An organization is a social arrangement which pursues collective goals, which controls its

own performance, and which has a boundary separating it from its environment. Organization
is the association formed by a group of people who see that there are benefits available from
working together towards some common goal. Organization studies are the study of
individual and group dynamics in an organizational setting, as well as the nature of
organizations themselves. Whenever people interact in organizations, many factors come in
to play. Organizational studies attempt to understand and model these factors. Organizational
study is essential to any MBA graduate as it helps them to connect theory with practice.
Organization study refers to the study of organization as a whole and getting adequate
knowledge with various departments in the organization.

Executive Summary

The organization study was conducted at “CEAT Ltd.” for 15 days from 1th January 2018 to
15th January 2019. Organization study is a curriculum part of the management programme. It
is done to understand functional areas of the organization and it also helped to learn the theory
and practice which is being followed in the organization.

In the process of organizational studies, the things that I have learnt are to correctly identify
human interactions in organization and workplaces according to firm perspective. Learn
integrative concepts and perspectives from employees in different parts and analytically
observe the work done. Describe distinctive elements of organization culture, social influences,
interpersonal communication and organization change as applied to work setting. Demonstrate
critical awareness of the influence of organization in society in the context of at least one of
the following: gender, power, community and economic development, technology, alternative
organizational forms. Accurately select and apply qualitative and quantitative findings to case
studies in future and demonstrate basic knowledge of organization behaviour.

The structure of an organization varies depending on number of influencing factors. Structure

is influenced by the external environments in which the business operates as well as its culture
and the nature of work and activities it undertakes. The structure of CEAT Ltd. has a positive
impact on its business. Having the right structure allows a business to respond and adapt to
changes in the market quickly.
Organisation Study on CEAT Ltd.

Organisation

In common parlance, ‘organisation’ refers to ‘institution’. The term ‘organisation’ has emerged
over a period of time from the traditional task oriented to the modern people-oriented concept.

According to business dictionary, organisation is defined as a social unit of people that is

structured and managed to meet a need or to pursue collective goals. All organizations have a
management structure that determines relationships between the different activities and the
members, and subdivides and assigns roles, responsibilities, and authority to carry out different
tasks. Organizations are open systems-they affect and are affected by their environment.

Organisational study

Organisational study refers to the practical learning about how an organisation works under
day to day operations and method adopted by the organisation in order to increase optimum
usage of the resources and in order to have a competitive advantage over its competitors.
Organizational study is an effort towards understanding the organization, its policies, structure
and methodology adopted. It gives us brief description of the overall functioning of the
company or organization. Organisational study encompasses as a critical component in and
forms of Management Education.

Organisational study was conducted at CEAT Ltd (Mumbai plant) for a period of 15 days,
dating from 1st January 2018 to 15th January 2019.

This Organisational study is a partial fulfilment of the regular MBA Program. Organisational
study is done in order to understand the functional areas of the organization and it also helped
to learn and understand the theory and practice, which is being followed in the organisation.

a. Importance of Organizational Study

1) The study encompasses the systematic and careful application of knowledge. About how
people perform within organizations.
2) To understand the working environment of the organization.
3) To understand the functions within the organization.
4) To analyze the organization structure.
Nature and scope of study

CEAT Ltd. is one of India’s leading tyre manufacturers and has strong presence in global
markets. CEAT produces over 15 million tyres a year and offers the widest range of tyres to
all segments and manufactures world-class radials for heavy-duty trucks and buses, light
commercial vehicles, earthmovers, forklifts, tractors, trailers, cars, motorcycles and scooters as
well as auto-rickshaws. This study is conducted in the bhandup plant located on Mumbai,
Maharashtra.

An Organisation Study of CEAT Limited

Organization study is a part of MBA curriculum of CMS Business School, Jain University. It
is aimed to understand the functioning of different Departments of an organization. The study
was conducted in high-performance world-class radial tyres for a range of vehicles.

Objectives of the study

 To understand the nature of business carried out by CEAT Limited.

 To understand the various policies and programs of the organization
 To understand the core business level functions of the organization.
 To understand the organization structure and design
 To understand and generate SWOT, PESTEL and Porter’s Analysis for the
organisation.
 To understand and to review the Organisational structure carried out by Bosch
Limited.
 To understand the business practices carried out by CEAT Limited under the core
activities of an organisation.

Methodology

The data for the study has been collected from Primary and Secondary source.
Limitations

 This study will be only limited to CEAT Ltd (Mumbai plant).

 Due to the busy schedule of managers, it was difficult to obtain all the required data.
 The reliability of the data used for the study depends on the company’s reports and
information given by the executives.
 The company has limitations to disclose some of their confidential data so a detailed
analysis of the same was not possible.
 An in-depth study could not be carried on due to lack of sufficient time.
Chapter 2

INTRODUCTION

CEAT Ltd, a part of the RPG conglomerate is one of the leading tyre manufacturers in India.
The company offers the widest range of tyres to leading Original Equipment Manufacturers
across the world. They manufacture a range of tyres catering various segments, which includes
tires for heavy duty trucks and buses (T&B), light commercial vehicles (LCVs), earthmovers
and forklifts (specialty segment), tractors, trailers, passenger cars (PC), motorcycles, scooters
and auto-rickshaws. They produce over 7 million tyres a year and commands around 13% share
of the Indian tyre market.

The company operates two plants in Maharashtra, one in Bhandup and the other in Nasik. They
have a robust national network consisting of 34 regional offices and over 3,500 dealers among
which approximately 100 are exclusive dealers running the CEAT Shoppe outlets for passenger
cars segments and 96 exclusive dealers running the CEAT HUBs for Truck & Bus Segments.
The company has their presence in 110 countries.

BACKGROUND AND INCEPTION OF THE COMPANY

The company was founded as Cavi Elettrici e Affini Torino (Electrical Cables and Allied
Products of Turin) by Virginio Bruni Tedeschi[4] in 1924, in Turin, Italy.[5] On 10th March
1958, the company was incorporated as CEAT Tyres of India, in Mumbai. Initially, the
company collaborated with the Tata Group.[6] In 1972, the company set up a research and
development unit at Bhandup. In 1981, Deccan Fibre Glass Limited was merged with the
company.[7]

In 1982, RPG Group acquired the company, and in 1990, the company was renamed as
CEAT.[8] In 1993, the company collaborated with Yokohama Rubber Company, to
manufacture radial tyres at their Nashik unit.[9] In 1999, CEAT formed a joint-venture, named
as CEAT Kelani, with Asia Motor Works (AMW) and Kelani Tyres, to manufacture and
market CEAT tyres in Sri Lanka. in 2006, CEAT Kelani commissioned their first Sri Lanka-
based radial-tyre manufacturing unit in Kalutara.[9] In 2009, AMW exited the joint-venture

INDUSTRY PROFILE

Tyre industry is capital intensive and as capacities come in spurts, it leads to constant
demand-supply imbalances and consequent cyclicality in prices. Variable cost is also very
high, with raw materials forming nearly 70% of the costs. Profit margins are therefore thin.
Production process is technology intensive and globally huge sums are invested in R&D.
Tyre demand is a derived demand, dependent on the auto industry, both for OEM and
replacement market. The major segments are Truck & Bus (T&B) tyres and car tyres. Value
share of T&B segment is about73%. This segment is highly competitive and margins are
typically lower than in the car tyres segment. Replacement market forms the largest segment
(about 58%),followed by OEM (about 22%). Export accounts for about 15%. With global
demand slowing down, there is a consolidation of capacities through mergers etc. The
domestic tyre industry broadly mirrors the market characteristics of the global industry.
However, due to rough road conditions, the more rugged, suitable and cheaper cross ply tyres
are in vogue. Consumption of natural rubber is, therefore, proportionately higher. The
government has decided to impose 10% safeguard duty on carbon black and hiking
benchmark prices of natural rubber (25-30% of sales)in February 1999. Its impact was felt
only to an extent as prices of these commodities are ruling at historical lows in the global
market.

CEAT is part of the RPG group, which is diversified, with presence in major sectors like
power, fertilizers, pharmaceuticals, tyres, computer, telecom, financial services etc. The
group stumbled trying to grow via diverse platforms and has many companies that have
turned sick. But lately the strategy seems to be one of restructuring and consolidation. The
group is divided into 4 broad areas - rubber & allied products, power, electronics & telecom
and chemicals. CEAT’s investments in its subsidiaries have also come down this fiscal which
is a sign of prudence on the management.

BUSINESS DESCRIPTION CEAT is a manufacturing company, which produces rubber,

tire, nylon fabric products, nylon tire yarn, glass fiber, automotive flaps, filament mats and
other rubber products for the automotive markets in India. The company has a well
established research and development center that evaluates the application and development
of new raw materials, compounds and tire sizes. It produces tires for two and three wheeled
vehicles, passenger cars, LCVs, trucks and buses. CEAT exports to almost 50 countries, with
the US being the largest destination.

The company also provides investment financial services through Meteoric Industrial Finance
and Atlantic Holdings. Automotive tire sales account for around 90%of revenues, automotive
tubes account for about 8% and the remaining revenues come from other non-core operations.
The company is pursuing a strategic initiative of intensifying outsourcing to expand its
product range and increase production volumes. CEAT has an agreement with Pirelli of Italy
for outsourcing radial tires which are being marketed under the CEAT Spider Radials brand
name.

GROWTH AND PRESENT STATUS

CEAT Tyres, the flagship company of Mumbai-based RPG Enterprises, is one of the most
respected and fastest growing brands in the Indian tyre market. Amidst heavy competition
from the likes of MRF, JK Tyre and Apollo Tyres, CEAT has maintained its status of a
technically savvy tyre-maker and a highly profitable company. Instead of specialising in
manufacturing tyres for particular segments, CEAT is an all-round player, making tyres
across segments.

In the last few years, the company has remained profitable despite a challenging
environment. For the year ended 31 March, 2016, it reported a consolidated net profit of Rs
446.49 crore, growing by 40.76 per cent year on year. Between FY12-13 and FY15-16,
CEAT’s PAT grew over four times, while its debt equity ratio came down to 0.3 in FY16
against 1.1 in FY13. There was a 10x growth in market capitalisation from Rs 500 crore in
September ’13 to Rs 5,000 crore in Sep ’15. The tyre-maker launched close to 350 new
products between FY13 and FY16.

CEAT Ltd revenues from new products in the focus categories have doubled. The products
are technologically superior and offer higher safety to users. One of the breakthrough
developments in two-wheelers has been the introduction of puncture proof motorcycle radial
tyres recently, which solves one of the key pain points of the company.”

GLOBAL SCENARIO

About CEAT Limited

Established in 1958, CEAT Limited is the flagship company of RPG Group. It is one of
the largest tyre manufacturer in India in revenue and produces over 33 mn tyres a year.
The Company produces best-in-class high-performance tyres for a wide range of vehicles.
CEATs product portfolio spans across the automotive spectrum, with tyres for Two-Three
Wheelers, Passenger Car & Utility Vehicles (PC/UV), Trucks and Buses (T&B) and Off-
the-road Vehicles. The Company has a strong presence in global markets, selling its
products in over 100 countries and offers a wide range of tyres in all segments. The
Replacement, Original Equipment Manufacturing (OEM) and Export segments account for
61%, 27% and 12% of revenue, respectively.
Global economy
2017 was characterised by recovery in economic activity reinforced by private
consumption and investments, as well as a major uptick in global trade. After crises in
emerging markets and a dip in energy-related business investment in the US (which had
controlled demand in 2015 and 2016), growth returned to the US, Eurozone and Japan
over the course of 2017.
The continuing renewal of pro-cyclical forces promises to be the chief driver of rise in
demand in the western world in 2018. As companies raise investment, a solid labour
market and recent gains in incomes will boost consumption across most of the developed
world, which can look forward to growth at least in line with the underlying movements.

Indian tyre industry

India is one of the largest automobile markets in the world, which makes the country one
of the leading markets for tyres. The tyre industry is directly affected by the performance
of the automobile industry, which, in turn, depends on the overall economic growth.
Further, the replacement segment is the largest demand segment of the industry.
According to the Investment Information and Credit Rating Agency of India (ICRA), the
domestic tyre industry is expected to see a volume growth of 7-8% to reach 180 mn tyres
during 2018. This growth is despite the weak volumes during the first quarter and part of
the second quarter during the GST rollout. In tonnage terms, tyre demand is estimated to
grow by 7% during 2018, supported by a pick-up in Truck & Bus (T&B) replacement tyre
demand after over 2 years of weak growth.

KEY PLAYERS IN INDUSTRY

Harsh Goenka (Chairman)

Anant Goenka (MD)

SWOT ANALYSIS

Strengths in The SWOT analysis of CEAT Tyres

Strengths are defined as what each business does best in its gamut
of operations which can give it an upper hand over its competitors. The
following are the strengths of Ceat:

 Wide product portfolio: The CEAT brand is popular for its motorcycle tires
which are sold under the labels CEAT Zoom, CEAT Zoom Tubeless, F67,
F85, Milaze, Secura Sport and Secura Zoom, etc. The company also
manufactured tires for scooters under the labels Gripp and Zoom D and
passenger car tires under the names Czar AT, Czar HT, Rhino and Rhino
TQ. Their range of tires for commercial vehicles are Buland and Buland
Mile XL RIB while for three wheelers it is Anmol SL and Buland Mile XL.
In addition to this, it also manufactures tires for farm and agriculture vehicle
 and specialty tires for mining, quarrying, rock excavation, construction and
port applications.
 High brand visibility: Ceat Tyres is a popular brand in India and has
high brand recall and recognition. The company has been consistent in its
advertisements and has been always communicating the same value
proposition of being value driven as well as technical savvy.
 Focus on customer needs: Ceat has always based its products on
customer feedback and has always been modifying its products in
accordance with customer perceptions. The latest focus of the company
is on technologically superior products and on driving safety.
 FMCG model distribution channel: Quite unlike other tyre manufacturers
the company has modeled its distribution channel on FMCG companies.
Instead of selling tyres to the customer directly they have added an
intermediate layer of dealers who sell it to sub-dealers. This has helped
them to widen their reach considerably.
 Advertisements: The company has been undertaking a lot
of promotions lately and some of the latest campaigns like the Nimbu
Mirchi one has been able to grab the customer attention significantly.

Weaknesses in The SWOT analysis of CEAT Tyres

Weaknesses are used to refer to areas where the business or the brand
needs improvement. Some of the key weaknesses of Ceat are:

 No market leadership: Though Ceat has the presence in multiple

categories like two equipment and specialty tires it is not a market
leader in any of these categories though it has strong brand presence.
 Low margins: The key focus area of Ceat is on truck radial tyres and in
this domain, the competition is high because of which sales volumes are
low and the margins are high.
 Focus on too many segments at a time: The company focuses on too
many segments at a time and this has resulted in diluting its presence in
all segments and they were rendered incapable of beating the competition
and this was thinning down the already scarce resources.
 Low focus on after sales service: Though Ceat Tyres has a lot
of customer service outlets the quality of service is poor. There are a lot of
complaints about the behavior of the personnel in the service outlets as
well.

Opportunities in The SWOT analysis of CEAT Tyres

Opportunities refer to those avenues in the environment that surrounds
the business on which it can capitalize to increase its returns. Some of
the opportunities include:
  High growth potential: The country has around 60 manufacturers of
tyres both big and small, some of whom are regional players. The growth
rate of the tires market is around 9 % per year between 2015 and 2021.
The highest growth is predicted for the two-wheeler tires.
 Changing Customer Needs: The customer needs are changing
continuously and currently the demand is for driving safety and comfort.
This is creating a huge market for tires which have high grip.
 Growing market for passenger cars: The market for passenger cars is
growing in India and many multinationals are setting shop in India. This
will result in the increase in demand for OEM’s.

Threats in The SWOT analysis of CEAT Tyres

Threats are those factors in the environment which can be detrimental
to the growth of the business. Some of the threats include:

 Competition: The company faces stiff competition from brands like JK

Tyres, Apollo Tyres, Dunlop, Bridgestone, Michelin, Good year and
Cooper Tires in India.
 High cost of material: Materials used in tires like synthetic rubber, carbon
black, steel reinforcement, chemicals etc are highly fluctuating and this will
invariably affect the final pricing of the products,

VISION To provide better value to every passenger and goods Carrier in the nation through economical and
technologically advanced tyre solutions. CEAT will at all times provide total customer satisfaction
through products and services of highest quality and reliability.”
MISSION innovate and Lead

Our passion for innovation and our efforts to excel is synergized by cutting edge technologies, processes and
practices with sustainable development that produce high quality and economically advantages tyre solutions,
whilst demonstrating respect for customers, stakeholders, society and the environment. To nurture an exciting
and challenging work environment with fairness and transparency.”

OBJECTIVES

Product profile

CEAT manufactures tyres for various types of vehicles like heavy commercial vehicles, light
commercial vehicle, off-highway tyres, passenger cars, tractors, motorcycles and scooters and
SUVs. It exports to countries across the Africa, Americas, Australia, and Asia.