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INDUSTRY PROFILE
Home Appliances are that without which a modern home is considered incomplete,
especially in urban areas. We have become so used to some of the home appliances that it seems
difficult to live without them. Since the mid-1800s, people have been thinking of new and
innovative ways to store food, cook food and clean up after eating food. Many of these ideas were
good enough to be used by a large number of people and they are still around today. Indeed, they
have made our life more comfortable and easier than ever. In metro cities and big towns, such
household appliances are regarded as a boon, as they are instrumental in cutting down the time
involved in most of the domestic chores. This is really a great help since people often find it
difficult to keep a balance between professional obligation and household needs. China has
become one of the world's major producers of home appliances after development over a decade.
The Indian pressure cooker market size is approx. 9 million pieces p.a., which is equally
divided between organized and unorganized sector. Pigeon enjoys 30%+ market share in the
pressure cooker market of which it is the market leader in the outer lid market segment with 65%
market share and 5% of its recently entered into and a highly competitive inner lid market.
The branded cookers market has been growing at 5-6% over the last 4-5 years
While Pigeon has witnessed volumes growth at 8 -10%. We expect this segment to continue to
clock similar volumes growth over the next 2-3 years. Pigeon strategy in this segment has been
to innovate and give the user a better product experience. Pigeon has introduced both aluminium
and stainless steel cookers, the latter of which has given boost to the overall average realization.
Pigeon product innovation, superior quality and product technology has always enabled it to
command a superior price realization over its peers. Pigeon cookers are targeted towards middle
class and the upper middle class and enjoy a 3-5% price premium over other branded
manufacturers. Pricing Rate Structure and Incentives to Consumers. If done right, time of use
electricity pricing will not require people to change their behavior to save money and help the
environment. Communication Standards: Standards and protocols for communications with
Smart appliances must be open and limited in number across all utility districts. While smart
appliances must work seamlessly with electric utilities in a fully functional smart grid system,
the consumer must always have control over the appliance. If a consumer wishes to override
deferral of an appliance function and incur a higher electricity rate, they should be able to make
1
such a choice the boundary of the utility's reach should end at the smart meter. The purpose of
the Pigeon is to provide more efficient use of energy, not for utilities to control or monitor
appliance usage. It is commonly believed that a trio of kitchen appliances—the refrigerator, the
mixer-grinder, and the pressure cooker have transformed the lives of millions of housewives in
India. Given the unique culinary habits of Indians, who use a lot of lentils and rice in their foods,
the pressure cooker is perhaps the most important kitchen appliance in an Indian home.
COMPANY PROFILE
Founded in 1995 by a young 25 year old first generation entrepreneur Mr.Rajendra.J.Gandhi ,
the current Chairman & Managing Director, whose passion for manufacturing, keen eye to learn
& innovate and ability to manage the company hands-on, has made Stovekraft - the FASTEST
Growing Kitchen Appliances Company in India.
Stovekraft established in 1997 as an unit of Vardhman group started manufacturing LPG
stoves in Banglore breking the stranglehold of Delhi based companies and become the largest
LPG stoves manufacturing in the country. Being an OEM for brands like TTK ,Maarlex ,
inaslsa and host of other brands was a feather in the cap for Stovekraft. In 1999 stovekraft pvt
ltd as born and started a tie up with BPL to manufacture its ulter premium LPG stove range.
It was time to taper down the OEM business and to have own brands birth of two brands
happened in 2001-Pigion and Gilma . From then on there is no looking back and the company
started adding new products to its protfolio every year.
Success has not in any way changed the values of the organization. Humility, Reliability and
Trustworthiness have always been the driving factors behind the growth of Stovekraft .But
evolving at Stovekraft is not just about being a market leader. The company provides its
employees, an environment that allows them to excel in their areas of competency and interest.
The work culture at Stovekraft is based on the profound belief that employees are its most
2
important asset. Respect and genuine concern for each employee in the organization is the basic
principle on which the organization functions.
Stovekraft recognizes the need of the consumer depending on his values and lifestyle. The 250
Crore plus company is the proud owner of the two flagship brands in the market, namely
and . Pigeon being a value for money brand is now an immensely
successful brand with a wide product portfolio. Gilma branded products are targeted at the
premium segment.
The company has carved a niche for itself in the domestic and foreign markets, garnering export
orders from countries like Fiji, Sri Lanka, the Middle East, and Africa. Today, Stovekraft has
gained a strong foothold in all the markets it operates in and has managed to edge out the
existing competition. The company, whose turnover is INR 2500 Millions Plus, continues to
spread its wings and grow every day.
History and Growth
Starting with Manufacturing of Kerosene Wick stoves with a turnover of INR 24 lakhs Company
in 1994, adapting itself to the changing times, has constantly moved up the value chain.
Stovekraft established in 1997 as an unit of Vardhman Group, started Manufacturing LPG
stoves in Bangalore breaking the stranglehold of Delhi based companies and became the largest
LPG stove manufacturers in the Country. Being an OEM for brands like TTK, Marlex, Inalsa
and host of other brands, was a feather in the cap for Stovekraft. In 1999 Stovekraft Pvt ltd was
born and started a tie up with BPL to manufacture its Ultra Premium LPG stove range.
It was time to taper down the OEM business and to have own brands. Birth of two brands
happened in 2001 – Pigeon and Gilma. From then on there is no looking back and the company
started adding new products to its portfolio every year.
Most Valued Relationships
Stovekraft Ties-up with Petro Giant HPCL (HP) in April 2006 for Co-branded ISI
marked Green Label Series Pigeon LPG Stoves
3
Stovekraft ties-up with Indian Oil in August 2006 for co-branded ISI marked Green
Label series Gilma LPG Stoves.
Stovekraft ties-up with Bharat Petroleum in August 2007 for co-branded ISI marked
Gilma stoves.
Stovekraft receives order from Tamil Nadu Govt. to supply 75,000 nos. of LPG Stoves
in December 2006.
Tamil Nadu re-imposes trust with an order for 200000 LPG Stoves in 2009.
Stovekraft is selected as the sole vendor by Pondicherry Govt to supply 10,000 nos. of
LPG Stoves in March 2007.
SIDBI SME Growth Fund has invested INR 22 Crores in Optionally Convertible
Debentures.
Ernst and Young are the Statutory Auditors of the Company.
Grant Thornton are the Internal Auditors for the Company.
Standard Chartered and State Bank of India is the Bankers to the Company.
The Company values these relationships very much and is confident that these relationships will
bring great benefits to the Company.
Nature of business:-
Actually the unit situated at Medmarnahalli , Bangalore rural. The nature of business is
manufacturing company. Stovekraft private Ltd. operates as a home appliances company
worldwide, specialized in kitchen appliances.
There are 4 units :
Production:
1. LPG FAB:
From 1 burner to 4 burner LPG Stoves with both Auto ignition and
Non-Auto Ignition systems
High Fuel Efficient Green Label Series LPG Stoves co-branded with
Public Sector Oil Companies
4
Imported Gas Hobs in Gilma Range
2. Cooker
Aluminium and Stainless Steel Pressure Cookers
Imported Electric Rice Cookers
3. Non stick
Conventional pressed aluminium cookware to imported Pressure Die
cast aluminium Non stick Cookware.
4. Moulding
VISION:
Establish Stovekraft as a global brand known for its values assertiveness and the acumen to
adopt the ever changing environment.
MISSION:
To deliver innovative, user friendly and better quality product at best value to
The customers, keeping in mind the prosperity of the company and its stockholders.
GOAL:
Distribution Network all over India for Pigeon with over 25000 dealers
95 Company Owned Brand Stores for Gilma across south and western India.
3 International class showrooms for Gilma Kitchens.
Comprehensive service facility.
5
Group turnover exceeding 350 Crores.
Product Profile :
Gilma:
1. Electric Chimneys,
2. Hobs,
3. Cook tops
4. Microwaves.
5. Modular Kitchens
6. Solar Water Heaters
7. Electronic safe
Pigeon:
1. Stainless Steel LPG stoves
2. Stainless Steel Wick Stove
3. Aluminium Pressure Cooker & Pressure Pans
4. Stainless Steel Pressure Cooker & Pressure Pans
5. Non – Stick Cookware
6. Mixer Grinder
7. Electronic pressure cooker
8. Microwaves
9. DVD Player
10. Water purifier
11. Water filter
12. Induction cooker
13. Stainless Steel Vacuum Flask
6
14. Electric Rice Cooker
15. Electric Iron
16. Coffee Maker and Kettle
17. Pop-up Toaster
18. Sandwich Toaster
19. Citrus Juicer
Infrastructure:
Over 50 acres of land.
Canteen facilities: There is a canteen in premises of the factory, which provides food at
Free of cost .Canteen open on all working days.
Power Sanction of 1000 Hp.
Trained and Committed Production Team.
Quality Tool Making Facilities with highly skilled personnel.
Total built up area of over 250000 Square Feet.
Exclusive admin block – under construction.
Exclusive accommodation for workers.
Transportation Facility : Company owns vehicle
Medical Facilities: The Company has set up a medical center in the premises which has
qualified doctor with supporting staff. Medical facilities are available around the clock. It
has basic facility like ambulance, wheel chairs etc.
Capacity:
Pressure cooker – 2 million p.a
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LPG stoves – 3 million p.a.
Non-stick cookware – 3 million p.a .
Over 1700 employees
Achievement and Awards:
1999- Stovekraft Private Limited is born. A tie-up with BPL to manufacture its ultra-premium
LPG range.
2000- Pigeon Appliances Pvt. Ltd. Is born, develops and adds Mixers Grinder to its product
portfolio.
2004- State-of-the-art manufacturing unit at Baddi to deliver new range of exciting products.
Pressure cooker is added to Pigeon portfolio Gilma adds 4 burner cook top that stuns the market
with its looks and quality. In no time it becomes a star product.
2006- Chimneys, Hobs are launched under the Gilma brand. Becomes a major brand in India in
the lifestyle segment.
TIE-UP WITH PETROLEUM GIANTS HPCL , BPCL and IOCL To manufacture and market
co-branded ISI certified GREEN LABEL LPG Stoves with more than 68% Thermal Efficiency.
2009- STOVEKRAFT is the India’s largest manufacturer of co-branded ISI certified GREEN
LABEL LPG Stoves .To meet the raw material requirements we are setting up a rolling mill to
manufacture 5000 tons of Aluminum circles per Annum which will also be the largest facility in
India
2010- State-of-the-art fully automated Pressure cooker & LPG manufacturing unit at Bangalore
2010- State-of-the-art fully automated Nonstick and Wonder cast die cast manufacturing unit at
Bangalore.
8
ORGANISATIONAL STRUCTURE:
MANAGING DIRECTOR
GENERAL MANAGER
9
Finance Dept
Production Dept
Marketing Dept
Purchase Dept
HR Dept R&D Dept
Tool room
Service Dept
VP&CEO VP Marketing Senior Manager
GM Purchase
Director VP GM Head
GM A/c GM finance
Manager Production
ManagerVP Head In charge
In chargeAsst
Manager
Deputy Manager
Senior Manager
GM MktSenior
Manager
Supervisor Asst Manager
Executive Executive Designer Technician
Manager A/c
OperatorTrainee TechnicianAsst
ExecutiveAsst Purchase
Branch Manager
Line SupervisorManager
Finance
Accountant
Assistant
Asst Sales
Executive
Promoters
Competitors Information:
PREETHI:
Preethi, the largest selling mixer-grinder brand in India, today launched its new range
that would lead the company’s pan-India market expansion and was planning to enter into the wet
grinder market in the next 12 months. Preethi is a strong competitor in the market for Mixie. In
Mixie they are strong competitor for every one they are maintain a standard value in the minds of
the customer.
PANASONIC:
Under the Panasonic brand and its slogan, "Panasonic ideas for life," Panasonic Corporation
provides a wide range of products, from audiovisual and information/communication equipment to
home appliances and components, as one of the largest electronic companies in the world today.
The company aims to become the No.1 "Green Innovation Company" in the electronics industry.
PRESTIGE:
Over the past five decades TTK Prestige Limited, has emerged as India’s largest kitchen appliances company catering to the needs of home makers in the country. Every Prestige brand product is built on the pillars of safety, innovation, durability and trust, making the brand Valuable. We always begin by understanding the needs and requirements of our customer and then we design and deliver innovative products. TTK Prestige Limited has come a long way. Today, TTK Prestige Limited has the widest product portfolio covering all aspects of the Kitchen making it the only brand to offer TOTAL KITCHEN SOLUTIONS to the customer. The product range includes Pressure Cookers, Non-Stick Cookware, Rice Cookers, OTG’s, Kitchen Hoods (Chimneys), and Hobs, LP Gas.
SUNFLAME:
Renowned for its high-quality, high-performance kitchen/home applications, Sun flame is clearly the No. 1 choice of homes across India. With leading-edge technical superiority, and innovation as the cornerstones of our corporate philosophy, Sun flame assures its customers consistent quality and dependability. Limited is also the first Kitchenware Company in India to receive the ISO 9001 Certification and the PED/CE Certification by TUV, Germany. Prestige has been
10
awarded with Selected “Super Brand” validated by Consumers and also it is the most preferred brand in Kitchenware segment.
BUTTERFLY:
The Butterfly Group, Pioneers in Stainless Steel Appliances started operations four decades ago. The company was the first in India, to introduce Stainless Steel Pressure Cookers and Vacuum Flasks, and acquire the ISO 9002 certification, in the LPG and Mixie divisions. Over the years, under the enterprising leadership of Mr. V Murugesa Chettiar and his sons, Butterfly has grown to be a household name among millions in India. Today, Butterfly manufactures a comprehensive range of home appliances, kitchen products and cookware.
NIRALI;
Nirali appliances" is a prominent name in world class electrical/electronic appliances
product. Our company was started with an aim to establish themselves as market leaders in the
service oriented industry. Our company believes that quality standards of products and services
can be raised through distributor/dealer network, teamwork, training and motivation.
Area of operation:
Area of operation of Stovekraft private limited.
Regional:
Bangalore rural: Stovekraft private limited
.#81 Harohalli Industrial area , Kanakapura Taluk , Ramanagara District , Bangalore Rural.
National: Himachal Pradesh
Baddi
Countries to which exported
1. UAE (Dubai)
11
2. Kenya
3. Fiji Islands
4. Uganda
5. Sri Lanka
6. Kuwait
7. Sultanate of Oman
8. Singapore
9. Tanzania
Exploring Markets
1. South Africa
2. Botswana
3. Mexico
Countries of Import
1. Thailand --- Stainless Steel Sheets and Coils
2. Brazil --- Stainless Steel Sheets and Coils
3. Spain --- Stainless Steel Sheets and Coils
4. Indonesia --- PTFE (Non Stick coating chemical)
5. China --- Imported range of small appliances
J. Future growth and prospects:
SKPL is the Only one company to have such a widest range of products under the umbrella of Pigeon and Gilma two brands, in the world of kitchen appliances product which are consumed very frequently and also has a great demand for the product hence their a tremendous scope for growth as company has growing at a very rapidly in terms of turnover year by year.
The company with over 2000 employees with a turnover exceeding 500 crors with a growth of
100% year by year adding new successful products to its portfolio managing successful brands in
a different marketing segments. Looking at the future sales growth prospects company has
enhanced its in-house manufacturing facility to meet out the demands of the marketing.
12
SOWT Analysis:
STRENGTHS
1. Maintain A Good Relationship With All Workers.
2. Highly qualified and efficient staff management.
3. Good industrial relation.
4. Low cost skilled labor.
5. ISO certified Company known for quality.
6. Employees working from many years in the same company which is one of the advantages
to the Company in molding the relationships and experiences.
7. Flexible in terms of production quantity and lead time.
8. Power generation.
9. It is located in the place where good infrastructure is available.
WEAKNESS:
1. Lower productivity and cost competitiveness
2. Quality is not consistent.
3. Low level of training.
4. Few Products quality is bad.
5. Lack of Creativity.
6. Lack of communication.
7. Poor Relationship b/w Workers and management.
OPPORTUNITIES:
1. Huge demand for value added goods in all major countries.
2. Relocation from high cost economies.
3. Large and relatively untapped domestic market
4. Had an Opportunity of NO-1 Position.
13
THREATS:
1. A Heavy competition between one against other.
2. Deficiency of confidence in workers.
3. More Local Brands may exist in Market.
4. Though there is high mortality of these players they tend to impair the rapid growth
Of quality conscious branded players by putting their legitimate margins under pressure.
As has been the policy, the company continues to invest in innovation, feature and value
addition, customer education and brand promotion to stay above these unorganized players.
5. Declining economy of manufacturing sectors in general.
6. Govt Policies towards manufacturing industries, imposing environment pollution
restriction.
14
Work flow model:
Cooker:
Body Operation Lid Operation
Not Ok
15
Ingots for Melting to Vendor for Job work
Ingots for Melting to Vendor for Job work
Inspection of Aluminium
Inspection of Aluminium
Send Back to Supplier
Send Back to Supplier
First & Second Draw Operation
First Drawing
Broaching Operation Trimming Operation
Locking Profile Operation Edge Folding Information
Trimming
Outer Polishing Bottom Bending
GRS Slot Cutting
GRS Hole Piercing Side Hole Piercing
Outer Polishing Side Hole Piercing
Logo Stamping Top Logo Stamping, Vent tube & Safety Valve Piercing
Not Ok
16
Inside Sunray OperationSunray Operation
Bracket Riveting Bracket Riveting
Body Hand Fitment Dimpling & Safety Valve Hole Bending
Side Supporting Handle Fitment
Packing with Trivet
Master Carton Packing
Labeling
Cleaning
Fitment Test With Lid & Body
Gasket Fitment
Safety Valve & Vent tube Fitment
Lid Handle Fitment
Pressure Test Rework
To Stores & Dispatch
1. Structure It prescribes formal relationship among various position and activities .Arrangement about the reporting relationship, how an Organizational member is to communicate with other members, what roles he has to perform and what rules and procedures exist to guide the various activities performed by a member are all part of Organization arrangement and relationships.
b) Departmental study:
HR Department:
Competence Building
Commitment
Motivation
Employee Relations
17
M D
Senior Manager
Asst Manager
HR Executive
Asst Executive
In the backdrop of the above, the focus of Human Resource Development initiatives at
Stovekraft emphasizes the following
I] MAN POWER PLANNING
Out sourcing of low tech and medium tech jobs
Fresh induction only in critical / highly specialized areas based on requirements due to
increase in work load and super annotation profile. In the Workmen Cadre, induction
will be restricted to Direct Workmen only
Improving the existing qualification profile by focusing on induction of professionally
qualified personnel and diploma holders
Hence focus of recruitment would be to recruit people with a combination of knowledge, skill,
experience and attitude in line with the organizational requirement through appropriate
manpower plan both short term (contract appointments) and long term recruitment program.
II] TRAINING AND DEVELOPMENT
Training is one of the most important tools for developing human resource. Hence, identification
of training competency profile in terms of Vision, Mission of the Company would be the
strategic point of the training and development strategy of the Company. The following
objectives have been set in this regard:-
To provide training to all employees at regular intervals in a plan period of 5
years
Training to become an integral component of individual professional evolution
by:
o updating knowledge to avoid obsolescence
o enhancing professional creativity
o enabling employees to shoulder higher responsibility
18
Keeping in view the organizational requirement and goals and objectives of training, the
following have been identified as the key focus areas of training:
Technology
Tooling
Quality
Information Technology
III) PERFORMANCE APPRAISAL:
Appraising people for meeting the Company's goal would be the prime focus of performance
management. The new Performance Appraisal System based on work planning and commitment
(mutually agreed tasks) , self-review and performance analysis, performance review and
feedback would ensure that the focus would be on value adding activities rather than on routine
activities which bear no relationship with the Organization’s goals and objectives.
Identification of low performers and resultant corrective action throughout the Company would
be given priority. Similarly, faster career growth opportunity would be provided to high
performers.
IV] REWARD SYSTEM
The focus of the reward system in the Company is to promote team work and cultivate a sense of
achievement and excellence in the Organization. This is in addition to the existing scheme of
reward for an individual who innovatively and creatively makes exemplary contributions in the
key thrust areas of the Company that would lead to its achieving overall excellence. Lastly, the
HRD Plan will also include time-to-time OD Interventions to address specific requirement of the
Company.
19
Marketing
Definition:
Philip Kotler defines marketing as 'satisfying needs and wants through an exchange
process'. Within this exchange transaction customers will only exchange what they value (money)
if they feel that their needs are being fully satisfied; clearly the greater the benefit provided the
higher transactional value an organization can charge.
20
MD
Director Marketing
VP Head
GM Marketing
Promoters
Assistant Sales
Executive
Functions of marketing department
Connects link between the buyers and producers Help in increasing standard of leaving Generate revenue for firm Source of information to the top management regarding market condition and demands Facilitate development of business Receiving the purchase order Avoiding excess issue.
Transportation service will be getting from the third party through contract basis and regular basis majorly stocks and materials are moved by road to super distributors /distributers through transport with whom company as regular tie-up.
Distribution Channel:
Company
Super distributor
Distributor
Dealer
End customer
Advertisement agency:
1. Cocoon – Creative’s Agency
21
2. Group M- Agency for Print and Electronic media releases
Finance:
Accounts of finance department are the main and the heart of every department of the company
or industry. Here in this factory, the accounts section maintains all the transactions related to the
factory dealings. The sales accounts, purchase accounts, etc are maintained and this department
22
MD
VP &CEO
GM Accounts GM Finance
Manager Accounts
Senior Manager Senior Manager
Accountant
Assistant
Manager Finance
prepares P&L account, Balance sheet, etc. In SKPL Pvt Ltd. Accounts department is divided into
four sections.
1. Billing section.
2. Receivables.
3. Payables.
4. MIS &Costing.
In accounts section book keeping is followed. In Billing Section following functions are
performed like
1. Refer to planning sheet
2. Verify with price list.
3. Duties and Taxes.
4. Verify the stock.
Accounts Receivables & Payables section deals with all units’ expenses which includes
manufacturing, Job work-transport, Advertisement, Expenses, Import payment, Fixed
asset register. This section performs the functions like
1. Verify with GRN
2. Verify with purchase order
3. Verify the Taxes and Calculations.
4. Job work- verify with Stock statement.
Cash section: The company book is maintained by recording day today transaction such
as payment, salaries, and wages to banks, payment to suppliers and statutory payment,
salaries and wages.
Internal audit: This is main function of the accounts department to do the Auditing of
vouchers, payment, and purchase, debit note, credit note etc.
Finance:
23
The primary function of any business is to earn profit. To earn profit the business has to produce
goods or render service .To do this the management should have adequate supply of funds. It is
the responsibilities of the financial department to ensure of needed funds.
Over the year’s financial function in a business has assumed greater significance .These reflects
by the fact that, some business is known headed by Financial managers. The finance Dept is
assigned the responsibilities of managing the cash flow in such a manner that it would ensure
that the organization will have the means to carry out its objectives as satisfactorily as possible
and the same time meet its obligations.
Taxation:
1. Direct Tax
a)Income Tax
2. Indirect tax
a) Sales tax (Monthly return)
b) Central excise (Annual return)
c) Service tax (Half yearly return)
d) Professional tax (Monthly &annually return)
e) Tax deducted at source (Quarterly return)
3 Banking functions are as follows:
a) Funds position
b) Quarterly, Half yearly report, financial flow report
c) CMA data
d) Monthly stock report
e) Annual budget.
24
Production:
The task of production department is not only to produce products of specified quality but also to produce within the desired time and in most economical manner.
Production department functions:
It maintains the plant and machinery used for the production, in good condition. It provides information regarding the process and methods of production. It corrects the deviations from the standards, if any It informs to the top level management regarding the plant and machinery, quality of the
products, loss incurred and changes to be made.
25
VP Marketing
Supervisor Production
Line Supervisor
Manager Production
MD
Cooker unit:
Cooker unit is the largest production the SKPL here they are dealing with aluminum pressure cooker two types
1. Outer lid Cooker2. Inner lid Cooker
Marketing department informs requirement for the month. (Ten days prior to the month) Planning and purchase department releases the purchase orders /plant for material procurement.
Production unit has four major sections
1. Component department.2. Press section.3. Assembly section.4. Buffing section.
Production is carried out as per quality standards set for the product .Periodic process control checklists are used to ensure quality.
The manufacturing is carried out of following guiding principal as shown below.
Safety
Delivery 100% on time.
Cost
Quality
Production
26
Maintenance department carries out periodic maintenance of machines. Periodic audit is carried out to identify unsafe act, unsafe condition and corrective measures of department.
Application of McKinsey 7S Model
The 7-S model is better known as McKinsey’s 7-S model. This is because of two persons who
developed who developed this model. Developed in the early 1980s by Tom peters and Robert
Waterman have been consultants at McKinsey &company at the time. The model starts on the
premise that an organization is not just structure, but consists of seven elements.
The 7-S model is a tool for managerial analysis and action that provides a structure with which to
consider a company as a whole so that the organizations problem may be diagnosed and a
strategy may be developed and implemented. The 7-S is a framework for analyzing organizations
and their effectiveness. It looks at seven key elements that make the organization and their
effectiveness:
Strategy
Structure
System
27
Style
Skills
Staff
Shared values
The seven aspects of McKinsey’s framework are inter-twinned as shown in the diagram below:
The 7-S diagram illustrates the multiplicity of interconnectedness of elements that define
organizations ability to change that it is not just a matter if devising a new strategy and
following it through nor it’s a matter if devising a new strategy and following it through nor it’s a
matter of setting up new system and letting them generate improvements.
28
To be effective, their organization must have a high degree of fit, internal alignment amongst all
the seven S’s. All S’s are interrelated and a change in one has a ripple effect on all the others. It’s
impossible to make progress on one without making progress on all. Thus, to improve their
organization, you have to pay attention to all of the seven elements at the same time. There is no
starting point or implied hierarchy. Different factors may drive the business in any one
organization.
Those seven elements are distinguished as Hard S’s and soft S’s. The hard elements are feasible
and easy to identify. They can be found in strategy statement, corporate plans and organizational
charts and other documentations.
The four soft S’s however, are difficult to describe since capabilities, values and elements of
corporate culture are continuously developing and changing. They are highly determined by the
people at work in the organization. Therefore it is much difficult to plan or to influence the
people at work in the organization. Therefore it is much difficult to plan or to influence the
characteristics of the soft elements. Although the soft factors are below the surface, they can
have a great of the hard structure, strategies and system of the organization.
Description:
The hard S’s
Strategy: Action a company plans in response to or anticipation of change in its external
environment.
Structure: Base for specialization and co-ordination influenced primarily by strategy and by
organization size and diversity.
System: formal and informal procedures that support the strategy and structure.
(System are more powerful than they are given credit)
The Soft S’s
Style: The culture of the organization, consisting of two components:
29
Organization culture: The dominant values and beliefs and norms, which develops over time
and become relatively enduring features of organization life.
Management style: More a matter of what manager do than what they say, how does a
company’s manager spend their time? What they say, how does a company’s manager spend
their time? What are they focusing attention on? Symbolism– the creation and maintenance (or
sometimes deconstruction) of meaning is a fundamental responsibility of managers.
Staff: The people /human resource management- process used to develop managers,
socialization processes, way of shaping basic values of management cadre, way of introducing
young recruit to the company, ways of helping to manage the careers of employees.
Skills: The distinctive competences – what the company does best, ways of expanding or
shifting competences.
Shared values: Guiding concepts, fundamental ideas around which a business is built must be
simple, usually stated at abstract level, have great meaning inside the organization even though
outsiders may not see or understand them. Effective organization achieves a fit between these
elements. This creation is the origin of the other name of the model: diagnostic model for
organization effectiveness.
System:
System Refer to the processes used to manage the organization
Once an origination is setup more and achieves its basic market share it becomes more service
oriented on the way to its growth. It has adapted the system like no child labour , employees are
taken care of by providing them the facilities like medical aids and their complaints are
considered and over come immediately. Their safety is taken care of by supplying them with
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the safety gadget and the necessary training for using the same. In case of any minor problems in
the company they are handled by the HR department.
Systems include:
Management information system.
Performance management system.
Financial system/Capital allocation system.
Compensation system/Reward system.
Total quality system.
A system is defined as a process or set of processes that links and orders activities to enable work
to be done and goals to be achieved. System in simple words is the formal and informal
procedures including compensation system, management information system and Capital
allocation system that govern every day activity.
Some of the system followed in Stovekraft pvt ltd Inventory control system, total quality
management system, Attendance system. Below is the detail study of system followed in SKPL.
Attendance system:
Company’s punctuality will be measured through their rules and practices .Where
attendance will be played a vital role in punctuality concept .At SKPL ,attendance will
be ,maintained either manually or electronic mode, It depend on the company’s standard.
At SKPL, there are adopting Biometric standards, where each and every employee of the
company will be registered under the Biometric standard /machine where everyone have to
punch their finger prints at the time of entering the Factory premises login and end of the day as
logout time. Will be recorded and maintained for every month .It will be very useful to calculate
the master roll activities of the company.
Out pass:
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Staff can go out Side during office hour only after submitting the outgoing pass (duly signed
by the concerned HOD) at the security department.
On Duty:
On duty intimation means where employee will be performing his/her duty out side the
company within the state or the country, where employee should be give his/her intimation
through a standard format which is duly signed by the authorized person and same will be
submitted to the HR department.
Shift Timings:
Shift Timing
General shift 9 AM to 5.30 PM
1st Shift 6 AM to 2 PM
2nd Shift 2 PM to 10 PM
3rd Shift 10 PM to 6 AM
Skills:
A skill is the ability, knowledge, understanding and judgment to accomplishing a task.
Skills may be defined as what the company does best; the distinctive capabilities that reside in
their organization. The organization selects and assigns personnel performing work affecting
product quality based on appropriate education skills and experience. The company has skilled,
unskilled, semiskilled labors. Depending on the nature and importance on-job Training will be
given to them.
The company requires technical skills for production and manufacturing divisions. Also it
requires strong management skills in marketing and H.R. divisions. The marketing executives
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must have good communication skills and better knowledge of the company and its product.
Many marketing executives have the engineering background with MBA.
Staff:
Staffing may be defined as filling and keeping filled the position in the organization
structure. This is done by identifying work force requirements, inventorying the people available
recruiting selecting placing promoting appraising planning the current job holders so that tasks
are accomplished effectively and efficiently.
At entry level fresher and people with one year or less than one year is also considered. Each unit
specifies the number and type of people required and the recruitment is done as per that
specification. The candidates are placed usually according to their location preference to
particular unit or location. The entry level recruitment process involves short listing and selecting
the candidates based on resumes and personal interview.
The company provides employment to 1903 people, from managerial level to stop floor level as
below:
Office staffs 167
Outside factory 329
Senior Management 19
Workers 1388
Total 1903
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Strategy:
Strategy is a plan an organization formulate to gain a substantial advantages over the
competition .Strategy is the art of devising and employing a system of activities that mobilize all
recourses towards a valuable goal .Strategy is the determination of basic long term goals and
objectives of the enterprise, and the adoption of course of action and the allocation of recourses
available for carrying out these goals.
In other words, the routs that the organization has chosen for its future growth, a plan an
organization formulates to gain a competitive advantage.
Company strategy is to give a customer’s quality products at a best price ‘value for money’ this
is achieved by cross subsidizing the products under combination schemes to dealer as well as
customers depending on the seasons.
For example:1) Consumer scheme : If a customer by induction cook top he gets one induction
base cooker and Tawa as a free .
2) Dealer scheme: If a dealer left specified quality in a lot /month he will be eligible
for additional incentive in kind.
Shared value:
A shared value means that the employees are aware about the common guiding
values. Values are things that one would strive for even if they were demonstrably not profitable.
Values acts as an organization’s conscience, providing guidance in times of crisis. Identify the
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corporate values is also the first essential step in defining the organization’s role in the larger
community in which it functions.
SKPL has the commitment and organization values with quality policy, customers satisfaction
and also with the employees.
The top management ensures whether the employees at all levels are focused towords
achieving the objectives of the company.
The top management arranges training programmers if any deviation exists.
The top management provides adequate resources for carrying out the activities as per the
requirement is given.
The top management carries out the activities relating to monitoring ,measuring analysis
and improvement of quality.
Style:
Style of leadership or relationship refers to the manner in which an individual uses his or her
talents, values, knowledge and attitude to lead and relate to others. Style express the person’s
character .Style is the leadership approach; also the way in which the employees in the
organization present themselves to the outside world, to suppliers and customers. In simple
words, a style is the pattern of behavior, which a leader adopts in influencing the behavior of his
followers in the organization aromatic.
Stovekraft Pvt Ltd has the culture to delegate the authority and responsibility to the workers,
where the worker can exposé his/her talent in the organization. According to culture of the
organization, the company gives the rights and powers to the managers in decision making.
The organization structure consists of managing directors, managers, officers and workers etc.
formal method is created is carried on for routine activities such as quality control and process
control etc. The employees are entrusted with responsibility is concerned. The policies and
procedures are clearly laid down and they are made easily available to the employees.
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