“An investigation how Kashmir Handicrafts Emporium (Pvt.) Ltd, restructured its Human Resources to have a competitive edge in Handicrafts' industry in Pakistan”

ABSTRACT

In this research, we will study the impacts of the implementation of the modern western techniques in Kashmir Handicraft Emporium (pvt.)Ltd, which is based and situated in Pakistan. The overall culture of the country has a significant impact on the company culture, where most of the staff was Pakistani Nationals with different backgrounds. The cultural values are strongly rooted in their customs. We will discuss the issues which would be the driving forces which resulted in the change from typical traditional culture to the more developed and advanced system of management. We will study the Human Resource restructuring process of KHE (pvt.) ltd which led to change of the corporate leadership and behaviour. This study reveals the impacts of the decisions made by the leadership of KHE ltd and their subsequent impact on the workforce of KHE.

CHAPTER ONE

INTRODUCTION

In this ever changing competitive world it has become very difficult for the companies to become differentiated from others. Each company can have the same infrastructure, technology, policies, raw material and processes. HR is the only resource which can give competitive edge to one company over the other to sustain and increase their market share. The dissertation will explain how KHE pvt ltd realized their needs of restructuring the Human Resource Department that can contribute toward aligning the HR goals with the Organizational Goals.

The report will be discussing the application of Western HR models such as ignoring the cultural difference, infrastructure difference and size of organization as-well as increasing trend of outsourcing the HR functions like recruitment and selection, training and development practiced by KHE (Pvt.) Ltd.

Fundamental to the argument that modern organizations should move to empowering employees is that results make sense in commercial terms.(Rosenthal et al, 1998)

Analysis of Current Situation:

In this research we will study about Human Resource of Kashmir Handicraft Emporium ( KHE LTD) a manufacturer in handicraft industry in Pakistan. The current market situation is studied and the driving forces which resulted in the change. It will compare the literature with the case study of KHE LTD and will be concluded the advantages of restructuring Human Resource which gave an competitive edge to the company.

KHE LTD was established in 1999 by its two share holders ( Directors) Mr Azad Ashraf and Mr Mushtaq Aziz which hold t0% shares each. Mr Ashraf mostly live s outside the country (Pakistan) and runs another business in Spain ( not related to Handicraft Business). As he lives outside the country, so he is not much involved in the operational activities of KHE LTD. Mr Aziz the second Director has the sole responsibility fo operational and other activities of the company.

Growth:

From 1999 to 2002 company started with slow response. After 2002 there was gradual growth in the company. Some new products were launched and the new produces were design keeping in mind the fashion taste of the customers of the local and the international market. The growth started till 2007 and after 2007company couldn't show any remarkable significance in the market, and ultimately, there was a decline in the profit margin in 2008 and 2009. Company tried to introduce following techniques to sustain in the market during the crises season.

Finance departments.

No financial statement of earlier years were present. Data was gathered by asking the rough estimates of the profits at the end of the year. Mr Aziz helped to get this data.

Price competition:

Prices were reduced as a competition with the market. KHE has significantly cut its prices and the profit margin was kept to standardized form, to keep the current customers.

Finding competitive suppliers:

KHE management tried to find the competitive suppliers. The price of the finished product has a direct effect on the raw material price. Every effort was made to do market research and find the most cheapest supplier. Miscellaneous service agreements with previous suppliers were reviewed under the current agreements. The goal was to sustain in the market and to keep the finishing product at low price.

Redundancy ( Extra Staff)

Extra staff was made redundant. Mostly affected people were the daily wages labourers like picker and packers, loaders and un loaders, unskilled workforce, office workers etc to reduce the cost and expenditure of the company.

Conversion of Vehicles to cheap fuel (CNG)

As far as transport department is concerned, the fuel cost was cut to minimum. In Pakistan the cost of unleaded petrol is very high as compare to its neighbouring countries, so an alternate cheap way of fuel was established. Compressed Natural GAS (CNG) was used in the transportation vehicles to cut the price and it also helps to reduce pollution.

Cutting Over Heads.

A contingency plan was introduced and all the expenses going out were monitored by the senior management. Specifically cutting the overheads was one of the important step to bring the expenses low in the period of financial crises around the world

Outcome of the above action.

The above actions were carried out to bring the cost down and to cut the expenses and to sustain in the market but all these factors contributed to only 7% in the profit

Reasons:

There were several reasons why the company was going in loss. These were discussed in detail in next chapters.

Let us analyze the company management structure which will give us some more useful information.

FLAT ORGANIZATION STRUCTURE:

The company had a flat structure of corporate management. The company had four manufacturing units in four provinces. One supervisor was assigned in each unit. He had to do multiple tasks. He needs to maintain accounts, recruitment and all the crises involved. So there was more responsibility on one staff. Although the supervisor was assisted by his staff .But there was lack of well defined management structure.

Graph.

Supervisor need to look at the marketing, production unit, sales and distribution, strategy etc. No clear departments were present. The workforce was working on

ad hoc basis and most of the workers were just making the same design over and over.

Driving Forces for Change

There were some factors which contributed to the change. We need to have a look at the structure of the organization, the allocation of staff, production departments, sales departments etc.

Years

Distribution of Work force according to products

Distribution of work force according to departments

Management Structure

Rugs

Jewellery

Wooden

Glass

Sales & Dist

labours

Stocking

Supervisors

1999

20

15

10

10

8

4

2000

22

4

2001

30

4

2002

44

4

2003

60

4

2004

100

4

2005

150

4

2006

170

4

2007

4

2008

4

2009

152

35

50

45

18

23

12

16

Overview of KHE LTD before restructuring

It was believed that managerial positions to be kept to minimum or we can say that there was no managerial post available. when asked about why they didn't feel about the managerial need, the following answer was given by the one of the supervisor .

If you employ one manager, say his salary start from 20,000 PKR so at the end of a year the manager cost will be 240,000/ PKR( Pakistan Rupees) and for the four units it will cost 960,000. Which was the total profit gained by the company during 2000 so the directors were thinking traditionally to cut the cost and the introduction of multitasking was started. But there were some adverse effects of these techniques and process.

Disadvantages of Flat Structure:

Following were the disadvantages of the Flat Structure organization of KHE.

Slow output:

Company couldn't deliver some of the projects in time due to loads of work and no proper system of management. Some of the valuable customers were lost by the result of the slow output

Low sale:

low output resulted in lesser sale and the profit of the business decreased.

High labour turn over.

Utilization of labour force became a problem. It increased cost of the projects in all the units across the country and some unites were near to the loss state. Productivity of the items was reduced and affected.

ncreased in fixed expenditures:

Increased in fixed cost resulted in the lower quality. Production was affected by increased in the expenditure.

High conflict among staff:

As there were no well defined job structure, so conflict was high among the staff . No one was there to took the responsibility of the of any problem or loss and ultimately bring negative effect on the company and its revenue

No well defined Shape:

As discussed earlier, there was no well defined structure and no one was held accountable for so there was a chance of loss.

Lack of Managerial Actions:

Supervisors were under pressure from work related tasks and there was no proper functionality of the operation in place. The actions which require swift managerial actions were not taken straight away . example if a staff need to be disciplined, there was no well organized structure. Mostly termination of the employment caused conflicts and sometimes created problems to the company.

Over Stocking:

As a result of mismanagement, the first department to be affected badly was the sales department. The sale of the company was reduced. If the sale of the company is reduced then the revenue generation is reduced which results in over stocking of the materials and items. Money is stuck and no circulation of money effects the system badly.

On the basis of the above facts, and when all the efforts of cutting the costs and to sustain in the market failed, then there was a need of urgent meeting of corporate management.

Directors Meeting:

When there was a general decrease in the profit of the company for the last two years and the corrective measure taen by the supervisors were not seem to be successful, then directors met to discuss the planning for KHE LTD(LTD).. As explained before there was no regular formal meeting between the directors. The communication was mostly on the phone and when the director Mr Ashraf visit the country during a six month time, they meet and discuss the company situation.

Meeting:

On 05th July, 2009, Directors meet at Islamabad Office for the formal meeting

Meeting Agenda:

Following were the agenda of the meetings.

1. Current company situation

2. Actions to be taken

3. Objectives

4. Profit Maximization

5. Growth in the next 3 years

6. Company shortcomings.

Mr Ashraf, suggested the appointment of a new Post of Chief Executive Officers for the company to help in the operational activity of the company and to assist the director Mr Aziz. It was decided that the new CEO have to restructure the current company and to take the corrective measures for the company.

In the meeting the ways of cutting the cost were reviewed and it was agreed that company will continue its cost cutting techniques and no new staff for production will be hired. Bonuses of Eids( Holly Festival of Muslims) were stopped with immediate effect and companies overheads to be reduced immediately.

Appointment of New CEO.

As discussed in the meeting, the new post of CEO was to be established who will work as a coordinator between the company operations matter and with the company corporate Management.

For the post of CEO in the company. The post was advertised in the daily newspaper “Jung” and by the mid of July, interviews had been conducted and three suitable candidates were selected.

Mr Ayaz Qammar was selected as a final candidate for the post of CEO. Mr Sheikh was briefed about the company by the directors and the problems which the company is facing. Mr Qammar was an experienced CEO who had an MBA degree holder from UK and he had experience in working with multinational companies in UK. He decided to relocate to Pakistan due to his personal reasons.

Challenges for new CEO

Following were the immediate challenges to the new CEO

1. Traditional workers mindset

2. Resistance to Change by the Supervisors

3. Structuring the company resources.

4. Better Brand Awareness

5. To gain the lost reputation of the company

6. Profit maximization

7. And Growth of the company

Strategy of New CEO;

CEO observed the current situation very closely and a report was made to the directors, advising them and briefing them about the new ideas and the plans to meet the objectives.

First and most important aspect which was emphasized was the restructuring the HR. He assessed the need that by restructuring Human Resource People working with in the company can contribute in achieving the objectives of the company. And the company can progress and operate more effectively.

Typically saying, Human Resources Management ( HRM) mean employing people, developing their resources, utilizing, maintaining and compensating their services in tune in job and organizational requirement. (wikipedia/wiki/HRM)

CEO decided to restructure the KHE PVT LTDon the following basis

* Organizational management

* Recruitment ( personnel

* Man power management

ANALYSIS:

SWOT Analysis:

SWOT analysis is a tool by which we can identify the Strengths, Weaknesses, opportunities and threats of any organisation. Swot analysis was carried out for KHE LTD(LTD).. It will help us to identify the internal and external factors affecting KHE LTD(LTD).. As KHE PVT LTDis situated in a developing country, so apart from the internal factors, there are many external factors which affect the progress of the KHE LTD(LTD).. These factors are political, Social, Economic etc. We will discuss these factors in detail.

We will carry out Swot analysis in two groups.

1. Internal factors which include Strength and Weaknesses

2. External factors like opportunities & threats faced to KHE LTD(LTD).

PESTEL analysis is also a useful tool to identify the external factors like political, economical, Social, Technological etc.

Strengths of KHE LTD(LTD).

KHE PVT LTDis fortunate to have some very strong Strengths, which helped this company to sustain the crises period and which gave her an upper edge over its competitors.

Traditional Work Force:

KHE PVT LTDhad this opportunity to make use of readily available work force. When setting up the KHE LTD(LTD)., the directors chose the best locations where there was enough skilled workforce available for work. We need to keep in mind that Handicraft business is a traditional business and the families which are associated with this business had these professions from their grand parents and so on. And at the same time there is no institute or training centre in Pakistan in which students can go and have a training of handicrafts.

Perhaps it is one of the key strength of KHE PVT LTDto have the traditional workforce. If you see the structure of the company you will see that its centres are spread across four provinces which give it an upper edge. For example In Baluchistan, traditional people are weaving handmade carpets (rugs) for centuries. These people are not much educated and they have a passion for the land, so these people do not relocate to other cities. These people don't have education and ultimately they have no other skills other than a certain skill of weaving the handmade carpet which they acquired as a family business from centuries. So keeping in view these facts a centre was opened in Baluchistan which can easily communicate and liaise with these people.

In return KHE PVT LTDwas benefited with a very high class rugs at a very low price. This strategy seemed to be very successful. People were encouraged to work from home, like women were allowed to work from home. No contract was signed as this gave the employer a flexibility.

When a rug is completed and ready, it is brought to the centre. The supervisors check and inspect the rug and if it seems ok, he buy it on behalf of KHE PVT LTD. so there was an advantage of opening centres across different regions.

Low Capital Investment:

KHE PVT LTDwas opened on allow investment. As the centres are spread across four provinces, so locations were selected which were not expensive. An amount of 1.5 million PKR (equivalent to £11,000) was used to open two centres in Punjab and Baluchistan in 1999. Later years the result showed that this investment was a worth and company was able to recover that cost in two years time.

Production Flexibility:

KHE PVT LTDhad four operational centres and the production was taking place simultaneously in all the four centres. If during the year one centre sale is not good enough then other centres sales may cover up the expenditures and the overall profit increases.

Low Barriers to new Entry:

Handicraft market is one of the oldest industry in Asia. People used to have this traditional business for centuries. So far KHE PVT LTDto enter the market was of less competition. KHE PVT LTDneed to gather and collect quality stuff and then resale the stuff. so there fore there was less barriers for KHE PVT LTDto enter in to the market.

Diversified product Range:

There were a large number of products range available in KHE PVT LTDin all the four provinces of Pakistan. For example. In NWFP Gemstone market is very popular. In Baluchistan handmade rugs and jewellery are very famous. In Punjab Quality Wooden work can be exported mostly to central Asia. So KHE PVT LTDhad a huge range of diversified products

( products to be added in the table)

Large Diversified Potential market:

As the products of Handicraft market are diversified, and there are a number of both national and international customers. KHE PVT LTDproducts are mostly exported to the foreign markets like Europe, USA, UK, Japan

Following table shows the percentage of sales of KHE LTD Handicraft products to the countries

Products

USA

UK

EUROPE

JAPAN

Local Market

Neighbouring Countries

Rugs

14%

16%

17%

23%

30%

Jewellery

13%

15%

19%

36%

27%

Wooden Furniture

15%

18%

17%

46%

35%

Glass Decorations

17%

19%

18%

13%

59%

New Markets are searched now in South Africa and Eastern European countries.

KHE PVT LTDPotential Source of foreign revenue:

Mostly the foreign revenue is the main source of income for the KHE LTD(LTD).. The margin rate is very high in this regard. During the research, I came to know that there is up to 300% profit margin in some products.

Real Example:

Oriental Rug name Belgick costs to KHE PVT LTD after all charges including labour and production at a rate of 2500 PKR equivalent to £18.00. The same rug sells on a different rate according to the market and country.

It was researched that the same rug cost different in different Markets of the world

Countries

Price in Pound Sterling

Profit margin

UK

£ 50-£55

400%

USA

£ 55- 58

420%

Middle Est.

£40-£45

220%

S-Asia

£33 -£35

200%

Japan

£50-£55

400%

Local market

£25-30

50%

For comparison purposes all prices are generalized to£ Pound Sterling.

WEAKNESSES:

There are some weaknesses in the KHE PVT LTD organizational structure. We will discuss in details the Weaknesses of KHE LTD.

Lack of coordination:

There is lack of coordination between government and local bodies. The government hasn't introduced any tax rebate policies to help flourish the business. This is a weakness in the system. Neighbouring countries Like India and china had definite policies and there is a good coordinating system present among their government and handicraft business.

High export Duties:

KHE Pvt ltd have to pay high export duties on its products, both locally and internationally which makes the product expensive as compared to international market rates.

Time consuming:

Sending a shipment to abroad like USA and UK is very time consuming and it takes weeks to reach the destination. Air travel is very expensive, so KHE PVT LTD have to rely on the sea channels for its overseas shipment which is a time taking activity.

Inadequate information on current market trends
As there is no system available which can monitor the market trends and strategic planning department was practically non existent. So there was inadequate information available on the international trends. KHE PVT LTD lacks this information which is very crucial in setting up this business.

5. Return Policy

If a product is found faulty by the local customer and the customer need to replace or return the product, then it is a very time consuming process and it can takes weeks to get a replacement product

Frustrating to customer.

Time consuming makes the customer frustrating. So Customer prefer to buy the product directly from the shop, so that he/she can return it back and its money is saved and secure.

No computerized Customer Services Facilities

There no proper computerized system for the delivery and despatch fro local and international customers inside the country. If a customer calls, then the old records need to be checked manually and it consumes pretty much time

Geographic location disadvantage:

As KHE PVT LTD is a Pakistan based company and the political situation is not stable, so direct sales to the customers across developed countries is nearly non existent. This reason, the directors haven't made a website till now. KHE PVT LTD also reluctant to writ its brand name and location on its products. “Customers got suspicious, when he/She see a product name with Pakistani label “comments of Mr Zia (supervisor).

OPPORTUNITIES:

Rising Demand for handicraft products

there is arise in demand every year for the handicraft products especially in Europe, USA and UK. So there are opportunities which exist in these countries in term of good market value. KHE PVT LTD is now paying more attention on the demand of foreign markets

Local Fashion Industry Requirement:

Local fashion Industry also required handicraft products to be used. Jewellery, gemstones, rings etc are used in Fashion products. So there is an opportunity in Fashion industry. KHE PVT LTD need to look at these in future

Retail industry ( interior Decoration ) require Handicrafts

Now in Pakistan, and all around the world, people use handmade items to decorate their house and offices. Items used in the houses can be carpets, decorative items, antiques, Furniture, garments, jewellery painting etc.

Tourism Sector

When tourists visit some country, then the commerce and trade of the country is increased, because tourists come and invest their money in that country. So the local markets are also benefited. As KHE PVT LTD has a handicraft business, and lot of investment comes from foreign then it is expected that in future, KHE PVT LTD will get good response in terms of tourist industry.

Ecommerce and Internet

More and more businesses are using the internet and ecommerce facilities. KHE PVT LTD is trying to establish a website with online shopping options. If KHE PVT LTD does this, it is suggested that the sale will be increased and lot of extra revenue will be brought to the company.

THREATS:

Potential Competitors:

There are several threats to the KHE LTD. There is a rising threat from local market. Market is very competitive both local and international and new competitors are entering into the market. So to sustain and survive KHE PVT LTD need to adjust to the change and to take decisions according to the market requirements. Similarly there is another threat from international market like countries like India and china. Quality products are manufactured in India and China and they are also very low in price.

Improved Technology

Competitive countries like India and china have better technological support and facilities as compared to the KHE LTD. Now world has become changed into a global village. And most business are done by the internet and ecommerce industry. So KHE PVT LTD lacks these facilities and skills.

Need Better Marketing:

Marketing department need to be focused so that better result be gained. It is suggested to KHE PVT LTD to make a separate marketing department and a share should be allocated from the profits for marketing. Due to marketing will get more awareness about the products of KHE PVT LTD and ultimately, the company will grow and profit will increase.

PESTEL ANALYSIS:

In this section, we will discuss about the PESTEL analysis of KHE. We can find out the overall trend of the market, whether it is going to the growth or toward decline. The business current positions can be regulated and predictions can be made for future.

PESTEL consists of following acronym

P for Political

E for Economics

S for Social

T for Technological

E for environmental

L for legal Factors:

The analysis will see the market demand and the change associated with it. The companies capabilities and resources can be predicted by the help of PESTEL analysis.

POLITICAL:

The political factor will influence of the Kashmir handicraft Emporium in its regulations. The political stability of the country where the business is normally situated has a great influence. As KHE is situated in Pakistan and for the last many years the political situation of the country is not very good, so political situation has a bad effect on the business capabilities of the KHE.

Political factors directly affect the KHE because; as this is a tourist related industry and most of the customers are tourists or foreign people. So when there is political instability of the country, then there is no foreign investment. When there is no foreign investment, then country suffers and ultimately, the KHE business suffers.

Long term business plans are not carried out in a unstable country like Pakistan, so it also effect the investment process.

Economical:

An investor looks to invest in a economy, who has a trend of business and the government policies are more flexible and tax rebate and profit margin is high. Economic factors can have an effect on the purchasing power of that country. In the case of KHE most of the products are expensive, as it requires a lot of attention and time.

As far as Pakistan economical condition is concerned with respect to KHE. The Economic condition is not well stable, GDP per capita is low, rate of interest is steeping high and the inflation rate is nearly 11%. So in this regard, KHE ltd have to suffer as well.

Social:

The social cultures influence the businesses and communities across the world. As Pakistan is a Islamic country and Islamic values are deeply rooted in the conservative culture. The economic conditions have gone worse over the last few years, so most of the people live a very simple social life.

People prefer to buy the products which are cheap and reusable. As explained earlier, the handicrafts products are very expensive and most people of Pakistan haven't got the buying power, so In this regard, KHE will suffer and the profit margin is decreased.

Technological

Now a days technological factors play an important role in the market and the businesses. Technology offer services which are user friendly and make the system easier. In case of Kashmir Handicraft Emporium pvt ltd, there are several technological factors which need to be used and benefited.

For example: company doesn't have website, there is a definite need for the website and it should give the users online facility to buy products on line. Definitely the sale will be increased and the company will grow.

Use of computer internally for record keeping is a good example of management. Records now a day are kept manually. So in case of any query, the time is consumed.

Environmental:

Most of the products of KHE pvt ltd are very expensive and the raw material is also very expensive. For example, in case of gem stone, explosives are used to mine out these precious metals. For wooden products, very expensive wood is been cut. Gold and silver are very expensive materials, Brass and Glass products are also very expensive .Although KHE pvt ltd buys the raw material from the market, but by the involvement of political factors, the shortage of these expensive materials from the market can trigger price war with the competitors. And being such a medium sized company, under current situation can adversely affect the situation.

FINDINGS OF INTERNAL AUDITS:

After the review of whole audit process and the anlysis of SWOT and PESTEL, followign internal Audit problems had been encountred. These problems had been identified so that in future, KHE PVT LTDhelp to facilitate the services and improvements can be made.

KHE PVT LTD Procedure to be followed:

Employees of KHE PVT LTDneed to aquit themselves with the procedures and the policies of the KHE PVT LTD.Employees need to trained and informed about any new policy and procedures.

All actions need to be documented and should be written. As there is no proper system available so written matterial and actions to be stressed upon.

Lack of written procedures.

Inefficient and ineffective processes or procedures.

Improper use of General Ledger accounts

Miscalculation of Goods and Services Tax (GST) receivable.

Steps Taken by new CEO

After careful analysis, the new CEO decided to restructure the HR of KHE PVT.

Organizationa Design and Structuring:

New Need of Vacancies:

CEO find out that due to multiple tasks carried out by a single person ( Supervisor), there are severe shortfalls in the operation of KHE LTD Supervisor have to control all the activities and operations. The decision making was usually carried out by the staff. The top management( directors) need to contact the supervisors of provinces if he need to require any information. CEO suggested that there is aneed of new system and new vacancies need to be created in order to get maximum results and to bring the business back on track. CEO suggested that following departments need to be restructured accordingly.

Restructuring of departments:

Four new departments were created and restructured. By the new CEO. These are Department of Fiance

Department of HR

Department of Sales and distribution

Department of Strategic Planning.

So when departments were created, now there was a need of managerial positions who can handle these departments activities.. so it was decided that each department will have a designated manager and each manager will have an assistant manager. So if a company director need to ask any finance related issue, He will contact the finance department and will get the result.

No well defined shape:

As one supervisor was responsible for doing so many things so there was no well defined shape. Human Resource, Finance, departments were not present. Although the work of these departments was done on adhoc basis but due to lack of proper system, the progress was very slow.

Lack of organisational Structure:

There was no organisational structure eg.Drivers were some times used inte field for laoding and unloading. There was no centralized reporting system and there was less transparency. Permanent monitoring of the staff was absent and response rate to any queries was very low due to lack of organizational structure. The working relationship between different departments was nearly non existant and it badly effected the efficiency of the compny.

MATRIX ORGANISATION STRUCTURE:

Organisational structure of KHE PVT LTDbefore the appointment of the CEO was a flat structrue

Where there was on supervisor in each regional level and all actions were controlled by one supervisor. New CEO felt the need of new hierarica concept of subordination of entities in regional level. The KHE PVT LTDwas restructured in a way that taks , aim and objectives of KHE PVT LTDare achieved in a systematic and professional way. In Matrix organisational structure, responsibilities were divided among different entities like department and their sub groups.

CEO of KHE PVT LTD suggested the following Change.

Regional level Functional Structure:

The first job CEO has done was te creation of regional level department with in each manaufactureing units and their tasks and jobs were assigned to them.

Following departments were created in each region

e.g in Punjab four departments were created.

* Finance Department

* HR Department

* Sales & Distribution

* Strategic Planning.

Finance Department:

Finace department was reponsible for all financial related queries. All expenses & expenditures were monitored by finance department. By the presence of a finance department funds were provided , managed and controlled according to the need of KHE PVT LTDin more systematic ways.

Before issuing any funds, the risk related tasks were studied and interrelated, so risk was reduced.

A Finace Manager was responsible for all the activities of the finance department. Each finance manager have two subordinates Assistant Finance manager and an accountant.

INVOICES:

Financial Statements

Tax returns

Payment Outs:

HR Department:

Newly restructured HR department have many taks to perform. In Each HR department, there was HR manager and is supported by an assistant manager and Admin Staff. The most primilarly job is to find out abou the suitable candidate for th job and to the ocmpay. The employees can be contractual or permannet employess depending upon the structure and need of the organization

In KHE LTD, the newly appointed CEO restructured the HR Department. By restructurding HR Department, best employees been nominated and their performance was increased. System was developed for monitoring of employee activities according to the company standard and regulations. These policies and pricedures were put together in employee hand book and manuals so that each employee have got knowledge and awareness of what to do and what rights they got and what responsiblities they share.

Human Resource Development manager was hired and it was given its taks to monitor the career development of the employee in terms of continuous training programmes.

In KHE LTD four HR managers were hired in regional levels in Sindh, NWFP, Punjab and Baluchistan.

Following is the HR Structure at regional level of Punjab province

Human Resource management and Business performance:

The contribution of the individual performance must make a significant contribution to the production process ( Becker et al. ( 1996)

Increased productivity and improved quality are just two direct benefits of a ‘multi-dimensional view on performance, because it takes into account the competencies and capabilities of ( human) resources…' (pauwe, 1996:15)

Source:( Becker et al. ( 1996)

HR department had to do a lot of job for KHE LTD

Following are the new responsiblities of the Newely Developed HR deparment with respest to new changes.

1. Recruitment

2. Training & Development

3. Employee Monitoring

4. Supervision

5. Performance management

6. Disciplinary Procedures

7. Holidays & Maternaity leave management

8. Career Counselling.

In this research, we will discuss mostly about the recruitment procedures of HR with respect to the resturcturing

Sales and Distribution department:

Sales and distribution department was well organized as compared to other departments but still lacks basic Management Structure in KHE LTD. We will study what were the traditional channesl or models which were used to meet the demand of the market and what new distribution channesl were used to get a competitive edge in the market

Traditional Method;

KHE LTD was using traditional methods of sales and distrubution. When a supervisor received an order , it passed that order to the head of the sale team called as team leader. The team leader will process the order with the help of work force and send directly to the distribution. There was no definite distribution deparment in the KHE LTD. The team member was responsible to make sure the order is taken correctly and is distributed to the right person. Then drivers were contacted for the delivery purpose.

No Check and Balance:

There was no check and balance on how the supervisors were working and the order has been supplied to the relevent person in time or not.

Sales:

Sales was carried out as a traditional basis. There were regular customers who used to buy the KHE LTD products for years

Marketing:

Marketing deparment was not present in the old system.

Distribution: There was a well defined distribution system. Each provincial unit have their own transport mechanism. Drivers and helpers (for loading and unloading) was easily available. Mostlydaily wages staff was hired for loading and unloading but drivers were hired by the company and were given monthly salaries.

New Changes in Sales and Distribution department:

When a new department of sales and distribution department was established. Following strategy was adopted by the sale and distribution department.

Advertisement:

Advertisement was carried out in local newspaper. Local daily newspaper was contacted for the advertisement. The AD of 4x6 inches on classified section cost nearly 4000 pkr (equivalent £32). So weekly ad was advertised throughout the country. Wheich had helped to maximized the profits.

Strategic Planning:

This department was established to forecast the change and to make the strategies of the company. The purpose of the department was to established a system in which we can see where we are in the current situation and where we will be in the next five years. How is the performcne of KHE LTD What perforance measures are require. The information sharing of strategic planning with its stakeholders. The Strategies are value driven and have impace on the company in terms of profit maximization and market value.

Response of Directors:

At first directors agreed to start this department on a trail basis of three months. During this period, these were number of events which took place in KHE LTD regional divisions.

Below is the list of some events which took place in strategic department.

The strategic manager of NWFP left the job in two months looking for better career progression.

Unfortunately, no sutiable candidate for the post of strategic manager was selected in Quetta resulting in teh position been vacant.

Sindh strategic manager was unable to produce a three month report due to the trail system and the presence of no definite records.

Similarly, no significant performance was measured by the manager of Punjab province.

ADVANTAGES OF MATRIX SYSTEM

In this chapter we will analyze the advantages of the matrix structure introduced by new CEO. It helped KHE LTD to recognize real time complexit of the business in terms of technology, daily activities and function of the organization.

Matrix organization structure simplifies the complex organization structure and distribute the responsibilities and reserves among the individuals. It helps in better coordination among the departments and jobs are well defined and regulated.In this system some one have given a authority and responsiblity for which he is accountable to the actions and outcome of the processes and procedures. It also helps in improved regional and global prespectives and people are given chance of being more skilled and gain development through continuous training. The most importantly, the communication is increased and jobs are carried out much easily and in the fastest way as compared to flat structure organization system.

Following are the main advantages which KHE LTD gained by introducing the matrix Structure across its units throughout the country.

Minimization of project Cost:

Due to the matrix organizational structure, the overall project cost is reduced. As the system itself is efficient, and operational in action. Cooperation is important factor which increases efficiency and the cost is reduced. Designated people are assigned to perform different tasks so organization can have a good commadn system to monitor teh activities. So overall project cost is decreased.

Minimization of conflicts:

In some prebureucratic structure when task are not standarized, then there are alwasy probability of conflicts among the staff and the management. Matrix systgem helps to decentralized the structure of th organization and follows a command system from top to bottom ina herarichal way. Thus minimizing the conflicts.

Balance Between time cost and performance:

A good reputated firm/company make sure that the delivery of products is on time and at a cost which is reasonable to the company. In the example of KHE LTD as a flat structure, the delivery time was a problem although the company had good transportation system in place. The stock taking from the company to the ware house was not in time usually. Matrix system whelps the management a time effective and cost effective system and the performance is monitored and accused. The accountability factors help to maintain standard and integrated solutions to customer.

Sharing of authority and responsibility:

The example of KHE LTD, responsibility and authority was centralized to one supervisor who had a lot of other jobs to perform. Responsibility is called the obligation to accomplish the goals related to the position of that organization(www.answer.com/topic/managment -authority & responsibiltiy). Now in KHE LTD now managers have different authorities and responsbilities. Like finace department will look after the wages and inviceing queries. HR will concentrate in human resources and devleopment. So responsibility is shared and efficiency is increased.

Stress Distribution among team.

Stress is reduced among the team. KHE LTD now have different departments working togeher in a coordination For Example production and manufacturing department have given a specific task of say “200 Rugs” to be completed in six months. So to do this job the job will be divided among different sub divisions and in this way each division will do his job so, the stress will be reduced.

Faster decentralized decisions.

Before one decision could have taken days. For example, if a decision is needed for one item in wooden furniture, then the site supervisor had to talked to the senior Supervisor and then to the directors. Directors had to think and seek advice if needed. So the time was lost. Now with matrix system, the departmental manager is authorized to make decisions instantly after consultation with its CEO.

Broader and mulitskilled people availability:

Multitasking is a skill in which workers are allowed to participate in more than one process.( www.ce-utexas.edu/org/icis/a-ccis-reort.pdf). Mostly in multitasking, there is one specialized field for the employee but he have to contribute to other processes in the project. It helps to save the labour cost according to (Burlerson 1998) the multitasking bring 5-20% labour cost savings and considerable amount of redutions in work force and personal employment tenure of he employee is increased. New CEO emphasized the role of multitasking in its company and it was encouraged by eh new matrix system.

Increased communication and coordination across the business:

As KHE LTD has four units across the country and the directors need to ommunicate with all of them at regular intervals. So by the introduction of matrix system, this coordination has increased significantly. Managers acrosss the provinces have bben able to communicate and supply and demand can be monitored. Similarly a problem arising in the unite can be rectified by teh consultation of other provincial units. Therefore communication has increased and business grow.

Reflect the needs of regional customers:

In matrix Structure the regional customer are given a priority. A regiional cusotmer can direc tly contact the unit and the sales team can assist them, according to the needs ofthe situation. Where as this system was not present in flat organization structure.

Information Sharing:

Information sharing is an important part of business. All the different units of the business are interelated to each other. And theinformation need to be centralized. By the help of matrix system, all the managers among the same unit and with the other regional levels were able to communicate with each other and they can discuss the formulate their prioritites.

Recruitment:

When new department were created in KHE LTD different units so it created job vacancies in that units. And there was a need of recruiting new employees for the job. The new CEO mostly worked and stresses on the managerial positions vacancies. It was felt that there should be a structure and procedure for the recruitment procedures.

For the post of Managerial positions across each units of KHE LTD, the job advert was put on the newspaper and it was advertised online as well. Attracted salary packages were introduced with holidays entitlement were offered.

Now the question was is it worth to put a new manager or to use the existing experience Supervisor to be promoted to the post of Managers. After consultation with directors that new managers need to be recruited with relevant job knowledge and skills.

Followign criteria was considered when applying for a managerial job.

* At least 3 years experience in the relevant field.

* Qualificaiton obtained like degree holder candidates.

* Have necessary skills to perform their job.

* Other attributes.

Recruitment Procedure

Following job recruitment procedure was adopted when hiring new employees for the managerial posts.

Job Advertisement:

Job was advertised on the internet and in the daily newspapers. Qualification and experience was necessary for the job requirement. There were four types of job advert been advertised for four different jobs in finance, HR, sales and Distribution and Strategic planning.

A sample of job advert for the post of a HR manager for Punjab province is as follows

JOB ADVERT

Recruiter : Kashmir Handicraft Emporium

Salary : 25,000 Rupees per Month

Benefits: Company transport, Holidays entitlement, and an increment every year

Location : Punjab Province, Islamabad

Closing Date: 15th July, 2009

Description :

A Fantastic opportunity has arised to work in a reputable handicraft firm who is a manufacturing organisation with over 300 staff members

Job Description:- To upskill operational employees via development and implementation of site Training & Grading Schemes * To provide a comprehensive Learning and Development service to the Bradford site * To support generalist HR activ

Date of posting: 08th July, 2009

Please note that due to huge volume of candidates apply for the job, only short listed candidates will be contacted.

A sample of job advert for KHE LTD.

Previous CVs Reconsideration:

Previous CVs were also reconsidered for the recruitment process. Applicant were contacted by Phone and their willingness was asked.If the applicant is still willing, he was asked to fill the application form and he/she was called for the interview.

Name

Age

Address

Post applied for

Qualifications

Availabiltity to work

Willingness

communications

Xyz

25

22 street

HR Mgr

BBA

As soon As possible

Yes

Normal

GHL

26

123 street

HR Mgr

MBA

Require Two week notice

Need to think about

Good

Attracting the Able candidates:

To attract applicants, job was advertised on local news paper, internet, professional publications etc sourcing was given utmost importance. It was make sure that this advert reaches the deserved persons to get maximum result. The job advert was advertised twice a week one on Sunday newspaper and the other on Wednesday newspapers.

Procedure for Selection:

The response to the job was good and now there was a need for a system to be established that all the deserving candidates should be contacted. And the shortlisting of the candiates to be made easy.for that purpose list of suitable candidate was made along with their other details.

The list was as follow.

Name

Age

Address

Right to Work

Relvent Experience

CV expression

Currently employed or not

Qualifications

Checkable history

communication

Oral Interview:

Oral interview were conducted before calling for formal interview. Oral questionaires were as below. The purpose of the oral interview was to check the candidate communication over the phone, and the suitability for the job.

ORAL QUESTIONAIRE

Applicant name: ....................................................................................................

Address: ..............................................................................................................

Sex: ......................................................................................................................

Which post applied for: ..........................................................................................

How did you hear about us: ....................................................................................

Have you got CV with Cover letter? .........................................................................

When you are available to work? : .............................................................................

Communications: .............................................. Telephone Manner: ..........................

Interviewers Comments:

Additional Information:

Short Listed Candidates:

Short listed candidates with good knowledge and experience were contacted and called for interviews. There was a list of documents which they need to bring along with their application form for the interview. The documents need to bring with the interview are as below.

DOCUMENTS TO BRING ALONG WITH INTERVIEW

1. National ID card of Pakistan

2. Two proof of address from the following list.

1) Bank Statements

2) Utility bill

3) Mobile phone bill

4) Pakistan Telecommunication corporation limited (PTCL) bill

3.One Photo ID

1) Driving license

2) Passport

4. Attested Photocopies of academic qualifications ( Degrees and certificates duly attested by a gazetted officer of Pakistan)

5.Two Photographs

6. Self addressed envelope.

Interviews:

Interviews process was a lengthy and time taking process and it was carried out in two phases.

Phase 1:

Interview by CEO:

First interview was carried out by CEO. CEO Checked the documents and CV of the short listed applicants and following procedure was adopted.

Steps of interviews :

* CEO first explained the KHE LTD background, Types of products offered, Locations of the units and the location of the current vacancy.

* Identification of the applicant was verified before the interviews and attested photocopies were kept in file of driving license, passport etc.

* CEO explained to the applicant briefly about the type of jobs which we expect from the applicant and the policies and procedures of the company.

* Basic pay structure was explained to the applicant

* Any gap in the employment was asked to explain

* Any criminal offence and declaration by the applicant to be signed

* References personnel and job references were taken before interview.

* Interview Questions were asked to the applicant.

Interview Management

As there were four types of Job vacancies available one of each department like Finance, HR, sales and Distributions and Strategic Planning.

So to make the system easy, days were selected for one department e.g

1. Monday for Strategic Planning Candidates

2. Tuesday for HR Candidates

3. Wednesday for Sales and Distribution

4. Thursday for Marketing interviews

5. Friday for Review only.

Interview Questionnaires:

Below are some of the selected questionnaires which were asked by the candidate during his/her interview process.

1. Q: Introduce yourself?

2. Q: Where did you hear about the job?

3. Q; About Qualifications and experience?

4. Q: Why you think you are suitable for the job or why we employ you?

5. Q: Where do you see yourself in the next 5 years in the company.?

6. Q: Scenario Test question?

When the task of interviews been finished. Then the most suitable candidates were selected and contacted again for second interview with the directors.

Phase 2:

Directors Interview:

Usually Directors do not involve themselves in the interview processes but as this was an important step in the restructuring of KHE LTD and lot of investment and future was based upon, so Directors decided to attend the final interviews by themselves and gave their comments about the candidates:

CEO was also present in the director's interview. Applicants were assessed on the criteria of 1 to 10. At the end suitable candidates were selected for the posts.

Screening the Candidate:

Usually screening of the candidates takes up to 13 weeks but in this occasions screening was done within two weeks time. All the former employers were contacted and personal references were also checked. A file was maintained for each manager.

Criminal Records Checking:

Criminal records were checked in order to make sure that the candidate is suitable for the job. As the job is in Pakistan, so each candidate have to bring NOC (Non -objection- Certificate) from the police and the local police station have to verify it.

Selection of Candidates:

When a candidate is selected, Then the candidate was offered with the Job letter. In the job letter following information were provided.

Probation period:

Candidate was told that he will remain on a probation period of three month. Upon completion of the probation period, the candidate automatically become regular employee and then now entitled to company benefits like sickness, annual increment and holiday's entitlement.

Job Description:

A rough draft of job description was presented to the newly appointed managers detailing them about their job roles and responsibilities. It was suggested that a detail job description will be prepared with the help of company solicitor, CEO and Directors later on.

Workforce Training Programme:

Workforce training issues were discussed in the meeting. As there were no systematic system of training for handicraft market, so it was very hard for the workforce to send them for a training. In Pakistan, there is no training school available for workforce training and no formal qualification is present. So it was suggested by the directors that KHE LTD will organize an internal training program offered by the senior supervisors who have been in their field for years.

RESEARCH METHODOLOGY:

In this chapter we will discuss about the methods and techniques used to collect the data and then its subsequent analysis to discuss the relevant issues involved. The first source of information gathering was Interviews and Questionaires. Interviews were conducted from the directors, CEO , Managers and Supervisors to the low level work force and their opinions were recorded, which helped a lot in this research.

To get the results of the research, it is necessary that the information should be precise and accurate, so that on the basis of these information, recommendations and future suggestion can be made.

Primary Data is the most significant form of information gathered in this research. Research objectives can't be achieved with the proper use of primary data . primary data can be used to identify the drawback, limitation and other issues in the research and the subject on which research is been carried out.

There are many factors which need to be considered while gathering the information and data. The misuse can led to the inaccurate results and it can alter the paradigm of research. Similarly the method used to conduct reseach should be taken into consideration .

The finding of the research showed that KHE PVT LTDwas a medium sized company with traditional oriented approach. Introduction of new western HR technique had significantly improved the performance of the company in term of value, operations and services.

Finding out how the change happened in the management of KHE PVT LTDwas an interesting task to do. The main purpose of this research was to find out why the company who had been at loss for the last two years, bounce back in its first quarter with the appointment of new CEO and to study the driving forces which were hinderence to gain the objective.

Research Purpose:

The purpose of this research is to study the driving forces which led to the change management and to explore the importance of new HR techniques in understanding and managing any organization. By this research, new medium sized companies can be benefitted by using the same techniques and procedures in their operations as a reference of KHE LTD(LTD).. This case study will also help KHE PVT LTDto ddevelope and improve other aspects of its management in a more efficient way in future .

Validation of research work

The research work carried out in these paper was selected intentionally about a different backgroud than UK. So that we can research the psychological and other factors can be studied with altogether different culture of UK. In this research different management classes and cultures were studies and interviewed, their roles and management. It means a hirarchy of management was studies for this purpose. Restructuring of HR was only carried out in one area. It is interesting to see that how it affected the whole operation while making changes on one field of operation.

Steps taken for the Research:

This research was started by consulting the primary data. As the KHE PVT LTDhasn't got much documentation available, so to have a comprehensive knowledge of the current situation primary data was of most importance. New improved methods of data collections were used in order to get the required information. Interveiws and questionaire were designed in order to get the accurate information. The questions were designed in order to get the real understanding of the driving foreces which affect the overall culture of the organization with its impact on the local market. organizational design restructuring was emphazed. The result was then analyzed with the tables and comparison was made for it. One important factor was that these questionare was distributed to the managers and to the labours and subordinates in order to get the true picture of the situation and to manage and measure the gap between the top management and with its subordinates.

Personal interview were conducted. Most of the impormation was gathered by interviewing the staff. Three kinds of interviews were conducted. Directors level, CEO interview, managerial interview and finally the subordinatre interviews. Recommendations for improvement and more effective organizing were given at the end of the report.

A plan outlining how information is to be gathered for an assessment or evaluation that includes identifying the data gathering method(s), the instruments to be used/created, how the instruments will be administered, and how the information will be organized and analysed (http://www.mondofacto.com/facts/dictionary?research+design)

In this research the data gathered was of two kinds. First way of research was a exploratory way. In this kind of reseach, the data is explored by using internet, literature review, surveys and questionaire etc. this type of data gathered has some important features like it is more conceptutal and not expensive. But at the same time this type of data has some drawbacks being not accurate, chances of error, the authenticity of the information can't be proved etc.

The second type of data used for this research is the description portion of the research. In this type of research, we have used our simple questionare to get our reseach objectives.

Response rate :

Fortunately, in this research the response rate of the overall questionaire and interviews was above the expectation. The response rate was 90% high. The reason behind was that, in order to get the high result ,you should be aware of the market and the trends available for it. As the company is a Pakistan based Handicraft company, and the new directors, Managers and CEO are all Pakistani nationals, so it was easy for me to talk to them and makethem understand that it is just a research and the information you provide will be kept confidential. A letter was designed and written and attached with the questionare to inform the participant that your information will

Response Rate:

fortunately, in this research the response rate of the overall questionaire and interviews was above the expectation. The response rate was 90% high. The reason behind was that, in order to get the high result ,you should be aware of the market and the trends available for it. As the company is a Pakistan based Handicraft company, and the new directors, Managers and CEO are all Pakistani nationals, so it was easy for me to talk to them and makethem understand that it is just a research and the information you provide will be kept confidential. A letter was designed and written and attached with the questionare to inform the participant that your information will be kept confidential.

Another reason about the good response rate was the personlizaton of the corporate managmenet of the KHE PVT LTDand the researcher. I was in constant contact with both the directors and it helped me a lot in gaining the data.

Further more the questionares were followed up regularly. When questionnaire was given to any member of KHE LTD(LTD)., I always took his/her number and asked about the progress of the questionare. If they are not sure about any thing with in the questionnaire, I helped them to understand the questionnaire . some of the staff members lost the questionnaire twice, but I provide them questionnaire whenever they lost the questionnaire.

Design of the questionnaire was also important. The questionnaire was short, too the point and result oriented. It took less than 7 minutes for an average person to fill the questionnaire.

Interviews as a source of Qualitative methods analysis

Normally interviews are the most difficult way of getting information for a research work. Because the businessmen/women are usually very busy and they are not interested in the research. When asking for interview, very abrubt and strict answers can be expected. The response rate is usually very low. Inteviewing general public is also a time consuming and frustrating.

But the case of KHE PVT LTDwas totally opposite, my main research was based on the direct interviews. I conducted interviews with the top management and with the local work force. Interveiws were conducted on two units of kashmir Handicraft Emporium one in Islamabad ( capital of Pakistan situated in Punjab province)and the other was in Peshawar ( provincial capital North West Frontier Province).

I got very good response rate in Islamabad with the local workforce. People were agree to respond to the questions and the response rate was almost 95%. But there was a slightly different in NWFP. In Peshawar most people speak Pestu and some of them could n't understand my point and gave me irrelevant answers. Reinterviewinng them was a frustating task to the person being interview.

The advantage of this interview method is that it is a source of most accurate information and you can get the answers straight away. You know the person you are interviewing and facts can be obtained easily.

The disadvantage of this interview was it was very expensive and time consuming process.

Sample of Interview Conducted with The Director Mr Mushtaq Aziz is attached below.

Q: When did you start this company and why you specifically choose the Handicraft market:

Q: 2 Who are your Partners and roughly how much you invested in this business when you start till now:

Q:3 Can I have a look at the financial statements of the company.

Q4: Sir, can you please let me know average profit margin on the products.

Q5: what is the best way to get a brand name and to enter in to the handicraft market.

Q6: How you manage your units across the country.

Q7: Are there any specific information do you need for the local handicraft market.

Q8: Why did you feel the need of restructing the KHE LTD(LTD).

Q9: Can you please let me know what steps have you taken before deciding to appoint a New CEO.

Q 10: Have you seen any change after organizational change and restructuring process.

Q11: How you will arrange your staff training .

Q12: How is overall KHE PVT LTDprogress during the last year 2009 and now.

Q13: How human resource policies and procedures will be implemented in Pakistan culture.

Q14: Do you have any idea, how your employee reacted to the change of restructuring HR department.

Sample Interview with Chief Executive Office (CEO) of Kashmir Handicraft emporium.

Q1: When did you joint KHE LTD(LTD).:

Q2: How did you hear about the job and why you selected to join KHE PVT LTDwhen you had choices availble for other positions with in several mulitnational companies

Q3: what were the difficulties you facedwith when you join the KHE PVT LTDas a CEO.

Q4: What were your aims and objectives when you joined the KHE LTD(LTD).

Q5: Why you specifically selected the HRM to be restructured for KHE PVT LTDLtd

Q 6: Why do you feel the need of new departments in KHE LTD.

Q7: How you manage the coordination between the all the four units

Q8: What are the market trends and what specific information do you need about the market.

Q9:What would be the new role of HR manager in KHE LTD.

Q10. What would be you next steps in future regarding KHE LTD

Due to limitation of research, interviews conducted by managers, and subordinates can't be put here. But the results were gathered by analyzing the interviews conducted.

Questionaires as a source of Quantitative methods

Questionares can be defined as a “structured techniques for data collection,consisting of a series of questions, written or verbal, that a respondent answer” (Malhotra & Birks, 2000).

The primary purpose of the questionare is to get the accurate information from the participant by asking him specific questions and to give him limited choices. It will help to get rid of un necessary informations and the results are accurate and to the point. The structure of the survey will based on the questionare.

There are two types of questionaires, open questionirs and closed questionaires:

In open questionaire, the participent have to write the answer in detail. This type of questionaire is very time consuming and people most of the time avoid this type of questionaire. While in closed questionaire, the participant have to choose from the tick or cross to the specific question.

The questionaire I designed for KHE LTD survey has both open and close types. I used a more proactive approach. I wanted to know, what they think and their suggestions were recorded. Two types of Questionaire were produced, one for the top management and the other for the subordinates of KHE LTD.

Design of Questionaire

While designing the questionaire, many fact were taken into consideration. The questionire should not give any indication of forcing the participant. The questionarie should be partial and all the choices to be put for the participant to think about. E.g apart from the YES and NO answer, it was included also NO COMMENTS or NOT KNOWN clause. It will add the value of the questionaire.

There are certain good qualities which the research need to take into consideration before designing a questionaire. The questionaire should be designed in such a way that it gives truth and accurate information. As this information will be processed and validated for futrure purposes.

As discussed above two types of questionaires were selected. One for the managerial level and other for the working class skilled labour force. The performance of management was measured by asking several questions about the management.

Questionaire was designed into three parts. First part was based on the personal information, company and management procedures before the implementation of new HR Techniques in the company. The second part of questionaire consist of the situation after the introduction and restructuring of HRM ,its influences on their life and on the overall culture of the organization. And third part is an open part, in which suggestion were asked from the respondent, and how we can increase the productivity of the company and its employees by minimizing the conflicts with in the company.

Secondary Data collection

Observations:

Observations were made during the process of data collection. It was noted that some of the working class of KHE LTD was not satisfied by the way the new system has implemented. For them the change was very sudden and unexpected. There was no notice or formal meeting with the employees of the company about the change. So people are reluctant about the change and they got some reservations about the new system.

Some people are traditionalist, and they are doing this job for years. So having worked so far in one style has make this style their habit. So any new change or system is an alien to them and they react to the new system.

I will only give one example at this regard.

There was an introduction of night shifts pattern in one of the department of KHE LTD. It was suggested by the new supervisor that all employee have to do two day and two nights to be fair. And there will be two day off in between. The workforce reacted against this decision and write and application to the senior manager to revert this change. So the decision was taken back.

Data analysis and interpretation:

Data collected by the process of research now need to be analyzed and validate to get its aim. The main aim of the questionaire was to see the difference before and after the implementation of restructured HR techniques and how these techniques were successful in gaining the company overall growth and productivity.

Research reliability and Validity:

Every effort has been made to make the research reliable. A research is called reliable if it is repeated over again and gave the same results. So far in this regards, the research was carried out in two units and the values were cross matched. Although there were some errors which can effect the reliablity of the research. These are systematic errors and the random errors. An error due to some known physical law by which it might be predicted; these errors produced by the same cause affect the mean in the same sense, and do not tend to balance each other but rather give a definite bias to the mean.
(statistics) An error which results from some bias in the measurement process and is not due to chance, in contrast to random error. (http://www.answers.com/topic/systematic-error)

Research Limitations

Ethical consideration

Summary

LITERATURE REIVIEW

Introduction:

In this chapter we will discuss in detail the literature reviewed during the research work carried out by the author and its relevance to the organizational management culture by its new Human Resource strategies in context to the KHE LTD. We will also discuss the results of the change occurred due to the implementation of new policies as a result of restructuring the HRM of KHE LTD.

The culture of a region or a country always have a huge impact on the culture of the organization. The management style of manager have different thoughout the cultures. For example in the case of KHE LTD, as the company exists in a developing country, there are many cultural barricades with can influence the implementation of modern HR models and systems in that organization. Different management cultures have different management approaches across the regions ( newman and Nollen, 2006).

The case studey of KHE LTD revealed that implementation of the new HR policies change was not anticipated by the traditional culture of the organization. It is based on the idea that Human Resource Management across different countries are diffenet based on the influence of culture, education, family value, religions etc.

Over the past decade company have changed significantly. New HR policies and procedures were introduced and the now the HR department in a company is more role to play than before. It has also influenced from the changing market and the environment of the company working in. In this section we will review the change management of KHE LTD by its New CEO and its implication on the service and efficiency of the company. There according to the bryans & Smith, “ For an organziation to enter in to knoweledge economy, it is important for them to review the management culture of the organization ( Bryans & Smith 2000)

Cross cultural Management at KHE LTD

As there was a huge cultural difference in the KHE LTD due to its diversified locations across the country. Four production units were situated according to the needs of the business, so there was a cultural issues involved. “Cultural management is intended to enhance the overall effectiveness across different cultures” ( Harris & Moran, 2000).

The cultural management has some significant impacts on one hand for the companies because it

a literature review uses as its database reports of primary or original scholarship, and does not report new primary scholarship itself. The primary reports used in the literature may be verbal, but in the vast majority of cases reports are written documents. The types of scholarship may be empirical, theoretical, critical/analytic, or methodological in nature. Second a literature review seeks to describe, summarise, evaluate, clarify and/or integrate the content of primary reports."

Cooper, H. M. (1988), "The structure of knowledge synthesis",
Knowledge in Society, Vol. 1, pp. 104-126

CHAPTER 4

DATA ANALYSIS

4.1 Introduction:

This chapter will analyzed the data collected during questionnaire which was conducted in three unites of the KHE LTD mostly in Karachi, Islamabad and Peshawar.The response rate and the demographic positions will be discussed later in the chapters. In part 2 of the questionnaire, same set of questions were asked to the managers and to their subordinates, in order to get the different mind approach about the same subject or topic. We will discuss in detail the comparative study of the perceptions of managerial and the work force.

4.2 The Target population profile

As discussed earlier, the questionnaire was conducted in Three production units of KHE LTD at a divisional level of Karachi, Islamabad and Peshawar. The target population was the senior manager from each department and then its subsequent subordinates. Interviews and Surveys were conducted to the low level workforce,so that we can find out what is the overall perception about the restructuring of the KHE LTD and its subsequent effects on the employees.

Target population of KHE LTD

Departments

No of Employees

Sample size

Percentage

Finance Dept

12

8

20%

HR Dept.

32

12

20%

Strategic Planning

10

4

20%

Sales and Dist

25-30

12

20%

Production

160-170

30

20%

4.3 Comparative Study of the available Data

Following is the list of comparative analysis of the managers and the workforce perception of change. It will give us an indication how, the top management of KHE LTD and the low level work force think and what are their priorities in terms of business

Does KHE LTD facilities the Change Driven Strategy

When I compare the data of managers and the subordinate for this question, I saw most of the results same. Most of the people have answered it as Agree. Below is the chart which shows the probability

Managers

Workforce

MIN

MAX

MEAN

STANDARD DEVIATION

Overall culture of the organization is affected positively or negatively after restructuring KHE LTD

In the second questions, managers think that yes the restructuring has created a positive effect on the company progress, while the work force doesn't seem to be much convinced and it is seen that work force thinks that new system hasn't got much change in the over all culture of the KHE LTD

Restructuring KHE LTD was a right decision to make by the management:

There was a mix decision seen on this impact. It is seen that although workforce think that the new system hasn't bring a significant change in the management but at the same time, it looks that the work force appreciated this change. So overall level seems to be

Staff was redundant by the process of restructuring the KHE LTD

The progress of the company has increased in terms of efficiency after restructuring KHE LTD.

The organization have a system for responding and dealing with any issues arising with in the organization with respect to change management.

Leaders

Subordinates

1

2

MAX

4

5

Mean

2.40

3.52

td. Dev.

1.14

0.91

The managerial management introduced by new CEO were effective.

The organization management system doesn't reflect the gap between the top level management and the low level management.

The progress of Low level staff( labours, workers ,drivers ) has increased due to the introduction of new management style.

The organization KHE LTD believes in the individualism of the employees

SUMMARY:

The results shows that there is a different perception approach between the managers and the work force. As work force are not well educated people and they are not aware of the western management system techniques. They don't like a change in their system. The main cause can be that they are working from years and new change is not welcomed by them.

On the opposite site, managers are highly qualified people who have their own perceptions of using the western management techniques.

FINDINGS AND DISCUSSIONS:

After careful analysis of the KHE ltd, it was found that the culture of the organization has changed by the introduction of new western Techniques and the implementation of the New Matrix system by the new CEO. Although this change was felt a long time but no

SELECTION OF CENTRES

For research and analysis work on KHE LTD three centres were selected across the country which include Karchi, Islamabad and Peshawar.

Before Restructuring KHE LTD

After Restructuring of KHE LTD

Employee Satisfaction:

Over all employees are satisfied with the performance of their company with regards to their job. There are some issues, which the employees got some reservations and they need to be addressed.

Comparison of departmental efficiency

Value of business before and after change

Areas of Success:

1.

2

3

4.

5.

6.

Shortcoming in the new HR System

Drawback of new Matrix Organziation Structure

Redundancy of Staff

Closing down of one Department of Strategic planning

Fixed expenditure

EVALUATIONS AND CONCLUSIONS

Suggestions

After analysis of data described above, then there is a need felt from the researchers that some ideas and suggestion need to be given to the KHE ltd management in order to more effectively manage the organization culture.

Short Term Strategy

It is suggested that after successful restructuring the company, there is a need to increase the profit. For that purpose a short term strategy need to be prepared. The fixed expenditures of the company need to be monitored.

As a matter of fact, due to the credit crunch crisis, when overall market is not so much suitable and the interest rate is soaring, there fore a well definite short term strategy to be implemented by KHE ltd in order to sustain in these world of crisis.

Another point was noted during the research that the new CEO gave much emphasis on the

Long Term Strategy

Ecommerce and Web design

Conclusions:

The finding obtained by analyzing the data, found that KHE ltd “case Study” is an example of national culture versus the modern HR techniques. KHE ltd before restructuring was operating under the traditional ways based on national or domestic culture of the region. It showed that these cultures had some positive points but at the same time there was lack of many important factors which was affecting the productivity of the company.

The restructuring the Human Resources of KHE has led to the theory that Restructuring HR has let to modernisation of the company, not only westernisation.

We need to admit this fact, that the local people working in the KHE ltd want that their cultural values need to be respected and preserved. So they take the Restructuring as a change driven agent and the fear is that they might loose their cultural values and traditions.

On the other hand, the managers are imposing the change. The communication level between the work force and the managers need to be increased in order to get the maximum results. Any change need to be addressed to the employee and suggestion should be sought and the reason of change need to be informed to the

Limitation to the study:

The topics covered in this research have much bigger exposure and spectrum and it is very difficult to cover each aspect in this research. As KHE ltd is a private company and it is based in Pakistan. So if at the later stage I need to feel more data, it was not possible for me to travel back to country and get the data.

Another limitation for this research was the expensive travel and far distance. There was also limitation in the cultural barriers to perform this research.

Questionnaires survey does not full address the cultural behaviour of the KHE ltd before and now and it doesn't give an idea how culture are influenced by the western management techniques and what are the implications of restructuring in this context.

Another limitation in the study was that most of the labour work force was not educated and they have difficulty in answering the questions.

The centres are situated quiet a far and it consumes time and money.

Keeping in view all the above limitation and the scope of study, however, I tried my best to get as much details as possible and cover the relevant chapter and issues which are needed for this research.

Scope after this Research:

This research will give a good knowledge for further research. For example, How a western management system can influence the overall progress of the country of Pakistan. How conflicts can be minimized by understanding the people cultural values. Roles and responsibilities of Human Resource Department in local Pakistani culture and how it can play a significant role in changing the company growth.

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