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: 2010 2012.

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 Academic Coordinator Dr. Kalim Khan 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 thank Ms. 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

Page no.
4-5 6-12 13-19 20-23 24-27 28-29 30-31 32-33 34-35 36-37 38-39 40 41 42-44 45 46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17

Executive Summary Overview of Recruitment as a Function Background Check of FMCG Sector in India About ACH MANAGEMENT CONSULTANTS LTD. Organizational Structure in Indian Companies, an Overview Organizational Structure for Sales Function Organizational Structure for Marketing Function Organizational Structure for HR Function Organizational Structure for SCM Function Organizational Structure for Quality Function Organizational Structure for R&D Function Sources of Information Post Data Collection Process The Interview Transcript Conclusion Bibliography

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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 resource planning 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 the investment? 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 the ROI 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
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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 lowermiddle income group accounts for over 60% of the sales for the sector. Rural markets account for 56% of the total domestic FMCG demand. A wellestablished 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 and is 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 foodprocessing 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, semiurban 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 gap between 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 ACH has 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 analyze and plan the existing workload of the . Then it also needs to comprehend the workforce needs. 2. The second step involves the crucial aspect of Attracting and Deploying the right people required for the prospect job. 3. The third step involves evaluating the available employees and recognizing their performances at workplace.
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4. In the fourth step, the HR intends to identify and groom potential leaders who have been a part of the organization since long. 5. Once the potential leaders have been identified, the fifth step involves employee engagement and involvement in myriad activities across functions. 6. When the first five steps are followed in sync, it automatically leads to strengthening of the existing HR capabilities in the organization. 7. The ultimate goal of conducting these interrelated areas of concern was to 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 companies and 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 structure 2. Functional organizational structure and
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3. Line and staff organizational structure Given below is the Organizational Structure of ACH Management Consultants LTD.

Managing Director (Sandeep Jadhav)

Research & Strategy (Neha)

HR Consultant Anamika Aggarwal

Rushikesh (Research) Amit (Research) Amol (MIS)

PUNE Asst Manager (Pratibha)

MUMBAI Team Leader (Sohail)

MUMBAI Team Leader (Deepa)

MUMBAI Team Leader (Anjali)

MUMBAI Team Leader (Vacant)

GURGAON Team Leader (Satish)

Reeta Sushant

Nilesh Pradnya Vasim Nitin

Reepa Sonal Krushita Sarita

Farhanaaz

Clayton Prakash Zainab Veena Priyanka

Batkeshwar Anurag Dimple Gaurav Umesh

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 it requires 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:
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Production Manager

Factory Manager

Foreman 1

Foreman 2

Foreman 3

Workers

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.

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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:

Director- Sales

Vice President- Sales

General Manager- Sales

Zonal Sales Manager

Regional Sales Manager

Area Sales Manager

Area Sales Officer

Territory Sales Incharge

Territory Sales Officer

Sales Team Leader

Pilot Sales Representative

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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 is larger 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 who in turn reports to the Director Marketing. Given below is the general Organizational Hierarchy for the Marketing function.

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Marketing: Director- Marketing

Vice President- Marketing

General Manager- Marketing

Group Product Manager

Brand Manager

Asst Manager Product Development

Brand Development Executive

Asst Brand Manager

Marketing Executive

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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 Welfare Officer 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:
Director- HR

Vice President - HR

General Manager-HR

National HR Manager

Organization Development Manager

Sr. Manager - HR

HR Generalist

HR Manager

Talent Acquisition Manager

Welfare Officer

HR Executive

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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 of raw 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.

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Supply Chain Management:

Director Manufacturing Supply Chain Operations

Inbound

Outbound

VP Procurement

VP Production

General Manager - Franchise Ops

Procurement Manager

Production Manager

Manager - Franchise Ops

Procurement Officer

Production Executive

Logistics Manager

Plant Manager Logistic Executive offi Factory Manager

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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.

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Quality Assurance

Head Quality Assurance

QA Manager

Asst. Manager - QA

Sr. Executive Q.A.

Team Leader, QA

QA Executive

QA Officer

Trainee Executive

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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 governmental 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. is frequently carried out as corporate or

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Research and Development:

Director Head -Research and development

Senior Research Scientist

R&D Manager

Research Scientist

R&D Officer

Principal Scientist

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 of reach 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 that there 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 the Category tends to have a flatter hierarchy. The Job Title and Job Responsibilities of every employee working varies from company to company, both the concepts are two different things altogether. The entire project has helped me gain tremendous insight of how I can align 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

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