TableNo. Of Content e 1.1 1.2 1.3 1.4 1.5 1.5.0 1.5.1 1.5.2 1.5.3 1.5.4 1.6 2.1 2.1.1 2.2 2.3 2.4 2.5 2.6 2.6.1 2.6.2 2.6.3 2.6.4 2.6.5 2.6.6 2.7 2.8 2.9 2.10 2.11 2.12

ofContentes

ContentPage No. 09 09 11 13 15 16 17 17 17 17 18 19 19 20 22 22 24 24 25 25 25 25 26 26 26 26 27 27 27 28

Introduction of Organization SWOT Analysis for LOPSPL Understanding of Strategic Frame Work Business Pressures Strategic Response HRM Factors Restructuring Of Organization Organize Training And Development Formulate HR Policies For R & D Improve Employee Brand Image Conclusion Introduction Little About TOC & Why The Area Of Teamwork Is Important For LOPSPL Team, Group & Teamwork Benefits Of Team Understanding Dynamics Of Team Teamwork Development Process Preparation To Form A Team Team Leader Selection Of Team Member Establish Purpose & Mission Statement Of Team Link The Purpose Of Team To Business Focus Prepare Project Plan & Define Team Members Role Establish The Process For Conducting The Meeting & Review Mechanism Threats Of Team Group Decision-Making Method Advantages & Disadvantages Of Group Decision Making Process Group Cohesiveness Trends In Industries Conclusion

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List of Tables, Figures & Annexure[A] List of Tables :Sr. 1 2 3 4 5 6 Table No. 1.1 1.2 1.3 2.1 2.2 2.3 Title of Table SWOT Analysis For LOPSPLFrame work for linking of Business Pressure to HRM factors through Strategic Response Export of Engineering Goods & Services During 2008-09 To 2009-10 Characteristics Of An Effective Team

Page No. 10-11 13 14 21 22 27

Actions From One Stage To Another Advantages & Disadvantages Of Group DecisionMaking Process

[B] List of Figures :Sr. 1 2 3 4 5 6 7 8 Fig. No. 1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 Title of Figure Sales Growth Achieved Strategic FrameworkIndustrial Raw Material Index Export Market To Developed Country From China Increased The Framework of Strategic HRD

Tuckmans Team Development Model Model For Group Development Process Forming A Team

Page No. 09 12 13 14 16 23 24 25

[C] List of Annexures :Sr. 1 Annex. No. 1 Title of Annexure Annexure 1 (Organization Chart) Page No. 29

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Answer to question no. 1

1.1

Introduction of organization:- Laxmi Oil Pumps & Systems Pvt Ltd (henceforth referred as LOPSPL) is selected for the study which is a medium scale industry located in private industrial estate, having 15000 sq meter area within the Solapur city Municipal corporation limit. Earlier this unite was know as Laxmi Engineering works and was manufacturing centrifugal water pumps. In 2002 this partnership company was converted to private limited company (LOPSPL). LOPSPL is presently manufacturing Lubricating Oil Pumps & assemblies required for Diesel engine and compressor for circulating of lubricating oil. Since from the inception aggressive marketing and fast product development of new models kept the organization on increasing sales growth. Fig 1.1 gives the details of sales growth achieved over last few years.

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Fig. 1.1 : Sales Growth Achieved

1.2

SWOT analysis for LOPSPL was done in last year and submitted for the PMA (Business Strategy & Strategic Management) is given below in the Table no 1.1

External Factor Evaluation Matrix for LOPSPLOpportunities Sr Key Factors N o 1 Major customers are increasing their product range & market penetration 2 European manufacturers are looking for low cost manufacturing base Weigh t 0.06 0.08 Ratin g 3 4 Weighte d score 0.18 0.32

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Abolition of Octroi tax will reduce the cost Manufacturer other than automobile are looking for supplier for low volumes 5 New international Air port at Solapur is announced by Govt 6 New reforms were announced in labour laws, boost the contract workers 7 Increased budget allocation for infrastructure will boost the construction machinery 8 Estimated power generation shortage leads to increase demand of gen sets in local market 9 Reduction in average tariff rate will reduce the import cost of raw material 10 Indian currency becoming strong against $ makes import viable for machinery 11 low cost technology transfers are available Threats Sr Key Factors N o 1 Withdrawal of stimulation package by Central government 2 Abolition of octroi will take long time to actual implementation 3 Difficulty in getting quality casting supplier for low qty and desired price 4 Difficulty in getting quality gear supplier for low qty and desired price 5 China has low cost alternative for oil pumps 6 Increase in overall package of middle managers due to IT sector 7 Overall global recession affected Indian economy 8 Increased in minimum wages because of inflation 9 Power shortage will increase the cost op operation 10 Strong Indian currency reduces the cash realization 11 High rate of octroi tax on imported goods Total

3 4

0.02 0.04 0.02 0.02 0.06 0.06 0.02 0.02 0.08 Weigh t 0.02 0.04 0.1 0.08 0.06 0.04 0.04 0.06 0.04 0.02 0.02 1.00

2 1 1 1 4 2 2 2 4 Ratin g 2 1 4 4 2 3 4 2 2 1 2

0.04 0.04 0.02 0.02 0.24 0.12 0.04 0.04 0.32 Weighte d score 0.04 0.04 0.4 0.32 0.12 0.12 0.16 0.12 0.08 0.02 0.04 2.84

Internal Factor Evaluation Matrix for LOPSPL StrengthsPage 5

Sr N o

Key Factors

Weigh t

Ratin g

Weighte d score

Organisation has got vast experience in manufacturing 2 Expertise in quick product development Have "TOC" based strong culture adaptable to 3 any change Skilled work force available at reasonable good 4 price 5 Facilities are "Marin classification" approved Modern management techniques (lean 6 manufacturing , Six sigma etc) are well practiced Good vendor base is available to support 7 subcontracting activity 8 Being OE supplier marketing cost is less 9 Group company supports in case of emergencies 10 Established ERP supports strong MIS Weakness 1Sr N o Key Factors

0.1 0.08 0.08 0.04 0.03 0.04 0.04 0.06 0.02 0.04Weigh t

4 4 4 3 3 4 3 4 3 3Ratin g

0.4 0.32 0.32 0.12 0.09 0.16 0.12 0.24 0.06 0.12Weighte d score

Dose not have internal design department Facilities are suitable for batch production & 2 have limited capability to cope mass production 3 Old infrastructure gives bad first impression Conservative management view of family owned 4 business 5 Internal fund generation is limited 6 Material to sale ratio is increasing 7 Product realisation cycle is very high 8 Less inventory turns increases inventory cost Old workers not having modern skills are not 9 easily replaceable 10 Logistics is always problem due to low batch qty.Total Table 1.1 : SWOT Analysis For LOPSPL

1

0.1 0.05 0.07 0.06 0.04 0.04 0.02 0.03 0.02 0.041.00

1 1 1 1 2 2 2 2 2 2

0.1 0.05 0.07 0.06 0.08 0.08 0.04 0.06 0.04 0.082.61

(Source : From PMA Business Strategy & Strategy management)

1.3

Understanding of Strategic frame work:- Strategic planning plays an important role in the modern management of organization. In order to cope up with internal and external forces influencing the business, needs to be addressed thoroughly. According to Pawan Budhwar and Samuel Aryee [1], A classical strategic management process consists of a series of steps, starting from establishing

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a mission statement and key objectives for the organization; analyzing the external environment (to identify possible opportunities and threats); conducting an internal organizational analysis (to examine its strengths and weaknesses and the nature of current management systems, competencies and capabilities); setting specific goals; examining possible strategic choices / alternatives to achieve organizational objectives and goals; adoption / implementation of chosen choices; and regular evaluation of all the above. The first five steps consist of strategic planning and last two steps address implementation of strategic implementation process. It is always stated that organizations human resource development activities should be in line with the strategy of the organization. While defining the strategic human resource development (SHRM) Wright and McMahan [2] argue, We define strategic human resource management as the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals. Hence the linkage between the organizational goal and the activity in HRM has to be established through strategic HRM. While emphasizing this importance, Devanna, M.A., Fombrun, C. & Tichy, N., [3] states that, Organizations are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalization, changing demographics of the workforce, increased focus on profitability through growth, technological changes, intellectual capital and the never-ending changes that organizations are undergoing have led to increased importance of managing human resources The external forces like technology, economic & market forces are causing organizations to make the changes in their strategy as well as human resources management. Paul R Sparrow and Andrew M Pettigrew [4] had given frame work for establishing this relation ship and given in the fig 1.2

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Fig 1.2 : Strategic FrameworkSource : Adopted from Strategic Human Resource Management in the UK computer supplier industry (Sparrow & Pettigrew, 1998)

1.4

Business Pressures:- External business pressures influencing the present and future business of LOPSPL are listed in the first column of Table 1.2. Since last ten years increasing trend of raw material prices is playing the biggest role. Cast iron casting and steels are the major contributors.

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Table 1.2 : Frame work for linking of Business Pressure to HRM factors through Strategic Response

Fig 1.3 shows the increase in the raw material price index. This increase is not fully compensated by the customer and ultimately putting pressure on the bottom line with increase in the material to sale ratio. R/M INDEX

Fig 1.3 : Industrial Raw Material Index Reserve Bank Of India, which is government, regulated bank increased interest rate 11 times in last one-year period in order to control the inflation. This has put the cap on new capital investments. Every large engine manufacturer had put the plant in China in order to exploit its low cost base. Local sourcing of all the parts and assemblies is lucrative alternative for engine manufacturer. Export market to developed country from China had increased significantly. Fig 1.4 shows the trend.

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Source : China National Bureau of Statistics. Note : Labour Productivity=GDP/No. of employees.

Source : UN Comtrade; The Beijing Axis Analysis

Fig 1.4 Export Market To Developed Country From China Increased

Due to global recession the export from the India has reduced. Table 1.3 shows the reduction in the export from India in the year 2008-09 and 2009-10. [5](Source from Export statistics EEPC www.eepc.org/export -data/ ) LOPSPL has also badly hit by this. Total per annum export was 40% of total sale in the year 2007-08 which has significantly reduced to 18% in the year 2009-10. Value In CRORE Rupees SL. GROUP-WISE EXPORT A CAPITAL GOODS B CONSUMER DURABLES C NON-FERROUS METALS & PRODUCTS THEREOF D PRIMARY IRON & STEEL & ITEMS THEREOF TOTAL 2008-09 2009-10 Growth % 83362.88 76113.46 -8.70 28912.99 26619.70 15936.75 16330.94 60797.94 40871.80 189010.56 159935.91 -7.93 2.47 -32.77 -15.38

Table 1.3 : Export of Engineering Goods & Services During 2008-09 To 2009-10Source : From Export Statistics EEPC www.eepc.org/export-data/

Earlier LOPSPLs scope was limited only to develop and supply of Lube oil pumps, but the customer focus has changed. In order to comply with increased pollution norms engine manufactures are compelled to change the design of the engine. Instead of giving the drawings and specification for the pump development, now customer is expecting the complete solution for lubrication circuit. In such a situation it is become mandatory for LOPSPL to build the internal capacity for design and

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development of the pump as per required specifications of the customer. Engine manufacturer will plan to meet Pollution norms in phased manner it affected with shortening the life cycle of the engine and subsequently pump required for it. LOPSPL has biggest location disadvantage. Being located in the municipal limit it attract local tax (named Octroi) which is 3.2 % for the parts purchased from Indian market and almost 10% on Imported goods. Labor rates are higher by 20% than the wages in the other area of the states. Due to poor infrastructure and under developed city, attracting and retaining the talent is the biggest challenge. required for operating of CNC machines.1.5

As

organization is pretty old some of senior workmen dose not have the modern skill like

Strategic response: - According to Peter Drucker [6], strategy can also be described as a sum of three components. First, there are assumptions about the environment of the organization: society and its structure, the market, the customer, and technology. Second, there are assumptions about the specific mission -expressed as a far-reaching vision or more exact objectives - of the organization. And third, there are assumptions about the internal resourcestangible and intangible-of the organization. Seen this way, strategy is about making the internal resources meet the external environment so that the future goals can be achieved. In order to cope up the internal and external business pressures LOPSPL needs to redefine the strategy with covering these points. Mainly it require to form strategic sourcing team to locate and develop alternate sources for low cost material. The focus area should be in plant efficiency increase and west reduction program. Presently domestic market share is only 12%, which can be further explored for increased business. To support the changing market needs, establishing design house and strengthening the development department would be added advantage. Though the relocation of the plant is not so easy but the cost benefit due to reduction in tax and reduced labor rates will definitely compensate the cost incurred for relocation. Particularly for SME sector, sourcing and retention is big problem, strategy to improve the brand image will help to attract new talent and upgrading the existing one.

1.5.0

HRM Factors:While linking the strategy with HRM, Mikko Luoma [7] states that, one can identify the need-driven, the opportunity-driven, and the capability-driven approaches.

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Likewise, one can see the framework consisting of elements internal to the organization, elements external to the organization, and a process that binds the two parts together. The need-driven approach is particularly connected to the developmental needs that are internal to the organization, the opportunitydriven approach originates from the opportunities external to the organization, and the capability-driven approach plays itself out starting from strategy that emphasizes capabilities, progressing through the organizational setting that is created or modified to go together with the capabilities, and ending in the actions of HRD. Further he suggests the framework to link the strategy to HRM factors shown in Fig 1.5.

Fig. 1.5 : The Framework of Strategic HRDSource : Mikko Luoma, Investigating the link between strategy and HRD, University of Vaasa, Vasa, Finland

1.5.1 Restructuring of organization:- Development department considering the initial volumes while product is in development stage does currently sourcing and then product is handed over to routine purchase department. Organization restructure for the purchase department with separating the routine activity than the initial sourcing will help the team to concentrate on to achieve the targeted saving with taking the quantity discount, considering the full production volume.

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Also in the marketing department thrust has to be given for development of customer for indigenous market rather than export market. Considering this point the restructuring of marketing department should be done. For developing the indigenous market, zone wise responsibility to be fixed for individual. 1.5.2 Organize training and development:- Apart from strategic sourcing to be cost competitive internal efficiency also needs to be increased. Company wide initiatives for six sigma and lean manufacturing will help to reduce the wastages and also to optimize the process characteristics. Rigorous training for all department heads as a core team and for implementers on supervisor level needs to chock out with the help of external consultant. 1.5.3 Formulate HR policies for R & D: - Considering the customer need for complete design solution, LOPSPL needs to put up separate Design department. But attracting and retaining talent required for this department at remote location like Solapur would not be feasible. Hence putting up development centre at Pune and giving support to manufacturing unite would be more practical solution. Relocation of manufacturing plant to nearest industrial area but out side the Octroi limit will save on the tax front and labor cost but logistic cost will increase, hence cost benefit analysis needs to worked out on which decision would be made. But it is big task and project from the HR angle and more detailing is required. 1.5.4 Improve Employee brand image: - Working in LOPSPL or that matter in any engineering manufacturing organization is not white-collar job. Also the lucrative work environment in IT industry influencing the new generation engineers to give the preference to non-manufacturing jobs. Campus selection at higher secondary school level and fostering them for higher education would help to get the good people. Industry institute interaction, which LOPSPL had already started, needs to further explored for this purpose. With the help of technology allowing senior team to work from virtual office also a good alternative. Flexible shift timing, five days a week would help employee to keep better work life balance.

1.6 Conclusion: - While advocating the importance of linking the HR factors with strategy, Ed van Sluijs & Frits Kluytmans [8] state that, Increased integration between human resource management and business strategy is one of the most important demands that are placed upon modern strategic human resource management. In both the management and the academic literature, it is generally acknowledged that the strategic deployment and management of personnel can contribute to the success

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and continuity of the firm. Some go even further by stating that a firms human resources form the basis of the firms competitive advantage. In this view, the human resources are the most important assets of an organization. At the same time, in addition to the importance of the human resources as such, it is believed to be important that the management of the human resources should be in perfect fit with the management of the organization as a whole and its strategic plans. Model suggested by Paul R. Sparrow and Andrew M. Pettigrew, for integrating the business pressures to HRM factors through business strategy is vital important in order to get the competitive advantage. Purchase engineer Tech Assistant Engineer (RQA) Sr. Engine er (QA) In-charge Calibratio In-charge n (Inprocess QA) Job Inspectors Calibration Assistant Purchas e Asst. Ass t.

Manager (Purchase)

Job Inspectors SQI engineer (01)

Marketing Consultant

Manager (process Development) Administrativ e Officer

CEO (Chief Executive Officer) (Marketing & HRD)

Technical Assistant Store Supervisor Accountant Store Asst Store Asst. Direct Workmen Indirect Workmen Trainees

Senior Manager

M. R & Training

Assistant (Productio n Planning)

Production Engineer

Shift Supervisor Direct Workmen Indirect Workmen Trainees

EDP(System Co-ordinator)

Annexure - 1 Maintenance Supervisor

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Organisation Chart

References

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[1] Pawan Budhwar and Samuel Aryee An Introduction to Strategic Human Resource Management Chapter 1 2] Wright, P. and McMahan, G. (1992) 'Theoretical Perspectives for Strategic Human Resource Management' Journal of Management, 18(2): 295-320. [3] Devanna, M.A., Fombrun, C. & Tichy, N. 1981. Human resource management: A strategic perspective, Organizational Dynamics, 9 (3): 51-68. [4] Paul R. Sparrow* and Andrew M. Pettigrew Strategic human resource management in the UK computer supplier industry

[5] www.chinasourcingblog.org/supply-chain

[6] Drucker, P.F. (1994), ``The theory of the business'', Harvard Business Review, September-October, pp. 95-104. [7] Mikko Luoma, Investigating the link between strategy and HRD, University of Vaasa, Vasa, Finland

[8] Ed van Sluijs & Frits Kluytmans, Business Strategy and Human Resource Management: Setting the Scene, MERIT Open University

[9] R. Berry and L.B. Smith, Conceptual foundations for The Theory of Constraints Human Systems Management 24 (2005) 8394 83 IOS Press [10] M. Beer, Organizational behavior and development, [Online] Available: www.hbs.edu/dor/papers2/9798/98-115.pdf (December 27, 1998). [11] Douglas J. Matthews, LEADING ORGANIZATIONAL CHANGE Right Management Inc. www.right.com Product # 6100-4US A MANPOWER COMPANY [12] Wikipedia, Encyclopedia http://en.wikipedia.org/wiki/Team

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[13] Davis, Barbee. 97 Things Every Project Manager Should Know: Collective Wisdom from the Experts. Beijing: O'Reilly, 2009 [14] G M Parker, Team Players and Teamwork :The New Competitive Business Strategy (San Francisco: Jossey-Bass, 1990), Table 2, p 33. Chapter 7 Group and teamwork [15] Pacanowsky, M. (1995). Team tools for wicked problems. Organizational Dynamics,23(3), 36-51. [16] Source: http://www.e3smallschools.org/download/TuckmansTeamDevelopmentModel.pdf. [17] Janis, Irving L. (1982). Groupthink: Psychological Studies of Policy Decisions and Fiascoes. Second Edition. New York: Houghton Mifflin. [18] http://www.citeman.com/571-groupthink-and-groupshift. [19] Kendra- Cherry http://psychology.about.com/od/sindex/g/socialloafing.htm [20] Williams, K. D., & Karau, S. J. 1991. Social loafing and social comparison: The effects of expectations of co-worker performance. Journal of Personality and Social Psychology, 61: 570581 [21] Tim Barnett Group Decision Making - advantages, model, type, disadvantages, Group decision making methods http://www.referenceforbusiness.com/management/Gr-Int/GroupDecision-Making. [22] Groups and Teamwork, highered.mcgraw-hill.com/sites/dl/free/.../KreitnerSmapleCh.pdf [23] Druskat VU, Wolf SB 1999. Effects of timing of developmental peer appraisals in selfmanaging work groups. Journal of Applied Psychology, 2: 78-94. [24] M. En C. Eduardo Bustos Faras. 2. Effective Groups and Teamwork www.angelfire.com/ak6/organizational_behav/lecture5.pdf

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