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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/