PRINCIPLES OF MANAGEMENT

Assignment

Company:

Date: 20th March 2009

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TABLE OF CONTENT
Topic Brief history Vision Core Values Questionnaire Results Questionnaire Analysis Interview Analysis Conclusion and Recommendations Page Number 3 4 4 7 14 15 17

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Brief History
Search for oil by Pak Stanvac, an Esso/Mobil joint venture in 1957, led to the discovery of Mari gas field situated near Daharki. Esso was the first to study this development in detail and propose the establishment of a urea plant in that area. The government approved the proposal in 1964, which led to the making a fertilizer plant agreement signed in December that year. In 1965, the Esso Pakistan Fertilizer Company Limited was incorporated, with 75% of the shares owned by Esso and 25% by the general public. The construction of a urea plant commenced at Daharki the following year with the annual capacity of 173,000 tons and production commenced in 1968. At $ (US) 43 million, it was the single largest foreign investment by any MNC in the country. A full-fledged marketing organization was established which undertook agronomic programs to educate the farmers of Pakistan. As the nations first fertilizer brand, Engro (then Esso) helped modernize traditional farming practices to boost farm yields, directly impacting the quality of life not only for farmers and their families, but for the community at large. As a result of these efforts, consumption of fertilizers increased in Pakistan, paving the way for the Companys branded urea called "Engro", an acronym for "Energy for Growth". As part of an international name change program, Esso became Exxon in 1978 and the company was renamed Exxon Chemical Pakistan Limited. The company continued to prosper as it relentlessly pursued productivity gains and strived to attain professional excellence. In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of Exxon Chemical Pakistan Limited, in partnership with leading international and local financial institutions bought out Exxons 75 percent equity. This was at the time and perhaps still is the most successful employee buy-out in the corporate history of Pakistan. Renamed as Engro Chemical Pakistan Limited, the Company has gone from strength to strength, reflected in its consistent financial performance, growth of the core fertilizer business and diversification into other fields. Investments in people, process solutions and resource conservation initiatives have reduced energy use per ton of urea by a third, whilst increasing urea production nearly six-fold since 1968. Not only does this save money, it stretches non-renewable energy sources and mitigates the impact of waste. Along the way, a major milestone in

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plant capacity upgrade coincided with the employee led buy-out; innovatively optimizing our resources, Engro re-located fertilizer manufacturing plants from the UK and US to its Daharki plant site an international first. Our pioneering spirit continues in our social investments, exemplified by the only snake-bite treatment facility in the Ghotki region and the first telemedicine intervention in the country.

Vision
"To be the premier Pakistani enterprise with a global reach, passionately pursuing value creation for all stakeholders"

Core Values

Our employees performance can only flourish in a sound work environment. That is why ENGRO is committed to supporting its leadership culture through systems and policies employee health and safety.

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SAFETY, HEALTH & ENVIRONMENT We will manage and utilize resources and operations in such a way that the safety and health of our people, our neighbours. our customers and our visitors is ensured. We believe our safety, health and environmental responsibilities extend beyond protection and enhancement of our own facilities, and we are concerned about the distribution, use and after use disposal of our products. ETHICS AND INTEGRITY We do care how results are achieved and will demonstrate honest and ethical behavior in all our activities. Choosing the course of highest integrity is our intent and we will establish and maintain the highest professional and personal standards. A well-founded reputation for scrupulous dealing is itself a priceless asset. LEADERSHIP We have leaders of high integrity, energy and enthusiasm who have the necessary managerial, professional and people skills to inspire a group or an organization to set high goals and achieve them willingly. We believe that leadership skills need to be strengthened at all levels within our organization and that managerial and professional competence is a necessary foundation. QUALITY &CONTINUOUS IMPROVEMENT We believe that quality and a relentless commitment to continuous improvement are essential to our ongoing success. To this end, we define quality as understanding the customer's expectations, agreeing on performance and value, and providing products and services that meet expectations 100 percent of the time. Our motto is, "Quality in all we do." ENTHUSIASTIC PURSUIT OF PROFIT Successfully discharging our responsibilities to our shareholders to enhance the long-term profitability and growth of our company provides the best basis for our career security and meaningful personal growth. We can best accomplish this by consistently meeting the expectations of our customers and providing them with value. EXTERNAL & COMMUNITY INVOLVEMENT We believe that society must have industrial organizations that it can trust. Trust and Confidence are earned by our performance, by open and direct communication, and by active involvement in the communities in which we live and conduct our business."

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CANDID & OPEN COMMUNICATIONS We value communications that are courteous, candid and open and that enable each of us to do our jobs more effectively by providing information that contributes to the quality of our judgement and decision making. Effective commuication should also provide the means for gaining understanding of the company's overall objectives and plans and of the thinking behind them. ENJOYMENT & FUN We believe that excitement, satisfaction and recognition are essential elements of a healthy, creative and high-performing work environment. Having fun in our work should be a normal experience for everyone. INNOVATION Success requires us to continually strive to produce break through ideas that result in improved solutions and services to customers. We encourage challenges to the status quo and seek organizational environments in which ideas are generated, nurtured and developed. INDIVIDUAL GROWTH & DEVELOPMENT We strongly believe in the dignity and value of people. We must consistently treat each other with respect and strive to create an organizational environment in which individuals are encouraged and empowered to contribute, grow and develop themselves and help to develop each other. TEAMWORK & PARTNERSHIP We believe that high-performing teams containing appropriate diversity can achieve what individuals alone cannot. Consciously using the diversity of style. approach and skills afforded by teams is a strength we must continue building into our organization. DIVERSITY & INTERNATIONAL FOCUS We value differences in gender, race, nationality, culture, personality and style because diverse solutions, approaches and structures are more likely to meet the needs of customers and achieve our business goals. Corporate Responsibility Report

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QUESTIONNAIRE RESULTS
Question 1:
Type of Culture
8 7 6 5 4 3 2 1 0 Adaptability Culture Achievem ent Culture ClanCulture Bureaucratic Culture

The first question was about the type of culture followed at Engro. This was to know how the employees of the company perceive its culture. The number of bars represents the number of employees out of 10. Some of the employees checked more than one option therefore the figures add up to more than 10. The best thing about the companys culture is that it follows not only adaptable culture but achievable culture as well.

Question 2:
Communication

One wa communica y tion Two wa communica y tion

This chart shows the result for the question about the type of communication method being followed at Engro. A 100% result was achieved which clearly indicates that Engro encourages feedback from the employees. The company follows a two-way communication process, which is very essential for a companys rapid progress.

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Question 3:
Team Based working pattern?

Yes No

Again a 100% result is seen. Team based working pattern is the best a company can follow, which eventually leads to the betterment of the projects undertaken and the organization as a whole. Question 4:

S tructure of Org aniza tion

Horizontal Vertical

Majority of the employees have voted for horizontal structure of organization as it is the better way of communication between the upper management and the lower management and is a tool for increasing the relation with the employees. Horizontal structure of organization allows easy access and flow of information. Question 5: -8-

When asked which according to the employees is better, following results were obtained.

S tructure of Orga niza tion

Horizontal Vertical

Majority of employees suggest that horizontal structure of organization is better and employees can directly contact to the upper management and it is the best way to build a bridge between the upper and lower management. Question 6:

Im portanceof Pe oplefactory for Eng ro's Grow th

6 5 4 3 2 1 0 Poor Average Very Extremely

The bar shows the result of the importance of people factory for Engros growth. 50/50 result has been achieved which suggested that the importance of people factory is very important for the development of any organization.

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Question 7:

Corpora tion's attitude tow ards dive rsity

Ethnocentric Monoculture Ethnorelativism Pluralism

In this question, we provided employees with 4 different options along with their respective explanations so that it is easier for the employees to understand the question and answer accordingly. More than 50% employees believe that Pluralism, which means that the organization accommodates several sub-cultures, is Engros general attitude towards diversity. However, a few were of the opinion it is Entnorelativism meaning that the organization believes that the groups and subcultures are equal. Question 8:
Glass Ceiling?

No Yes

This figure shows that the majority of the employees believe that there is no glass ceiling in their organization.

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Question 9:
Gender Favoritism within the organization?

Yes No

Gender favoritism is not unheard of in many leading organizations. In order to find out whether this is a practice in Engro Polymer, we included this question in our questionnaire. Out of the 10 only 2 people were of the opinion that gender favoritism is part of Engros culture. Question 10:
Re cruiting Re quire nts me

Cultural diversity Education and Training Community outreach Community outreach Education and Training Cultural diversity

The employees of Engro polymer were asked to tell us which of the above three they believe Engro Polymer focuses on while recruiting. Majority of them believed that education and training program is focused on more, some thought it is culture diversity and few of them suggested the community outreach program.

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Questions 11 to 16 were open ended questions. Employees feedback is discussed with respective questions. Question 11: This open-ended question asked how Engros culture stands out from other companies. Employees believe that Engro has a rich history and its culture has evolved with time. Its Ethics and Values have played an important role in establishing open culture which has an open door policy where employees at all levels have easy access to top management. According to them, the culture is such that it encourages job delegation, diversity and career development. Question 12: This question asked how the organizations culture motivates the employees and increases their willingness to perform. Most employees think that it is highly motivating for them to have empowerment and no red-taping, quick decision making which saves time. The appraisal system and viable pay plan also encourages employees. Moreover, employees feel that they like to be associated with a culture that has deep roots and has evolved with time. They are motivated when they are allowed authority over their work and also by the immense work delegation and various development opportunities offered. Question 13: In response to the question about the 5 best parts of Engros culture to an individual employee, the most favourite answer was Open door policy. Other points included development opportunities, work delegation and authority, diversity, perks and benefits, focus and competitiveness, bias free culture, limited office politics and better working environment. Question 14: When asked whether Engro is a profit-oriented or a customersatisfaction oriented organization, most employees answered that Engro follows both profit and customer orientation methods. But according to a few employees Customer-Satisfaction is given more importance at Engro. Question 15: This question asked which according to the employees is better, Profitorientation or a customer-satisfaction orientation approach? Many employees stated that customer oriented approach is better as no company can survive if its customers are unsatisfied. Question 16: - 12 -

The last question asked for their recommendations for increased and better performance both internally and externally. Following responses were given by the employees: o Product development o Increased/aggressive marketing o Diversity o Increased delegation o Investment in human resources focus on development of manpower o Emphasis on retention of employees o Building knowledge-base for employees o Global approach

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Questionnaire ANALYSIS
The survey of Engro was quite informative and proved out to be really beneficial regarding our management course. The information we gathered highlighted the major management areas as in: o culture of Engro o cultural differences between Engro and other organizations o type of communication cycle planned o team based working pattern o gender differences o customer and employee satisfaction The analysis drawn from the questionnaire is as follows: o The best thing about the companys culture is that it follows not only adaptable culture but achievement culture as well. The company follows two-way communication, and is therefore progressing with a boom. o The working pattern followed is a team based working pattern which is now a days very famous and progressing rapidly. o Adequate resources and authority are provided to the employees to ensure excellent results. o Upper management actively supports the goals of work teams and guarantees 100% success. o Engro polymer follows a horizontal structure of organization as it can effectively form bridges between the upper and lower management. o The best part about this is that there is no gender favoritism within the organization. Engro polymer focuses on education and training while recruiting. o Engro Polymers culture stand out from other companies as it favors its employees and follows authority = responsibility rule which guarantees success. o The best part about Engro Polymers culture are that medical benefits, on time salary, bonuses and allowances, good communication between employees etc. o Engro Polymer is customer satisfaction oriented which eventually leads to profits. In order to conclude our analysis: New companys vision is:

Customer is always right

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Interview Analysis
In order to get a clear picture we went to the organization and interviewed 3 very important employees of Engro Polymers, namely: Mr. Arshaduddin Ahmed (Chief Financial Officer & Company Secretary), M. Imran Farookhi (Human Resource Manager) and Mr. Saleem Lallany (Head of Internal Audit). The interview consisted of around 15 questions and our findings are stated below. Engro Polymers follows a combination of both Adaptability and Achievement culture. The Achievement culture allows the company to improve continuously and keep growing by innovations and over a period of time has diversified its business into fertilizer, petrochemicals, food, and energy. They have also recently started Evixion, which is a software engineering plant for industry. The organization structure of Engro Polymers is horizontal. It is divided into four basic tiers. First the President, then the division head, followed by the unit heads, with the officers bringing up the rear. Engro believes that two-way communication is a basic tool for employee motivation and it also enhances efficiency. Company meetings are held every quarter between the CEO and all the employees of the organization. Financial results and major objectives so far acheived are discussed, along with future operations and plans for the next quarter. In these forums any employee from absolutely any level of the organization is welcome to put forth his or her complaints against any part of their job structure, or the company in particular, to the CEO in a lively one-to-one discussion. For increased efficiency there are monthly departmental meetings between the departmental heads and their employees, keeping in mind the results of the targets and goals for that month. Alongside this, the CEO and the board of directors meet with the management or departmental heads to discuss major challenges faced by the company. The People Factor is one of Engros greatest strength. Recruiting is a very important process of the Human Resources department. In both fresh graduates and experienced personnel looking for jobs, Engros employers basically look for integrity, high ethical standing and initiative drive. When given the choice between choosing the employee with a high CGPA or one who is street-smart, all the employers unanimously agree that they will choose the latter. Engro employs more than 700 employees who bring expertise and dedication to the workplace. They value each employee, their input and views about the company. Continuously striving to become employer of choice, they

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provide a workplace where people feel confident, valued and inspired. In order to motivate its employees, Engro also offers non-monetary benefits such as bonuses and allowances, rewards and recognitions and the appraisal system which is performance dependent along with a pat-on-back system. It is Engros vision that their people and culture drive them to achieve greater success, which clearly indicates the management belief that the employees fall under the category of McGregors Theory Y. If however, any employee falls under the category of Theory X, it is the supervisors responsibility to warn that employee against his or her lapse in initiative drive, as under the achievement culture of Engro Polymers, every supervisor is accountable for his or her employees performance. Engro is proud of the values it gives to its employees, and the visible corporate culture that it brings forth as a result. They believe that their organizations values take precedent over their visible corporate culture, as without values such an impeccable visible corporate culture is impossible. The corporations attitude towards diversity is extremely positive as they are string supports of Ethno-relativism. We were pleasantly surprised to find that there is absolutely no gender favoritism within the organization, with every employee having an equal opportunity to walk his or her way to the top. Employees from all levels of the organization are encouraged to come up with new ideas for the company, as Engro Polymer is continuously striving for improvement in every sector of organization. Lastly, it is a customer satisfaction oriented company; as without a satisfied customer there can be no profit.

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Conclusion and recommendations

In our analysis we have come to the conclusion that Engro Polymers way of functioning is parallel to the GE way: both companies give immense importance to the People factor; both companies live or die by their customers and both companies are continuously striving to be either No. 1 or No. 2 in their respective industries. We believe that Engro Polymer is a very fast growing organization; however, we would like to recommend that it should try to concentrate on increased interaction internally with respect to the organization, if it wants to achieve the No.1 position, rather than No. 2, in the industry and stay there.

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