WELCOME TO OUR PRESENTATION

Management and Organization BehaviorCourse ID: MGT 506Semester: Fall 2012

MBA ProgramUnited International University

We AreApu GhoshMd. Masudur RahmanMohammad Saifur RahmanGazi Tauhid AhmmedShihab Khan

The TopicAssume that you are the top executive of an organization. Now think of a decision which will bring significant changes in your organization. Justify why you want to take such a decision and how will you implement it.

The ContextThis topic is assigned as a term paper in the course Management and Organizational Behavior under School of Business of United International University. This assignment concerns for different management decision, decision making process and its justification in accordance to the company objective. This presentation elaborates a decision making process in Green Trading Ltd (A hypothetical company), one of the growing trading companies of Bangladesh, as a case.

Green Trading Ltd: An Overview A reputed trading Company involved in joint venture projects in Bangladesh. Representing as an exclusive marketing agents for International brands products. Head office is in Dhaka 7 branch offices in the commercial towns. (Chittagong, Barisal, Sylhet, Rajshahi, Khulna, Gazipur and Narshigdi ). The distribution network is carried out in the rest of the country through 100 appointed dealers.

An Overview (Cont..)The Company has 114 full time efficient and dedicated employees, who believe in teamwork to materialize the objectives set by the management. The major range of products we handle includes :

pharmaceutical finished products, animal health care products, feed premixes, pharma-active materials, packaging materials, car paints, protective coatings, industrial chemicals and several other items.

The objective of our companyThe objective of the Company is to provide professional services and good quality products to the consumers in Bangladesh through efficient team and net work. This objective is perused keeping in mind respect for the customer needs and satisfaction. The Company’s continuity is achieved through commitment to hard work, growth and profitability .Our aim is to remain as a leading marketing organization by rendering efficient services to our customers and to be a respected member of the society.

Employees of our companyIn our company there are three levels of employees - Top, Mid and Low. Top Level : 3 personsChairman ; Vice-Chairman & CEO ; Managing DirectorMid Level: (1st Tire) : 7 personsManager – Marketing; Manager - Sales and Distribution; Manger – Trading; Manager – Accounts and Logistics ; Manager – Business Development; Manager – Technical Service; Manager – Commercial and Regulatory Affairs

Employees of our company (cont..)Mid Level: (2nd Tire ) : 20 personsArea Manager – Marketing ; Area Manager - Sales and Distribution ; Deputy Manager – Trading; Deputy Manager – Accounts and Logistics; Deputy Manager – Technical Service; Deputy Manager – Business DevelopmentLow Level: (1st Tire) : 35 personsExecutive – Marketing ; Executive - Sales and Distribution ; Executive - Trading ; Executive – Accounts and Logistics; Executive – Technical Service; Executive Secretary to top level ManagersLow Level: (2nd Tire ) : 24 personsDelivery Assistant; Peon; Driver for delivery vans

Annual total revenue, total cost and profitThe annual total revenue of the company in 2011 was Tk. 400 millions i.e. 40 crore. Our daily sales capacity is on an average Tk. 10 lac per day with the present working speed possessed by our low level workers especially. But it is believed that our workers can earn more for us. However, we are satisfied with this rate as the profit earned for our company in the present socio economic context is above average.

Annual total revenue, total cost and profit (cont..)The expenditure for our company involves office maintenance, staff salary, yearly tax, transportation for carrying goods from Chittagong Port to Dhaka and to branch offices, inventory and storage cost, product delivery costs etc. In 2011, our annual expenditure was Tk. 36 crores and thus the net annual profit was Tk. 4 crores. Our daily profit target ranges within Tk. 95,000/= to Tk. 1,00,000/=. The profit per day varies slightly because of multiplicity of causes. This profit goes to mother fund/fixed deposit account for future project extension or as a backup for future adversities.

Current problem that we are facing

As we monitor regularly, it has been the mater of great concern that we could not reach to our target for last few months in 2012 and daily profit margin has fallen to Tk. 80,000/= to 85,000/=. We had deviation from our set target and also deviation from past achievement. In 2012, our low level employees seemed to be less productive and de-motivated; On the other hand some of our mid level employees left the company getting good offers.

Current problem that we are facing (Cont..)As the three functions of management (leading, organizing and controlling) got disrupted in the last few months of 2012 our profit per day decreased for Tk. 15,000/= to 20,000/= as from estimated limit because of lower sales. Also for this low sales rate, our inventory cost increased and some of the agro products got damaged. As a result our annual profit came down to Tk. 2.8 crore at the end of year 2012. We are afraid that if this trend continues we may lose potential customers. The goodwill of our company is also under threat.

Importance of our decision making As top level executives we should always try for the higher productivity. As the current problem is hampering the productivity we need to take a decision that would bring significant change in our profit and as well as would solve the problems regarding our human resources. It is said that management involves 6 M (Man, Material, Machine, Method, Money and Market). Among these 6 M, Man (Human Resource) creates major problems for a manager. So, an effective decision making has significant role in this regard.In making our decision we have followed the due steps of decision making process.

Identifying the causes of current problem

For the last few years the cost of living has gone up significantly in Bangladesh that caused the mid-income group to fall under a threat. Majority of our mid and low employees’ income is spent for buying regular food items, house rents and conveyances. As a result we have found that mid and low employees are very much dissatisfied with their current salary structure. They are depressed with the price hike that made their life miserable than earlier.As fuel price has increased employees are to spend more on their conveyances. Again hectic traffic and poor public transport facilities are restricting them to come to work on time and to concentrate in work properly. That has put impact on their productivity. Our competitor companies are offering competitive remuneration packages to our very efficient mid level managers. As a result, some of them left the organization.

Identifying the causes of current problem (cont..)

As some of the efficient mid-level employees left the organization one after another, our company is now having management crisis. Leading in departmental level, organizing and controlling had been hampered and that has resulted into indiscipline among the low level supervisee’s. They are not getting due direction and not paying attention to their work. Among Mid and Low level workers, who are mediocre and not getting opportunities to switch to other organizations has become frustrated and de-motivated and as a result they have lost interest in their works. It has direct impact on our decrease of sales. So the employees want increase of payment and who are based in Dhaka are demanding transportation facilities to workplace.

Developing Alternative SolutionsWe came up with two solutions after analyzing the situation and these are:Hiring more efficient sales and marketing executive with attractive salary package .•Maintain the present stuffs and empower by reviewing the salary and incentive scheme.•We know that our problem has alternative solutions. Those are:Brainstorming.Talked to some of our mid and low level employees.We hired a consultant to analyze and review the problem .

Our Decision to Solve the Problem and JustificationMajor DecisionWe will increase the salary for all level of employees. Here we will follow the Cost of Living Adjustment (COLA) method and would also consider the market demand and competencies of our employees. So, the increment will not be of same percentage at all level.So the increment would be as follows:Top Level: 5%Mid Level (1st Tire): 15%Mid Level (2nd Tire): 10%Low Level (1st Tire): 12%Low Level (2nd Tire): 8%

JustificationJustificationOur salary package offered to mid-level and low level staff is not competitive and do not match with the market demand. So, turnover rate is high among our most efficient managers. They are keen to switch organization if they get good offers from other companies.Among Mid and Low level workers, who are mediocre and not getting opportunities to switch to other organizations has become frustrated and de-motivated and as a result they have lost interest in their works. It has direct impact on our decrease of sales.

Justification (cont..)For the last few years the cost of living has gone up significantly in Bangladesh. So our decision of increasing salary would bring significant change in our company by motivating the employees providing incentive to them. As top level employees are already highly paid, their increment is the lowest. Our efficient mid level (1st tire and 2nd tire) employees are keen to switch job, so incentive is the highest to retain them based on market demand analysis. Our low level (1st tire) employees play key role in sales and distribution so their incentive is higher than the mid level (2nd tire). Our low level (2nd tire) employees are given incentive as per market demand analysis.

Subordinate DecisionSince every problem has got more than one solution so we will also take some additional motivational decisions phase by phase, which also act to satisfy our employees especially who are based in Dhaka and having transportation problem.We will provide transportation facilities to our Dhaka based staff. Apart from the top level employees we have 23 employees in our Dhaka office. We would rent microbuses on monthly basis to provide them with the facilities. Respective JustificationAs fuel price has increased employees are to spend more on their conveyances. Again hectic traffic and poor public transport facilities are restricting them to come to work on time and to concentrate in work properly. That has put impact on their productivity. Providing transport to work would solve the problem and would maintain in-time to work properly.

Implementing the decisionAction planFirst we will calculate our existing staff salary cost and increased salary cost and transportation cost and estimate the added expenditure required to implement our decisionLevel and Tire Current Salary Cost

(per anum)

Increased Salary cost

(per anum)

Top Level : 5 persons 1,95,00,000/= 2,04,75,000/=

Mid Level (1st Tire): 7 persons 91,00,000/= 1,04,65,000/=

Mid Level (2nd Tire): 20 persons 1,56,00,000/= 1,71,60,000/=

Low Level (1st Tire): 50

persons

1,13,75000 1,27,40,000/=

Low Level (2nd Tire): 32 4,160,000/= 44,92,800/=

Total 59,735,000/= 65,332,800/=

Extra amount needed Tk. 559,7,800/=

ConclusionWe think new decision, which came out eventually with the problems we are facing, shall not only benefit our company but also uphold our country as well. This is because more trading companies will become interested to increase salary if they can strike the balance like we did between disciplines, giving workload, ensuring facility for the workers and rather make more profit than loss by utilizing the capability of our workers. May be we will need some extra money at the beginning but after setting up we will be able to make greater profit & our investment will be make up within a reasonable time.

Thank You all for your patience hearing.