final pel shrm

FINAL PROJECT

SHRM

LAHORE BUSINESS SCHOOL


(THE UNIVERSITY OF LAHORE)

FINAL PROJECT SHRM

SUBMITTED TO:

SIR ASIM KHAN SABRI

SUBMITTED BY:

OMER AKRAM MBA 01091-008

HAFIZ M. YASEEN MBA 01091-019

ATEEQ-UR-REHMAN MBA 01091-023

SHAMMAS KHALID MBA 01091-040


PREFACE

As per requirement to complete MBA (HRM) at LAHORE BUSINESS

SCHOOL (THE UNIVERSITY OF LAHORE), we group members with

honestly and put our best energy and time for the completion of our project

at “Pak Elektron Limited (PEL) on the topic of Training & Development of

Employees for Strategic Human Resource Management.

The final project report has been completed, which is a result of one’s time

taking efforts. We prepared this report by face-to-face a no. of meetings

with the HR executive and through the questionnaire that we filled from the

HRM department in PEL. We also got the help of company’s published

material. For instance, introductory part of this report is mostly taken from

“Company Profile”, and knowledge of TRAINING & DEVELOPMENT from

HRM department.


ACKNOWLEDGEMENT

By the grace of Allah Almighty we complete our project. We would like to

thank PAK ELEKTRON LIMITED (PEL) for giving us the opportunity and

their precious time.

We would particularly like to thank to Sir, ASIM KHAN SABRI for their

valuable instructions and time. We also thankful to Mr. RUHKAAM

KARMIAN (HR executive), Mr. QASIM BAJWA (Marketing Manager), Mr.

RIZWAN (Accountant), who guides us and their valuable suggestions and

cooperation enables us to complete our SHRM project.


TABLE OF CONTENTSTITLE PAGE…………………………………………………………………………………………..1PREFACE……………………………………………………………………………………………...4ACKNOWLEDGEMEN….……………………………………………………………………....5EXECUTIVE SUMMARY…………………………………………………………………..…….7HISTORY OF PEL………………………………………………………………………...…………8PROFILE OF PEL………………………………………………………………………….…………9APPLIANCE DIVISION……………………………………………………………...…………..9

POWER DIVISION..…………………………………………………………………...………..10PRODUCT HIERARCHY……………………………………………………………...…………12MAJOR COMPETITORS OF PEL.……………..…………………………………………….13UNIQUE FEATURES OF COMPANY…………………………………………………..….14BUSINESS VOLUME…………………………………………………………………………..…14MANAGEMENT PROFILE……….…………………………………………………………....16VISSION,MISSION…….……………………………………………….………………………...20HR DEPARTMENT,HR VISION INTO ACTION…………………..………………...….21GENERIC STRATEGY OF PEL IN APPLIANCE DIVISION……….…………...…….22

STRENGTH & WEAKNESS OF HR…..………………………………………………...…….24HR HIERACHY…….…………………………………………………………………………...…….25PROCESS OF HR…………………..………………………………………………………...……..26PEL PEOPLE DEVELOPMENT MODLE………..……………………………………….…..30TRAINING & DEVELOPMENT QUESTIONNAIRE RESULT ..…..……………...….34STRATEGY & STRATEGIC GOALS..……………………………………………………...…..36BUSINESS PROCESS ANALYSIS……….……………………………………………..……….36

PEST ANALYSIS………………………….…………………………………………………..……….38POLITICAL ENVIRONMENT.…...……………………………………………………………...38ECONOMIC ALENVIRONMENT…………………………………………………………..…..39 SOCIAL ENVIRONMENT..………..………………………………………………………...…..40TECHNOLOGICAL ENVIRONMENT..…..…………………………………………..……….40SWOT ANALYSIS..…………..………………………………………………………………...……41

STRENGTH………………..………………….……..………………...……………………...….41


WEAKNESS……………………………………………………….…………………………….....44OPPORTUNITIES..……………………………………………………………………………....46THREATS………………………………………………………………………………………….….47

COMPANY DEPARTMENT FUCTIONS………………………………………………..…..50PROBLEM/ISSUES…………………………..……………………………………………………..51SUGGESTION……………………………………………………………………………………….…52APPENDIX/BIBLIOGRAPHY………………………………………………………………….….53

EXECUTIVE SUMMARY

Pak Elektron Limited (PEL) is the flag bearer of the Saigol Group of

Companies. The products manufactured by PEL have always been of high

standard and the name 'PEL' is synonymous with QUALITY all over

Pakistan. Since its inception, the company has been working for the

advancement and development of engineering know-how in Pakistan. The

company has produced hundreds of engineers, skilled workers and

technicians through its apprenticeship schemes & training programs.

The company comprises of two divisions; 1st is Appliances Division:

This Division of PEL consists of home appliances manufacturing particularly

Refrigerators. 2nd is Power Division: PEL Power Division is one of the

major electrical equipment suppliers to WAPDA & KESC. The company

manufactures transformers, energy meters, switchgears, compact stations.

In the year 1980 the company expanded into consumer products with the

introduction of Window Type Air Conditioners and today also manufactures

Split Air Conditioners, Refrigerators, Microwave ovens, Deep Freezers and

Compressors etc.

PEL products right from the beginning have been of a high standard and the

name PEL is synonymous with QUALITY all over Pakistan. Since its


inception, the company has been acting as an institution working for the

advancement and development of engineering know how in Pakistan.

HISTORY OF PEL

Pak Electron Ltd. (PEL) was established in 1956 with the technical collaboration of

M/S AEG Germany and is the oldest composite electrical equipment manufacturing

unit in Pakistan.

In October 1978 the company was taken over by the SAIGOL GROUP, which is

one of the leading industrial and commercial groups of Pakistan. The products

manufactured by PEL have always been of a high standard and the name “PEL is

synonymous with quality all over Pakistan.” PEL, since its inception, has been

acting as an institution working for the advancement and development of

engineering and modern technology in Pakistan

Since its inception, the company has been working for the advancement and

development of engineering know-how in Pakistan. The company has produced

hundreds of engineers and skilled workers and technicians through its

apprenticeship schemes & training programs.

PEL has been continuously adding new products to its range. As a result, PEL has

registered a significant increase in its sales volume, during the last ten years


In 1978, the Saigol Group of Companies purchased major shares of Pak Electron

Limited. At that juncture, the company was only manufacturing transformers and

switchgears. With the Saigols in management, PEL started expanding its product

range by entering into Air Conditioner manufacturing.

In 1981, PEL window type air conditioners were introduced in technical

collaboration with General Corporation of Japan.

In 1986-87, the company started manufacturing of refrigerators in technical

collaboration with M/s IAR-SILTAL of Italy..

In 2006, the Company has started manufacturing of split type air conditioners of various

capacities as the customer choice has shifted from window type to split type air conditioners.

The product has received good response from the market, which encourages the company to

multiply its production in the coming years.

Today, PEL has become a household name. Its products are not only in great demand in the

local market but the Company has also started exporting its appliances to foreign markets.

Profile of PEL

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods

in Pakistan. It was established in 1956 in technical collaboration with M/s

AEG of Germany with object of initially producing transformers,

switchgears and electric motors. AEG experts and PEL personnel carried

out the designing and production of these equipments jointly. It is the oldest

composite electrical equipment-manufacturing unit of Pakistan producing

power and consumer products. In October 1978, the company was taken

over by Saigol Group of Companies. Since its inception, the company has

always been contributing towards the advancement and development of the

engineering sector in Pakistan by introducing a range of quality electrical

equipments and home appliances and by producing hundreds of engineers,


skilled workers and technicians through its apprenticeship schemes and

training programmers.

The company comprises of two divisions:

Appliances Division Power Division

APPLIANCES DIVISION:

This Division of PEL consists of appliances manufacturing.

PEL Washing machine

PEL Air Conditioners PEL Deep freezer Refrigerator Generator Water dispenser Micro wave oven


Power Division:PEL Power Division is one of the major electrical equipment suppliers to WAPDA & KESC. Since 1956 the company manufactures transformers, energy meters, switchgears, kiosks, compact stations and shunt capacitor banks. PEL also has had the privilege of getting its equipment approved and certified from well-reputed international consultants such as:

Preece, Cardew and Rider, England

Harza Engineering Company, USA

Snam Progeti, Italy

Societe Dumezm, France

Miner & Miner International Inc. USA

Ensa, France

PEL Power Division manufactures

Energy meters

Transformers Switchgears Power transformer shunt capacitor

All these electrical goods are manufactured under strict quality control and in accordance with international standards.


Product Hierarchy:


Major Competitors of PEL:

Appliances Division Power Division


PAK ELEKTRON LTD.

Power Division

Distribution Transformers

Energy Meters

Switchgare

Power transformer

Grid Station

Appliances divisin

Manufactruing division

Refrigratior

Deep Freezer

Air conditined

Tarding Division

Washing Machine

Microwave oven

Genrator

Televison

Dawlance

Waves

Haier

Mitsubishi

Orient

Singer

Panasonic

Seimens

Climax

Transfab

J&P

AB Ampere

Ahmad & companies

Feco

Areva

Fico

Pempam

Tariq Electric

Syed Bhais

Microtech

Escort

SB Electronic

Creative Electric

Unique Features of the Company

Low Price product Reliable


Modern Environment Friendly High Quality Product Consistent Quality ISO 9001 Certified

Business volume

The “SAIGOL GROUP” is one of the leading industrial groups in Pakistan.

The Saigol Group belongs to the Saigol Family, which is an old business

family and has contributed a lot towards Pakistan’s industrial development.

Saigol Group remains a leading and forward-looking group and believes in

continuous development and growth. The result is a global business activity

monitored through various offices worldwide. They are serving nation in

diversified business activities in the fields of:

Textiles

Engineering

Banking and Finance

Fuel and Energy

Trading

Automobiles

LOCATION AND FACILITIESThe head office is in Gulberg Lahore and the production unit is situated at

14-k.m. Ferozepur Road, Lahore, and is spread over an area of 242 kanals

and 15 Marlas of leasehold land in industrial area of Kot Lakhpat, Lahore,

and presently the total covered area comes to 232,883 square feet. Factory


is located on the main road where public transport is available round the

clock helping in easy access to the labor and customers.

SAIGOL GROUP OF COMPANIES

Textile

Azam Textile Mills Ltd. 06-Egerton Road, Lahore

Saritow Spinning Mills Ltd. 06-Egerton Road, Lahore

Fuel & Energy

Kohinoor Power Co. Ltd. Kohinoor Nagar, Faisalabad

Kohinoor Energy Ltd. 06-Egerton Road, Lahore

Engineering

Pak Elektron Ltd.1 14km, Ferozepur Road, Lahore

PEL 2 21 km, ferozepur road Qasoor

Banking & Finance

Union Bank Ltd. 06-Egerton Road, Lahore

Union Leasing Ltd. 07-Egerton Road, Lahore

Trading

Saritow Pakistan Ltd. 06-Egerton Road, Lahore

Saigol Computer Ltd. 162-Shadman Colony, Lahore

Automobiles

Kohinoor Motor Works Ltd. 07-Egerton Road, Lahore


Education

Faisalabad Grammar School

MANAGEMENT PROFILE

A committed team of highly qualified, experienced professionals, financially

sound and reputed sponsors manages the Company. Through sheer

dedication, diligence and the Almighty’s Beneficence the management team

at Pak Elektron Limited have earned reputation for excellence in

manufacturing of electrical as well as home appliances and their marketing.

Corporate Information

BOARD OF DIRECTORS

Mr. M. Naseem Saigol Chairman / Chief Executive Officer

Mr. M. Azam Saigol

Mr. M. Murad Saigol

Mr. Muhammad Zeid Yousaf Saigol

Mr. Muhammad Abdullah Haroon Saigol

Mr. Haroon Ahmad Khan Managing Director

Mr. Syed Zubair Ahmad Shah NIT Nominee

Mr. Wajahat A. BaqaiNBP Nominee U/S 182 of the Ordinance

Mr. Syed Iqbal AshrafNBP Nominee U/S 182 of the Ordinance

Mr. Rizwan Hameed NBP Nominee U/S 182 of the


Ordinance

AUDIT COMMITTEE

Mr. Azam Saigol Chairman/Member

Mr. Wajahat A. Baqai Member

Mr. Rizwan Hameed Member

Mr. Haroon Ahmad Khan Member

COMPANY SECRETARY

Mr. M. Omar Farooq

CHIEF FINANCIAL OFFICER

Syed Manzar Hasan FCA

AUDITORS

M/s Yousaf Adil Saleem & Co.(A member firm of Deloitte Touche Tohmatsu)

Chartered Accountants

LEGAL ADVISORS'


M/s Hassan & Hassan Advocates

REGISTERED OFFICE17-Aziz Avenue, Canal Bank,Gulberg-V, Lahore.Tel: 042-35718274-5, 35717364-5Fax: 042-35715105E-mail: [email protected]

SHARES REGISTRARCorplink (Pvt) LimitedWings Arcade, 1-K CommercialModel Town, LahoreTel: 042-35839182, 35887262, 35916719Fax: 042-35869037

ISLAMABADRoom # 1404, 14th FloorGreen Trust Tower, Blue Area, IslamabadTel: 051-2824543, 2828941Fax: 051-2273858

KARACHIKohinoor Building25-West Wharf Road, KarachiTel: 021-32200951-4Fax: 021-32310330

CHINA910, No. 1007, Zhong Shan Naun Er RoadShanghai, chinaTel: 86-21-64567533Fax: 86-21-54109971

WORKS14Km, Ferozepur Road,LahoreTel: 042-35811951-7 (7 Lines)Website: www.pel.com.pk

UNIT II34Km, Ferozepur Road,Keath VillageTel: 042-35935151-2Website: www.pel.com.pk

BANKERS

Bank Alfalah Limited

Bank of Khyber

Bank of Punjab


http://www.pel.com.pk/

http://www.pel.com.pk/

mailto:[email protected]

Deutsche Bank

Faysal Bank Limited

KASB Bank Limited

Meezan Bank Limited

My Bank Limited

National Bank of Pakistan

NIB Bank Limited

Royal Bank of Scotland Limited

Saudi Pak Commercial Bank

Soneri Bank Limited

Standard Chartered Bank


HRM DEPARTMENT

Vision Statement

To achieve Excellence through innovative HR Practices and continuously exceeding our PEOPLE Expectations.

Mission Statement

To Manage Talent and build capabilities of our people thus enabling them to deliver Sustained Performance.

To facilitate them in creating a Collaborative Work Environment that develops a culture of Continuous Learning.

Values

Respect Team Spirit Commitment Customer Satisfaction


HR VISION INTO ACTION

Transition from Training to Learning

Learning is a continuous process

Learning focuses on long term perspective

Bring urge for self-development

Engage learner to excel

Learning Methodology

Experiential Learning- fun packed activates with serious lessons

Action Learning- sharing of experiences & discussion on way forward plan to bring improvement

Two-way interaction- meaningful discussion for development

Edutainment- education + entertainment

L& D “Helping You Grow”

Create a sense of urgency for personal growth

Aligning personal growth with business framework

Equal opportunity at all level


3000 employees work under this management


HUMAN RESOURCE MANAGEMENT

Human Resource Management is the function within an organization that focuses on recruitment and selection, learning and development, performance management and organizational development and providing direction for the people who work in the organization.

HIERACHY


PROCESS OF HR

1. Recruitment and Selection

2. Learning and Development

3. Performance Management

4. Organizational Development

1. RECRUITMENT AND SELECTION

Recruitment and selection process is a process in which company hire the persons for the required job. The Company takes two

steps for hiring.

i. Employee Requisition Processii. HR (Recruitment and Selection)

i. Employee Requisition Process:

In this process the Company use Man Power Requisition Form with the help of which they hire the persons for the jobs. Requisition form contains Title of position, Grade, No. of vacancies, Education, Experience, and Age etc.

ii. HR (Recruitment and Selection):

First of all the Company advertised for the new vacancies of the Company.

Then they done short listening.

After short listening they do telephoning screening.

Then HR manager take interviews of the candidates.

After interviews technical interviews are done by HR.


Then they finally hire the persons for the job.

2. LEARNING AND DEVELOPMENT

Learning and development is basically the name of Training and Development. PEL change the name of training and development process into Learning and Development last year.

1. Training Programs: There are two programs run by PEL for providing

training to the managers and employees of the Company.

i. OEP (Open Enrolment Program)ii. PCP (PEL Customized Program)

i. OEP: (Open Enrolment Program)

PEL uses Open Enrolment Program in which 1 to 3 persons of the Company recommended by Head of Department for external training. OEP is an outhouse training program. The trainers charge 50,000 per day which is given by the management of the Company.

ii. PCP: (PEL Customized Program)

PEL Customized Program is a training body within the Company. PCP is an in house training program. They do course material preparation in this program to their employees. Company chooses 60 persons for this which has been given the training of 1 day.

After giving one day training to the employees Training Evaluation Program is done in which they use training evaluation form. Then they make analysis


PEL – PEOPLE DEVELOPMENT MODEL


Each program at every level offers different perspectives to leadership and building capability.

Management development its not always easy to tell where training leaves off and management development begins. The latter, however tends to emphasize longer term development and to focus on developing the capabilities of current or future managers. Management development is any attempt to improve managerial performance by imparting knowledge, changing attitudes, or increasing skills.

L & D has built in house capabilities to serve organization with variety of learning interventions. This capability has helped and played a major part in


developing quality human resource companywide. This in-house capability not only improves quality of work but also provides learner an opportunity to acquaint themselves with updated knowledge. As a result of these in-house interventions we were not only able to save time for our people but it has also proved to be very cost effective.

In-House Programs:

1. Unlocking Potential

Creating personal vision, align with organizational objectives

Continuous effort – not strength or intelligence – is the key to unlocking our potential…

(Liane Cordes)

2. Communication Power

Communication process and its types

Listening skills

Understanding communication styles

Importance of feedback

3. Presenting with Impact

Present with clarity, conviction & confidence

Use of body language, eye contact & gestures

Involving and handling audience

4. Winning teams

Trust building

Conflict resolution

Exceptional performance through collaboration


Coming together is a beginning.

Keeping together is progress.

Working together is success.

(Henry Ford)

5. Tame Your Time

Work life balance

Avoid time chunking

6. Delighted Customer

Develop customer- oriented mind set

Good image of the company

Delighted customer with extraordinary services

If we don’t take care of our customers, someone else will

7. Jago Kar Dikhao !

Customer centric service

Creating a positive PEL image

Effective handling of customer complaints

Prompt feedback to all stakeholders

8. Interactive English

Improve confidence & English fluency

Listening & English speaking skills

Reading & writing skills

9. Take the Lead !

Leadership styles

Leadership personality traits

Leadership should be more participative than directive, more

enabling than performing.


(Mary D. Poole)

The secret of success in life is for a man to be ready for his opportunity when it comes.

(Benjamin Disraeli)

10. HR skills for line Managers

The changing role of line managers

Understanding key HR skills for managing teams

Coaching, counseling and talent management

11. Think Different !

Solving problems with creative ideas

Breakdown of old patterns

PEL Resource Club (PRC)

PRC is pool of in-house trainers who are “subject specialists” with broader options

Customized in-house solutions

We identify their potential & provide them this platform to sharpen their training skills

Encourage PRC members by remunerating their services for company

2.PERFORMANCE MANAGEMENT:

The Company evaluates the performance of the employees. For this purpose they use software which is called performance management development program (PMDP). Performance Management Development Program is such software which consists of goal setting of the managers. The Company takes following steps:

Meeting / Interviews by HOD (Goal setting of 500 managers)

After 6 months review of goals and self learning.

After 1 year appraisal.


3. ORGANIZATIONAL DEVELOPMENT:

In organizational development the Company takes steps to change the culture and for this purpose they arrange seminars, fun fairs, trips, business dinners etc.

TRAINING AND DEVELOPMENT QUESTIONNAIRE RESULTS:

Training regularly assessed by HR and by HOD They offer leadership training, executive training, technical

training and computer training Employees permitted time-off from work to attend training with pay In-house training provided for employees with training director Training conducted by supervisors and human resource department,

conducted by outside professionals Minimally 9 to 24 hours per year in which employees must participate

in training. Format of offerings are workshops, classes and briefings Length of

offerings both full-day and half- day Best days for offerings training Monday, Tuesday, Wednesday,

Thursday and Friday. All training programs and opportunities communicated to employees

through E-mail & one to one meetings Learning and development policy state the organization’s philoshy on

employee training and development They assessing the organization’s immediate training needs and

individual development needs through questionnaires, surveys, focus group sessions etc.

Organization’s immediate and future training and development needs communicated to HOD’s on monthly basis

Result of training programs monitored and evaluated Cost consider in selection of training resources.


BENEFITS

1. Overtime facility:

Overtime facility is given to the employees but in these days they are not providing this facility due to certain circumstances.

2. Medical facility:

Unlimited Medical facility is provided to the employees and managers but only for wife and children not for the whole family.

3. Mess facility:

Mess facility is provided to managers only and they pay 1000 per month for this facility.

There is a workers canteen in the Company and they pay 1.5 rupees per day for this facility.

4. Mobile facility:

Mobile facility is only provided to the managers up to 1400.

5. Provident fund:

Company also provides provident fund facility to the managers. The amount of provident fund is deducted from the salaries of the managers which is paid after the retirement.

6. Bonus:

3 bonuses are provided on basic salary to every person per year.

7. Leaves facility:

Three types of leaves are provided to all the employees by the Company.

Sick leave Paid leave Casual leave


STRATEGY AND STRATEGIC GOALS

To excel in providing engineering goods and services through continuous improvement.

To provide quality products and services to the complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources.

To focus on personal development of our HR to meet future challenges.

To promote good governess corporate values and a safe working environment with a strong sense of social responsibilities.

BUSINESS PROCESS ANALYSIS

As Pak Elektron Limited is a manufacturing organization so the business process of the company starts from purchasing of raw material. The Procurement Department is responsible for the purchase of the raw material. The company purchases raw material from local as well as from

foreign markets. The company analyzes the material requirement and selects the market which gives the company high quality material in a favorable credit terms and price. Before purchasing the manager of procurement department gets permission from Finance department, which allocate the budget for procurement according to the needs and forecast of production.

The forecast of Production is decided by the Marketing as well as Production department. Marketing Department forecasts the market


demand by analyzing the economic, political, social and technological indicators of the target market. This forecast is very critical for the company as a wrong forecast can lead to shortage or surplus of the product. As for the year 2007-08, the company forecasted a low demand for home appliances due to economic meltdown but during the year shortage of products happened in the market.

The raw material is stored in the raw material stores where from the concerned departments demand the material when needed. The Production Manager issues a material requisition voucher to the store and also feeds its entries in the web system of the company. After receiving this voucher the store issues the material to the department and also does the entries in the network system which also maintains the inventory of material.

Business Process

The raw material is processed in the production departments of different products and controlled by their divisions. This raw material is put into the process where the quality control inspection is occurred at every stage of production, and defected units are separated from the good units. The quality checked products are packed and then sent to the finished goods stores in the factory.

The finished goods store departments maintain the inventory of the finished goods and issue a units receiving note to production department as a proof. On the other hand units received are entered in the system of network of the company. The Sales department receives orders from the customers and confirmed the orders if stock are available in the factory. The units from finished goods store are sent to the customers by the dispatch department after receiving request from the Sales department.


PEST ANALYSIS

POLITICAL ENVIRONMENT

Pakistan is facing the situation of great political instability and uncertainty since last couple of years. According to the Economist.com survey Pakistan is at the 11th number of top most vulnerable countries of the world. Due to this problem business activities in Pakistan are severely affected. The Foreign Direct Investment also decreased dramatically due to current insecurity.

There are very few incentives to the manufacturers in Pakistan by the government as compare to upcoming giants like China. The cost of manufacturing is very high due to the electricity rates and other overheads. So most of the time manufacturer hesitates to do manufacturing in Pakistan and prefer to import finished goods or only assemble goods in Pakistan.

The government decided to increase the minimum wage rate of workers from Rs.6000 to Rs. 7000 which increase the cost of production and inflation. It is heard that it will be increased more in future.

ECONOMIC ENVIRONMENT

Due to the global economic crises, Pakistan’s economy is also facing a lot of problems. Although Pakistan’s economy is not directly hit by the crises yet the economic situation is severe in Pakistan.

To resolve the power sector issues, removing subsidies and concurrent transfer of international oil price changes is also


likely to risk a further slowdown in economic activities, at least in the near future.

In Pakistan there is a strong black economy due to the circulation of black money from illegal businesses like smuggling.

Unemployment rate has been increased from 13.6% (2008 est.) to 15.2% (2009 est.)

Inflation remains the top concern among the public, jumping

from 7.7% in 2007 to 20.8% in 2008, and 14.2% in 2009.

Economists are expecting a better condition for Pakistan economy due to the loan from IMF.

In the financial year 2008-09 the GDP growth rate was 2.0 percent in 2008-09 as against 4.1 percent last year and growth target of 4.5 percent.

Overall manufacturing posted a negative growth of 3.3 percent in 2009 against the target of 6.1 percent and 4.8 percent in last year. The massive contraction is because of acute energy outages, a weak security environment and political disruption in March 2009.

Per capita income in dollar term rose from $1042 last year to $1046 in 2008-09, thereby showing marginal increase of 0.3 percent

The consumers in Pakistan are spending most of their income on food and basic needs of life.

SOCIAL ENVIRONMENT


Now a days people are becoming more price conscious due to inflation and crises in Pakistan. Their primary focus is on food and daily use goods and thus people have lessened their interest in electronic goods.

Now consumers prefer the Split Air Conditioners over Window Air Conditioners because Split ACs are considered as energy savers. That is why Window ACs are almost obsolete because of high energy consumption and Split ACs are becoming more popular because of low electricity bills.

In countries like Pakistan the usage of Air Conditioners is great because of extended summer season of nearly 8 months. In Pakistan Air Conditioners are used by upper and middle class.

The companies are becoming more socially responsible these days as they have introduced CFC free refrigerants, anti bacterial and anti dust filters.

The people in Pakistan have started considering Split Air Conditioners as a status symbol and feel disgraced if split units are not installed in every room of their houses. That is why people purchase home appliances on installments from the dealers.

TECHNOLOGICAL ENVIRONMENT

With the introduction of Split Air Conditioners, it made the air conditioning more affordable and easy to install and maintain.

The efficiency of air conditioner depends upon its outer unit. The bigger is the outer units the more efficient will its inner unit. So companies are introducing big outer units to get more efficiency.

In the international market, the non CFC (Chloro-floro Carbons) are shifting in air conditioning industry and all major companies are using non CFC gases in their products. CFC gases are harmful for the environment and cause depletion of ozone layer,


due to which the danger of global warming is happening. From 2005, no CFC gases product can be sold or bought in the international market.

So to remain in the international market it is necessary for the Pakistani companies to adopt new technology of non-CFC gases.

Companies are introducing refrigerators with cool bank which remain working for 5 hours even after switch off.

The multinational companies are using information technology to coordinate and communicate within companies as well as with external parties. The electronic inventory management systems are used to reduce the cost of handling the inventory and orders.

SWOT ANALYSIS

The strengths, weaknesses, opportunities and threats of PEL are discussed below:

STRENGTHS

PEL has the following strengths and is in more competitive position in these areas than its competitors. Following are the main strong points of PEL;

Strong Brand Image

PEL has created the strong brand image in the mind of the customers through higher quality and low price. The customers of the PEL always prefer to buy the PEL home appliances like WRAC split AC and refrigerators whenever they wanted to buy. PEL is a popular company in Pakistan and every one knows about the PEL products and its brand. That’s why PEL selling of WRAC are very high in the market

than the competitors selling.

Strong Dealer Network

It is also the plus point for the PEL that it has also developed the strong dealer network in the market. PEL has its dealers in 22 major


cities of Pakistan like Karachi Lahore, Quetta, Peshawar, Rawalpindi, Hyderabad, Multan, Gujrat etc. The dealers are always trying to sell the PEL appliance to the customers because they know there are high margin in the PEL products. They can get more money after selling the PEL products. The PEL also provides more incentives to their dealers than their competitors. Dealers are very conscious about the PEL products and always guide the customer in buying the PEL appliances and tell them the more qualities of PEL products than others products.

Strong Quality, Sales and Services

PEL has Country-wide Customer Care Centers in 21 major cities of Pakistan which enable customers to access PEL customer care centers easily. PEL is also in a strong position that it provides the superior quality to its customers. It makes sense in the mind of the customers that PEL products are better in quality than the other companies’ products. PEL also provides the after sale service to their customers which delight the customers satisfaction. It is another way to advertise the products because when customer is highly satisfied

then he tells the other ten persons that they should buy the PEL products. It is very good publicity of PEL products that PEL Company gains.

ISO Certified Company

PEL was 16th company in Pakistan which got ISO 9002 Certification in 1997. The international standard practices in PEL have been upgraded as per the revised ISO 9001 standards and its scope of application is expanding ever since and top management is committed to make PEL a total quality management (TQM) company.

Market leader in WRAC (Window Room Air Conditioner)

It is another strong point that PEL is a market leader in WRAC. The window room air conditioner is more demanded by the customers than its competitor’s air conditioners because it has more durability in


operating systems and cools the room in few minutes. PEL always strives to provide the innovative features in WRAC. PEL air conditioner is cheaper and has a higher quality than others WRAC. That’s why customers always purchase the PEL window air conditioner.

Monopoly in Power market

PEL has the largest market share in power market in Pakistan and has a monopoly in market.PEL is one of the major electrical equipment suppliers to Water and Power Development Authority (WAPDA) and Karachi Electric Supply Corporation (KESC), which are the largest power utilities in Pakistan. Backed by the innovative genius of Saigol Group, PEL is now technology forerunner and market leader in providing new products and services to meet ever changing and technology intensive needs of its customers. PEL aims to maintain this competitive edge and at the same time keep striving to improve it further by continuous R&D, creating new knowledge and adapting to global developments in technology and product design.

Number 2 in Appliances Market in Pakistan

Pak Elektron Limited has a second position in appliances market in Pakistan after Dawlance. PEL always continuously strives to pursue the strategies adopted by the competitors. PEL is also making efforts for the technological improvements and better customer services to become market leader in appliances market in Pakistan.

Strategic Alliance with LG

The strategic alliance with LG has increased the strength of PEL. As LG is a major player in international appliances market, it will give PEL the advantage of technology and increase market share.

Contract with Government of Punjab

PEL has the contract with Government of Punjab for providing and installation of air conditioners in the premises of Service and General Administration Department of Punjab. This remains PEL busy in operations even in the current crises of low demand in market.


Customer Loyalty

As PEL is a pioneer of electronic manufacturer in Pakistan and in the market since last 5 to 6 decades. So it has a strong customer loyalty and people are using PEL’s products generation to generation. As PEL is satisfying the needs of customers with economic and durable products, the loyalty of its customers is ever increasing.

Strong Grip in Home Appliance

So PEL is one of the companies, which is having a strong grip in the home

appliance i.e. WRAC, Refrigerators, micro way Owen etc that is a strong point for the company. PEL is penetrating the market by introducing the new home appliance like Split Air conditioners and Water Dispensers and always trying to get the maximum shares in the home appliance market.

Strong Research and Development Department

PEL has a strong research and development department that is continuously trying to develop new features for the products. R&D department spends huge amount of money for the development of product. R&D makes research for introducing the new product and asks the customers what they want extra in our products. For this purpose they hire the highly qualified employees in R&D department. That is another strong position of PEL.

Free Customer Service

PEL provides free customer service for one year to its customers. So the customers always buy the PEL products due to its

free service and it becomes loyal customer for the PEL. PEL always

provides help to their customers for repairing the WRAC, Refrigerators and other items. PEL always make efforts to satisfy the customers.

Public Limited Company


Although PEL is owned by the SAIGOL GROUP but its shares can be purchased and sold in stock exchange market. So every one who is interested in purchasing the shares of PEL he can purchase. It is also called public limited company. So people are more interested in buying the PEL products.

WEAKNESSES

Like other companies PEL has some weaknesses in operating the business. If PEL overcome on these weaknesses then it can become a market leader in the home appliance. PEL loose some competitive edge in the following points:

Financial Problems

PEL faces the financial problems because its stocks are so much piled up in the stores that create the problem of cash flow because when the stocks are not sold and the production is in process for 24 hours a day than the company faces such problems.

So company aggressively researches the sources of cash and stresses the dealers to sell the PEL’s products to the end consumers. Company sometimes sells their products on advance bases to the dealers and gives them high margin of profit. That’s why a company is facing the financial problems and company never pays attention on the alternative resources that will help in reducing the stocks. That is a customer demand and due to this it is the main weakness of company.

Low Satisfaction Level of Employees

The most useful and important assets for any company are its employees; if they are satisfied they will give their best performance and which will be fruitful for both employees as well as for the company. It is very big weakness of PEL that its employees are not satisfied and thus not giving their best performance. Middle and lower level of employees have not any sense of involvement in decision making for the company, as PEL has not given them empowerment to take their decisions for the company.

Lack of Advertisement


It is a second major weakness of PEL that it has lack of advertisement on TV and other media. That creates hurdle in selling the products and customers cannot know the changes, which are made in products by the company time to time. Company is not in a position that it made advertising of all their products on a wide range because of its

high cash requirement towards the production side. Due to this problem company always make efforts to develop strong relationships with dealers and try to get their loyalty by offering them different incentives and dinners and parties.

System Variations

It is also the main weakness of PEL that there are rapidly a change in polices of selling the products. That’s creates problems for the selling team how to sell the products to the dealers because the top management requires the urgent amount of money. So selling team sells the products sometimes on hard cash that will reduce the prices of products that gives the benefits to the dealers and creates problems for the management.

Middle and lower level of employees have not any sense of involvement in decision making for the company, as PEL has not

Gave them empowerment to take their decisions for the company that the problem with the selling team.

Good Communication plan

Job satisfaction is the positive feeling about the job that a person hold about the job if higher the level of positive feeling then higher level of satisfaction. (working conditions, supervision, pay raise, promotional opportunities, relationship with the coworkers).

Gave them intrinsic rewards growth, achievement, recognition, responsibility, advancement.


Workplace spirituality

PEL overcome the leakage of money problem by makes changing in the system like unlimited medical allowance convert into the limited medical limit and pay or reimbursement bills according to the percentage of their scale or grade

Inappropriate Working of HR Department

In this modern and highly competitive era, Human Resource Management has an immense importance for the company. The companies making progress in the world have excellent human resource management departments. In PEL, the Human Resource department is not performing their all duties properly. HR department was started before 3 years and it looks like a formality that company has HR department. HR department is not functioning properly and it is weakness of company which can cause company’s repute in the

market and will lose attractiveness for the employees.

Less Utilization of Resources

Due to lack of finance a company cannot utilize all its resources on its full capacity. It increases the cost of products per unit that decreases the profit margin of each consumer item. Sometimes company cannot allocate the resources according to the requirements of production department that’s becomes the problem for the complete utilization of resources. For the company it is also the main point of weakness.

OPPORTUNITIES

For the PEL there are more opportunities for expansion the business. If PEL realize that opportunities then it will be more fruitful and profitable for the company. Even if company does not take advantage of these opportunities then it will loose its competitive position and high profit. Its competitors will give PEL tough time to pursuing the opportunities that are adopted by them. Following are the opportunities for the PEL.

Exploration of Market in Pakistan


PEL has the opportunity to explore the market in all over the Pakistan. Even though PEL introduce its products in all cities of Pakistan but there are so many places that have the capacity to absorb the PEL’s products. These places are tribal areas in NWFP and northern areas of Punjab and NWFP, central area of SIND. If company introduces their products in these areas then it can get a large amount of profit and increase its market shares.

Rising population

Although rise in population is a problem for the country but where there is problem, there is an opportunity. So due to increase in population the demand will also increase in the market. So PEL can have more customers in future.

Increase in Product Range

It is the main opportunity for the PEL that it can increase its product range that will be a more profitable for the company. PEL can improve its product range in the power segment with the establishment of a new factory and can explore further growth opportunities in the Middle East and Eastern Europe, going forward. If PEL does not take this opportunity then it will loose high margin of profit and market share. It will reduce the fixed cost and increase the efficiency of the employees.

Export Opportunity

PEL Company has also the opportunity to export their products in other countries like UAE, SAUDI ARABIA, and other Arabic and African countries. It will not only reduce the dependence on one market but also increase the market shares and profits. It will also help the company to spread the fixed cost on all of its production that will reduce the total cost and company will enjoy the high profit.

Increase in Production Capacity

Company can also increase its production capacity at the maximum level that will increase the efficiency of the employees and also will reduce the total cost. Sometimes company cannot allocate the resources according to the requirements of production department that’s becomes the problem for the complete utilization of resources.


Company should look the market conditions then it will produce their products.

Increasing Investment in Power Sector

Due to current power and energy crises in Pakistan, the government is increasing investment in power sector. So this is a great opportunity for PEL to focus on power division and take the steps to capture high demand of power products in the future.

THREATS

PEL Company in such a competitive era has many threats as well. These threats are for the present situations and future. Company should make its policies and strategies according to these threats. So following are the main threats for the PEL:

Strong Competition

There is very strong competition for the home appliance in the market. So every company tries to come in the number 1 position for achieving the maximum shares in the market. Every company adopts different strategies for selling of the products. It reduces the profit margin of each company and increase the bargaining power of the buyers who will demand higher quality of products and lower cost. That is the main threat for the PEL Company.

Chinese Products

China’s products are another threat for the Pakistani companies because these products are cheaper than the Pakistani products. An even china product not well in quality but it is comparatively in low prices than the consumer’s home appliance that are manufactured by the indigenous company. China products stress the indigenous companies to lower the quality and prices that will not be profitable in the long run.

Decrease in Pakistani Rupee Value


The economy of Pakistan is not strong and that is why value of Pakistani Rupee is decreasing. This decrease in value of Rupee can severely affect the company as it will result into increase in the cost of raw material purchased from outside Pakistan. This will increase the cost of production and company has to rise in prices of its product which can disturb its economic products position in the customer’s minds.

Price war

As there is a stiff competition in the home appliance market that will cause the price war. So every company reduces the prices of its products to increase the sales. It will not only reduce the profit margin of the company but also reduce the quality of products. So price war is the main threats for all the companies, which are operating in these products.

Decreasing Growth Rate in Pakistan

There is also slow growth rate of home appliance in Pakistan that will increase the stocks of the company. It becomes the burden for the company that how to sell these stocks. Its main reason is that purchasing power of the buyer is very low and it has no income to buy the expensive home appliance. It is also becoming a main threat for all the companies.

Tax Department

Tax department is another major threat for the companies that will restrain the business expansion. There is more complicated tax procedure for the companies, which are interested to increase the investment in their businesses. Due to fear of heavy taxes companies would not like to invest the heavy amount.

Rapid Technological Changes

World is watching fast technological changes and there is a rapid change in designs and technologies in products. So it is very important to move with latest technologies which increase the cost of production.

Black Economy in Pakistan


Due to the black economy in Pakistan the marketers cannot make proper estimation of market demand. The marketers acquire data from State Bank Economic Surveys which do not reflect the fair picture of the economy. It is a threat for company as it will not properly forecast and meet the market demand of Pakistan.

COMPANY DEPARTMENTAL FUNCTIONS

OPERATIONAL DEPARTMENT

Operational department of the Company manage the operational system of the company. The Operational Manager manages the material, quality and cost of the products.


FINANCE DEPARTMENT

Finance department of the Company manages the financial system of the Company. The financial system is composed of consumers, manufacturers and distributors. The financial manager manages the financial system and provides or raises funds for the purpose of the business.

MARKETING DEPARTMENT

Marketing department of the Company manages the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives. The marketing manager is responsible for formulating, planning, executing and evaluating the marketing function.

SALES DEPARTMENT

Sales department of the Company manages the sales functions of the business. Sales manager works for enhancement of sales. The manager is responsible to achieve quantitative sales goals.

COMMERCIAL DEPARTMENT

Commercial Department deals with sales tax custom, and excise matters. Commercial department is headed by “Commercial manager”, who supervises commercial staff.


IMPORT SECTION DEPARTMENT

PEL is an engineering concerns company introducing Deep freezer, Air-conditioner, Refrigerator, Energy meters, Transformer and Switchgears. Not even any one product is entirely manufactured in PEL by locally available raw material. But practice is that, company imports a large portion of raw material from foreign suppliers.

Import section plays an integral role in achieving cooperate goals, as it is responsible for all imports concerned matters. Usually, this department imports:

Raw-material

Parts

Equipment

Machinery

Import activities are started from marketing- plan, in general. This plan is forwarded in systematic way and finally import plan is formulated. On the bases of import plan, import section allocates their activities.

Problems / Issues

Financial Problems More activity based rather than process based. Low Satisfaction Level of Employees Confined to office Lack of Advertisement Less connectivity with executives Inappropriate Working of HR Department Medical problem Leakage of money


Suggestions

Other competitor companies have good marketing and advertising campaigns PEL also need to heavy advertisements and marketing campaign to boost up the sales. Introduction of seasonal schemes can help to boost sales.

Continuous training programs. Increase their satisfaction level by gave them both tangible and

intangible incentives according to their performance. They also know what happen on the floor and the problems of the

employees they face and how to increase the performance. Executive connectivity with the HOD and include them in strategic

management process. PEL is doing some advertising efforts but problem is that there is no

creativity in ads. No doubt PEL is making excellent products, but unfortunately PEL is not realizing creative advertising is also important part of their Marketing success.

Not confined to office they also know what happened on the floor and improve their performance.

Pay / reimbursement percentage of fixed amount according to grade. Leakage of money control by change the plan and through a proper

check and balance. Include human resource department in the strategic management

process.


Appendix

PEL Pak Elektron Limited

WAPDA Water and Power Development Authority

KESC Karachi Electric Supply Company

TQM Total Quality Management


ISO International Standard Organization

SMQ Senior Manager Quality

MC&C Manager Credit & Control

M.D Managing Director

GM General Manager

Asst. Assistant

D&CCSM District & Credit Control Senior Manager

Bibliography

The sources from where we gathered data for the completion of our report are

www.pel.com.pk

6 meetings (face-to-face) with the Ruhkaam Karmian (HR Executive) in PEL on the topic of “TRAINING & DEVELOPMENT”.

Ms. Gul Zaib (HR Executive)


Data collected with the help of questionnaire on “Training and Development”.

Human Resource Management, Eleventh Edition, BY “Gary Dessler”

Accounts Department Mr. RIZWAN (Accountant)

PEL Marketing Department Mr. QASIM BAJWA (Marketing Manager)

PEL Sales Department(Mian Muhammad Ashraf )

www.pel.com.pk/refrigerator.html

www.pel.com.pk/group-profile.html

www.adverts.pk/...Home_Appliances/104228__PEL_Refrigerator_Fridge_ For_Sale.html

www.pakistan fact & figure. Com

https://www.cia.gov/library/publications/...factbook/.../pk.html -

www.demographic of pakistan.com


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