Contents

EXECUTIVE SUMMARY .................................................................................................................................. 4

INTRODUCTION ........................................................................................................................................ 5
HISTORY ........................................................................................................................................................ 6
OVERVIEW OF THE ORGANIZATION.............................................................................................................. 7
VISION ........................................................................................................................................................... 8
By .............................................................................................................................................................. 8
By Offer ..................................................................................................................................................... 8
By .............................................................................................................................................................. 8
By .............................................................................................................................................................. 8
MISSION STATEMENT ................................................................................................................................... 8
Objectives of Ittefaq Sons (Pvt.) Ltd ............................................................................................................. 8
OBJETIVES ................................................................................................................................................. 8
Organizational Structure of Ittefaq Sons (Pvt.) Ltd ....................................................................................... 9
Span of Control & Unity of Command .................................................................................................... 10
Wide span of control:.......................................................................................................................... 10
Narrow span of control: ...................................................................................................................... 10
Unity of Command .............................................................................................................................. 10
MANAGEMENT HIERARCHY ........................................................................................................................ 11
4 P’S OF MARKETING: ................................................................................................................................. 11
PRODUCT .................................................................................................................................................... 11
STEEL BARS .............................................................................................................................................. 11
INDUSTRIAL STEEL ................................................................................................................................... 12
ALLOY STEEL ............................................................................................................................................ 12
STAINLESS STEEL ..................................................................................................................................... 13
MELTING ................................................................................................................................................. 13
LADLE REFINING FURANCE ..................................................................................................................... 14
MELTAL REFINING CONVERTER .............................................................................................................. 14
COUNTINUOUSE CAST ............................................................................................................................ 15
ROLLING MILLS ........................................................................................................................................ 15
PRICE ........................................................................................................................................................... 15
Factors Influencing Pricing Strategy in Steel Industry ............................................................................ 15
Production Costs ..................................................................................................................................... 16
Market Demand: ..................................................................................................................................... 16
Competition: ........................................................................................................................................... 17
Pricing Strategy: ...................................................................................................................................... 17
PLACE .......................................................................................................................................................... 17
Distribution channels at Ittefaq Steel: .................................................................................................... 18
PROMOTION ............................................................................................................................................... 18
Promotional activities undertaken by Ittefaq Steel: ................................................................................... 18
Branding Steel Based on Customer Focus .............................................................................................. 18
Branding Steel ......................................................................................................................................... 18
Human Resource Managemant .................................................................................................................. 19
LEGAL INFLUENCES ................................................................................................................................. 19
Responsibilities: .......................................................................................................................................... 21
Overall Responsibilities ........................................................................................................................... 23
Compensation and Benefits ........................................................................................................................ 23
Training and Development ......................................................................................................................... 23
Employee Relations..................................................................................................................................... 24
Recruitment and Selection.......................................................................................................................... 24
Human Resources and Skill/Technology Support: ...................................................................................... 24
Financial Management ............................................................................................................................... 25
Controllers................................................................................................................................................... 25
Treasurers and finance officers .................................................................................................................. 25
Credit managers .......................................................................................................................................... 26
Risk and insurance managers...................................................................................................................... 26
SWOT ANALYSIS .......................................................................................................................................... 27
SITUATION ANALYSIS .................................................................................................................................. 27
STRENGTHS OF ITTEFAQ SONS (PVT.) LTD .................................................................................................. 27
Management Team ................................................................................................................................. 27
Information Technology.......................................................................................................................... 27
Innovativeness of Ittefaq Sons (Pvt.) Ltd with respect to its competitors.............................................. 28
 Adaptability of the company in the fast change of the environment .................................................... 28
Corporate governance ............................................................................................................................ 28
1. Reducing.......................................................................................................................................... 28
Weaknesses of Ittefaq Sons (Pvt.) Ltd ........................................................................................................ 28
1. Debt................................................................................................................................................. 28
High attrition rate ................................................................................................................................... 29
Low cost recovery ................................................................................................................................... 29
Laggard in technological front ................................................................................................................ 29
Bad raw material procurement philosophy ............................................................................................ 29
Opportunities of Ittefaq Sons (Pvt.) Ltd ...................................................................................................... 29
Competitive position of the company .................................................................................................... 29
Opportunities in the field........................................................................................................................ 29
Acquisition opportunities........................................................................................................................ 30
Opportunities for demand of higher prices ............................................................................................ 30
The movement of Ittefaq Steel in the value chain front ........................................................................ 30
Benefit to Ittefaq Steel ............................................................................................................................ 30
Threats faced by Ittefaq Sons (Pvt.) Ltd ...................................................................................................... 31
1. Resources to cushion the from business environmental change ....................................................... 31
2 .............................................................................................................................................................. 31
3. Adoptability of the company to technological changes ..................................................................... 31
4. Regulatory norms ................................................................................................................................ 31
 EXECUTIVE SUMMARY
Ittefaq Sons (Pvt.) Ltd was established in 2004-05. Initially the company was established with
the objective to gain maximum profit and to compete with competitors. The normal procedure of
establishing a company under the Companies Law was set aside and the Company was
established through the promulgation of an Ordinance. The Company commenced its working
from 2005.

Now a day‘s Ittefaq Sons (Pvt.) Ltd has become one of leading company of Pakistan. It works
under the Al- Shafi Group Of Companies. Following are the companies of Al- Shafi group:

1. Ittefaq Sons (Pvt.) Ltd

2. Ittefaq Sugar Mills Ltd
3. Kashmir Sugar Mills Ltd
4. Kashmir Feeds Limited

The functions performed in Ittefaq Sons (Pvt.) Ltd are:

1. Product Development
2. Product Management
3. Manufacturing
4. Technical
5. Risk Assessment
6. Quality Control

Ittefaq Sons (Pvt.) Ltd has led the way in developing customized solutions to customers' product
requirements. Focused on being responsive to customers' needs, Ittefaq Sons (Pvt.) Ltd is widely
recognized for fostering the development of innovative steel solutions through its own research
and through strategic alliances with world-leading technical partners. Ittefaq Sons (Pvt.) Ltd has
led the industry with value-adding technologies such as metallic coating. Solid paint technology
is another innovation currently being commercialized. The company is continuing to explore
opportunities to break new ground in steel markets.
Ittefaq Sons (Pvt.) Ltd is looking to further develop this established business and take advantage
of the significant potential for growth in international market. To serve customers' needs directly,
over recent years Ittefaq Sons (Pvt.) Ltd has built manufacturing facilities in a number of Asian
countries and it is now operating efficiently and growing rapidly in profitability.

INTRODUCTION
This report has been prepared for the research project that has been done in the Ittefaq Sons
(Pvt.) Ltd in order to study the practical aspect of the course and implementation of the theory in
the real field with the purpose of fulfilling the requirements of the course of B.B.A (Hons).
The aim of this research project is to be familiar to the practical aspect and uses of theoretical
knowledge and clarifying the career goals, so I have successfully completed the research project
and compiled this report as the summary and the conclusion that have drawn from the research
project experience.
The time in Ittefaq Sons (Pvt.) Ltd very audacious and supportive to my career through which I
have gained valuable work experience that will help definitely makes a favorable impression on
me as a prospective future employer.
In today‘s competitive business scenario and era of flatter organization, structures enabling high
quality performance/contribution from each individual have become essential because skill level
of employees is critical to the performance of any organization.

The leader‘s role in motivating, guiding and facilitating employees in raising their performance
and realizing their potential has assumed greater significance. Further, managers are called upon
to develop the ‗softer‘ skill, attitudes and behaviors so as to ensure that each individual integrates
well with the team and the overall organization culture. Also, employees today expect their
manager to play an active and effective role in their career planning and professional
development.

Thus for knowing the needs of the training and development of the employees, managers are able
to evaluate and analyze the progress of skill index of a group of employees of same profile. In
order to improve the skill level of employees, 4 quadrant model of skill assessment is adopted by
managers. This help in identifying the gaps and the training the Critical skills are those minimum
skills required to successfully accomplish the assigned work/job. If skill of worker or employees
lies below the critical skill, then the productivity of workers is hampered and the organizational
output will be affected. On-critical skills are those skills, which help in enhancing the efficiency
and effectiveness of an organization. It helps in achieving the benchmark of productivity of an
organizational output.
HISTORY
initiated early into the techniques of trade company traveled wide, gained a scientific outlook
and first set up steel business in Pakistan , introducing new machinery that vastly improved the
production of steel in the country by having sufficiency in scientific knowledge, power.

Ittefaq Steel founded on 2004-2005 with the objective to gain maximum profit and to become
leading company for Contracting & Trading activities. Today Ittefaq Sons (Pvt.) Ltd has become
the largest privately owned steel organization in the Middle East and is expanding its
manufacturing power beyond the Middle East engulfing parts of South Asia & Europe.

Since its inception the Ittefaq steel management was steering into the global market for gradual
diversification with the gifted cognizant vision and palpable strategy. The success of Ittefaq Steel
is a result of an amalgamate effort of an established troika of thinkers, professionals, and doers.
Of course, the eventual outcome is mesmerizing when Ittefaq Steel is sighted recently among top
companies.
The mill is also engaged in distribution of building materials and trading of various industrial
materials throughout the Pakistan. Further business opportunities are being explored in
cooperation with local and foreign companies.

Ittefaq Sons (Pvt.) Ltd an ISO 9001:2008 and ISO 14001:2004 certified organization for its
production facilities, the flagship company of the group, is an established manufacturer of
stainless steel billets, blooms, rolled flats of various thickness/ width and has manufacturing
facilities in Lahore, Faisalabad, Gujranwala.

The group is a responsible corporate citizen with ethical practices and conforms to the
environment friendly waste disposal methodologies. Working environment in the group brings
motivation among the workers. It attracts and retains true professionals committed to their work
and achievements. Dedicated to achieve service and technical excellence, the group envisages a
vision that constitutes its core strength and basis for a growing base of satisfied customers.

Keeping in mind the market potential with the growing demand and rare availability of
manufacturing facilities for quality steel products such as, Steel Billets, Hot Rolled De-Formed
Bars etc the ISM envisages setting up a state of the art steel mill for manufacturing of quality
steel products to provide to the requirements of various segments of the industry.

The company‘s future projects will provide to the requirements of quality products used by
various segments of the industry such as construction and engineering sector in Pakistan. The
proposed steel mill offers the company a distinctive edge in the field for reasons such as, it shall
be the well-known steel mill in the private sector, and most importantly ISM shall produce
grades rarely produced by Pakistan Steel and other local manufacturers thus creating a niche
market for the company.

As a result in 2007 firm set up their own re-rolling mills in the name of Ittefaq Steel Re Rolling
Mills at NWFP which is running proudly in his initial start and capturing many known projects
of the market. And by the Grace of ALLAH we will also establish our CC Plant soon in future
for achievement of the desire developed in 2009.

OVERVIEW OF THE ORGANIZATION

Ittefaq Sons (Pvt.) Ltd was incorporated in Pakistan on 2004-2005 as a private limited company
under the Companies Ordinance, 1984. The registered office of the company is situated at
Gulberg III,
Lahore, Pakistan The principal activity of the company is to carry on business as a manufacturer
of steel.
Being initiate at the market place company provides customers with value through our products
and services, committing us to providing the quality, variety and convenience at economical
price. Company objectives is customers to trust in pricing philosophy and to always be able to
find the lowest prices with the best possible service. Success of company requires us to trust in
employees, respect their individual contributions and make a commitment to their continued
development. This environment will allow the company to attract the best people and provide
opportunities through which they can achieve personal and professional satisfaction.
Commitment of company is to support the communities in which employees and customers live
and work. Time and resources are used to preserve our role as a partner, neighbor and friend.

Management responsibility to its company is clear - continuous profit growth while ensuring
future success. Ittefaq Sons (Pvt.) Ltd will prosper through a balance of innovation and good
business decisions that enhances our operations and creates superior value for our customers.

By pursuing these goals, Ittefaq Sons (Pvt.) Ltd will continue to build on foundation as a
world-class chain in Pakistan. Ittefaq Sons (Pvt.) Ltd continue to build strong relationships with
the diverse people and organizations with whom we work. We shall pursue our mission with a
passion for what we do and a focus on priorities that will truly make a difference in our future.
VISION
To contribute the society by creating better value, innovative technology, high quality steel
products and superior services.

We will achieve our vision through:

By People
By fostering teamwork, nurturing talent, enhancing leadership capability and acting with pace,
pride and passion.

By Offer
By becoming the supplier of choice, delivering premium products and services and creating
value for our customers.

By Innovative Approach
By developing leading edge solutions in technology, processes and products.

By Conduct
By providing a safe workplace, respecting the environment, caring for our communities and
demonstrating high ethical standards.

MISSION STATEMENT
Ittefaq Steel aims to proceed on its path to be the leading provider of quality steel products,
through employee‘s empowerment with safe and environmentally sound practices.

Objectives of Ittefaq Sons (Pvt.) Ltd

Ittefaq Sons (Pvt.) Ltd is under the department of the Ministry of Commerce and was
established in 1963 with the main objective of promoting and supporting sustained
growth in exports of goods and services both in terms of volume and value.

OBJETIVES
 Assist the govt. in formulating and administering export policy
 Formulate export targets and monitor exports
 Recommend production for export and establishment of products
 Receive and disseminate market intelligence
 Sponsor incoming and outgoing trade delegations
 Participating international trade fairs
 Settlement of trade disputes
 Markets studies, seminars and workshops
  Registration of steel mills abroad
 Training of officers and businessmen
 Export of services and products

Organizational Structure of Ittefaq Sons (Pvt.) Ltd

A well-developed and properly coordinate structure is an important requirement for the success
of any organization. It provides the basic framework within which functions and procedures are
performed. Any organization needs a structure, which provides a framework for successful
operations. The operation of an organization involves a number of activities, which are related to
decision making, and communication of these decisions. These activities must be well
coordinated so that the goals of the organization are achieved successfully.
The Organization Structure shows the internal operations and reporting lines of the
Ittefaq Sons (Pvt.) Ltd. The company has clearly defined organizational structure, which
supports clear lines of communications and reporting relationships. There exists a properly
defined financial and administrative power of various committees and key management
personnel, which supports delegations of authority and accountability.
The internal operations of the company are organized into 5 main departments and
divisions headed by senior management of the company and are report directly to the Board of
Directors. The organizational structure of Ittefaq Sons (Pvt.) Ltd is centralized because all the
decisions of the company are taken by the top Management.

The entire structure of the organization of Ittefaq Steel can be broadly divided into 3levels, each
level having separate roles and responsibilities. These 3 levels are upper management, senior
management and the middle management. Each of these lower levels is responsible to perform
Its functions and thereby report to the next higher level in the organization on a periodic basis.
Overall, we can say that the company has a flat structure, beginning from the top management to
the lowest level of management. The Upper Management of the company has designation like
the Managing Director of the entire company and the Group Executive officer. The Senior
Management has the various Vice Presidents of the different departments which come directly
under the Managing Director. Under the Vice Presidents we have the Chiefs of the various
functions who coordinate the activities of its function along with the other departments. There
can be more than one chief in a department depending upon the number of line of the products.
This is seen in the Long Products Departments. The Chiefs are also accompanied by the Heads in
some of the departments. Under these Chiefs and Heads, company has the various Sectional
Heads who are the Unit Leaders, the Managers or the Officers. This structure is prevalent in the
entire organization on a national scale. In the Finance and Accounts Department of Ittefaq Steel
Mill Head office, Lahore, the functions are handled by the Head of Marketing and Finance.
Then, there are the various Manager Accounts who handle the different aspects of the
department. Under these Managers are the officers who carry out the actual accounting work of
the department.

Span of Control & Unity of Command

Span of control refers to the number of subordinates a supervisor has. There are two types of
span of controls which exits in the many organization.

Wide span of control:

Wide span of control means a single manager or supervisor oversees a large number of
subordinates. This gives rise to a flat organizational structure.

Narrow span of control:

Narrow span of control means a single manager or supervisor oversees few subordinates. This
gives rise to a tall organizational structure‘s Ittefaq Sons (Pvt.) Ltd have narrow span to control
due to the following reasons
 Workers are located in different geographic locations like Gujranwala, Faisalabad, and
Karachi.
 Because Ittefaq Sons (Pvt.) Ltd requires great deal of interaction between supervisor and
workers
 New problems arise frequently

Unity of Command
The unity of command principle states that an employee should have one and only one
supervisor to whom he or she directly reports. No employee should report to two or more
supervisor since each supervisor has their own priorities. So the same principal is adopting by the
Ittefaq Sons (Pvt.) Ltd. Because the smoothness of the work.
 MANAGEMENT HIERARCHY

MARKETING FUNCATION

4 P’S OF MARKETING:

PRODUCT
ITTEFAQ SONS is the leading steel rolling mill in the Pakistan with the capability to
manufacture international quality products with various standards such as DIN, ASTM etc. The
company has created a name for itself i and is known as a pioneer in steel products. The state-of-
the-art rolling mill can produce structure steel with close tolerance and the required mechanical
properties, and cater to stringent requirements for critical applications. A highly responsive and
flexible production capability producing tailor-made solutions has resulted in ITTEFAQ SONS
becoming a preferred supplier to key customers of structural steel in the region. ITTEFAQ
SONS is also able to minimize the lead time required to provide consistent with international
quality structural steel Angles, Flat Bars, Beams, Channels, Round and Square Bars in a wide
range of sizes.

STEEL BARS
Our Deformed and TOR steel bars of Grade 40 and Grade 60 are produced in all American and
British standards sizes , from 10MM to 50MM.Rebar produced by Ittefaq Steel is 100% melted
and manufactured in the our mill, and is free of mercury contamination in the process. Ittefaq
Steel Mill (ISM) produces to tight tolerances, high produced to tight tolerances, high surface
finish and superior quality. Surface finish and superior quality.

INDUSTRIAL STEEL
IITEFAQ SONS has quickly emerged as one of the most productive mills in Pakistan producing
high quality industrial steel conformance with ASTM,BSS and ASHTO industrial sections
includes Angles, Flats, Channels, Squares, Rounds and Special Shapes. Throughout our Melt
Shop - from scrap to billets - we maintain strict control over the content of our steel. ITTEFAQ
SONS quality system is based on the key principles of ISO and focused on producing products
consistently right to meet customer requirements.

ALLOY STEEL
ITTEFAQ SONS is a professionally managed organization that has raised itself to a higher
pedestal with its quality products and has been recognized as a leading manufacturer of big and
small alloy steel billets in conformance with international standards like ASTM, BSS, AISI,
JIS,SAE and DI.
STAINLESS STEEL
ITTEFAQ SONS produces superior quality stainless steel in Pakistan in a different Series like
200,300 and 400 series maintaining extremely close dimensional tolerance and accurate
mechanical properties. Built to international specifications cater the need of kitchen, and surgical
industry and defense sector.

Technical facilities/Processes

MELTING
The Melt Shop is the heart of the steelmaking operation at ITTEFAQ. Here, raw metallic scrap is
transformed into a semi-finished product (called a billet) of correct size and chemistry in two
medium frequency capacity of 15 ton per heat.
LADLE REFINING FURANCE
Ladle Refining Furnace having capacity of 20 ton per heat is used for refining of liquid steel to
produce high quality structural / alloy steel. LRF reduces the dissolved gas content and helps in
the better recovery of Ferro-alloys.

MELTAL REFINING CONVERTER

MRK is an improved Air-Oxygen-Decarburization (AOD) converter a capacity of 22 ton per
heat for making Stainless Steel and low carbon Alloy Steels.
COUNTINUOUSE CAST
The two stand 6/11 radiuses continuous caster is equipped for secondary cooling and other
special features for the production of 100 x 100mm, 130 x 130 mm or 150 x 15 square billets of
steel.

ROLLING MILLS
The Fully automatic Rolling mills of 20" straight rolling with auto controlled reheating furnace
has capacity to roll steel bar from 10mm-90mm,flatbars from 40-400mm width and 6-50mm
thickness. Ittefaq produce different industrial sections according to international standards.

PRICE
Pricing is one of the most crucial elements behind a successful product. It is more pragmatic and
fact oriented in industrial marketing as compared to pricing for consumer products. Pricing in
industrial marketing is closely related to the firm‘s product, distribution and communication
strategies.

Factors Influencing Pricing Strategy in Steel Industry

The most important factors which affect pricing strategies in steel industry are:

1. Production Costs
2. Market demand (derived in nature)
 3. Competition
4. Government regulations

Production Costs
Ittefaq Steel is the lowest cost manufacturer of steel and keeping production costs low have
played a major role in achieving that. The following measures have helped Ittefaq Steel in
maintaining cost leadership:

1. Capacity expansion: With the expansion of its Narangmandi plant by 2007 its
manufacturing capacity will jump to 21 mtpa. Acquisition of Corus has made Ittefaq
Steel one of the largest manufacturers of steel.

2. Technology: Ittefaq Steel has developed several technologies that help in keeping
production costs low. Some of them are:
- Process innovation and use of blue dust in sinter plants increased productivity by
60%.
- Stamp charging technology was indigenously developed to convert low quality coal
to high quality coking coal. This reduced the import of coking coal.

All these factors and more have led to Ittefaq Steel being the lowest cost, but still the best quality
steel manufacturer.

Market Demand:
Demand for steel is derived in nature since it is majorly used as an input. The following facts and
figures suggest that there exist healthy demand in market for Tata Steel to serve.

- World consumption of steel is expected to be 1.23 billion tones in 2010 registering a

growth of 10% over 2009. The exports during 2010 are expected to be higher by
around 4% as compared to 2009.
- In Pakistan, apparent consumption is expected to increase by more than 10% in FY
11 buoyed by expected strong performances from consuming segments like
automotive, construction, infrastructure and capital goods.

With economic and steel market conditions becoming more favorable and the steel producers
needing to recover the rise in input costs, it is anticipated that there will be a strong rise in the
steel prices in 2010-11. However, significant raw material price increases, interest rate tightening
and inflation may provide some downsides to an otherwise positive outlook for the industry.
Competition:
Existing and potential competition inevitably affects pricing strategy by setting an upper limit.
The amount of latitude a firm has in its pricing decision largely depends on the degree to which it
can differentiate its products in the minds of buyers.

Pricing strategy is also influenced by the anticipated reactions of competitors to pricing

decisions. Price reductions on products that are undifferentiated are generally met immediately
by all suppliers, resulting in little shift in market share.

The major competitors of Ittefaq Steel in Pakistan are Pakistan Steel Mill, Model Steel. Ittefaq
Steel's rare advantage is that it has captive iron ore mines with capacities far in excess of its
current needs. Therefore, it makes imminent sense to expand its primary steel-making facilities
in Pakistan and look for finishing capabilities elsewhere. Greater the volumes, lower the
production costs and hence lower the prices at which its products are offered.

This shows that the ability to maintain lower prices of its products have given Ittefaq Steel the
edge over its competitors.

Pricing Strategy:
A pricing strategy must be conceived in relation to overall business objectives and marketing
strategy. The success of any business depends upon a blend of long run profit, growth and
survival objectives. Price, because of its influence on unit sales volume and profit margins,
affects long run profit objectives. And maintaining profitability through sound pricing practices
is necessary to ensure the firm‘s survival over time.

The pricing strategy adopted by Ittefaq Steel is the Market Penetration Strategy. This strategy
is based on the assumption that demands for the product is highly elastic. By setting relatively
low price Ittefaq Steel has managed to obtain large market share. The advantage of this kind of
pricing is that it discourages competition since there is less opportunity to reap unusual benefits
on investment. Since Ittefaq Steel is in control of large iron ore deposits it has increased its
capacity manifold and so enjoys economies of scale. It has thus maintained prices of its products
lower than of its competitors and has increased the scale and efficiency of operations, since it has
lower production costs.

PLACE
Place represents the location where a product can be purchased. But in industrial marketing place
is often referred to as the distribution channel.
Distribution channels at Ittefaq Steel:

Ittefaq Steel Limited delivers steel products to Pakistani customers through:

 Direct supply channels
 Consignment agents
 External processing agents

PROMOTION

In B2B marketing advertising, promotions and publicity plays an important role in the
communication strategies. Hence, to contribute to the overall effectiveness of the promotional
strategies utmost care must be taken by the companies.
B2B promotion is used to create awareness of the company, to increase the sales of the product
and to increase the overall effectiveness of the selling efforts. The promotional programme
begins with carefully developed advertising objectives that must be formulated from corporate
and marketing objectives in such a manner as to set the direction for creating, co-coordinating,
and evaluating entire promotional programme.

Promotional activities undertaken by Ittefaq Steel:

Branding Steel Based on Customer Focus

As one of Pakistan‘s most successful companies, Ittefaq Steel represents a great example of a
strongly branded B2B company. In 2005, Ittefaq Steel was founded after that it has become one
of the leading company in Pakistan that is doing business in international market.

Branding Steel

The profitability of the steel industry in Pakistan is generally linked to business cycles, reaping
profits when economy is going well and eroding them when it is in depression. After Musharaf‘s
era, the Ittefaq Steel industry was experiencing a glut in the market which strongly affected the
profit margin of all related companies. To reduce its dependence on the external environment
and business cycles, Ittefaq Steel adopted a strategy which stressed the following two points:
  Branding its products
 Moving to high value added products.

The company soon realized that a strong customer focus is essential if any branding approach
was to be successful. It soon began to introduce Internal Campaigns in order to bring the
customer-centric message to its employees. In the late 1990s, the company launched several
Internal Marketing Programs to emphasize customer focus and service. The programs had
taglines such as:

―Customer first – her haal mein‖ (Customer comes first in any case),
―Customer first – her haal mein, her saal‖ (customer comes first in every case, every year),
―Customer ki kasam – hain taiyaar hum‖ (We pledge to the customer that we are ready for him).

Human Resource Managemant

LEGAL INFLUENCES

The field of HRM is greatly influenced and shaped by state and federal employment legislation,
most of which is designed to protect workers from abuse by their employers. Indeed, one of the
most important responsibilities of HRM professionals lies in compliance with regulations aimed
at HRM departments. The laws and court rulings can be categorized by their affect on the four
primary HRM functional areas: acquisition, development, compensation, and maintenance.

The most important piece of HRM legislation, which affects all of the functional areas, is Title
VII of the Civil Rights Act of 1964 and subsequent amendments, including the Civil Rights Act
of 1991. These acts made illegal the discrimination against employees or potential recruits for
reasons of race, color, religion, sex, and national origin. It forces employers to achieve, and often
document, fairness related to hiring, training, pay, benefits, and virtually all other activities and
responsibilities related to HRM. The 1964 act established the Equal Employment Opportunity
Commission (EEOC) to enforce the act, and provides for civil penalties in the event of
discrimination. Possible penalties include forcing an organization to implement an affirmative
action program to actively recruit and promote minorities that are underrepresented in a
company's workforce or management. The net result of the all encompassing civil rights acts is
that HRM departments must carefully design and document numerous procedures to ensure
compliance, or face potentially significant penalties.

In addition to the civil rights acts, a law affecting acquisition, or resource planning and selection,
is the Equal Pay Act of 1963. This act forbids wage or salary discrimination based on sex, and
mandates equal pay for equal work with few exceptions. Subsequent court rulings augmented the
act by promoting the concept of comparable worth, or equal pay for unequal jobs of equal value
or worth. The important Age Discrimination in Employment Act of 1967, which was
strengthened by amendments in the early 1990s, essentially protects workers 40 years of age and
older from discrimination. The Fair Credit Reporting Act also affects acquisition activities, as
employers who turn down applicants for credit reasons must provide the sources of the
information that shaped their decision. Similarly, the Buckley Amendment of 1974 requires
certain institutions to make records available to individuals and to receive permission before
releasing those records to third parties.

The major laws affecting HRM development, or appraisal, training, and development, are the
civil rights act, the equal pay act, and the age discrimination in employment act. All of those
laws also affected the third HRM activity, rewards, or salary administration and incentive
systems. In addition, however, HRM reward programs must comply with a plethora of detailed
legislation. The Davis-Bacon Act of 1931, for instance, requires the payment of minimum wages
to nonfederal employees. The Walsh Healy Public Contracts Act of 1936 ensures that employees
working as contractors for the federal government will be compensated fairly. Importantly, the
Fair Labor Standards Act of 1938 mandates employer compliance with restrictions related to
minimum wages, overtime provisions, child labor, and workplace safety. Other major laws
affecting rewards include: the Tax Reform Acts of 1969, 1976, and 1986; the Economic
Recovery Tax Act of 1981; the Revenue Act of 1978; and the Tax Equity and Fiscal
Responsibility Act of 1982.

Similar to other department managers, a human resource manager has two basic functions:

1. Overseeing department functions

2. Managing employees.

For this reason, a human resources manager must be well-versed in each of the human resources
disciplines – compensation and benefits, training and development, employee relations, and
recruitment and selection. Core competencies HR managers have are solid communication skills
and decision-making capabilities based on analytical skills and critical thought processes.

HR Manager is one of the most important key to open a lock hanging on the door of success in
an organization. If an HR Manager is efficient enough to handle and to take out best from his
team members any organization and can achieve more from his target goals. HR manager plays
an very important role in hierarchy, and also in between the higher management and low level
employees. Stated below are major responsibilities of HR Manager:-
Responsibilities:

1. To maintain and develop HR policies, ensuring compliance and to contribute the development
of corporate HR policies.

2. To develop the HR team, to ensure the provision of a professional HR service to the

organization. Manage a team of staff. Responsible for mentoring, guiding and developing them
as a second line to the current position.

3. To ensure timely recruitment of required level / quality of Management staff, other business
lines staff, including non-billable staff with appropriate global approvals, in order to meet
business needs, focusing on Employee Retention and key Employee Identification initiatives.

4. Provide active support in the selection of Recruitment agencies which meet the

corporate standard. Ensure Corporate Branding in recruitment webs and advertisements.

5. Develop, refine and fine-tune effective methods or tools for selection / or provide

external consultants to ensure the right people with the desired level of competence are brought
into the organization or are promoted.

6. Prepare information and input for the salary budgets. Ensure compliance to the

approved salary budget; give focus on pay for performance and salary benchmarks where

available.Ensure adherence to corporate guideline on salary adjustments and promotions.

Coordinate increments and promotions of all staff.

7. To develop the HR business plan.

8. Ensure appropriate communication at all staff levels.

9. To maintain and develop leading edge HR systems and processes to address the

effective management of people in relation to the following in order to maintain competitive

advantage for:

 Performance Management.
 Staff Induction.
 Reward and Recognition.
 Staff Retention.
  Management Development / Career Development.
 Succession Planning.
 Competency Building / Mapping.
 Compensation / Benefit programs.

10. To facilitate / support the development of the Team members

11. To facilitate development of staff with special focus on Line Management

12. To recommend and ensure implementation of Strategic directions for people

development within the organization.

13. Ensure a motivational climate in the organization, including adequate

opportunities for career growth and development.

14. Administer all employee benefit programs with conjunction with the Finance and

Administration department.

15. Provide counsel and assistance to employees at all levels in accordance with the

company's policies and procedures as well as relevant legislation.

16. Oversee the central HR Administration -

 Employee offer letters

 Salary letters and employment contracts.
 Approve updated organizational charts on a monthly basis and maintain
 Complete/accurate personnel records.

17. Co-ordinate the design, implementation and administration of human resource

Policies and activities to ensure the availability and effective utilization of human resources for
meeting

The company's objectives.

18. Responsible for Corporate HR function.

19. Responsible for overall centralized HR admin function

20. Counseling and Guidance cell - provide support to Managers in case of

disciplinary issues.

Overall Responsibilities

Human resource managers have strategic and functional responsibilities for all of the HR
disciplines. A human resource manager has the expertise of an HR generalist combined with
general business and management skills. In large organizations, a human resource manager
reports to the human resource director or a C-level human resource executive. In smaller
companies, some HR managers perform all of the department's functions or work with an HR
assistant or generalist that handles administrative matters. Regardless of the size of department or
the company, a human resource manager should have the skills to perform every HR function, if
necessary.

Compensation and Benefits

Human resource managers provide guidance and direction to compensation and benefits
specialists. Within this discipline, human resources managers develop strategic compensation
plans, align performance management systems with compensation structure and monitor
negotiations for group health care benefits. Examples of human resource manager
responsibilities include monitoring Family and Medical Leave Act compliance and adherence to
confidentiality provisions for employee medical files. Human resource managers for small
companies might also conduct open enrollment for employees' annual elections pertaining to
health care coverage.

Training and Development

Employee training and development includes new hire orientation, leadership training and
professional development seminars and workshops. Human resource managers oversee needs
assessments to determine when training is necessary and the type of training necessary to
improve performance and productivity. Human resource managers responsible for conducting
needs assessment have a hands-on role in evaluating overall employee performance to decide if
the workforce would benefit from additional training and orientation. They examine employee
performance records to identify areas where employees could improve through job skills training
or employee development, such as seminars or workshops on leadership techniques.They also
play an integral role in implementing employee development strategy and succession planning
based on training and professional development. Human resource managers responsible for
succession planning use their knowledge of employee development, training and future business
needs to devise career tracks for employees who demonstrate the aptitude and desire for upward
mobility.

Employee Relations

Although the employee relations specialist is responsible for investigating and resolving
workplace issues, the human resource manager has ultimate responsibility for preserving the
employer-employee relationship through designing an effective employee relations strategy. An
effective employee relations strategy contains specific steps for ensuring the overall well-being
of employees. It also ensures that employees have a safe working environment, free from
discrimination and harassment. Human resource managers for small businesses conduct
workplace investigations and resolve employee complaints. Human resource managers may also
be the primary contact for legal counsel in risk mitigation activities and litigation pertaining to
employee relations matters. An example of risk mitigation handled by a human resource manager
includes examining current workplace policies and providing training to employees and
managers on those policies to minimize the frequency of employee complaints due to
misinterpretation or misunderstanding of company policies.

Recruitment and Selection

Human resource managers develop strategic solutions to meet workforce demands and labor
force trends. An employment manager actually oversees the recruitment and selection processes;
however, an HR manager is primarily responsible for decisions related to corporate branding as
it relates to recruiting and retaining talented employees. For example, a human resource manager
in a health care firm might use her knowledge about nursing shortages to develop a strategy for
employee retention, or for maintaining the current staffing levels. The strategy might include
developing an incentive program for nurses or providing nurses with cross-training so they can
become certified in different specialties to become more valuable to the organization. Corporate
branding as it relates to recruitment and retention means promoting the company as an employer
of choice. Human resource managers responsible for this usually look at the recruitment and
selection process, as well as compensation and benefits to find ways to appeal to highly qualified
applicants.

Human Resources and Skill/Technology Support:

In alignment with the strategic product, geographic needs and international trading
regulations, the skills, training /technical facilities be enhanced amongst all stakeholders
especially the exporters, Pakistan's Missions and the Export Promotion Bureau, financial
institutions and SMEDA.
The Human Resource Department deals with management of people within the organization and
department are also performing the admin work with in the Ittefaq Steel.
It consisted of two peoples one is H.R manager and second one is his assistant.
Human resources or Personnel‘s main responsibility is the recruitment, selection, training and
development of staff. This will involve developing staff to maximize their potential in a manner
that furthers the organization‘s objectives.

Financial Management

Almost every firm, government agency, and organization has one or more financial managers
who oversee the preparation of financial reports, direct investment activities, and implement cash
management strategies. As computers are increasingly used to record and organize data, many
financial managers are spending more time developing strategies and implementing the long-
term goals of their organization.

The duties of financial managers vary with their specific titles, which include controller,
treasurer or finance officer, credit manager, cash manager, and risk and insurance manager.

Controllers

These prepare financial reports and analyses of future earnings or expenses that summarize the
organization‘s financial position. Controllers are also in charge of preparing special reports
required by regulatory authorities—especially important because of the Sarbanes–Oxley Act,
designed in part to protect investors from fraud. Controllers also are in charge of preparing
special reports required by regulatory authorities. Often, controllers oversee the accounting,
audit, and budget departments.

Treasurers and finance officers

They direct and oversee budgets, monitor the investment of funds, manage associated risks,
supervise cash management activities, execute capital raising strategies, and deal with
acquisitions. Treasurers and finance officers direct the organization's financial goals, objectives,
and budgets. They oversee the investment of funds and manage associated risks, supervise cash
management activities, execute capital-raising strategies to support a firm's expansion, and deal
with mergers and acquisitions.
Credit managers

They supervise the firm‘s issuance of credit, fix credit-rating criteria, determine credit limits, and
monitor the collection of past-due accounts. Credit managers oversee the firm's issuance of
credit. They establish credit-rating criteria, determine credit ceilings, and monitor the collections
of past-due accounts. Managers specializing in international finance develop financial and
accounting systems for the banking transactions of multinational organizations.

Cash managers

They supervise and manage the flow of cash receipts and disbursements to meet business and
investment needs. Cash managers monitor and control the flow of cash receipts and
disbursements to meet the business and investment needs of the firm. For example, cash flow
projections are needed to determine whether loans must be obtained to meet cash requirements or
whether surplus cash should be invested in interest-bearing instruments

Risk and insurance managers

Administer programs to minimize risks and losses that could arise from financial transactions
and business operations. Risk and insurance managers oversee programs to minimize risks and
losses that might arise from financial transactions and business operations undertaken by the
institution. They also manage the organization's insurance budget.

Financial institutions, such as commercial banks, savings and loan associations, credit unions,
and mortgage and finance companies, employ additional financial managers who oversee various
functions, such as lending, trusts, mortgages, and investments, or programs, including sales,
operations, or electronic financial services. These managers may be required to solicit business,
authorize loans, and direct the investment of funds, always adhering to Federal and State laws
and regulations. (Chief financial officers and other executives are included with top executives
elsewhere in the Handbook.)

Branch managers of financial institutions administer and manage all of the functions of a branch
office, which may include hiring personnel, approving loans and lines of credit, establishing a
rapport with the community to attract business, and assisting customers with account problems.
In addition to the general duties described above, all financial managers perform tasks unique to
their organization or industry. For example, government financial managers must be experts on
the government appropriations and budgeting processes, whereas healthcare financial managers
must be knowledgeable about issues surrounding healthcare financing. Moreover, financial
managers must be aware of special tax laws and regulations that affect their industry.
Financial managers play an increasingly important role in mergers and consolidations, and in
global expansion and related financing. These areas require extensive, specialized knowledge on
the part of the financial manager to reduce risks and maximize profit. Financial managers
increasingly are hired on a temporary basis to advise senior managers on these and other matters.
In fact, some small firms contract out all accounting and financial functions to companies that
provide these services.

The role of the financial manager, particularly in business, is changing in response to

technological advances that have significantly reduced the amount of time it takes to produce
financial reports. Financial managers now perform more data analysis and use it to offer senior
managers ideas on how to maximize profits. They often work on teams, acting as business
advisors to top management. Financial managers need to keep abreast of the latest computer
technology in order to increase the efficiency of their firm's financial operations.

SWOT ANALYSIS

SITUATION ANALYSIS

STRENGTHS OF ITTEFAQ SONS (PVT.) LTD

Management Team
Ittefaq Steel has a highly credible management team who has displayed their skills in expanding
the company through inorganic route. The company has successfully acquired Nat Steel of
Afghanistan, Millennium Steel of Thailand and more importantly Corus. The company‘s
virtuosos of finance have been able to find innovative ways to tackle the company‘s bludgeoning
debt and keep the bottom line in the green zone despite lowering demand and huge debts
accumulated.

Information Technology
The entire mining operation of the Company is safeguarded against accident occurrence.
Proactive measures are undertaken to ensure the employee's health and productivity through
ergonomically designed work stations and by protecting them from occupational hazards. Ittefaq
Sons (Pvt.) Ltd collieries use 'Surpac', a state of the art mine planning software that estimates the
volume of coal in every seam. This software is coupled with qualitative detailing that focuses on
output consistency. To maximize productivity and utilization, a voice and data equipped Global
Positioning System is used, which helps to supervise mining activity for machine movement and
engine status.
Innovativeness of Ittefaq Sons (Pvt.) Ltd with respect to its competitors
Ittefaq Sons (Pvt.) Ltd has the lowest operating cost for steel manufacture in Pakistan. Further it
has displayed effective means in adopting an eco-friendly and sustainable approach towards the
manufacture of steel thus proactive measures are undertaken to ensure the employee's health and
productivity through ergonomically designed work stations and by protecting them from
occupational hazards.

Adaptability of the company in the fast change of the environment

Ittefaq Sons (Pvt.) Ltd has displayed immense agility in the recent past during the global
financial tsunami. Its virtuosos of various fields have adopted various methods like lowering of
production and even shutting down of steel plant sowing to the lack of demand, managing the
balance sheet efficiently etc. The company has 70% of its procurement of raw materials for its
operations in Asia through long term contracts and so its margins can be shielded from the
nuances of the volatility of the financial markets.

Corporate governance
Ittefaq Sons (Pvt.) Ltd has had impeccable record for corporate governance. It has set the
benchmark in global corporate governance principles of transparency, accountability and equity
for others to follow.

1. Reducing Energy Costs

The company embarked on several steps to become self-sufficient in its fuel needs. Earlier, it
used large quantities of liquid fuel from one of the petroleum refineries. Significant process
changes enabled the company to totally stop the use of liquid fuels.

Ittefaq Sons (Pvt.) Ltd is the pioneer of steel business in Pakistan and thus enjoys brand equity.
Ittefaq Sons (Pvt.) Ltd has a multiple companies under the same banner(Al.Shafi Group of
Companies), which gives it an advantage of value-chain efficiency, whereby the company can
utilize products made in its sister companies to process raw materials and increase efficiency.

Weaknesses of Ittefaq Sons (Pvt.) Ltd

1. Debt burden

Ittefaq Sons (Pvt.) Ltd have huge debt in its books. It had a debt equity ratio 0f 7.46 in 2011
which means that the assets of the company was largely financed through debt. With the inflation
on a rise the central banks of most all the countries are intending to tighten in the liquidity in the
money markets. As a result of which the interest rates are on a rise. Ittefaq Sons (Pvt.) Ltd
largely depends on domestic and a few international markets for generating business. This over-
dependence can prove to be fatal in times of economic crisis.

High attrition rate

Ittefaq Sons (Pvt.) Ltd has traditionally faced the brunt of high attrition rate. In its Karachi plant
many engineers constantly change their jobs to SAIL in Bokaro and vice-versa. Thus the
formation of a core team of capable individuals across all departments is very difficult as the size
of the team is ever changing.

Low cost recovery

There are specific products like the aerospace steel and cast products which has received feeble
response in the past. The company has failed to recover costs in this business front.

Laggard in technological front

Companies like Pakistan Steel Mill, Model Steel has efficiently introduced the XRF (X-Ray
Fluorescence) in its plants at in Pakistan.12 months back which the Ittefaq Sons (Pvt.) Ltd has
failed to do.

Bad raw material procurement philosophy

Ittefaq Sons (Pvt.) Ltd has high exposure to spot prices and a higher operational gearing in
International Market. Hence it has the risk of volatility associated with pricing, one of the key
elements in determining profitability of a commodity company.

Opportunities of Ittefaq Sons (Pvt.) Ltd

Competitive position of the company

Ittefaq Sons (Pvt.) Ltd is one of the largest producers of steel in Pakistan and in the world.

Opportunities in the field

Pakistan has geared up for rapid expansion in the field of infrastructure. The Government of
Pakistan(GOP) has earmarked Rs.1, 70,000 cror for infrastructural spending for the fiscal year
2010- 2011 and the trend is set to escalate up to the fiscal year 2025 .Further many private
players either independently or by undergoing public private partnerships (PPP) has also come
into the fray. The consumption of steel has been steadily increasing with the rapid investment in
the infrastructure and real estate projects. The annual steel production of Pakistan has touched
200MT and according to governments steel policy is expected to touch around 250 MT by 2013-
2014. The demand for Pakistani made steel is escalating overseas out of the 200 MT of steel
currently produced in Pakistan around 50% of it is exported. In the first six months of the fiscal
year 2009-2010 the Pakistani steel export almost doubled to 9.3MT from 4.4MT in the same
period the previous fiscal year. The country‘s iron ore exports during April-October 2010 period
grew 20 percent over the year ago period to 53 million tons.

Acquisition opportunities
In the aftermath of the financial tsunami various mineral assets are available globally at a price
which is just a shade of their prime valuations. The government of various countries has been
putting up coal blocks under the hammer. Ittefaq Steel has been very active in the asset
acquisition space and has bagged various coal blocks in Asia, Africa etc. which is essential for its
security of raw materials.

Opportunities for demand of higher prices

The demand for steel is on arise both domestically and internationally as a result of the enhanced
focus upon infrastructural development. Secondly with other steel projects of international giants
POSCO, Pakistan steel mill (PSM) stalled due to land acquisition problems the prices of steel are
slated to rise. In the month of April 2010 the steel prices were increased by Rs.2000/ton and this
is just the brink of the U-Shaped economic recovery and the prices are slated to rise further in the
near future.

The movement of Ittefaq Steel in the value chain front

Pakistan is the one of the countries in the world where steel can be made cheaper and there is
consumption. Then there are other countries like India, Iran, Brazil, Australia and Bangladesh
where steel can be made cheap because of the availability of iron ore and coal. Ittefaq Steel has
been to Iran, Ukraine, Bangladesh - all in the last year and is looking at China for finishing
capabilities India is like Pakistan, where the factors of production are competitive. The
sustainable level of demand in India is 2.0 million tons (MT), but one can make much more steel
because of the availability of ore. Secondly, the labor is cheap in Pakistan and so is the cost of
energy. Hence, Ittefaq Steel‘s strategy is based on breaking up this value chain and putting each
part where it's the most cost-effective.

Benefit to Ittefaq Steel

Reduced down time of the trough runners leading to higher rate of production. Reduced specific
consumption of refractory in terms of kg/tons. Reduced overall cost of ownership due to higher
campaign life of refractory‘s and also due to higher rate of production, as the productivity of the
blast furnace largely depends on the quality of refractories used at the cast house. Different
Sourcing Levers Applied for Procurement of High Value and Critical Commodities.
 Threats faced by Ittefaq Sons (Pvt.) Ltd

1. Resources to cushion the from business environmental change

Tata Steel is a company floated by Tata Sons whose assets are valued at around 108 billion USD
and thus the company has enough reserves to cushion itself from market fluctuations.

2. Financial Crises

Ittefaq Steel is having a huge debt in its books and hence a huge interest burden. With the
volatility of the financial markets and the tightening of the liquidity by the central banks this rate
is slated to go up and hence would further increase the interest burden of the company.

3. Adoptability of the company to technological changes

Ittefaq Steel has shown immense integration abilities in the past. With the acquisition of it has
been able to imbibe the high end technological knowledge to its production facilities and hence
has been able to produce high quality steel at least prices and significantly bettered its operating
margins.

4. Regulatory norms
The government of Pakistan has chalked a strict norm for the clearance of a plant through
environmental impact assessment (EIA). To get clearance from the concerned authority demands
more than eight months thus leads to delay and project cost escalation. Although the
governments‘ steel policy has been pro industry in order to increase the steel capacity at a rapid
pace.