PRINCIPLES OF MANAGEMENT

Project Report

SUBMITTED TO: MISS TOSIQ HAMMIAT

SUBMISSION DATE: 3/APRIL/2019

PRESENTED BY

MUHAMMAD ASAD LAKHANY (22940)

UZAIR YOUSUF (38233)

MUHAMMAD HAMZA HANIF (40424)

ALI HYDER (43946)

ABDUL HADI (46539)

 ACKNOWLEDGEMENT

“In The Name of Allah, the Most Merciful & Beneficent”.

Thanks to Almighty Allah for enabling us to fulfill all the requirements

for the completion of our Management Project Report. We are also
grateful to the IQRA University that provided us a chance to explore
our skills, qualities, abilities and potentials through BBA program and
we are also thankful to our teacher Miss Tosiq Hammiat for giving us
a chance to show the best of our abilities during the period of our
course.

At Sitara Chemicals Industries Pvt Limited, I would like to thank Mr.

Atta Omair (HR Manager) and Imran Haider (Marketing Manager)
who provided us full opportunity to accumulate first hand
comprehensive information we needed during the course of our project.

Finally we are responsible for all possible omissions, errors and

mistakes presented in the report and a positive and constructive
criticism will always be greeted warmth. And we hope that all
concerning regards of this report will forgive our errors.
 TABLE OF CONTENTS

 Company Description
 Strategic Objectives & Plans
 Vision & Mission
 Code of Ethics
 Business Practices
 Goals
 Core Competency and Sustainable Competitive Advantage
 Situation Analysis
 Swot Analysis
 Industry Analysis
 CompetitorAnalysis
 Company Analysis
 Customer Analysis
 Questions / Answers
 Recommendations & Conclusion
 EXECUTIVE SUMMARY

SCIL was incorporated in 1981 and began producing Caustic Soda in

1985, initially at a rate of 30 metric tons caustic a day. The plant’s
capacity was gradually increased over years to current level of 610
metric tons a day. In addition, various by product facilities have been
added and expanded from time to time to cope with growing demand.
Company entered into textile business in 1995. Its specialty chemicals
and export division was established in 2001 and agri chemicals division
in 2003.

This report provides a comprehensive insight into the company,

including business mission , vision, problems, functions, processes,
objectives, roles and their goals in the organization. The company’s
strenghts and weakness and areas of development or decline are
analyzed as well.
 COMPANY DESCRIPTION

HISTORY:

Sitara Group of Industries is one of the renowned industrial groups of the country.
This group started its industrial activity with textile weaving sector in 1956 under
leadership of two brothers, Haji Abdul Ghafoor (Late) and Haji Bashir Ahmed.

Sitara Group by now is in textile cloth finishing and processing, textile spinning,
chlor alkali industries and power plant. Haji Abdul Gafoor (Late) and Haji Bashir
Ahmed the present Chairman of the Group, the two creative and courageous men,
later joined by second generation, making a blend of experience and modern
business knowledge, managed the business growth and development with
assistance of highly qualified team of professionals. Faith in Almighty Allah and
in their own abilities & commitment to the cause, untiring efforts and leadership
qualities of the family, established the group, which now stands amongst Leading
Industrial Groups of the Country, under the Chairmanship of Haji Bashir Ahmed.

OVERVIEW OF THE ORGANIZATION:

SCIL was incorporated in 1981 and began producing Caustic Soda in 1985,
initially at a rate of 30 metric tons caustic a day. The plant’s capacity was
gradually increased over years to current level of 610 metric tons a day. Side by
side other Plants of Caustic Soda Flakes, Bleaching Powder and other allied
products were also added from time to time to cope with growing demand of the
country. Sitara Chemicals entered into textile spinning business in 1995, its
Specialty Chemicals and Export Division was established 2001 and Agriculture
Division in 2003. In addition, various by product facilities have been added and
expanded from time to time to cope with growing demand. By the grace of
Almighty Allah, toady Sitara Chemicals stands as the largest Chlor-alkali
Chemical Complex of Pakistan.

Sitara Chemical Industries Limited (SCIL) is an ISO certified Company for

Quality Management System (ISO 9001) and Environmental Management
System (ISO 14001).

The Company is three time winner of Top 25 Companies Corporate Excellence

award, by Karachi Stock Exchange.

Sitara Chemical Industries Limited (SCIL), as a part of Organizational

Development Program, puts special emphasis on development of human
resources through in-house and external training, in order to update the staff with
latest advancements in technology and management techniques, resulting in a
highly competent pool of human resources. The professional management always
emphasizes on motivating the resources and increasing the team spirit. The
continuous improvement and excellence is the goal in SCIL working
Environment. It has more than 1600 employees.

PRODUCTS:

 Basic Chemicals
 Textile Chemicals
 Specialty Chemicals
 Gases
 Agriculture Chemicals
 STRATEGIC OBJECTIVES & PLANS

ACHIEVING MARKET LEADERSHIP:

Believing in the “Customer First” philosophy as associated with manufacturing and providing
high quality chemicals that fulfill industrial and consumer requirement. In addition to this they
have employed customer insight and feedback for continuous corporate renewal including
product development, improving services and customer care.

QUALITY:

“SCIL is committed to remain alert and advance, to continuously grow as a quality symbol for
its products and in meeting industrial and consumer requirements, through training, team work,
and procedures, on time, every time.”

RESPECTING OUR PEOPLE:

Treating employees as the most important asset and promoting individual creativity along with
team work, all the while supporting equal opportunities and diversity helps in building
competitive value through mutual trust and mutual responsibility between the team and the
company.

BECOMING A GOOD CORPORATE CITIZEN:

They follow ethical business practices and the laws of the land; engage in philanthropic and
social activities that contribute to the enrichment of the Pakistani society. Enhancing corporate
value and respect while achieving a stable and long term growth for the benefit of our
shareholders.
ENVIRONMENTAL POLICY:

“SCIL is committed to continual improvement of its Environmental Management

System (EMS) by adoption of appropriate pollution prevention measures and
complying with all relevant training teamwork and procedures as implemented
from time to time.”

CORPORATE SOCIAL RESPONSIBILITIES:

“SCIL is socially responsible organization. They are investing in healthcare and

skills development of their people and peoples of the area as well as education of
best of the brains. This industry is well acknowledged for its contribution to
socio-economic uplift of the region and strengthening social safety nets. They
value their workforce as the most integral part of the organization.”

Effective risk management consists of combining the capacity to prepare for risk
with the ability to cope with the results and costs versus the probable benefit. Our
plans and strategies to effectively mitigate the risks and capitalize on the
opportunities are based on the following principles:

 Continuously gauging customer sensitivity

 Learning from “Best Practices”
 Scenario Planning and sensitivity analysis
 Identifying market gaps
 Improving organizational learning
 VISION & MISSION

VISION:

“Strive to develop employ innovative technological solutions

to add value to business with progressive and proactive
approach.”

MISSION:

“Continuing growth and diversification for the bottom line

result with risks well contained.”

• Respect & Corporate Image

• Quality & Safety
• Customer Satisfaction
• Production & Sales
• Profitability
• Best Employer
 CODE OF ETHICS
We believe in stimulating and challenging team oriented work environment
that encourages, develops and rewards excellence and diligently serve
communities, maintaining high standards of moral and ethical values.

BUSINESS PRACTICES
QUALITY POLICY:

“SCIL is committed to remain alert and advance, to continuously grow as a quality

symbol for its products and in meeting industrial and consumer requirements,
through training, team work, and procedures on time, every time.”

ENVIRONMENTAL POLICY:

“SCIL is committed to continual improvement of its Environmental Management

System (EMS) by adoption of appropriate pollution prevention measures and
complying with all relevant training, teamwork and procedures as implemented
from time to time.”

CORPORATE SOCIAL RESPONSIBILITIES:

“SCIL is a socially responsible organization, They are investing in healthcare and

skills development of their people and peoples of the area as well as education of
best of the brains. This industry is well acknowledged for its contribution to socio-
economic uplift of the region and strengthening social safety nets. They value their
workforce as the most integral part of the organization.”
 GOALS
While ensuring we return to profitability, we will continue to identify and
implement sustainable ways of doing business. As we look towards financial
year 2014-2015, we are excited about our business opportunities. The
demand for hydrogen peroxide in Pakistan is increasing, and we strive to
gain a stronger market presence by remaining committed to our goals. Our
focus remains to reduce costs, maintain quality, and surpass output levels.

CORE COMPETENCY AND SUSTAINABLE

COMPETITIVE ADVANTAGE
The idea of "core competences" is one of the most important business ideas
currently shaping our world. This is one of the key ideas that lie behind the
current wave of outsourcing, as businesses concentrate their efforts on things
they do well and outsource as much as they can of everything else.

SITUATION ANALYSIS

As evident from application of revenue nearly 40% of total revenue is spend on fuel and
power expenses. Caustic Soda produced through electrolysis of water solution of
common salt (Brine) therefore 68% of total cost of its production for chemical division
comprises of fuel and power and 10% in case of textile division. At present one unit of
electricity costs RS.6. It will be cost beneficial to have SCIL’s own power generation
plant. Recent dramatic increase in furnace oil prices compelled the management to
withdraw from furnace oil based power generation plant proposal. Other options are gas
and coal based power generation plants. The company after studying various power
generation technologies finally decided to go for gas engines. Management is hopeful
that close to mid of next year SCIL’s power project shall be in operation. After a
successful experiment of internally developed production process and marketing of
Calcium Chloride, during last three years on limited scale, SCIL is going for a larger
export based plant for Calcium Chloride which is at final stage of technology selection.

Management is also working on PVC project for which design wor! is at final stage.
The PVC project will consume Chlorine internally available. Polyvinyl chloride (PVC)
is prepared from the organic compound vinyl chloride. PVC is the most widely used of
the amorphous plastics. PVC is lightweight, durable, and waterproof. Chlorine atoms
bonded to the carbon backbone of its molecules give PVC its hard and flame resistant
properties. In its rigid form, PVC is weather-resistant and is extruded into pipe, house
siding, and gutters. Rigid PVC is also blow molded into clear bottles and is used to form
other consumer products, including compact discs and computer casings. PVC can be
softened with certain chemicals. This softened form of PVC is used to make shrink
wrap, food packaging, rainwear, shoe soles, shampoo containers, floor tile, gloves,
upholstery, and other products. Most softened PVC plastic products are manufactured
by extrusion injection molding, or casting.

SCIL have opportunity to start new plant such as Sitara peroxide. It will produce 550
metric ton per day. With chemical compound of hydrogen and oxygen with the formula
H2O2, hydrogen peroxide acts as both an oxidizing and a reducing agent. Its oxidizing
properties are used in the bleaching of substances, such as hair, ivory, feathers, and
delicate fabrics. In Pakistan Textile sector is its main demand Centre used as bleaching
agent. It is also used medicinally, in the form of a 3% aqueous solution, as an antiseptic
and throat wash. Hydrogen peroxide is used in restoring the original colors to paintings
that have darkened through the conversion of the white lead used in the paintings to
lead sulfide. The hydrogen peroxide oxidizes the black lead sulfide to white lead sulfate.
It is also used as a source of oxygen in the fuel mixture for many rockets and torpedoes.
As a reducing agent it reacts only with such easily reduced chemicals as silver oxide
and potassium permanganate.
 SWOT ANALYSIS
SWOT Analysis determines what is needed to meet objectives.

STRENGTH:

 STRONG CULTURE
 BRAND REPUTATION VALUE
 INDUSTRY LEADER IN PRODUCTION AND SALES
 CUSTOMER EXCESS
 PLANT INFRASTRUCTURE
 STRONG TECHINAL KNOWLEDGE
 ADEQUATE FINANCIAL RESOURCES
 HAVE DIVERSIFIED UNITS OF INDUSTRIES
 GOOD MARKET IMAGE
 COMPETENT MANAGEMENT AND WORKERS
 HAVE ABILITY TO COMPETE WITH COMPETITORS
 IN HOME FACILITY OF PRODUCTION:
 LOYAL CUSTOMERS:
 LARGEST SHAREHOLDERS
 FINANCIALLY STRONG

WEAKNESS:

 LARGE SCALE RECALLS

 WINTER SEASON
 LACK OF NATURAL GAS
 SLOW DECISION MAKING
 CULTURE CHANGE
 UNCERTAIN CHANCES OF PROMOTION
 SALARY PACKAGE LESS ATTRACTIVE
 LACK OF A PROPER HUMAN RESOURCE SYSTEM
 LACK OF OPERATIONS IN ABROAD
 RELYING ON PERMANENT CUSTOMERS
OPPORTUNITIES:

 INCREASE PRODUCTION CAPACITY

 INCREASE PRODUCT LINE
 TAKING ADVANTAGE OF GEOGRAPHIC POSITION
 ONLINE SERVICE & ORDERING SYSTEM
 SELLERS MARKET
 FEWER COMPETITORS
 STRONG CONTROL OVER MARKET
 STRONG BASE
 INCREASING USAGE OF HYDROGEN PEROXIDE

THREATS:

 RISING RAW MATERIAL PRICES

 INTENSE COMPETITION
 NATURAL DISASTERS
 IMPORTS (FINISHED PRODUCTS)
 LOW PRICE OFFERED BY THE COMPETITORS
 GST AND WTO POSE BIGGEST THREATS
 INSTABILITY OF PRICES DUE TO CURRENCY DEVALUATION
 ENTRANCE OF NEW AND QUALITY CONSCIOUS COMPETITORS
 ENERGY CRISES
 INDUSTRY ANALYSIS
Sitara Chemical Industries Ltd" is the largest producer of Chlor Alkali products in Pakistan"
The total amount of turnover in 2012 was RS.6 Billion Caustic soda industry in Pakistan
comprised of only three produces mentioned below" forecasting a persistent increase in
demand management is trying to increase production capacity of plant".

COMPETITOR ANALYSIS
 DESCON CHEMICALS
 ENGRO CHEMICALS
 ITHAD CHEMICALS LTD
 NIMER CHEMICALS LTD
 INTERNATIONAL BRANDS (IMPORTES)

COMPANY ANALYSIS
 To provide finest quality to the customers and to maintain leadership in market.
 Identify the product features as per requirements.
 Assess market demands, competition and profitability.
 To make the final plans to development of the product.

CUSTOMER ANALYSIS
 To target the largest sector of pakistan in Textile, Food and Agricultural Industry.
 Price prevailing in competitive international market.
 Mutually negotiated price between customer & SCIL.
 Product price as per customer specification.
 QUESTIONS / ANSWERS

Q.1: Discuss the traditional and contemporary views of work specialization, chain
of command, and span of control.

Ans: They respect their employees and believe that the success of their business is led by each
individual’s creativity and good team work. They stimulate personal growth for there
employees.
They support equal employment opportunities, diversity and inclusion of there employees and
does not discriminate against them. They strive to provide fair working conditions and to
maintain a safe and healthy working environment for all their employees.
They respect an honor human rights of people involved in there business and in particular does
not use and tolerate any form of forced or child labor. Through communication and dialogue
with there employees, they build and share the value “Mutual trust and mutual responsibility”
and work together for the success of there employees and company.
They are flat structured with :
• Human Resource & Administration
• Marketing Division
• Information technology
• Technical Department
• External affairs division
All comes under the supervision of COO who reports directly to the CEO. The CEO look after
the Internal Audit division, Finance and Commercial units.

Q.2: Describe each of the five forms of departmentalization ?

Ans: Five forms of Departmentalization are:
• Functional Departmentalization: Jobs are grouped by the functions ( Marketing, Finance,
Human Resources) performed. This approach is used in SCIL, although the functions change
to reflect the organization’s objectives and work activities.
• Product Departmentalization: Jobs are grouped by product line. Each major product area is
placed under the authority of a manager who’s a specialist in, and is responsible for, everything
having to do with that product line.
• Geographical Departmentalization: Jobs are grouped on the basis of a territory or geography.
• Process Departmentalization: This method groups jobs on the basis of product or customer
flow. In this kind of approach, work activities follow a natural processing flow of product or
even customers.
• Customer Departmentalization: Jobs are grouped on the basis of common customers who
have common needs or problems that can best be met by having specialists for each
departement.

Q.3: Explain cross-functional teams ?

Ans: With SCIL, many people from the cross-functional committee usually are panel people
addressing your business units linked to a particular cross-function, such as excellent or maybe
shipping. The particular goals as well as methods identified from the committee have
practically identical pounds because individuals coming from the panel. Each committee offers
concerning 10 people and is also headed with a older officer designated from the leader.

Q.4: Tell what factors influence the amount of centralization and decentralization
?
Ans: Large companies like SCIL usually use centralization because by this the activities
of an organization, particularly those regarding planning and decision-making, become
concentrated within a particular location and /or group or keeping all of the important
decision making powers within head office or the center of the organization.

Q.5: Explain how formalization is used in organizational design ?

Ans: The size also affects the organization formalization, which determines to what
degree the jobs in the organization are standardized and to what extent members of the
organization are governed by rules and regulations. Since SCIL has a tall structure, they
have a longer and more structured chain of command, which results in highly structured
jobs that are governed by many rules and regulations. They have a centralized structure
so the decision making are particulary concentrated to a specific group or people.
Q.6: Tell how organizational size affects organizational design ?
Ans: One aspect of organizational structure that is affected by size of an organization is
organizational design. For instance the departmentalization, which establishes how jobs
are grouped together. For instance SCIL which is a large organization use a high degree
of departmentalization when defining jobs since they need to provide their large
workforce with clearly definied tasks in order to keep the organization running
efficiently.

Q.7: Explain the relationship between strategy and structure ?

Ans: An organization’s strategy is its plan for the whole business that sets out how the
organization will use its major resources. In other words, an organization’s strategy is
a plan of action aimed at reaching specific goals and staying in good stead with clients
and vendors.
On the other hands, an organization’s structure is the way the pieces of the organization
fit together internally. For the organization to deliver its plans, the strategy and the
structure must be woven together seamlessly.
Organizational structure and strategy are related because organizational strategy helps
a company define and build its organizational structure. A company's organizational
structure is based on the result of the analysis of organizational strategy. The company
will use these results to determine its areas of concentration and how to position itself
in order to succeed.
One of the first steps a company takes in its initial stages is assessing its operational
environment in order to determine the conditions in which it must operate. This involves
checking out the competition, consumer trends, culture and other factors. The company
will find out the strengths and weaknesses of its competition, the buying habits of the
consumers, and its economic capabilities.
The relationship between organizational structure and strategy becomes clearer when
the company’s strategy is in place. With a clear focus of what it wants to achieve, the
organization will proceed to align its structure in such a manner to best achieve this. It
will allocate responsibilities for optimal results, create branches, and decide whether
individual efforts or group participation is the best method for it to achieve its goals.
Q.8: Contrast mechanistic and organic organizations ?
Ans: In SCIL both mechanistic and organic structure is used ;
 Joint Specialization: Employees work together and coordinate tasks
 Centralization: Decision-making kept as high as possible and Most
communication is vertical.
 Simple integrating mechanisms: Hierarchy of authority well-defined
 Standardization: Extensive use made of rules & Standard Operating Procedures
 Organization is network of persons or teams. People work in different capacities
simultaneously and over time.

Q.9: Differentiate between authority, responsibility and unit of command ?

Ans: AUTHORITY: The rights in a managerial position to tell people what to do and
to except them to do it.

RESPONSIBILITY: The obligation or expectation to perform.

UNITY OF COMMAND: The concept that a person should have one boss and should
report only to that person.

Q.10: Explain how environmental uncertainty affects organizational design ?

Ans: Current problems being faced by SCIL with respect to HRM:

 TECHNICAL MANPOWER SHORTAGE: SCIL has to face the shortage of

skilled labour because there is huge demand of technical workers in middle east.
Due to high compensation rate in foreign countries, technical man power prefers
to work there instead of Pakistan.
 DIVERSITY PROBLEMS: Work force diversity is causing serious problems in
SCIL because people belong to similar backgrounds form groups, monopolies
and they support only their own group members. Group members prefer to form
trustling relationship with people who have a similar background while
distrusting those from dissimilar backgrounds.
 MOTIVATION PROBLEMS: Great majority of employees are quite
enthusiastic when they start a new job. Employees morale sharply declines after
their first six months and continues to deteriote for years afterwards. And its very
difficult maintains the enthusiasm of employees in pakistan due to bad economic
conditions.
 RETAINIG PROBLEMS: The attraction and retention of high caliber persons is
key to success in every organization. Middle level managers and professionals
who have been inducted in the organization are difficult to retain and motivate
as the market offers higher remuneration to those who have acquired experience
at the SCIL.
 SPECIAL TRAINING & SKILL UP GRADUATION PROBLEMS: Many
employees have been sent abroad for overseas training, attachment, study tours,
seminars, etc. On their return , each participant is expected to share and
disseminate his learning with the larger group to which he/she belongs but many
employees donot do so.
 EMPLOYEE TURNOVER PROBLEMS: Turnover can be a serious obstacle to
productivity, quality, and profitability at any firm. The prospect of getting higher
pay elsewhere when an employee has acquired experience at the SCIL is one of
the most obvious contributors to turnover.
 INCREASING PERSONAL PROBLEMS: Due to increasing working women
in our society, parents give less attention to their children. This thing causes
many serious family problems. Due to disturbance of their personal life, many
employees are unable to concentrate on their assigned task and show lack of
motivation.
 RECOMMENDATION & CONCLUSION

RECOMMENDATIONS:
Organizations big or small profit or unprofitable have problems and there are always
chances of improvements. This is also the condition for Sitara Chemicals Industries
Limited. It is no doubt that the Sitara Chemical Industries Ltd has very effective amd
efficient human resource department. On the basis of our study during we recommend
following steps should be taken by the Sitara Chemicals Industries Ltd to eliminate the
weakness of the organization.

 Sitara Chemicals Industries Ltd must look for skilled and experienced staff for
its HR departmenet.
 There is a need to delegate the powers down the hierarchy so that CEO could
concentrate only on issues of strategic importance
 Sitara Chemical Industries Ltd must involve employees in its direction making.
 Internal and external candidates should be given proper importance while
selecting for a new position.
 Flat organization structure is recommended to reduce cost and to improve
decision making process. This will not only leads to cost efficiency but also
promotes job satisfaction.
 A well defined job manual, describing all inns and outs of job, along with job
training is necessary to win not only loyalty of employees but also to enhance
quality of job performance. Job rotation will improve confidence and mutual
dependence among employees as job will not suffer in case of absence of any
employee.
 Sitara Chemical Industries Ltd must have to increase the basic salaries of its
employees to increases their motivation.
 Compensation must be related with performance appraisal. Because at present
compensations are not related with the appraisal.
  Employees are allowed with the access to their personal.
 HR department must conduct a salary survey to make its compensation plan
more effective and efficient as compares to its competitors in the region. Because
their is not very much retention rate in Sitara Chemicals Industries Ltd.
 There must be same pay structure for all employees working on same position.
There should be specific pay policy.
 HR department must be headed by an experienced and skilled HR manager so
that proper HR policies can be developed and implemented and saith culture
should be ended.
 There is a lack of reward system for the management. Mostly rewards are
exclusively for physical workers.
 There is no female manager in human resource department. Although females
have better judging abilities than males.
 There should be more fringe benefits for the employees taking into consideration
their devotion skill and experience. The higher level would make the employees
more efficient and effective.

CONCLUSION:

Sitara Group of Industries is one of the renowned industrial groups of Pakistan

and its Human Resource is one of the best human resource departments. Defining
missions to selecting the employees, its most of the process are excellent. But still
there is some room for improvement in compensation system, and employment
planning.

THANKYOU