Ob Sec4-Group 1-Project 1

8/10/2019 Ob Sec4-Group 1-Project 1

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PAK CARPET INDUSTRIES

(PVT) LIMITEDORSC 201- SECTION 4 GROUP 1


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PAK CARPET INDUSTRIES (PVT) LIMITED

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Background of the Organization:

Pak Carpet Industries started in 1949, with the trading of hand crafted carpets

from Afghanistan and Iran. Syed Ali Akbar Rizvi, who is the primary founder of the

group, intended to aid the progress of the new nation by developing a local base for the

carpeting industry in Pakistan with a focus on customer satisfaction and stringent

quality assessment measures. Product diversification methods led PCI into the field of

manufacturing in 1951, and in the same year, the export process of its hand-made

carpets was induced. In 1965, the groups ventures developed further when their

machine made carpets acceded into the retail marketing sector. Currently PCI is the

largest trader of machine made carpets in Pakistan. Over the years PCI has expanded

exponentially in the automobile business under the name of Pak Suzuki Motors and the

Sheet metal business. This subsequent expansion called for vertical integration.

PCI is proud to place itself as the current largest retailer of machine made

carpets in Pakistan. It owes respectable position in the markets to its diligent workforce

and constant monitoring of production processes to ensure a raised level of customer

satisfaction and quality. PCI adopts an active stance against child labor and women are

with an equal chance to progress in their careers within the organization.


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Background of the Problem:

There has been consequential physical expansion with the continuous expansion

and growth that the PCI group has witnessed. A head office was established in

Islamabad, and within the geographical locus of Karachi, factories increased from one to

three. This growth significantly impacted the number of employees in the company.

More workers were employed in the production lines as the product range expanded,

and the lower rungs of the organization increased. Subsequently, there was a need for

more supervisors and managers to organize the workers and to allocate tasks and audit

the production processes. This led to inefficiencies and bottlenecks in smooth

functioning pertaining to communication lags given the tall hierarchical structure of the

organization.

With the success in the production line and diversification of merchandise, the

human resource department has flourished significantly. The organizational

environment has been revamped with an introduction of training programs and Kaizen

techniques to bolster and maintain quality standards. Despite of the existence of such

managerial controls, the HR manager, during the interview, seemed indifferent to

majority of the problems.

Furthermore, the companys Deputy HR manager, Hira Altaf also pointed out

lapses in the teamwork aspect due to ethnicity obligations. She accepted the fact that it

was very unfortunate that the organization is subdivided into ethnic groups who only

work for the personal interests of the in-group. As a matter of fact, the main locality of

PCI group remains Karachi and that very cosmopolitan nature of Karachi is mirrored in


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the structure of the work force of PCI group. PCI supports an image of merit worthy

advancement among the employees and encourages the inclusion of different races and

ethnicities in its workforce. This encourages a diverse environment with a mix of many

different ethnicities and religious sects. All these ethnicities have distinct attributes that

distinguish them from one another. Pre formed perceptions about other ethnicities

make them subject to stereotyping which is reflected from the in-group and out-group

behavior within the organization.

This clearly supported the hypothesis that diversity in the work force inevitably

leads to certain informal groups being formed on the basis of common interests shared

between the personnel. Speaking of Pakistani society in particular, it is inherent that

ethnicities hold utmost importance and there are clear divisions between in-groups

and out groups with respect to these ethnic groups. However, a problem that arises at

this point of time is that of conformity and group think that an organization has to face

as a result of these ethnic groups formed within the organization. As a matter of fact, all

such groups are tremendously cohesive in nature and result in extremely strong bonds

amongst all the members of the group. However, this factor clearly brings numerous

pitfalls with its existence that need to be taken into consideration. The factor of in-

group formation and the extent to which they are sentimentally attached, as a result

leads to discrimination, inefficient and ineffective communication, and deviant

workplace behavior such as lying and delaying work intentionally to bring down

productivity levels.


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Speaking on a general perspective, it is seen that different ethnicities and

cultural groups adopt a set of morals and values distinct to their own groups. However,

given the diverse nature of those values, they are bound to clash at some point in time.

This clash leads to inter group conflicts which are detrimental for the smooth

functioning of the organization. A problem that rises hand in hand with the notion in

context can be that of selective perception and labelling that follows as a by-product.

Unfortunately in the likes of the society we live in, certain personality traits have been

pinned down with ethnicities and changing those perceptions becomes really difficult.

So these built in perceptions that employees bring to the workplace adds to the plight of

ethical dilemmas an organization faces. They primarily comprise of favoritism owing to

personal preferences of those in charge. Similarly, verbal harassment and unfair

treatment is another evidence of how prejudices tweak the harmony that should

otherwise exist in the organization.

Another aspect that needs to be taken into consideration is that of existence of

several religious ethnicities that exist in Pakistan. As a matter of fact, over the past few

years Shia-Sunni conflict has seen an abnormal surge which has clearly created many

differences amongst the two ethnic cum religious groups in the workplace. This

subconsciously creates an unreceptive environment in the workplace and is a clear

disruption in the cause of harmony in the organization. Despite the fact that this

particular issue is not publicized on a macro level, yet the discrimination in deep rooted

and evident. Safeguarding the interests of ones own group in this particular situation is

a common practice which further reinforces the claim made above. This not only leads


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to ineffective communication, but also is a major source of inefficient allocation of

resources, be it time or other material resources like finance. All the above listed unfair

practices, favoritism, prejudices and discrimination indoctrinate diminishing levels of job

satisfaction that leads to high labor turnover for the firm. It also adds to the plight of

lower motivation levels which leads to falling productivity levels.

In the modern era, importance of team work cannot be denied at any cost. Given

the fact that all the above stated reasons lead to subordinates failing to empathize and

relate to each other, which clearly creates hindrances for team work and the entire

purpose of working in a team seems to get washed away. This brings down efficiency

levels as people fail to reach a solution that is agreed upon by all, or at least majority of

the members of the group. Storming process, as a result gets very time consuming as

there is failure to reach common grounds over assigned roles.

The growing, diverse workforce therefore inculcates a bottleneck in

communication of smooth flow of information within the organization. As an

organization grows exponentially there is an integral settling of managerial

diseconomies of scale, which pulls down productivity levels significantly resulting from

differing goals of the managers working in different organizations. This is followed by a

defrayal of the principal-agent problems where there are conflicting interests of the

workers and the owners. There are no common grounds on which different hierarchical

levels operate. Upward communication is one of the major dilemmas PCI faces as

subordinates find it difficult to voice their opinions to superiors in the organization.

There seems an air of lack of comfort and unnecessary fearfulness of the boss as agreed


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upon by Mehdi Ali Rizvi Director Finance and HR at PCI. Subordinates fear a loss in liking

by the superior if they voiced their opinions. When we asked several personnel at the

HR department they seemed exasperated by the situation and pointed out that it was

an issue that could be addressed to all major organizations across Pakistan at some

level. Upon asking a number of employees, it was clear the lower level employees were

reluctant to reveal information about the firm as they were fearful of the loss in their

job following whatever they revealed. However, after constant confidence, they did

admit that there was improper communication between the upper and lower levels of

management, which backs up our hypothesis of holdups resulting from the tall

organizational structure at PCI.

This problem creates a divide between the managerial staff and the workers in

the organization leading to more dissatisfaction in relation to job attitudes. The workers

believed that they were not acknowledged and appreciated for their efforts in a just

manner. Although they felt that their extrinsic rewards were prevalent to meet their

physiological, safety and personal needs (Abraham Maslow), there were certain

loopholes when it came to receiving intrinsic rewards such as acknowledgement and

appreciation. There were significantly high levels of frustration given the monotonous

nature of the work for employees in the production line of PCI.

Root Causes of the Problem:

After taking an in depth analysis of the organization, and its members from both

hierarchical levels, it was evident that two main problems could be highlighted.


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Declining motivation levels and absence of smooth flow of communication is what acted

as a barrier for the firm to achieve its objectives in an effective manner.

As defined by Stephen P Robbins, Motivation is the willingness to exercise high

levels of effort towards organizational goals, conditional by the effort ability to satisfy

some individual needs. Both of the problems mentioned above can be explained using

Herzbergs Two Factor Theory and McClellands theory of needs According to

Herzbergs two-factor theory, there are certain factors which lead to job satisfaction,

and some other set of factors that causes dissent and dissatisfaction amongst

subordinates. What needs to be understood at this point of time is that differing factors

confluence both dissatisfaction and satisfaction respectively. This implies that increasing

employee satisfaction by removing variables that cause dissatisfaction renders no good.

Instead he says that satisfaction is the opposite of absence of satisfactory cues and not

dissatisfaction, and vice versa.

This means, those managers in higher rungs of the organization can eradicate

cues that cause dissatisfaction; not to increase a sense of satisfaction amongst the

subordinates in the lower levels, but to increase a peaceful and non-hostile working

environment. Subsequently, Herzberg explained his theory by defining intrinsic factors

that could be related to satisfaction in one category known as motivators for the job.

Some examples of motivators could be promotions, development and growth prospects,

appraisal and acknowledgment, and bondage with the job and accomplishment.

Similarly, Herzberg also defined extrinsic factors as those related to root causes of

dissatisfaction amongst employees, as hygiene factors. Hygiene factors basically include


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pay scales, quality of appraisal and monitoring, company policies pertaining to welfare

of employees, job safety and security interpersonal relationship with other subordinates

in the organization.

Despite the fact that Herzbergs Two Factor theory cannot be practically put to

use in the modern era, cases revealed that the situation in PCI can practically be backed

up using this theory. It was evident that workers were lacked intrinsic motivation,

primarily because of lack of appreciation and recognition employees received for their

efforts. However, regardless of this, the presence of extrinsic awards somewhat

trumped the absence of intrinsic motivators at PCI. By offering sufficient reinforcement,

employees had motivation levels enough to stay at the job. Another aspect that needs

some light to be shed upon is the fact that workers did not lack motivation because of

deteriorated working conditions. They were, somewhat content with the working

ambiance PCI had to offer them, in terms of working conditions.

On the other hand, McClellans theory of needs can also be used to explain the

organizational behavior of subordinates of employees at PCI. The theory concentrates

on three needs as the bases to keep employees motivated: need for achievement, need

for power to exercise and have some say in the organization and lastly, need for

attachment with the firm which is the desire for developing close interpersonal

relationships at the workplace. However, these needs highly vary from subordinate to

subordinate, given the differing personality types existing in the organization.

An example could be of managers operating in the higher rungs of the

organization: they have a high need for power to get work done as opposed to need for


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sense of affection and belonging with other members of the organization. As mentioned

before, in PCI there were logjams in upward communication in the organization which

made it difficult for managers function in an effective manner. There existed an air of

tension and hierarchical barriers between differing levels of the organization and

subordinates were wary of voicing their opinions to the higher levels of management.

This can easily be related to the circumstances they were facing at PCI. Since workers

are not aware of what their needs were, they did not know what to demand and what

to voice their opinions about. At one instance, they might be high on need for affiliation

whereas as at some points in time, they might have a craving for the need of power.

However, what needs to be noted at this point in time is that these needs depend on

the position in hierarchy a subordinate has above and below him. For example, an

employee working in a lower rung would not be efficient if he has the need for power

because he really does not need power to exercise at this point in time.

Similarly, if we take contemporary theories into consideration, we see that the

concept of self-efficacy can also be used to explain the problems faced by PCI. The Self-

efficacy theory states that an individual believes in his or her potential ability to perform

a task. He is efficient and capable to accomplish any certain task. Higher efficacy can be

explained by higher confidence levels, greater persistence to solve problems when they

occur, and potential to unleash the best shot when needed. If subordinates are asked to

carry out a challenging goal, and if they have a strong sense of self-confidence and belief

in themselves to accomplish the stated goal, they can perform it well and meet

expectations of higher levels of management. This overall pushes up the productivity


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levels in the firm. However, this was a missing aspect in the employees at PCI where

workers independently were not wary regarding their proficiencies. As a matter of fact,

they were not given challenging tasks, and had no right to take decisions themselves.

Therefore, the level of trust and confidence the firm had rested in their employees was

missing and this resulted in declining motivation levels, as workers lacked the gesture

that the firm trusts them to accomplish difficult tasks on their own.

We observe that all these afore mentioned theories of motivation are in one way

or another applicable to the problems that were identified at PCI, where each theory

points to the various aspects of every problem. All of the theories are more or less equally

applicable to different aspects of the problems that exist and all of them are at agreement

in coming up with the reasons to why employees lack motivation. None of the theories

can be eliminated in our analysis, therefore we must account for all possible root causes

which may intend on reducing the welfare of the organization, which may be against

organizational interests.

We have already discussed that miscommunication or lack of communication is

embedded in the preconceived notions members of the organization hold, which are

mostly based on cultural stigmas. These notions indicate that to be silent in front of ones

superiors is approved and in fact appreciated. This is consistent with the view that

arguing or questioning policies and ideas are disrespectful, because such behavior causes

conflict. What hinders communication most is an ethnocentric view within the work

place which is caused by the stereotypes that we attach to different cultures. It holds true

that efficient communication leads to reduced uncertainty and increases satisfaction

among employees, it also increases the significance that one attaches to their work.


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Proposed Solution:

We came up with a number of solutions which the management could implement

to assure a healthy working envormoent at PCI, free from all sorts of discimination and

prejudices . These techniques, only when carried out efficiently will lead to improvement

in the operations of the company.

First of all, in order to instill upward communication in the organizaton, one can

incentivise initial response. When employees see their their suggestions materializing, it

will automtically lead them to put forward their opinions and suggestions more openly

This will inculcate an air of democratic style of leadership at PCI. They would also be

encouraged to be more vocal about their thoughts. Feedback to the upper hierarchial

levels in the organization will lead to better co-ordination within the organization.

To reinforce the need for better communication, employees can participate in

inexpensive group activity sessions, this would increase understanding among them.

Teams for these sessions should be selected such that they include members from

different hierchal rungs of the organization. Each member of the group should be

provided with bits of information in a random order, the groups will then unitedly decode

the message and successfully complete the specified task. Such a group activity will

make the members realize the essential position that communication holds in any

organizational set up. They should encourage collection of anonymous feedbacks from

employees so that they can feel fre when voicing their opinions regarding managerial

issues and any other vows they face at PCI. This will be a productive procurement with

the existing mindset of the workers. This is because at present employees feel that


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upward feedback would be damaging for them. Applying the feedback provided by the

employees ensures a more proactive approach towards the work place. The management

can successfully take into account the grievances of the employees. Through this method

a healthier working environment is created and the privacy and autonomy of the person is

also maintained. Such efforts which accomodate certain needs of the employees will

cause overall satisfaction and organizational citizenship behaviour to increase. Regardless

of the fact that it is likely that this method will be efficent, it also holds true that personal

feedback towards a person who uses this service may prove to be stressful. Employees

may also be dissappointed or dissatisfied if their problems are not addressed and the

justification for not acknowledging a complaint/objection is not provided.

Since the company consists of a very strong and strictly pre-defined hierarchal

structure therefore information is transferred in a chain pattern. However focus should

shift to an All-Channel network from such strict beurucracy where managers should

display a very open and accepting image towards the workers and hence maintain a

level of transparency with them.

To overcome the issue of absence of internal reward systems, the company

should introduce contests such as employee of the month and worker of the year

which will not only encourage workers to put in more effort and boost interest in work

but also increase the overall efficiency of the department. Public praise and

congratulations are other ways of internally rewarding workers and making them feel

valued. Group activities can further overcome the cultural diversities and norms present

in the department leading to even higher efficiency. Seminars and presentations can be

held to tell the workers about the satisfied customers hence improving task significance


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and leading to more meaningfulness of work. This is because that way the workers

would know that their efforts are helping others change their lives and are of utmost

importance to the customers.

A strong nationalistic element can be promoted in order to push away the strong

stigma attached to ethnic identities. Since Pak Carpets Organization came into being

when Pakistan was formed thus their nationalistic stance against child labor and gender

bias can be used to promote unity and exude an image of loyalty to the united cause

and the organization itself. Events that might help the organization in doing so are for

example screening of Pak vs India matches where the workers are encouraged to shed

their ethnic identities and realize that they do have a great number of similarities owing

to the cultural climate of the country as a whole. Hence this way they will be able to

generate a greater sense of patriotism and nationalistic fever in them. This will also

increae a sense of belonging amognst all employees alike as they will set aside their

ethnic differences and focus on the common footings they share.

To diminish the problem of uncooperative attitude of the staff, they can be

equated to a higher hierarchal level. However it should be made sure that no particular

department must be dominated by a certain ethnicity as that would not only lead to

discrimination and grudges within the department but would also lead to withholding of

information. New admissions should be done on the basis of skill set but quotas must be

kept in mind in order to avoid creation of an overpowering majority. People can also be

posted to different locations in order to learn to adjust to different cultures, place and


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people and hence be flexible in learning and adapting to new mindsets. Transfers on a

local basis would instil a more diverse and versatile outlook on problems.

The main dilemma lower level employes face is of illetracy which often acts as a

barrier for them to understand the logic behind guidelines conveyed to them. To

overcome this problem, social grooming programs must be held that would not only

help them in their personal growth but also make help them to be cautious of

conducting themselves around each other so that they refrain from offensive stances

and attitudes towards other employees. Ethnocentric view must be discouraged and a

nationalistic view must be set into play allowing the workers to abandon their existing

differences with each other and together work towards the wellbeing of the situation of

the organization. Celebrating different cultural days for example the Ajrak Day can

also lead to a decrease in hostility for different cultures and increase the extent to which

employees aree considerate and accommodate each others cultural values. It will not

only act as a social activity but will also help in portraying a very flexible and

accomodating image of the different cultures. Hence this celebratory stance highlights

the positives of every culture as well.

In order to manipulate the strong in-group tendencies, tasks should be assigned

with concrete goals and procedures to maximise the predispostion of the employees to

accustom to the prevalent norms of the group. Active leaders must be established who

would make sure that each contribution is just and equally given importance to. Team

behaviour should also be rewarded in forms of extrinsic rewards and bonuses to ensure

that the reinforcement is tangible. Rewarding is another way to help the lower level


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employees to work together and unitedly achieve the main goal of the group. Groups

should be competitive amongst one another, this will improve efficiency of work force..

Group competitiveness can be achieved by holding inter-group activities rather than

intra-group ones. However cultural diversity is not an entirely negative phenomenon. It

can be manipulated and used in ways to promote compeition within the workforce and

lead to higher levels of indivisual performance.

As mentioned above, different solutions have been proposed in this paper to

overcome the problems faced by Pak Carpet Industries and a definite plan of action can

be made to meet each goal separately. However the opportunity cost of conducting the

plan of action must be taken into account since the time and funds used are of pivotal

importance. Our course of analysis was not surface deep because we went deep into the

topic of study and identified the problems in relation to the organizational history and

environment. Hence solutions have been proposed by us that will in future lead to a re-

established sense of efficiency and satisfaction within the employees, especially the

lower level ones resulting in a positive outcome of a company that promotes

communcation, motivation and cohesiveness.

Documents

Ob Sec4-Group 1-Project 1