calculated at a lower price.

Chinese Tyres: These tyres are sold at a lower price as compared to General Tyres but they are not long lasting and of far lower quality as compared to General Tyres, but people buy Chinese tyres due to the low prices.

Recommendations: Company is in talks with Government to try and stop illegal smuggling of tyres. Under Invoicing:- The Government is being asked to set the right ITP (Import Trade Price) themselves for these tyres. Chinese Tyres:- We put our tyres against Chinese tyres in performance test to compare the quality and performance of the tyres and the results clearly show the poor quality of Chinese tyres. We are working on creating awareness in the consumers that Chinese tyres although cost cheaper are not only of a below par quality but they may be dangerous too, just imagine if a tyre was to burst while on the highway at high speeds.