Study of Strategic Planning in Descon Engineering

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Study of Strategic

Planning in

Descon

Engineering


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Presented to

Dr. Abdul Waheed

Assistant Professor at UCP - Business SchoolPhD, School of Business and Economics

Maastricht University, The Netherlands

MSc, Econometrics, Tilburg University, The Netherlands

MSc, Statistics, Punjab University, Pakistan


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Arslan Nawaz (L1S14MBAM1101)

Khawaja Faizan Masood(L1S14MBAM1095)

Muhammad Rahman Yousaf

(L1S14MBAM1111)

Syed Muhammad Daud Zaidi(L1S14MBAM1070)

Presented by


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Chapter 1: Company Overview

1.1: About Descon Engineering Limited

Descon Engineering Limited is a part of Descon group.

Descon group has interests in chemical and power sector as well

but Descon Engineering remains the flagship company for the

group.

Descon Engineering is a Lahore, Punjab, Pakistan based company

established in 1977 with 4 employees.

Today Descon Engineering is a major player in the region serving

the oil and gas, chemical, petrochemical, cement, power and

infrastructure sectors in Pakistan and internationally.


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Chapter 1: Company Overview 1.1: About Descon Engineering Limited

Descon Engineering Limited International Footprint

United Arab Emirates, Saudi Arabia,

Qatar, Kuwait, Iraq, Oman and Egypt


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1.1: About Descon Engineering Limited

Joint venture includes Olayan Descon in Saudi Arabia in 1980.

Descon Engineering Limited is in the business of delivering client-

specific solutions for projects related to Energy, Infrastructure and

Process industry.

All operations have requisite ISO, OHSAS and ASME certifications

in addition to Descon's own QA/QC and HSE standards.


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Vision

To provide additional valu

our customer through

comprehensive and integr

engineering, procurement

construction and project

support, while maintainincommitment to quality, sc

and service.

Mission

Professionalism, Team Work, Open Communication,

Leadership, Continuous Improvement

Core Values

To become a world-class

engineering, manufacturing and

construction company operating

internationally.


1.2 1.4: Vision Mission Core Values


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1.5: Descon Engineering Interested Sectors

Gas Processing and

compression

Refining

Power

Thermal

Hydel

Wind

Chemicals

Hydrogen

Peroxide

Soda Ash

Industrial

Chemicals

Petrochemicals

Polyester

PTA

Ethylene/Polyethylene

Polypropylene/PD

H

PVC

Fertilizer

Ammonia

Urea

DAP

Cement

Infrastructure Dams

Barrages

Irrigation

Channels

Motorways

Buildings

Water Treatment

Public Health

Industrial

Waste Water

Demineralizatio

Reverse Osmos

Desalination


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Chapter 2: Descon Structure and Hierarchy

1.6: Descon Engineering Services

EPC

Basic and Detailed Engineering

Procurement

Manufacturing

Construction

Civil/Structural Mechanical

Piping

Equipment

Painting

Insulation

Heavy Lifts/Rigging

Electrical

Instrumentation & Control

Tanks

Buildings

Testing

Pre-Commissioning

Commissioning

Maintenance

Retrofits & Upgrades


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Descon Group

Engineering Business

Descon EngineeringC.E.O: Dr Salman Zakaria

Company Subsidiaries

Descon Integrated

Projects (Pvt.) Ltd.President: MuhammadKhawar Khan

Presson DesconInternational (Pvt.) Ltd.C.E.O: Samad Goraya

Descon Engineering - Abu

Dhabi Head: MuhammadIqbal Khan

Olayan Descon - KSA GM:Wasif Hanif Khawaja

Qatar, Kuwait, UAE C.E.O:Dr Salman Zakaria

Chemicals Business

Descon Chemicals PvtLimited C.E.O:TaimurSaeed

Company Subsidiaries

Descon Oxychem Limited

Power B

Descon Pvt LimitWaseem

Compan

RouschLimited

Altern

Chapter 2: Descon Structure and Hierarchy

2.1: Descon Corporate Structure


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Chapter 3: Study of Strategic Planning in Descon Engineering

3.1: Current Strategies

Diversification

Defensive

Corporate Level Strategy (Descon Group)

Related Diversification

Market Development

Product Development

Business Level Strategy (Descon EngineeringLimited)


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Chapter 3: Study of Strategic Planning in Descon Engineering

3.2: Stages of Strategy Planning

StrategyFormulation

StrategyImplementation

StrategyEvaluation


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3.3.1: Strategy Formulation

In Descon engineering business goals are primarily derived fromcompany vision which is To become a world class engineering,

manufacturing and construction company operating internationally

The two words in the Vision statement, World class EMC Company

and operating internationally defines company goals. But one wo

in the vision is itself vague in nature, means to say how company

wants to be World class EMC company either by Cost or by quality o

by any other factor.


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The explanation of word World class EMC Company relies on themission statement or interpretation of Board of Directors or by Heaof Departments or by mutual consent of both.

And accordance to their interpretations they make strategies to fulfcompany ultimate goal which is to be World class international EMCCompany.

By taking one portion of vision to became world class company,Descon engineering is currently adopting strategies on technologicaadvancement, quick project completion, and on high quality sidewhere as second portion posses strategies like market developmentThis scenario follows goals to strategy approach.


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The explanation of word World class EMC Company relies onmission statement or interpretation of Board of Directors or by Heaof Departments or by mutual consent of both.

And accordance to their interpretations they make strategies to fulfcompany ultimate goal which is to be World class international EMCCompany.

By taking one portion of vision to became world class company,Descon engineering is currently adopting strategies on technologicaadvancement, quick project completion and on high quality sidewhere as second portion posses strategies like market developmentThis scenario follows goals to strategy approach.


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Derived fromvision

ClearGoals

Other thenvision statement

HiddenGoals


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Head of Department made his own

strategy which they called as initiative.The main focus of this initiative is toimprove business operations or tointroduce new things in the company.These initiatives sometimes laterbecome business level strategies.

Board of Directors and C.E.O or Mutual

consent of Head of departments andBoard of Directors plus C.E.O makebusiness level strategies in theirmeetings and then these strategies areconverted into annual objective andthese annual objectives later translatesinto monthly objective for theconcerned department.


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There are two types ofbusiness level

strategies in Descon by

time limit.

Short

term

(within 1year)

Long term

(1 to 3years)

Whereas by naturethey also have two

types of business level

strategies.

Business

Planstrategy

Future

Businessstrategy


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As per the interview and visit observations proper documented,comprehensive strategy formulation framework is not present inDescon. Descon have its own mechanism to formulate strategies anthese techniques are oral.

In Descon no formal documented tool is followed to judge StrengthWeaknesses, Opportunities and Threats of the company although

Descon followed it unconsciously. The SWOT is carried out accordingto nature of proposed situation, if situation is on high level thenSWOT is orally done in the meeting of Board of Directors, or HOD, oboth. Otherwise in the case of low stake situation this is done withCEO and HOD of the Concerned department.


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Selection of any strategy depends upon financial and strategic outcomes.

Some of these outcomes include Return on investment

Cash flows

Income Vs Cost analysis

Market share

Quality

Goodwill Profits

The higher return of these outcomes for certain strategy is, more chance

to select that strategy.


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3.2.2: Strategy Implementation

Strategy is implemented in Descon through top to bottom approach.Strategy formulated and selected at top level is now pushed down.

First, Business level strategy become concerned departments, departmenobjectives then these departmental objectives become annual objective fconcerned department and later this become monthly objectives. Nowthese monthly objectives become individual tasks for concerned personne

For example if business level strategy is to introduce latest technology ofcomputing servers, hardwares, and softwares in the company within 6quarters after strategy selection. Then this technological advancementstrategy become primary departmental objective for ICT department whicmain function is to address information and communication technologyneeds.


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For example there are 35000 computers in theDescon now annual objective will be formed likethat upgrade 72% of computer within first fourquarters after selection now this annual objectivebreak down into monthly objective like upgrade6% of computers from July 2014 to June 2015. Thismonthly objective will be on concerned personnel.


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It is quite obvious that Descon will face some issues while strategy

implementation. Most of the time company faced following issue whileimplementing their strategies but these issues varies from strategy tostrategy.

Shortage of Human resource needed

Resources movement

Funds allocation

Behaviors of employees

Communication problems

Interglot

As issues vary from strategy to strategy same like this solution of issue varto from strategy to strategy.


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3.2.3: Strategy Evaluation

In Descon strategies are controlled and evaluated throughmonthly review, some time weekly review. The main purpose ofthese monthly reviews is to check progress towards achievementVs Plan. In case of any problem or error corrective measures aretaken.

There is also another way to control strategy implementation. And

that is performance appraisal system. Monthly objective assignedto certain personnel become their job responsibility. Nowconcerned employee is ranked accordance with progress inrespect to strategic objective complementation in the specifiedtime frame.


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Individual employee will not be rate as alone for strategicobjective complementation. Now Performance appraisal systemfollows bottom to up approach. Concerned head of departmentwill also be rated for strategic complementation.

Strategies also evaluated through expected outcome Vs Actualoutcome.


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Take the example of technological advancementstrategy to make understanding easy. Monthlytasks were assigned to certain employees. On theperformance appraisal day employee will be ratedfor this objective accordance with his/herperformance. Now this mechanism move up andhead of department will be rated accordance with

his/her performance.


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Bibliography

Descon Engineering History . (n.d.). Retrieved 6 7, 2014, from

Descon Engineering:http://www.descon.com/engineering.php?id=61

Descon Engineering Sectors . (n.d.). Retrieved 6 7, 2014, fromDescon Engineering:http://www.descon.com/engineering.php?id=25

Descon Engineering Services . (n.d.). Retrieved from DesconEngineering: http://www.descon.com/engineering.php?id=18

Descon Philosophy. (n.d.). Retrieved 6 7, 2014, from DesconEngineering: http://www.descon.com/engineering.php?id=63

Hussain, S. I., & Saeed, S. (2014, 6 9). Strategic Planning inDescon Engineering. (A. Nawaz, F. Masood, & A. R.,Interviewers)


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Study of Strategic Planning in Descon Engineering