HAILEY COLLEGE OF BANKING AND FINANCE

Strategic Management
A case study analysis of Westward Exports Limited

COURSE INSTRUCTOR: Maam Farah Naz Naqvi

GROUP MEMBERS: Sidra Rasheed Mahwish Zia Asma Najam Kashmala Zaka Khan MSi11MBA032 MSi11MBA034 MSi11MBA039 MSi11MBA040

CASE AT A GLANCE
Westward Exports Ltd. was a private garment export company established in the year 1971, a family run business, and all four directors being brothers. Over the past 14 years the exports of company had grown from Rs. 0.71 million (1972) to Rs. 59.76 million (1984). Company owned no manufacturing facility of any kind, it purchased cloth from six different textile mills and had the cloth dyed and printed and then passed on to 138 switching subcontractors. The company was expanding the product line and by the year 1983 it was exporting about one million garments in over 100 basic designs. Since the company got things done through subcontractors, the managerial control of the operations became quite challenging. The directors felt the heat of the changing situation and decided to hire some professional assistance to bring more control over the operations. As a result Mr. Mahmood who had about 15 years of marketing and sales experience was hired in the year 1983 to be the general manager. Mr. Mahmood determined that if company was to remain in the business it must eliminate haphazardness in its operations like no proper costing, no scheduling, no status reports and no follow up charts etc. However, when Mahmood started to implement some new systems and procedures, Mr. Saleem who joined the company in the year 1973, the senior most supervisor of the entire manufacturing process, refused to go along with him. Mr. Saleem views were like all these luxuries are alright for big companies but not for companies like us. Mahmood was confident that company did need a change as soon as possible and he would not be able to do the job unless he could overcome Saleems reluctance to accommodate his new systems.

MANAGEMENT PROFILE
It was a family run business and all four directors were brothers. Mr. Mahmood was hired in late 1983 to be the new general manager. He was an agricultural graduate who had about fifteen years of marketing and sales experience with a multinational organization. He also had attended more than a dozen management development courses. Saleem joined the company in 1973 as a production officer, nearly the lowest rung in the companys hierarchy. He distinguished himself because of his hard work and was promoted to be a supervisor. By 1982, Saleem, under direct supervision of the directors, was looking after every activity in manufacturing. There are other 200 employees working in the organization.

PRODUCT DEVELOPMENT
Firstly it purchased cotton cloth from six different textile mills. Secondly had the cloth dyed and printed. Thirdly this dyed and printed fabric was then passed on to138 stichting subcontractors. And finally it was exported in over 100 basic designs.

SWOT ANALYSIS
STRENGTH: Hard working and experienced staff. WEAKNESS: Lack of coordination among employees and there may be duplication of efforts. There is no proper information available. OPPORTUNITIES: Being an exporting company, a huge market is still unexplored. (As they are exporting 90 percent of their exports to USA only) THREAT: Danger of facing cut throat competition from existing companies of same line and may be from new one also.

PEST ANALYSIS
POLITICAL FORCES: It includes areas such as tax policy, labour laws, environmental law, trade restriction, tariff etc. Any change in export duties by the government may have a great impact on the volume of exports. ECONOMIC FORCES: It includes economic growth, interest rates, exchange rates, inflation rates, etc. Any increase in the inflation will result in the rise in the cost of material and products. In the exports business, any appreciation in the domestic currency rates will results in losses. SOCIAL FORCES: It includes the cultural aspects and includes health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Any change in the trends and fashion will force the company to deviate from the existing designs. TECHNOLOGICAL FORCES: It includes technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. Furthermore, technological shifts can affect costs, quality, and lead to innovation.

NEED OF CHANGE
Mr. Mahmood concluded that the company was all so nebulous not clear in operation. A proper system to cure the lack of control is required. Hence change is important. As the size of company had increased enormously it requires a proper information system to maintain consistency in future growth. Mr. Mahmood himself suggested that there was a need for implementing a Management Information System (MIS). Mr. Mahmood was trying to implement the system but was facing resistence from Mr. Saleem. MIS will result in cost reduction and improved controlling as inventories will be reduced, more accurate decision can be taken and better projection can be made about future. Complete reliance on one person might have led to frauds and dominance. CONTROLLING MEASURES and INFORMATION GATHERING (or) GIVING is independent of size of the company. Small companies also need all these aspect as much as big companies. Coordination with employee and the subcontractors is the main key to improve the company.
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Clerical work to employee is not a burden, its inevitable one. If there is a problem in the company- physically means we have to see the blue print of the company, managerial means we have to see the follow up chat, if both are not available, think out the problem arise.

BENEFITS OF MIS
A proper system of control can bring proper costing, schedules, balance sheets and follow-up charts. Improves business and managerial challenges can be met. Company can overcome any problems easily in the long run with better control. It will be capable to withstand the tough competition in the export industry. Stable future and ease in managing company when Saleem retires.

POSSIBLE PROCESS FOR IMPLEMENTATION

Proper training of employees is required for successful implementation of MIS. Proper financial plan should be made as implementation of MIS requires huge amount of funds. Educated and experienced employees should be hired with good knowledge of computers. Proper coordination with suppliers and customers is required for accurate flow of information MIS should be based on internet for instant flow of information and efficiency in the process.

MISTAKE OF MR. MAHMOOD

Mr. Mahmood failed to convince the importance of the new system and started implementing them directly. Should have gained the trust of Mr.Saleem since he is the senior supervisor and close to the directors. Lack of self- confidence and doubtfulness in his experience. Should not bring drastic change, it wont be a adoptable by the employee, he has to take a step by step changes to implement management information system. He could have approached the directors with the proper presentation.

HANDLING THE CURRENT SITUATION

Since Mr. Mahmood has been facing opposition from Mr. Saleem for implementing his new systems so he should first explain the importance of the new system and advantages of having such system in the company. Mr. Mahmood should try to convince Mr. Saleem saying that thought he is capable enough of handling the company without any specific system, but on a long run prospective there is a necessary for a particular system which company needs to follow to remain in business. Hence there forth without any specific system company cannot depend on an individual for a long time as he\she will leave the company after retirement.

CONCLUSION
A factor, thing, element, or course involving uncertain danger, possibility of suffering harm or loss is parts of business we usually called them Business risk. If in that condition they are not going to take risk they would close the Westward Export. A great idea, design, policies, planning and strategy make the company stronger which Mr. MAHMOOD was thinking. Actually Mr. Mahmood made premises for future happiness. He worked late hours to comprehend fully the nature and scope of the companys business and its coordination and working relationships with the outsiders. He knows if I am bringing a new strategy which is may be difficult but we must take risk but to make future of the company brighter and more certain.