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TRANSCRIPT
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Project report
On
(To Study the FMCG Companies and Study the Organizational Hierarchy of
various Functions)
(ACH Management Consultants)
In partial fulfillment of the requirements of
The Summer Internship of
Masters of Management Studies
Through
Rizvi Academy of Management
Under the guidance of
(Mr. Sandeep Jadhav)
Submitted by
(T.J. Anthony)
MMS
Batch: 20102012.
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CERTIFICATE
This is to certify that Mr. T.J. Anthony, a student of Rizvi Institute of Management
Studies and Research, of MMS III bearing Roll No. 17 and specializing in Human
Resources has successfully completed the project titled
To Understand the FMCG Companies and study the Organizational Hierarchy for
various functions.
under the guidance of Dr. Neil Sequeira in partial fulfillment of the requirement of
Master of Management Studies by Rizvi Institute of Management Studies and
Research for the academic year 2010 2012.
_______________
Dr. Neil Sequeira
Project Guide
_______________
Prof. Umar Farooq Dr. Kalim Khan
Academic Coordinator Director
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ACKNOWLEDGEMENTS
I would like to take this opportunity to express my sincere gratitude
towards the following people without whose valuable guidance my efforts
would have never seen the level of understanding that I possess now:
Mr. Sandeep Jadhav-(Director of ACH MANAGEMENT CONSULTANTS
LTD.) my company guide who entrusted me with such a worthy project and
helped me gain an early insight into the FMCG Sector that has contributed both
to my academic & practical understanding.
I would like to thank Dr. Neil Sequeira our faculty and my guide, Rizvi
Academy of Management for his constant guidance & encouragement during all
the stages of the project.
I would like to thankMs. Garima Sharma our faculty member, for her intense
support & priceless guidance during the entire two months of my summer
internship.
T.J. Anthony
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Chapter Particulars Pageno.
1 Executive Summary 4-5
2 Overview of Recruitment as a Function 6-12
3 Background Check of FMCG Sector in India 13-19
4 About ACH MANAGEMENT CONSULTANTS LTD. 20-23
5 Organizational Structure in Indian Companies, an Overview 24-27
6 Organizational Structure for Sales Function 28-29
7 Organizational Structure for Marketing Function 30-31
8 Organizational Structure for HR Function 32-33
9 Organizational Structure for SCM Function 34-35
10 Organizational Structure for Quality Function 36-37
11 Organizational Structure for R&D Function 38-39
12 Sources of Information 40
13 Post Data Collection Process 41
14 The Interview Transcript 42-44
16 Conclusion 45
17 Bibliography 46
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Executive Summary
It is very, very hard to get ahead without being a positive person
because, very simply, no one likes to work under or near a dark cloud. Even if
the cloud is very smart.
Jack Welch, Winning
This credible attribute of positivity can never be instigated in any of
the factors that are responsible for productive employment. Such factors
distinguish the predominant importance that HUMAN as a factor wields, and
it has been solely responsible for carving this magnitude for human amongst all
other factors. But even a huge army of trained men unless guided and navigated
by an expert can never exercise their full potential. The power of human was
never realized till 1929 Great Depression, when legislations for labor came
into power. Despite the Welfare Officer coming into picture, neither the scene
nor the attitude changed.
The World War II fortunately revolutionized the scene. The US was
favored as far as economic parameters were considered, and with the passage
of time, around the 70s the supply augmented resulting in demand saturation.
It was the time when organizations around the globe realized the importance of
HUMAN as a factor and felt the need to restructure the way the factors
were looked at. Thus the ever neglected piece of rock (Human Resource)
became the corner stone on which the success of an organization depends.
Since man became the centre of attention, his needs and demands also started
gaining priority. The term HR came into picture around the 1980s. Unlike
the traditional concept of personnel wherein the philosophy believes that the
team aims and goals are primary and should come first, the HR philosophy
asserts that the aims, goals of the organization need to be aligned with the goals
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of the individual. Thus HR emphasized on the fact that employees needs
should be considered as an investment and not as a cost.
Human Resource best defined can be put as:
The resource that resides in the knowledge, skills, and motivation of people.
Human resource is the least mobile of the four factors of production, and
(under right conditions) it improves with age and experience, which no other
resource can do. It is therefore regarded as the scarcest and most
crucial productive resource that creates the largest and longest
lasting advantage for an organization.
William R. Tracey, in The Human Resources Glossary defines Human
Resources as: "The people that staff and operate an organization"; as contrasted
with the financial and material resources of an organization. Human Resources
is also the organizational function that deals with the people and issues related
to people such as compensation, hiring, performance management, and training.
A Human Resource is a single person or employee within your
organization. Thus it becomes highly essential to utilize the resource to the best
possible extent. With the increasing exposure that it has been getting as a
domain the responsibilities have also increased, and only those organizations
that upgrade themselves through astute principles and policies manage to
survive in todays competitive atmosphere.
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Overview of Recruitment as a Function
It becomes needless to state that every single function of HR ranging
from Recruitment to Industrial Relations have its own effects and side
effects on the smooth functioning of the organization. Recruitment as a
function is one of the most basic but highly neglected function in most of the
organizations. Let us understand and have an overview of the Recruitment and
its functions.
Recruitment is an important part of an organizations human resourceplanning and their competitive strength. Competent human resources at the right
positions in the organization are a vital resource and can be a core competency
or a strategic advantage for it. The objective of the recruitment process is to
obtain the number and quality of employees that can be selected in order to help
the organization to achieve its goals and objectives. With the same objective,
recruitment helps to create a pool of prospective employees for the organization
so that the management can select the right candidate for the right job from this
pool.
Recruitment acts as a link between the employers and the job seekers
and ensures the placement of right candidate at the right place at the right time.
Using and following the right recruitment processes can facilitate the selection
of the best candidates for the organization. In this is competitive global world
and increasing flexibility in the labor market, recruitment is becoming more and
more important in every business. Therefore, recruitment serves as the first step
in fulfilling the needs of organizations for a competitive, motivated and flexible
human resource that can help achieve its objectives.
According to Edwin B. Flippo, Recruitment is the process of searching
the candidates for employment and stimulating them to apply for jobs in the
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organization. Recruitment is the activity that links the employers and the job
seekers. It is the process to discover sources of manpower to meet the
requirement of staffing schedule and to employ effective measures for attracting
that manpower in adequate numbers to facilitate effective selection of an
efficient working force. Recruitment of candidates is the function preceding the
selection, which helps create a pool of prospective employees for the
organization so that the management can select the right candidate for the right
job from this pool.
The main objective of the recruitment process is to expedite the selection
process. Recruitment is a continuous process whereby the firm attempts to
develop a pool of qualified applicants for the future human resources needs
even though specific vacancies do not exist. Usually, the recruitment process
starts when a manger initiates an employee requisition for a specific vacancy or
an anticipated vacancy.
Recruitment Needs Are Of Three Types:
Planned:
In this case the needs arising from changes in organization and retirement policy
are planned and addressed.
Anticipated:
Anticipated needs are those movements in personnel, which an organization can
predict by studying trends in internal and external environment.
Unexpected:
Resignation, deaths, accidents, illness give rise to unexpected needs.
Every organization has the option of choosing the candidates for its
recruitment processes from two kinds of sources: internal and external sources.
The sources within the organization itself (like transfer of employees from one
department to other, promotions) to fill a position are known as the internal
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sources of recruitment. Recruitment candidates from all the other sources (like
outsourcing agencies etc.) are known as the external sources of recruitment.
Before making any investment, every organization would want to evaluate the
investment by answering the following questions in quantifiable terms:
What are the costs and the corresponding and related risks on theinvestment?
What are the expected returns of the investment? What is the expected pay-back period of the investment?
An organization makes a tremendous amount of investment in its
recruitment processes. A lot of resources like time and money are spent on
recruitment processes of an organization. But assessing or quantifying the
returns on the recruitment process, or, calculating the return on investment
(ROI) on recruitment is a complicated task for an organization. Indeed, it is
difficult to judge the success of their recruitment processes. Instead, recruitment
is one activity that continues in an organization without anyone ever realizing
its worth or measuring its impact on the organizations business.
Assessing the ROI on recruitments can assist an organization to
strengthen its HR processes, improving its recruitment function and to build a
strategic human resource advantage for the organization. Recruitment
management system is the comprehensive tool to manage the entire recruitment
processes of an organization. It is one of the technological tools facilitated by
the information management systems to the HR of organizations. Just like
performance management, payroll and other systems, Recruitment management
system helps to contour the recruitment processes and effectively managing theROI on recruitment.
Recruitment management system helps to incorporate and integrate the
various links like the application system on the official website of the company,
the unsolicited applications, outsourcing recruitment, the final decision making
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to the main recruitment process. It maintains an automated active database of
the applicants facilitating the talent management and increasing the efficiency
of the recruitment processes. It provides a flexible, automated and interactive
interface between the online application system, the recruitment department of
the company and the job seeker. The Recruitment Management System (RMS)
is an innovative information system tool which helps to sane the time and costs
of the recruiters and improving the recruitment processes. However with all
these increasing works pressure and difficulty in handling these nuances
organizations the function that is responsible for attracting the best candidates
for the prospect role is not given the due attention that it demands and with the
passage of time in many of the organizations both middle and large sized, it is
never done internally, i.e. Recruitment is outsourced.
This pattern of outsourcing recruitment to a third party (mostly
professional consultants) has resulted in the generation of an entire
Recruitment Industry, wherein large and small firms undertake the
responsibility of recruiting candidates for companies and in the process are
handsomely rewarded. In India, the HR processes are being outsourced from
nearly a decade now. Outsourcing industry is growing at a high rate. Human
Resource Outsourcing refers to the process in which an organization uses the
expert services of a third party (generally professional consultants) to take care
of its HR functions while HR management can focus on the strategic
dimension of their function.
The functions that are typically outsourced are the functions that need
expertise, relevant experience, knowledge and best methods and practices. This
has given rise to outsourcing the various HR functions of an organization. HR
Consultancies such as Ma Foi and Planman Consulting provide such services
through expert professional consultants. Human resources business process
outsourcing (HR BPO) is a major component of the worldwide BPO market.
Performance management outsourcing involves all the performance
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monitoring, measurement, management being outsourced from a third party or
an external organization.
Many organizations have started outsourcing its recruitment process i.e.transferring all or some part of its recruitment process to an external consultant
providing the recruitment services. It is commonly known as RPO i.e.
recruitment process outsourcing. More and more medium and large sized
organizations are outsourcing their recruitment process right from the entry
level jobs to the C-level jobs. The present value of the recruitment process
outsourcing industry (RPO) in India is estimated to be $2.5 billion and it is
expected to grow at the annual rate of 30-40 per cent for the next couple of
years. According to a recent survey, only 8-10 per cent of the Indian companies
are complete recruitment processes. However, the number of companies
outsourcing their recruitment processes is increasing at a very fast rate and so
is the percentage of their total recruitment processes being
outsourced. Outsourcing organizations strive for providing cost saving benefits
to their clients.
One of the major advantages to organizations, who outsource their
recruitment process, is that it helps to save up to as much as 40 per cent of their
recruitment costs. With the experience, expertise and the economies of scale of
the third party, organizations are able to improve the quality of the recruits and
the speed of the whole process. Also, outsourcing enables the human resource
professionals of organizations to focus on the core and other HR and strategic
issues. Outsourcing also gives a structured approach to the whole process of
recruitment, with the ultimate power of decision making of recruiting with the
organization itself. The portion of the recruitment cycle that is outsourced
range from preparing job descriptions to arranging interviews, the activities
that consume almost 70 per cent of the time of the whole recruitment process.
Traditionally, recruitment is seen as the cost incurring process in an
organization. HR outsourcing helps the HR professionals of the organizations
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to concentrate on the strategic functions and processes of human resource
management rather than wasting their efforts, time and money on the routine
work.Outsourcing the recruitment process helps to cut the recruitment costs to
20 % and also provide economies of scale to the large sized organizations.
Outsourcing is beneficial for both the corporate organizations that use the
outsourcing services as well as the consultancies that provide the service to the
corporate. Apart from increasing their revenues, outsourcing provides business
opportunities to the service providers, enhancing the skill set of the service
providers and exposure to the different corporate experiences thereby
increasing their expertise.Recruitment consultancies, agencies or
intermediaries are witnessing a boom in the demand of their services, both by
the employers and the job seekers. With an already saturated job market, the
recruitment intermediaries have gained a vital position acting as a link between
the job seekers and the employers.
Though it makes the job of the management extremely effortless, still a
large number of the recruited candidates express their dismay when they say
that most of the recruitment firms are least bothered about the aspirations of the
job seekers and bluntly notify them about the vacancy available. There are
certain drawbacks in hiring an offshore or offsite recruitment process
outsourcing vendor regarding potential cost associated utilization. Survey
conducted in the year 2008 showed that 39% of the recruitment processes
outsourcing centers were switched in last five years because they did not meet
the expectations of the quality of the service as well as the cost saving in job
candidate sourced.
It is necessary that the client needs to primarily define their recruitment
strategy to the recruitment outsourcing center and the process to them so that
they can work on it and avoid such problems. The recruitment strategy of the
client should not have a negative perception or not in working order in the
marketplace because it can be a drawback for Recruitment outsourcing center
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to work accordingly and get the desired results. A definite plan should be
designed which covers the client interest as well as the RPO working tactics
how to attain the best results from it. Many recruitment outsourcing centers
which are new in the business faces problems like this. Proper executive and
staffing agency is required in RPO to work accordingly with all the required
information of the market. In addition, these newly form Recruitment
outsourcing centers faces difficulties in communicating culture of the clients
to the potential job candidates.
The proliferation of the new recruitment outsourcing type vendors in
these years have driven down the prices as well as the quality of the services
provided by the earlier more experienced recruitment outsourcing vendors. For
example: there are many RPO vendors in the market which will bid the lowest
rate as possible to attract the company in hiring them with any assurance of the
quality of the service being provided by them. This has created a negative
influence in this business market and a lot of high quality providers are
suffering. These small vendors have entered into the market just to earn some
profit without any quality in their hand.
To get the desired result, the clients should monitor and control the
entire process of recruitment outsourcing to ensure that the implementation of
the plan is done correctly and everything involves in the agreement is followed
appropriately. Separating the companys function to an outsourcing company
doesnt mean that the management is free from its burden but in fact
monitoring is even harder. It is a pitfall for the parent company to look after the
working process of the recruitment outsourcing center and to modify any
changes needed. If an aspect of a business, such as Human Resources, is
controlled by an outside group, human resources are thus removed from an
organization and its formal structure. The hierarchal structure of business is
another area that has the potential to be impacted by outsourcing.
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Background Check of FMCG Sector in India
The study report focuses on the impact that Recruitment has on
FMCG Companies and vice-versa. But for that let us have a detailed view
about one of the largest contributing sector in the Indian Economy.
Indias FMCG sector is the fourth largest in the economy, with a
market size of over Rs 110,000 crore (around USD 22 billion). The lower-
middle income group accounts for over 60% of the sales for the sector. Rural
markets account for 56% of the total domestic FMCG demand. A well-established distribution network, intense competition between the organized and
unorganized segments characterizes the sector. Going forward, as anticipated by
CRISIL, FMCG sector will touch around Rs. 140000 crore by 2015
(33.4B$). Hair care, household care, male grooming, female hygiene, and the
chocolates and confectionery categories are estimated to be the fastest growing
segments, says an HSBC report. Though the sector witnessed a slower growth
in 2002-2004, it has been able to make a fine recovery since then. For example,
Hindustan Levers Limited (HLL) has shown a healthy growth in the last quarter.
An estimated double-digit growth over the next few years shows that the good
times are yet to come.
Growth Prospects:
With the presence of 12.2% of the world population in the villages of
India, the Indian rural FMCG market is something no one can overlook.
Increased focus on farm sector will boost rural incomes, hence providing better
growth prospects to the FMCG companies. Better infrastructure facilities will
improve their supply chain. FMCG sector is also likely to benefit from growing
demand in the market. Because of the low per capita consumption for almost all
the products in the country, FMCG companies have immense possibilities for
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growth. And if the companies are able to change the mindset of the consumers,
i.e. if they are able to take the consumers to branded products and offer new
generation products, they would be able to generate higher growth in the near
future. It is expected that the rural income will rise in the coming years,
boosting purchasing power in the countryside. However, the demand in urban
areas would be the key growth driver over the long term. Also, increase in the
urban population, along with increase in income levels and the availability of
new categories, would help the urban areas maintain their position in terms of
consumption. At present, urban India accounts for 66% of total FMCG
consumption, with rural India accounting for the remaining 34%. However,
rural India accounts for more than 40% consumption in major FMCG categories
such as personal care, fabric care, and hot beverages. In urban areas, home and
personal care category, including skin care, household care and feminine
hygiene, will keep growing at relatively attractive rates. Within the foods
segment, it is estimated that processed foods, bakery, and dairy are long-term
growth categories in both rural and urban areas.
Indian Competitiveness and Comparison with the World Markets
The following factors make India a competitive player in FMCG sector:
Availability of Raw Materials:Because of the diverse agro-climatic conditions in India, there is a
large raw material base suitable for food processing industries. India is the
largest producer of livestock, milk, sugarcane, coconut, spices and cashew andis the second largest producer of rice, wheat and fruits &vegetables. India also
produces caustic soda and soda ash, which are required for the production of
soaps and detergents. The availability of these raw materials gives India the
location advantage.
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Labor Cost Competitiveness:
Low cost labor gives India a competitive advantage. India's labor cost
is amongst the lowest in the world, after China & Indonesia. Low labor costs
give the advantage of low cost of production. Many MNC's have established
their plants in India to outsource for domestic and export markets.
Presence across value chain:Indian companies have their presence across the value chain of FMCG
sector, right from the supply of raw materials to packaged goods in the food-
processing sector. This brings India a more cost competitive advantage. For
example, Amul supplies milk as well as dairy products like cheese, butter, etc.
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Growth Drivers of FMCG Sector:
1. Disposable Income:
There is increase in disposable income, observed in both rural and
urban consumers, which is giving opportunity to many rural consumers to shift
from traditional unorganized unbranded products to branded FMCG products
and urban fraternity to splurge on value added and lifestyle products. The
increasing salaries, along with rising trend of perks in the corporate sector at
regular intervals, have increased peoples spending power. As per some
research, there is a high correlation between Disposable per capita and HPC per
capita.
2. Organized Retail:
The emergence of organized retail have lead to more variety with ease
in browsing, opportunity to compare with different products in a category, one
stop destination (entertainment, food and shopping) etc, which is playing an
important role in bringing boom in the Indian FMCG market. Currently the
modern trade is capturing 5% of the total retail space, which will increase to
10% and 25% in 2010 and 2025 respectively. Also, as the credit card and
organized retail trend picks up, people wont think much while buying and buy
more.
3. Distribution Depth - Rural Penetration:
There are 5500 towns and 6.38 Lacs villages with 2.5Mln and 5Mln
outlets respectively. Due to saturation and cut throat competition in urban India,
many FMCG companies are devising strategies for targeting rural consumers in
a big way. Many FMCG companies are focusing on increasing their distribution
network to penetrate with a step by step plan. This is the reason that FMCG
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urban market size has dropped from 50% to 29% in last 5 years. The FMCG
market size for semi-urban and rural segment was 19% and 52% respectively
for the year 2006-07. As per FICCI, the FMCG market size for urban, semi-
urban and rural for year 2007-08 was expected to be 57%, 21% and 22%, which
clearly shows that rural market is the growth engine for FMCG growth. Though
the urban markets are growing too, the incremental addition in consumers
households is much more in rural space as compared to urban markets.
The planned development of roads, ports, railways and airports, will
increase FMCG penetration in the long term. 180 million rural and semi-urban
peoples attention has already been diverted towards FMCG products, according
to latest estimates released by industry chamber, Assocham in 2008. The
estimated number of households using FMCG products in rural India has grown
from 131 million in 2004 to 140 million in 2007, according to market research
company IMRB. Over 70% sale of FMCG products is made to middle class
households and over 50% of middle class is in rural India.
4. Buying Pattern Shift:
The crisis of declining FMCG markets during 2001-04 was driven by
new avenues of expenditure for growing consumer income such as consumer
durables, entertainment, mobiles, motorbikes etc. Now, as many consumers
have already upgraded, their income is being directed towards pampering
themselves.
5. Favorable Indian Economy & Demographics:
45% people in India are under 20 years of age. Per capita disposable
income has increased from $550 to $600 in 2007 (9% increase). GDP is
growing at a CAGR between 8 to 9%.In the next five years, affluent and
aspirers as a total will supersede strivers and will be dominated by aspirers, as
per NCAER.
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FMCG Category Trends:
1. Underpenetrated Growth Categories:
Within the Indian FMCG industry, there are few categories that have
grown more than 20% during 2008-2009, like shaving cream, skin/fairness
cream, shampoos, skin care & cosmetics, tooth powder. Some other growth
categories will be hair color, skin care, anti-aging solution, deodorants and
mens products. Most of these categories are under penetrated and there is a
huge scope for growth.
2. Penetrated Growth Categories:
Even mainstream categories with high penetration levels such as
washing detergents, soaps and hair oils have shown strong underlying volume
growth, despite sharp inflation led price increases in FY08. This is partly related
to the growth in organized retail (3-5% of turnover for most FMCG players) that
gives more visibility to national brands with strong brand equity.
3. Response to the New Demand:
Anand Shah, an FMCG research analyst at Angel Broking, says most
FMCG companies are responding to the new demand by concentrating on
developing a big theme and building a portfolio around it. Nestle, for example,
has identified 'health and wellness' as its focus area, while Dabur is positioning
itself around ayurvedic (a traditional Indian system of healthcare), natural and
herbal products. At the higher price end, companies are leveraging health and
wellness trends by focusing on providing 'experiential' and 'higher order'
benefits rather than purely functional ones.
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4. Health Food Categories:
FMCG majors are widening their health food portfolio to cash in on
the rich, urban, health conscious Indian. Sugar free Chywanprash, organic
spices and multi grain pastas and biscuits are few examples. Urban India is high
on health and FMCG majors are cashing in on the opportunity. Processed foods
particularly juices that are based on the health platform would see stronger
growth. Also, with the Indian consumer becoming increasingly health
conscious, the demand for juices has witnessed rapid growth.
5. Impact of inflation since 2008:
Even if consumers don't switch to cheaper substitutes during inflation,
they normally switch from higher SKUs to lower SKUs of the same product.
This is the reason the companies have come up with smaller SKUs. In line with
this trend, Henkel has withdrawn its 500gm pack washing powder which was
priced at Rs.46 and has replaced it with a new 400gm pack that costs Rs.40. A
couple of months back, Amul introduced 25gm packs of butter. Not
surprisingly, this pack is fetching more sales than 100gm and 500gm
packs. Snacks and foodstuffs remain the category leaders, with recent launches
of several health and beauty products, particularly in urban markets.
With such a large business to run it becomes essential to get the best
of the skilled people to add to the value addition. At ACH Management
Consultants Pvt. Ltd, the efforts are constantly made to bridge the widening gapbetween the Job Market and the Job Seekers. Through a regular Recruitment
Consultancy, the aim is to provide jobs as per the choice of the job seeker.
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ALL ABOUT ACH MANAGEMENT CONSULTANTS PVT.
LTD:
ACH Management Consultant Pvt. Ltd. provides recruitment and
training services. The top management team comprises people from premier
management schools who have among them an average of 15 years of
experience each, primarily in the HRD, Sales and Marketing in reputed
Multinational, FMCG, Telecom, Agro Business, Retail, Consumer Durable &
Pharmaceutical organizations. ACH's roots in management consultancy enable
to bring a unique approach to recruitment. We recruit across various industry
segments for multinational corporations as well as for leading Indian corporate.
In the past 5 years we have partnered with more than 100 national and
multinational companies for their staffing requirements.
ACH was born out of the belief that recruitment could be delivered in
a more professional way. We embrace diversity and professional standards and
are committed to raising standards within our industry. We have been
providing upscale service to organizations we are working with. Our ever
expanding lists of clients who have reposed faith in our services testify our
quality and service delivery. We are committed to offer long term mutually
rewarding services to our clients with the best available talent in the industry.
For us our client's growth and satisfaction is our growth and
satisfaction. We seek to build eternal relationship with organizations on the
pillars of transparency, accountability, integrity and friendly and courteous
service. ACH's Culture is replete with positive energy and expectation. Every
single consultant working with ACH have inner faith in the virtue of positive
expectations. And how we think shows through in how we act. There is nothing
called as failure' for us; only learning is. We always feel great.
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Today ACHhas established itself as the one of the premier executive
search & selection group, a preferred recruitment partner for our clients and a
trusted consultant for their national and international requirements. Our
organization network includes 5 offices spread across 4 major Indian cities
namely Mumbai, Pune, Delhi and Nasik. We have more than 80 consultants
who bring with them several years of experience with leading Indian
companies. We operate through domain-specialist teams providing high quality
permanent hire services.
At ACH, the idea is to develop a modified and integrated approach to
Talent Management. It can be expressed with the help of the following
illustration. The given figure showcases the entire flowchart of how the system
of Recruiting and Selecting takes place in any organization.
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Lets try and understand the various steps in the procedure.
1. The preliminary step requires the in-house HR department to analyzeand plan the existing workload of the . Then it also needs to comprehendthe workforce needs.
2. The second step involves the crucial aspect of Attracting and Deployingthe right people required for the prospect job.
3. The third step involves evaluating the available employees andrecognizing their performances at workplace.
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4. In the fourth step, the HR intends to identify and groom potential leaderswho have been a part of the organization since long.
5. Once the potential leaders have been identified, the fifth step involvesemployee engagement and involvement in myriad activities across
functions.
6. When the first five steps are followed in sync, it automatically leads tostrengthening of the existing HR capabilities in the organization.
7. The ultimate goal of conducting these interrelated areas of concern wasto Create the perfect HR Culture that will lead to excellent output and
productivity.
As can be seen the three circles are concentric and are interrelated to
each other. Any sort of digression in any one of the steps may put the entire
configuration out of place. However it must be noted that amongst all the steps
the most crucial and critical one is the second step i.e.
Attracting and Deploying the right people
Under any circumstance this step should never be neglected nor
ignored, because unless there is a right mix of competent and proficient
workforce the end result will definitely suffer. The poignant part of the entire
discussion is that the in-house HR department hardly takes initiative in getting
the best people on board. Since the job of hiring is outsourced to the outsiders,
it seems as if it is the recruitment industry that decides the fate of the career in
the life of an employee. That is precisely where ACH distinguishes itself from
the lot. At ACH we follow the unique concept of:
Recruitment through Counseling
The job seekers are guided and counseled as to what kind of job would
suit them better, and what is required of them to make it to the elite league. The
study project involves Understanding diversity in functional structures in Top
FMCG companiesand studying their organizational hierarchy.
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Organizational Structure in Indian Companies, an
Overview
Let us have an exhaustively outlook of what is an Organizational
Structure and how imperative is it for any business.
As defined by F.KAST and S.ROSENWEIG, Structure is the
established pattern of relationship among the components or parts of an
organization. It refers to the blueprint of the correlation amongst individuals
and departments in any business. The organization hierarchy is the framework
through which the company operates. The relationship includes superior and
subordinate relationships, the relationships between levels, and the
relationships between departments. These relations are shown in the
organization charts and the job descriptions.
It is based on the duties and positions of individuals and departments in
the company. These duties and relationships give a definite sense of direction
to the workforce and create a specific goal or purpose to be achieved. The
formal organization structure of an organization has two dimensions i.e.
1. Horizontal dimension which depicts the various departments,2. Vertical dimension which depicts the hierarchy of the authority
from the top level to the lower level.
The structure of the organization also varies by the size of the
organization. The larger the size, the more complex is the structure as there is
more levels of management and more units or department that are involved.
There are three major types of organizational structure namely:
1. Line organizational structure2. Functional organizational structure and
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3. Line and staff organizational structureGiven below is the Organizational Structure of ACH Management
Consultants LTD.
MUMBAI
Team Leader
(Sohail)
Managing Director
(Sandeep Jadhav)
Research & Strategy
(Neha)
MUMBAI
Team Leader
(Deepa)
MUMBAI
Team Leader
(Anjali)
MUMBAI
Team Leader
(Vacant)
PUNE
Asst Manager
(Pratibha)
GURGAON
Team Leader
(Satish)
Nilesh
PradnyaVasim
Reepa
Sonal
Krushita
Sarita
Farhanaaz Clayton
Prakash
Zainab
Veena
Priyanka
Reeta
Sushant
Batkeshwar
Anurag
Dimple
Gaurav
Umesh
Rushikesh(Research)
Amit (Research)
HR Consultant
Anamika Aggarwal
Amol (MIS)
Nitin
The structure clearly depicts the line of command in the firm and
the pattern of reporting is explained with the help of the chart given above.
However the scope of the study project was to understand the hierarchy at
different functional levels so only the functional organizational structure has
been taken into consideration.
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Functional Organizational Structure:
The concept of Functional Organization was first introduced by
F.W.Taylor, in around 1900. Under this method, each function is managed by a
functional expert. In this case, each functional expert may serve other functional
experts in the organization. For e.g.: the Personnel Manager may decide the
matters related to the wages, recruitment, appraisal, etc., in all other functional
areas. Thus the functional expert has command over not just subordinates from
his department but also from other departments.
Employees within the functional divisions of an organization tend to
perform a specialized set of tasks, for instance the engineering department
would be staffed only with software engineers. This leads to operational
efficiencies within that group. However it could also lead to a lack of
communication between the functional groups within an organization, making
the organization slow and inflexible.
As a whole, a functional organization is best suited as a producer of
standardized goods and services at large volume and low cost. Coordination and
specialization of tasks are centralized in a functional structure, which makes
producing a limited amount of products or services efficient and predictable.
Moreover, efficiencies can further be realized as functional organizations
integrate their activities vertically so that products are sold and distributed
quickly and at low cost.
For instance, a small business could start making the components itrequires for production of its products instead of procuring it from an external
organization. Not only beneficial for organization but also for employees faiths.
Thus for instance, the organizational hierarchy of a production
department can be shown as follows:
http://en.wikipedia.org/wiki/Functional_organizationhttp://en.wikipedia.org/wiki/Functional_organization -
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Such type of a hierarchy enables the people of the organization to
understand the reporting structure as in who all report to whom and the seniority
amongst the workers. Lets start analyzing and understanding the organizational
hierarchy in the FMCG companies.
Production Manager
Factory Manager
Foreman 2 Foreman 3Foreman 1
Workers
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Organizational Structure for Sales Function
Starting with the most crucial function in any organization- the Sales
function. An agreement by which one of the contracting parties, called the
seller, gives a thing and passes the title to it, in exchange for a certain price in
current money, to the other party, who is called the buyer or purchaser, who, on
his part, agrees to pay such price. In any organization this is one of the most
crucial factors that contribute to the earnings of the company. This function, in
any company has the maximum number of levels for reporting unlike any other
function then be it marketing, supply chain, operations, hr, etc. the lowest level
for reporting is that of Pilot Sales Representative, while the highest order of
reporting ceases at the authority of the Director of Sales.
In case of Sales, the structure till the Area Sales Manager (ASM) is
concerned with the sales and distribution of the product to the concerned area.
The Area Sales Manager is assigned the role of looking after sales of particular
appointed area. If the area has a large expansion the number of ASMs will
increase. The Regional Sales Manager (RSM) is the next superior in command.
The ASM is accountable to report to the RSM, and he is responsible for the
sales that ensue in his allocated region within the state.
The RSM is followed by the Zonal level Sales Manager (one separate
for every zone: North, South, East, and West). The General Manager for Sales is
like the National Sales Manager, i.e the head of sales dept at national level. The
GM- Sales reports to the Vice President- Sales who in turn reports to the
Director Sales of the company.
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Sales:
Zonal Sales Manager
Vice President- Sales
Area Sales Manager
Territory Sales Officer
Area Sales Officer
Regional Sales Manager
Pilot Sales Representative
Sales Team Leader
General Manager- Sales
Territory Sales Incharge
Director- Sales
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Organizational Structure for Marketing function
The second most important function after sales is marketing.
Theoretically speaking marketing is the better half of sales. Unless there is a
buoyant marketing strategy to support the existence of the product in the
market, the sales will always be weak. Marketing in better words is providing to
the customer what he wants as per his needs and demands.
In the marketing structure, the lowest level is that of a Marketing
Executive or Market Developer. His core job is to create or develop the need in
the market for his product. The next in command is the Brand Development
Executive. His position is equivalent to the post of Asst. Manager Product
Development or Asst. Brand Manger. The position of the employee depends
totally on the organization, and their preference of title used.
The person in charge for these three positions is that of the Brand
Manager. The key responsibility of the brand manager is to handle the allotted
brand and ensure its growth in the market. When the size of the company islarger it needs more people to work on the same brand, in such a case there may
be more than one brand manager appointed. The brand manager reports to the
Group Product Manager. The group manager is responsible for handling an
entire portfolio of products of the company. The group manager reports to the
General Manager- Marketing. The GM is the head of the marketing function
and all its related activities in other functions.
The GM for Marketing reports to the Vice President-Marketing whoin turn reports to the Director Marketing. Given below is the general
Organizational Hierarchy for the Marketing function.
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Marketing:
Vice President- Marketing
Brand Manager
Asst Brand Manager
Marketing Executive
Group Product Manager
Brand Development Executive
General Manager- Marketing
Asst Manager Product Development
Director- Marketing
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Organizational Structure for HR Function
For any Company to function at its best possible productivity it is
highly essential to have a very powerful unit of Guardians who would be
guiding and guarding the workforce to the maximum potential. These guardians
are the highly competent force of HUMAN RESOURCE Professionals whose
prime responsibility is to align the work and workforce in a proper direction to
ensure smooth functioning of the organization.
Generally in an organization the lowest role is that of the WelfareOfficer or the HR Executive. They report to the HR Manager, and usually at the
same level there is also an HR Generalist and an HR Talent Acquisition
Manager. The Talent Acquisition Manager has the core responsibility of
Recruitment of competent and skilled workforce.
All three of them report to the Sr. HR Manager who reports to the
Organizational Development Manager. The OD Manager and the Regional HR
Managers report to the National HR Manager whose main responsibility is to
delegate the duties and responsibilities to the subordinates and to report to the
General Manager- HR.
The General Manger undertakes the responsibility of HR and related
activities in other departments or functions. The GM HR reports to the Vice
President HR who in turn reports to the Director HR. Thus better the HR
Practices and the power assumed by the HR department, better is the functional
efficiency of the workforce.
The Organizational Hierarchy for HR function in any general
company is given below.
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Human Resources:
Organization Development Manager
Vice President - HR
Welfare Officer
National HR Manager
HR Manager
Sr. Manager - HR
General Manager-HR
HR Executive
Talent Acquisition ManagerHR Generalist
Director- HR
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Organizational Structure for SCM Function
Supply chain management (SCM) is the management of a network
of interconnected businesses involved in the ultimate provision of product and
service packages required by the end customers. Supply chain management
(SCM) is the oversight of materials, information, and finances as they move in a
process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply chain management spans all movement and storage ofraw
materials, work-in-process inventory, and finished goods from point of origin to
point of consumption (supply chain).
Another definition is provided by the APICS Dictionary when it
defines SCM as the "design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a
competitive infrastructure, leveraging worldwide logistics, synchronizing
supply with demand and measuring performance globally."
The entire SCM can be broadly divided as Inbound and Outbound.The inbound SCM is further subdivided as the Procurement and Production
function. In case of procurement the lowest position is that of Procurement
Officer while in case of the production function the lowest position is that of the
Factory Manager. The Procurement Officer reports to the procurement manager
who in turn reports to the Procurement VP.
Similarly in case of the production function, the Factory Manager
reports to the Plant Manager, who in turn reports to the Production Executive.The executive reports to the manger and he is followed by the production VP. In
case of the outbound the Logistics Executive is at the base level followed by the
Logistics Manager. The manager reports to the GM Franchise operations. All
VPs report to the Director for Manufacturing and Supply Chain Operations.
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Raw_materialhttp://en.wikipedia.org/wiki/Raw_materialhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Raw_materialhttp://en.wikipedia.org/wiki/Raw_materialhttp://en.wikipedia.org/wiki/Business -
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Supply Chain Management:
Logistics Manager
Production Manager
Director Manufacturing Supply Chain Operations
Procurement Manager
Inbound Outbound
Logistic Executive
General Manager - Franchise OpsVP Procurement
Plant Manager
Factory Manager
Manager - Franchise Ops
VP Production
Production ExecutiveProcurement Officer
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Organizational Structure for Quality Function
Quality assurance, or QA (in use from 1973) for short, is the
systematic monitoring and evaluation of the various aspects of a project, service
or facility to maximize the probability that minimum standards of quality are
being attained by the production process.
Two principles included in QA are: "Fit for purpose" - the product
should be suitable for the intended purpose; and "Right first time" - mistakes
should be eliminated. QA includes regulation of the quality of raw materials,assemblies, products and components, services related to production, and
management, production and inspection processes.
For any product to gain a significant amount of customer
satisfaction there needs to be a very committed responsibility from the Quality
Assurance department. The core duty of the Quality team is to confirm and
verify that every single unit of product that has to be dispatched is of the
Highest Quality.
A trainee executive is at the lowest level of reporting in the hierarchy
for this function. The trainee reports to the quality executive. A team leader
(Quality), as well as a Quality officer also shares the same level of authority as
far as the reporting structure is concerned.
The three of the ranks report to the Sr. Quality Executive. Next in
command is the Asst. Manager for Quality who in turn reports to the Quality
Manager. There are quite a few managers depending upon the network of the
locations that the company has in consideration. The entire Managers report to
the Head of Quality Assurance. Given below is the general hierarchy level for
Quality Assurance Department of any company.
http://en.wikipedia.org/wiki/Quality_(business)http://en.wikipedia.org/wiki/Quality_(business) -
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Quality Assurance
Sr. Executive Q.A.
QA ExecutiveTeam Leader, QA
QA Manager
Trainee Executive
Asst. Manager - QA
Head Quality Assurance
QA Officer
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Organizational Structure for R&D Function
The phrase research and development (also R and D or, more
often, R&D), according to the Organization for Economic Co-operation and
Development, refers to "creative work undertaken on a systematic basis in
order to increase the stock of knowledge, including knowledge of man, culture
and society, and the use of this stock of knowledge to devise new applications".
Research and development is often scientific or towards developing
particular technologies and is frequently carried out as corporate orgovernmental activity.
A function that needs to be imparted the most crucial status as far as
the existence of the company is concerned is that of the Research and
Development. It is the extensive efforts of this department that helps open up
myriad opportunities for the company to expand and venture into the
unexplored areas.
The more a company invests in the function of R&D, the more is the
chance of the company to outrun its competitors and more is the chance of
reigning as the market supreme. There are two reportees to the Director Head of
R&D; they are Senior Research Scientist and R&D Manager.
The Senior Research Manager has the Research Scientist reporting to
him, while the Principal Scientist reports to the Research Scientist. The R&D
Manager has the R&D Officer reporting to him, while the Quality Assurance
Coordinator reports to the R&D Officer.
http://en.wikipedia.org/wiki/Organization_for_Economic_Co-operation_and_Developmenthttp://en.wikipedia.org/wiki/Organization_for_Economic_Co-operation_and_Developmenthttp://en.wikipedia.org/wiki/Technologyhttp://en.wikipedia.org/wiki/Technologyhttp://en.wikipedia.org/wiki/Organization_for_Economic_Co-operation_and_Developmenthttp://en.wikipedia.org/wiki/Organization_for_Economic_Co-operation_and_Development -
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Research and Development:
Research ScientistR&D Officer
Senior Research Scientist
Director Head -Research and development
Principal Scientist
R&D Manager
Team Coordinator, QA
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Sources of Information
The data has been collected during a very in-depth personal or
telephonic interview with the mid-level senior employees of the targeted FMCG
Companies. As an intern my role was to interact with these senior management
employees and get information about the way in which the roles were handled at
these companies. However trusted sources had to be accessed for the same. For
the purpose of data collection I accessed the following sources to get an idea of
the credibility of the employee:
LinkedIn:The most trusted source or rather as often referred as The
Corporate Directory. A crosscheck from this exhaustive database
would enlighten the rich work experience that s (he) possesses.
Job portals:These sites would give a clear thought as to whether the
employee is an active job seeker or not, and if yes then what are the
preferences that he has in mind. The portals that I accessed were
Naukri.Com, Timesjob.Com, and Monster.Com.
Company Internal Database:This was used to understand as to how many employees are
active clients of ACH and were always the first choice of preference to
be interviewed because of the relation that we shared.
Directors References:These were references given to cross verify the data we had
and to source in additional data for clarity of thought. Most of the
references were of senior management employees and top management
level employees who shared a very high level of rapport with the
Director himself.
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Post Data Collection Process
After collecting the basic data through these sources, the next job
was to have an in-depth interaction with them either personally or over the
phone. A transcript of the telephonic interview has been added to the report for
reference purpose. The main objective of the interview is to confirm the details
that the employee has put up on the sources that we referred. Another main
objective is to ask for the internal reporting structure of the company and to
brief the employee about the new plethora of services that ACH intends to offer
while launching itself into Corporate Training.
Post interview with the employee a detailed structure is created for
understanding the functional diversities across various FMCG Companies and
for the company reference. The entire project involved interfacing with the top
20 FMCG Companies in the country that included HUL, P&G, Marico, Dabur,
Colgate Palmolive, Cadbury, Heinz, Godrej, Coke, LOreal, GSK, Nestle,
Perfetti, Reckitt & Benckiser, Britannia, Wipro, CavinKare, Johnson & Johnson
and many more.
Since ACH is preparing to launch into Corporate Training a
questionnaire was also mailed to the vast employee database with whom we had
interacted to get an idea of their expectations. A copy of the questionnaire has
also been attached for reference purpose. The results are being documented and
analyzed to get the feasibility of conducting and launching premium services for
the mid and senior level employees in the corporate world.
Given below is an excerpt of how an in- depth telephonic interview
was conducted while interacting with a senior employee.
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The Interview Transcript
Me (Interviewer): Hello, Greetings of the day Sir/ Madam. Am I speaking to
Mr. /Ms. ABC?
Mr. /Ms. ABC (Interviewee): Yes, speaking.
Interviewer: Hi ABC, I am Anthony, and I am calling from the Career
Assessment Team of ACH Management Consultants. Is this the right time to
talk to you? Because Id need some valuable time of yours for a detailed
discussion.
Interviewee: Yes, go ahead.
Interviewer: Thank you! ABC, we are based at Mumbai and we keep in constant
touch with potential FMCG candidates like you. We are upgrading our database
and need you to help us with a few job details. We would be forwarding these
details to our Recruitment team and they would get back to you as soon as a
favorable opening turns up as per your preferences. So is it fine with you?
Interviewee: Yes, that is perfectly alright.
Interviewer: O.K. so, ABC, you have been with XYZ Co/- since?
Interviewee: For the last n years.
Interviewer: O.K. and your total work experience counts for y years, right?
Interviewee: Yes, that is correct.
Interviewer: So, can you just brief me a bit about your current job profile?
Interviewee: I am working with XYZ co/- as an Area Sales Manager. I am
handling the divisional region of KLM and I also handle the entire product
division of the company.
Interviewer: So what is the total volume of business that you are handling?
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Interviewee: I am currently handling a business of around (x) Rs/annually.
Interviewer: O.K. so how many people report to you and what is their profile?
Interviewee: As of now (n) number of Sales Officers report to me and they
handle a turnover of approximately (x) Rs/ annually.
Interviewer: Are there any other ASM in your concerned area or you alone
handle the entire area?
Interviewee: Yes, since the company has a very wide reach towards the end
user, in the same area there are about 4-5 ASM operating.
Interviewer: So, whom did you report to? What was his job demand?
Interviewee: I along with the other ASMs report to the RSM, i.e. Regional
Sales Manager, and his job is to supervise the functioning of the company in the
entire region.
Interviewer: So what function does Mr. PQR, address in the company?
Interviewee: Mr. PQR is the Zonal Sales Manager to whom the various RSMs
report regularly and he handles the entire zone (North/ South/ East/ West).
Interviewer: O.K. that would infer that the Zonal Managers would be reporting
to the National Sales Head? Is the position of National Sales Head and General
Sales Manager one and the same?
Interviewee: Yes, the Zonal Managers report to the National Head and yes in
case of our company both the NSH and the General Sales Manager are the
same. In some companies both the positions are different. Similarly for some
companies even RSMs and Zonal Managers are same.
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Interviewer: that was quite an enriching piece of knowledge that you have
enlightened me with. Moving on, I would also like to ask you what kind of a job
opening are you looking out for?
Interviewee: Well, I am open to any job until it is in the same FMCG sector.
Interviewer: And what level of an opening are you looking at?
Interviewee: That would be obviously something more enriching like that of an
RSM, and even an opening in the Marketing domain would be great.
Interviewer: Any target companies as such?
Interviewee: Yes, of course! Any Company in the FMCG domain with a good
reputation and better pay scale.
Interviewer: Are you flexible with any location or you have any specifics?
Interviewee: No, I am open to any location.
Interviewer: Thanks a lot for your valuable time ABC. Ill forward these details
to the Recruitment team, and as I said they will get back to you as soon as a
suitable opening as per your preference turns up.
Interviewee: Thank You!
Thus the entire interview is documented and the information is
segregated for the analysis and for forwarding it to the Recruitment team for
their job analysis. Such interviews have been conducted extensively for more
than 200-400 employees across FMCG sector to collect and cross verify the
credibility of the information sourced.
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Conclusion
To conclude on the study project that I was entrusted with I can state
that:
Organizational hierarchy depends upon the volume and the network ofreach of the business. So a company like HUL, P&G, would have a Tall
reporting structure.
Organizational hierarchy is very essential to be in place as it ensures thatthere is a sound order of functioning in all the core departments of the
company.
Companies like LOreal that focuses more on the Brand than on theCategory tends to have a flatter hierarchy.
The Job Title and Job Responsibilities of every employee working variesfrom company to company, both the concepts are two different things
altogether.
The entire project has helped me gain tremendous insight of how I canalign my plans and how fast does the growth of an employee get a boost.
To manage people well, companies should Elevate HR to a position of
power and primacy in the organization, and make sure HR people have the
special qualities to help managers build leaders and careers.
Jack Welch, Winning
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Bibliography
www.achconsultants.com www.absolutehr.com www.wikepedia.com Guidelines from the Director of ACH Mangement Consultants
http://www.achconsultants.com/http://www.achconsultants.com/http://www.absolutehr.com/http://www.absolutehr.com/http://www.wikepedia.com/http://www.wikepedia.com/http://www.wikepedia.com/http://www.absolutehr.com/http://www.achconsultants.com/