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performance apppraid

performance apppraid

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02/07/2013

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Sections

  • 1.1.1 Recent Growth Trends in Indian Economy
  • 1.1.2 The Economic scenario
  • 1.1.6 Growth potential
  • 1.2 Industry Overview
  • 1.3.1 Political (inc. legal)
  • 1.3.2 Economic
  • 1.3.3 Social
  • 1.3.4 Technological
  • 1.3.5 Market structure
  • 1.4 Industry Profile
  • 1.5.1.1 HP¶s Product Line
  • 1.5.1.2 The SWOT analysis of HP
  • 1.5.2.1 Dell¶s Product Line
  • 1.5.2.2 SWOT analysis of Dell
  • 1.5.3.1 Acer¶s product line
  • 1.5.3.2 SWOT analysis of Acer
  • 2.1 Company History
  • 2.2 Organizational Structure
  • 2.3 Awards and Certifications:
  • 2.4 SWOT analysis
  • 2.5 People
  • 2.6 Policies
  • 2.7 Lenovo Products
  • 2.8.1HR
  • 2.8.2 Accounts Receivables
  • 2.8.3 Customer Service and Support
  • 2.8.4 India Finance
  • 2.8.5 Pricing team
  • 2.8.6 Accounts Payable Team / Disbursement Team
  • 2.8.7 Internal Audit
  • 2.8.8 Business Control
  • 2.8.9 Claims Team
  • 2.8.10 Marketing and sales
  • 3.1. Introduction to the Project Topic:
  • 3.2 Statement of the problem
  • 3.3 Title of the study:
  • 3.4 Objectives of the study:
  • 3.5 Scope of the study:
  • 3.6.1 Sources of Data
  • 3.6.2 Research Type:
  • 3.6.3 Sampling Plan:
  • 3.6.4 Research Instrument
  • 3.6.5 Data Collection Method
  • 3.6.6 Limitations of the Study
  • 3.6.7 Operational Definitions
  • 4.1. Analysis and Interpretation
  • 5.1 Findings:
  • 5.2. RECOMMENDATIONS/SUGGESTIONS:
  • 5.3 Suggestions from Employees
  • 5.4 CONCLUSION

PART-A

CHAPTER 1 INDUSTRY PROFILE

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1.1 Indian Economy Overview:
India has been one of the best performers in the world economy in recent years, but rapidly rising inflation and the complexities of running the world¶s biggest democracy are proving challenging. India¶s economy has been one of the stars of global economics in recent years, growing 9.2% in 2007 and 9.6% in 2006. Growth had been supported by markets reforms, huge inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market. Like most of the world, however, India is facing testing economic times in 2008. The Reserve Bank of India had set an inflation target of 4%, but by the middle of the year it was running at 11%, the highest level seen for a decade. The rising costs of oil, food and the resources needed for India¶s construction boom are all playing a part. India has to compete ever harder in the energy market place in particular and has not been as adept at securing new fossil fuel sources as the Chinese. The Indian Government is looking at alternatives, and has signed a wide-ranging nuclear treaty with the US, in part to gain access to nuclear power plant technology that can reduce its oil thirst. This has proved contentious though, leading to leftist members of the ruling coalition pulling out of the government. As part of the fight against inflation a tighter monetary policy is expected, but this will help slow the growth of the Indian economy still further, as domestic demand will be dampened. External demand is also slowing, further adding to the downside risks. The Indian stock market has fallen more than 40% in six months from its January 2008 high. $6b of foreign funds has flowed out of the country in that period, reacting both to slowing economic growth and perceptions that the market was over-valued. It is not all doom and gloom, however. A growing number of investors feel that the market may now be undervalued and are seeing this as a buying opportunity. If their optimism about the long term health of the Indian economy is correct, then this will be a needed correction rather than a downtrend.

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The Indian government certainly hopes that is the case. It views investment in the creaking infrastructure of the country as being a key requirement, and has ear-marked 23.8 trillion rupees, approximately $559 billion, for infrastructure upgrades during the 11th five year plan. It expects to fund 70% of project costs, with the other 30% being supplied by the private sector. Ports, airports, roads and railways are all seen as vital for the Indian Economy and have been targeted for investment. Further hope comes from the confidence of India¶s home bred companies. As well as taking over the domestic reins, where they now account for most of the economic activity, they are also increasingly expanding abroad. India has contributed more new members to the Forbes Global 2000 than any other country in the last four years.

1.1.1 Recent Growth Trends in Indian Economy
India¶s Economy has grown by more than 9% for three years running, and has seen a decade of 7%+ growth. This has reduced poverty by 10%, but with 60% of India¶s 1.1 billion population living off agriculture and with droughts and floods increasing, poverty alleviation is still a major challenge. The structural transformation that has been adopted by the national government in recent times has reduced growth constraints and contributed greatly to the overall growth and prosperity of the country. However there are still major issues around federal vs. state bureaucracy, corruption and tariffs that require addressing. India¶s public debt is 58% of GDP according to the CIA World Fact book, and this represents another challenge. During this period of stable growth, the performance of the Indian service sector has been particularly significant. The growth rate of the service sector was 11.18% in 2007 and now contributes 53% of GDP. The industrial sector grew 10.63% in the same period and is now 29% of GDP Agriculture is 17% of the Indian economy. Growth in the manufacturing sector has also complemented the country¶s excellent growth momentum. The growth rate of the manufacturing sector rose steadily from 8.98% in 2005, to 12% in 2006. The storage and communication sector also registered a significant growth rate of 16.64% in the same year.

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Additional factors that have contributed to this robust environment are sustained in investment and high savings rates. As far as the percentage of gross capital formation in GDP is concerned, there has been a significant rise from 22.8% in the fiscal year 2001, to 35.9% in the fiscal year 2006. Further, the gross rate of savings as a proportion to GDP registered solid growth from 23.5% to 34.8% for the same period. Large, dynamic and steadily expanding, the Indian economy is characterized by a huge workforce operating in many new sectors of opportunity. The economy of India is as diverse as it is large, with a number of major sectors including manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a major component of the Indian economy, as over 66% of the Indian population earns its livelihood from this area. However, the service sector is greatly expanding and has started to assume an increasingly important role. The fact that the Indian speaking population in India is growing by the day means that India has become a hub of outsourcing activities for some of the major economies of the world including the United Kingdom and the United States. Outsourcing to India has been primarily in the areas of technical support and customer services. In general, the Indian economy is controlled by the government, and there remains a great disparity between the rich and the poor. Ranked by the exchange rate of the United States Dollar, the Indian economy is the twelfth largest in the world. In Purchasing Power Parity GDP, the figure for India was 1.5 trillion US Dollars in 2008. The per capita income of India is 4,542 US Dollars in the context of Purchasing Power Parity. This is primarily due to the 1.1 billion population of India, the second largest in the world after China. In nominal terms, the figure comes down to 1,089 US Dollars, based on 2007 figures. According to the World Bank, India is classed as a low-income economy. Recent trends have seen India exporting the services of a numerous information technology (IT) professionals. IT professionals have been sought for their expertise in
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and foreign trade. tourism. it has been observed that in the 2004. biotechnology. is to remove the economic inequalities that are still persistent in India after its independence in 1947. the process of privatization has still continued at a steady pace. This has been possible as a result of the high skill levels of Indian IT professionals. are needed to reduce the numbers affected by poverty in the vast Indian economy. pharmaceuticals. or birth control policies like the µOne Child¶ policy in China. It may be observed that in spite of the tremendous debate about the justification of the privatization of industries traditionally owned by the government. Indian economy has been witnessing a phenomenal growth since the last decade. by the Socialist movements. Over the years the Indian government has taken an economic approach that has been influenced. construction of ships. aviation. Poverty is a challenge that¶s becoming increasingly important in relationship to the alarming rate of new births. retailing and telecommunications. foreign direct investment. nanotechnology. below the 5 . almost 27% of the working Indian populace was living poverty line. The country is still holding its ground in the midst of the current global financial crisis. in part. software engineering and other financial services. Poverty is still one of the major issues although these levels have dropped significantly in recent years. As per official surveys. One of the major challenges before the Indian economy. Other areas where India is expected to make progress include manufacturing. Growth rates in these sectors are expected to increase dramatically. This implies that ever more rapid change. The Indian national government has maintained a high and authoritative level of control over certain areas of the Indian economy like the participation of the private sector.software. or those who are responsible for operating it.

Recent indicators from leading indices. indicate that the downturn has bottomed out and highlight the Indian economy's resilience. the Indian equity market has emerged as the third biggest after China and Hong Kong in the emerging Asian region.3 per cent over the corresponding quarter of previous year.5-8 per cent. prompting official expectations that foreign direct investment (FDI) inflows in 2009 would better the realized inflows of US$ 33 billion in 2008 and touch US$ 40 billion. According to the Asian Development Bank's (ADB) 'Asia Capital Markets Monitor' report.5 per cent and 7. Direct investment inflows also remain strong.1. Indian multinational enterprises (MNEs) have become significant investors in global business markets and 6 . Meanwhile. such as Nomura's Composite Leading Index (CLI). freight movement at major ports and encouraging data from a number of key manufacturing segments. with a market capitalization of nearly US$ 600 billion. for agriculture.24 billion.Quarterly gross domestic product (GDP) at factor cost at constant (1999-2000) prices for Q3 of 2008-09 is estimated at US$ 171. industry and services. 5-5. as against US$ 162. the Indian economy is estimated to have grown at close to 6.1 per cent in 2009-10. such as steel and cement. too bear out this optimism in the Indian economy.7 per cent in 2008-09. UBS' Lead Economic Indicator (LEI) and ABN Amro' Purchasing Managers' Index (PMI). With foreign assets growing by more than 100 per cent annually in recent years. respectively. A number of leading indicators. foreign institutional investors (FIIs) turned net buyers in the Indian market in 2009. according to a survey conducted by Dutch financial services firm ING.8-3 per cent. This scenario factors in sectoral growth rates of 2. such as increase in hiring. Despite the global slowdown. The Confederation of Indian Industry (CII) pegs the GDP growth at 6. 1.2 The Economic scenario Investor sentiment in India has improved significantly in the first quarter of 2009.57 billion in Q3 of 2007-08. showing a growth rate of 5.

y FDI inflows during April 2008-January 2009 stood at US$ 23. 2009. Bank credit touched 24 per cent (y-o-y) on January 2. y Since October 2008. the reverse repo rate has been lowered by 200 basis points. y India's foreign exchange reserves increased by US$ 4.4 per cent on January 4. Also.2 billion to US$ 255. according to the Department of Industrial Policy & Promotion. The sharp fall in inflation was due to several factors including easing prices of food articles and fuel items along with a high base effect. 2009. 2009. 2009. Despite the global financial crisis. the inflation rate stood at 0. 2009. fell to an all time low of 0. witnessing a growth of 65 per cent. Currently.9 billion for the week ended May 8. 2009. as against 21. Till April 7. the CRR had further been lowered by 50 basis points. the RBI has cut the cash reserve ratio (CRR) and the repo rate by 400 basis points each. according to the Securities and Exchange Board of India (SEBI).7 per cent for the week ended April 25. 7 .72 million on May 13.4 billion in the corresponding period of the previous fiscal. y Net inflows through various non-resident Indians (NRIs) deposits surged from US$ 179 million in 2007-08 to US$ 3.44 per cent. while the repo and reverse repo rates have been lowered by 150 basis points each. including a record single day net purchase of US$ 824. 2008. y FIIs have made investments of around US$ 2 billion as of May 14.999 million in 2008-09. according to the RBI. according to figures released in the Reserve Bank of India's (RBI) weekly statistical supplement. according to a survey by the Indian School of Business and the Vale Columbia Center on Sustainable International Investment. inflow of foreign capital to the country has increased sharply in 2008-09.India is rapidly staking a claim to being a true global business power. y The year-on-year (y-o-y) aggregate bank deposits stood at 21. 2009.9 billion compared with US$ 14. y Inflation for the week ended March 7.2 per cent as on January 2. 2009.

1.60 billion a year before. The growth rate in per capita income is estimated at 5. India will see 70 million new entrants to its workforce over the next 5 years. Development of basic infrastructure. making it one of the world's largest food producers²over 200 million tonnes of food grains are produced annually.6 per cent. the largest in the world. India is the world's largest producer of milk (100 million 8 . mainly on account of rising commodity prices and improved productivity. valued over US$ 300 billion.y Exports from special economic zones (SEZs) rose 33 per cent during the year to end-March 2009. Of the BRIC²Brazil.6 per cent during 2008-09.4 Per Capita Income The per capita income in real terms (at 1999-2000 prices) during 2008-09 is likely to attain a level of US$ 528 as compared to the Quick Estimate for the year 2007-08 of US$ 500.5 Advantage India y According to the World Fact Book. 1. as against the previous year's estimate of 7. better information services and access to funding are also bringing prosperity to rural households. with per capita income having grown by 50 per cent over the last 10 years.1.3 The rural India growth story The Indian growth story is spreading to the rural and semi-urban areas as well.1. India is among the world's youngest nations with a median age of 25 years as compared to 43 in Japan and 36 in USA. Rural India is set to witness an economic boom. Exports from such tax-free manufacturing hubs totalled US$ 18. generation of employment guarantee schemes. India is projected to stay the youngest with its working-age population estimated to rise to 70 per cent of the total demographic by 2030.16 billion last year up from US$ 13. The next phase of growth is expected to come from rural markets with rural India accounting for almost half of the domestic retail market. Russia. India and China²countries.1. y India has the second largest area of arable land in the world. 1.

sugarcane (315 million tonnes per annum) and tea (930 million kg per annum) and the second largest producer of rice.tonnes per annum). 1. India's consumer market will be the world's fifth largest (from twelfth) in the world by 2025 and India's middle class will swell by over ten times from its current size of 50 million to 583 million people by 2025.000 branches is among the largest in the world. The commerce department expects about 120 SEZs to be operational by 2009-end.84 million in March 2009.1. y With the largest number of listed companies . fruit and vegetables. y A McKinsey report. India has the third largest investor base in the world.000 across 23 stock exchanges. y India ranks among the top 12 producers of manufacturing value added (MVA)² witnessing an increase of 12.10. estimates that the Indian consumer market is likely to grow four times by 2025. 'The rise of Indian Consumer Market'. y India's healthy banking system with a network of 70. y According to a study by the McKinsey Global Institute (MGI). setting a global record. up from existing 87. according to a Grant Thornton report.3 per cent in its MVA output in 2005-07 as against 9 . which is currently valued at US$ 511 billion.6 Growth potential y Special Economic Zones (SEZs) are set to see major investments after the straightening out of certain regulatory tangles. The Indian telecom industry registered the highest number of subscriber additions at 15. y The volume of mergers and acquisitions (M&As) and group restructuring deals in India witnessed a sharp nine times jump at US$ 2.' India's telecom services industry revenues are projected to reach US$ 54 billion in 2012. y According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues. up from US$ 31 billion in 2008.27 billion during March 2009 against the volume of deals in February 2009.

y In textiles.6. twelfth in machinery and equipment and motor vehicles. while in electrical machinery and apparatus it is ranked fifth. leather products.98 billion in low-carbon and environmental goods & services (LCEGS). This space has been left blank intentionally. With a 6 per cent share of the US$ 4. y India has a market value of US$ 270. seventh in chemicals and chemical products. 10th in leather. y In a development slated to enhance India's macroeconomic health as well as energy security. the country is tied with Japan at the third position. It holds sixth position in the basic metals category. the country is ranked fourth. Reliance Industries (RIL) has commenced natural gas production from its D-6 block in the Krishna-Godavari (KG) basin. 10 . refined petroleum products and nuclear fuel.32 trillion global market.9 per cent in 2000-05²according to the United Nations Industrial Development Organization (UNIDO).

Lenovo announced a global resource restructuring plan in January 2009 to reduce costs and enhance operational efficiency. aggressive pricing and currency fluctuations.9 percent from 15.1.2 Industry Overview The impact of the global economic crisis in 2008 reached far and wide. It has significantly affected the worldwide PC market demand as many large enterprises delayed purchase decisions and reduced IT budgets. In addition. Even the growth of the China PC market has slowed down under the economic challenges. 11 . At the same time. The Group¶s gross margin performance was further affected by the continued shift in the market to lower price points. As a result. The gross margin (excluding one-off items) for the fiscal year declined to 11.901 million. the Group¶s market share decreased slightly to 7. Lenovo¶s overall sales for the fiscal year decreased 9 percent year-on-year to approximately US$14. The Group¶s financial performance in the second half of the 2008/09 fiscal year was significantly impacted by the widespread economic slowdown. During the 2008/09 fiscal year. ranking number four worldwide during the fiscal year. Lenovo reported lower-than-market growth in its worldwide PC shipments which only increased by approximately 2 percent year-on-year. the year-on-year growth of worldwide PC market shipments decelerated to approximately 4 percent mainly supported by consumer and low-priced notebook segments. In anticipation of continued deterioration in the global economic environment. the Group could not enjoy the benefits of the growth in transaction space as it has not adequately addressed the worldwide transaction segment outside China.500 employees were eliminated as a result of this action which is expected to realize annual savings of approximately US$300 million on a run rate basis in the coming fiscal year.0 percent while gross profit (excluding one-off items) decreased 27 percent yearon-year to approximately US$1. The China PC market and worldwide commercial PC segment in which Lenovo® is heavily weighted showed significant slowdown in the second half of the fiscal year under the economic crisis. resulting from the slower PC shipment growth and a steeper-than-normal decline in average selling prices exacerbated by the weak economic backdrop. in particular the consumer market.779 million.6 percent. the PC industry as a whole has shifted dramatically and rapidly to lower price points. About 2. imposing additional pressures on industry players.

likely benefiting from the troubles of Dell and Lenovo. Acer continues to capitalize on its growing channel presence to ship portables geared toward a wide range of cost-conscious consumers. This compared to a profit attributable to shareholders (including US$20 million net profit from discontinued operations) of US$484 million in the previous fiscal year. while yearly declines in mature regions slowed compared to the first quarter of 2009. The company continues to restructure operations. after accounting for US$146 million of restructuring costs and US$71 million of one-off charges. develop its consumer business.2. Dell saw good growth from consumer-focused SKUs and reclaimed the number one spot in the US.6% on year worldwide with above-market performance in the US.1 Vendor highlights Hewlett-Packard (HP) made further inroads into consumer portables through the retail channel and continued to gain share overall. Its home court advantage in Asia Pacific market excluding Japan also has led it to focus on a myriad of government stimulus programs. Lenovo's renewed focus on notebooks and emerging regions produced positive growth following declines in the past two quarters. Solid growth was reported in Latin America and Asia Pacific market excluding Japan. which could pay dividends while riding through the commercial downturn. The company also performed well in Europe and Asia Pacific. 1. The Group reported a loss attributable to shareholders of approximately US$226 million. The company maintained its lead in mini notebook PCs while its early entry into Atom-based netbooks should also pay dividends later in the year. Although still heavily affected by the commercial slump. the decline in sales and pressure on gross margin resulted in 95 percent year-on-year decline in the Group¶s profit before taxation (excluding the cost of restructuring actions and one-off charges) to approximately US$29 million for the year.Despite Lenovo¶s efforts to control expenses during the 2008/09 fiscal year. The company saw a significant gain in the US market. The vendor's shipments grew 3. 12 . and should benefit from an eventual rebound in the commercial segment.

291 Market share 19.7% 12.6%) (3.Toshiba had a solid second quarter where it outgrew the market in most regions and moved up to the fourth spot in the US.403 Market share 18.644 10.494 26.8% 100% 2Q08 shipments 12. Table 1.Top five vendors¶ worldwide PC shipments IDC: Top-5 vendors' worldwide PC shipments.108 8.095 9.7% 2.7% 5. July 2009 shipments 13.7% 100% Y/Y 3.5% 16.1.9% 10.1% 10% 8.757 3. Source: IDC.431 5.202 68. but exclude x86 servers.6% 42.1%) 13 .407 66.7% 8. compiled by Digitimes.815 5.6% (17.5% (9.2% 4. 2Q09 (k units) 2Q09 Rank Vendor 1 2 3 4 5 HP Dell Acer Lenovo Toshiba Others All Vendors * PCs include desktop and portable PCs (including mini notebooks).163 29.3% 39.1%) 23.596 3. Toshiba's mini notebook offering has helped it to weather the storm comparatively better than other Japan-based OEMs and it was the only major Japan-based OEM to have positive yearly growth in Japan.8% 13.984 6.

6% *According to IDC¶s India Quarterly PC Tracker 2008.0% 9.2% 9.6% 11.3% 4. 4Q 2008 vs.7% 7.6% 10.3. 4Q 2007* 4Q ¶07 Client PC Shipments 4Q ¶08 Client PC Shipments (Notebook PCs + Desktop PCs) Vendor Hewlett-Packard HCL Lenovo Market Share 17.7% 6.2: India Client PC (Desktop + Notebook) Shipments: Top 3 Vendor Market Shares (% of units). 4Q 2008 quarter.9% 9.6% 10.6% 1Q 2009 PC Shipments (Desktop PCs + Notebook PCs) Vendor Hewlett-Packard HCL Infosystems Dell Acer Lenovo Market Share 18.7% 14 .8% 9.9% (Notebook PCs + Desktop PCs) Vendor Hewlett-Packard Dell HCL Market Share 15.Table 1.6% 7. March 2009 release Table 1.8% 8.PC Shipments¶ Market Share 4Q 2008 PC Shipments (Desktop PCs + Notebook PCs) Vendor Hewlett-Packard Dell HCL Infosystems Acer Lenovo Market Share 15.

The computer industry adapts to this trend. 1. Additionally. computers get more and more involved in daily life.g. where they are additionally forced to accept minority shares and to provide money and technological know-how. no matter whether companies operate production facilities or if they do business with the country through exports.3.1.3. The higher the educational standard. the higher is the demand. by offering a wide range of notebooks and by trying to create a strong brand name. The only possibility to do business in those countries is to establish partnerships with local companies.3 PEST Analysis 1. 1.4 Technological There is hardly any industry that is characterized by a faster technological development than computer industry. Such policies often hinder foreign companies from entering into this market. Increased research and development have caused permanent 15 . However. allowing free trade to expand. Today. having an impact on the purchasing power of potential customers. In the course of globalization trade barriers decline and new markets emerge. Furthermore. legal) Political factors include government regulations and legal issues determining the conditions under which companies have to operate. e. the computer industry has to face certain restraints. This growth is influenced by the economic situation in a specific country. children already get familiar with the use of computers at a very young age.2 Economic The computer industry expects a growth of approximately 10 percent over the next years.3. changing inflation rates and currency fluctuation also determine the profitability of a company. This is especially true for China which has opened for many industries since its accession to WTO in2001. In this field. representing a generation that will hardly live or work without a computer in future.3 Social The national demand for computers is dependent on the educational level prevailing in a specific country. Additionally. Problems can arise in countries where political stability is not guaranteed. Many countries still have restrictive policies which are maintained to protect domestic manufacturers and production. 1.1 Political (inc. the brand image of a computer and lifestyle trends get more and more decisive for the purchasing decisions. the computer industry sees great potential in those countries which lose their restrictions.3.

The following graph illustrates the division of the computer market of each individual company. 9.70% DELL. 44.3. 15. 18.innovation processes which lead to short product life cycles resulting in a faster depreciation of the products. Company HP DELL LENOVO ACER TOSHIBA OTHERS Market share 18. 7.4% 4.6% 7.10% OTHERS.1% 15.4% 44.80% TOSHIBA.40% 16 . 1.1.60% LENOVO. It is dominated by 5 major global players although there are a lot of small companies which often serve only regional markets.5 Market structure The computer industry is characterized by a quasi-oligopolistic structure.Market Share of various players in PC Industry HP.7% Chart 1. 4.8% 9.40% ACER.

the software boom started somewhere in the late 1990s. Delhi-Noida-Gurgaon. partly as it moves up the value chain and partly as a response to the market dynamics. outsourced to an offshore vendor. when a large number of skilled personnel were required to fulfill the mammoth database-correction demand in order to cope up with the advent of the new millennium. a vast majority of US companies use the professional services of Indian Software engineers in some manner. such as Bangalore. It is estimated that India 17 . Software development centers. Ten years ago. Chandigarh. Pune. Ahmedabad. medium or small companies or through individuals recruited directly. Hyderabad. Software development activity is not confined to a few cities in India. through large.4 Industry Profile In India. Mumbai. Bhubaneswar. the vast majority of IT services (software development being just one of them) from developed countries. Chennai. one. The profile of the Indian IT Services has been undergoing a change in the last few years. outsourced and two.S. the Indian IT software and services industry is maintaining a steady pace of growth. India has the second largest English-speaking scientific professionals in the world. The professional IT services on the other hand are becoming increasingly expensive. most US companies would not even consider outsourcing some of their IT projects to outside vendors. Goa. The business software boom started with the emergence of Y2K problem. There is a high chance (almost a mathematical certainty). The market competition is forcing organizations to cut down on costs of products. Despite the global economic slowdown. and Trivandrum are all developing quickly. The offshore software development model is today where onsite professional services were ten years ago. will be. India¶s most prized resource is its readily available technical work force. Most of the Indian software companies at that moment offered only limited software services such as the banking and the engineering software. second only to the U. that in less than ten years. All of these places have state-of-the-art software facilities and the presence of a large number of overseas vendors. Vadodara.1. ten years later. Now. Calcutta.

focusing on finished products and solutions. India is among the three countries that have built supercomputers on their own. rather than offering them as raw material. Information technology consulting (IT consulting or business and technology services) is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. In perhaps another ten years. It needs to be able to recognize and build up on its strengths and work on weaknesses. India needs to constantly keep moving up the value chain. India provides IT services at one-tenth the price. over 1. 80 percent of all outsourced offshore development work will be done by 20 percent of all vendors. To become a global leader in the IT industry and retain that position.832 educational institutions and polytechnics. The third choice could be far distant. The enormous base of skilled manpower is a major draw for global customers. trusted vendors. Another extension of the IT industry is the ITES (Information Technology Enabled Services) which is a sector dependent on IT sector. and it is among the top ten networks of the world. The industry is in an expansion mode right now. No wonder more and more companies are basing their operations in India. India's INSAT is among the world's largest domestic satellite communication systems. a small number of high qualities. In addition to providing 18 . The other two are USA and Japan.785 computer software professionals every year. Only a few select countries and only the most professional companies in those countries will emerge as winners. which train more than 67.has over 4 million technical workers. It also needs to be able to package its services as products. with dozens of new offshore IT services vendors emerging every day. India has the third largest telecommunications network among the emerging economies. It has the potential to become and remain the country of choice for all software developments and IT enabled services. India is among six countries that launch satellites and do so even for Germany and Belgium. India will definitely be the country of choice for offshore software development. the industry has a high probability of being subjected to the 80:20 rule in not too distant a future. second only to the USA. rather than purely on skill sets and resumes.

Most are assembled from standardized components and not a lot of expertise is required. sells for so much money. The main reason for this is the simple fact that making a PC is just not that difficult. The PC industry is one of the strangest in the world. While I consider there to be absolutely no excuse for a company not treating its customers fairly. Some small companies make 19 . It's more typical for the vendor to make less than $100 profit on such a PC. The severe competition in the industry is the #1 reason why so many problems are encountered by those who deal with PC vendors. Many people buy a $1500 PC thinking the vendor is making. there are tens of thousands of companies making PCs that perform similar functions. profit before overhead and general expenses). and they find it hard to understand why these companies aren't getting rich. at the same time I think customers should have some idea of what vendors are up against in this demanding marketplace.1 Features of the Industry It Is Very Price Competitive: By far. y Systems and Components Sell with Low Margins: Since the market is so competitive. This causes the market to be extremely price-competitive. where the company selling the device is making upwards of 50% of the price of the product as gross profit (meaning. IT consultancies often implement. There are few barriers to entry to the market. the most important thing to remember about the PC industry is this: it is one of the most competitive in the world.advice. vendors often sell at very low margins. $500-700 on the item. Computers aren't like many other products. Most of the other characteristics of the industry follow directly from this fact.4. and yet is sold by so many companies for so little profit. say. As a result. meaning it is easy to set up a new PC company. deploy. and administer IT systems on businesses' behalf. For PCs it is more like 10% or less. There is probably no other type of product that is so technologically sophisticated. 1.

because it means that their already low margins get squeezed if prices drop between the time that they buy a product and the time they sell it. y Vendors Keep Low Inventories: In an environment where margins are low and prices are generally dropping. sometimes year after year. y Vendors Contend With High Bankruptcy Rates: Because of all the challenges involved in running a PC business. most companies try to keep as little in inventory as they can get away with. competitors.virtually no profit at all on straight PC sales. Many analogies have been drawn with other mature-product industries. such as automobiles. 20 . For this reason. but we find such comparisons inaccurate. keeping high inventory is a death sentence--whenever prices drop the vendor potentially loses money on every component in inventory at the time. It's not unheard of for a vendor to buy a component wholesale at price $X and find 24 hours later that the retail price has dropped below $X! The vendor must then try to dump the product as fast as possible to limit his losses. and then open another one with a new name. The original equipment manufacturers (OEMs) that produce and sell PCs bear most of the risk. prices are decreasing. have it fail. while the downstream suppliers of components make most of the profit. and survive on post-warranty support and consulting! y The Market Experiences Rapid Price Fluctuations: There is probably no other industry that has prices change as dramatically and frequently as the PC industry. You won't find many industries where this occurs with regularity. The key difference is that the suppliers of PCs are struggling to identify meaningful differentiation vs. This leaves manufacturers competing primarily on price. Many vendors have been in business only a short time. Some open a store. which exacerbates the pressure on margins. Usually. the bankruptcy rate is high. y The structure of PC industry is almost unique. This is good for the consumer but very bad for vendors.

Unit growth between 2006 and 2008 will average about 6 percent. these observations. Intel. Key PC component suppliers. such as Intel and Microsoft. but the carriers are struggling and further consolidation is viewed as inevitable. This leaves PC suppliers facing the prospect of producing more PCs for dwindling revenue. AMD. led us to predict that by 2007. In November 2004. all struggling with similar challenges in this highly cash-intensive business. We continue to observe fire sales resulting from overproduction and price-led promotions by PC suppliers looking to accelerate cash flow or boost market share. three of the top 10 PC suppliers would exit the market. 21 . Clearly. Our market analysis was straightforward. This situation will inevitably lead to further consolidation among the leading suppliers. while the adoption of emerging PC technologies will present additional risk. seems locked into a "race to the bottom" in the pricing of products. the downward movement of pricing is also because of oversupply. Aircraft manufacturers and airports are profitable and continue to benefit from growth in demand. this trend is unsustainable. Choice of supplier and continuity of supply will be less certain. There are too many suppliers. Microsoft and other component suppliers will also see change as the structure of their market evolves. The result is an industry which. the period of adjustment will bring additional challenges to the buyers and users of PCs. The impact of consolidation will not be limited to PC suppliers. IBM announced the sale of its PC Division to Lenovo Group. and their overall revenue from PCs will probably continue to grow as the market continues to shift toward mobile PCs. but revenue will remain flat. combined with our market expectations for 2006 through 2008. Although these changes will ultimately result in a healthier PC industry that is better able to equate innovation to sustainable business. in some market segments. Although the apparent inability to differentiate products drives the PC industry's focus on price competition.The airline business presents a more realistic comparison. Within weeks. have historically been highly adept at maintaining their PC revenue.

1. United State and operates in more than 170 countries around the world. HP specializes in developing and manufacturing computing.1 HP The Hewlett-Packard Company commonly referred to as HP.2 billion in FY07 to $118. software and services. 1.5. California. HP and Compaq came together to merge by a 25 billion$ stock deal.It is headquartered in Palo Alto. the company had a net revenue growth of 13% from $104. aspirations and dreams.This collection of research further explores the analysis behind these observations and examines the likely impact for PC suppliers. HP is a Fortune 500 company and is ranked 9 in 2009. The company employs 321. and networking hardware. is the largest PC manufacturer in the world.5 Major Players in the PC Industry 1. and its Personal Systems Group (PSG) is responsible for the 22 . 2008. Mark V. Hurd chief executive officer and the chairperson of HP since September 22. In august 2001. 2006 has focused on maintaining the companies leadership in exploring how technology and services can help people and companies address their problems and challenges. and realize their possibilities.5. Even in the poor economic conditions of 2008. storage.1 HP¶s Product Line The company HP provides a wide range of products and services to its customers and is divided into six business segments: y Personal Systems: Hewlett-Packard is the world's largest manufacturer of personal computers. 1. The company was founded by Stanford University classmates Bill Hewlett and David Packard in 1939.3 billion in FY08. key component suppliers and the buyers of PCs.000 people as on 31st December.

y Enterprise Storage and Servers: HP is one of the leading providers of servers in the world. leasing. offering a wide range of servers and storage products and solutions for small businesses and larger corporations. y HP Services: This segment offers a large variety of information technology services. handheld devices. and managed services. and scanning devices. small businesses. and educational and governmental customers in order to allow its customers to purchase complete end-to-end information technology solutions. HP's Imaging and Printing Group (IPG) provides consumer and commercial printer hardware. y Software: HP's Software segment provides management software solutions that assist large companies in managing their operations and information technology infrastructure. printing media and accessories. and other related services and accessories. The company sets its corporate objectives as: y y y y y y y y Customer loyalty Profit Growth Market leadership Leadership Commitment to employees Leadership capability Global citizenship 23 .development and sale of HP's commercial and consumer PCs. and other financial management services for its larger enterprise customers. digital entertainment systems. y HP Financial Services: Hewlett-Packard offers financing. consulting and integration services. printing supplies. workstations. including technology services. y Imaging and Printing: Hewlett-Packard is the leading provider of imaging and printing systems in the world.

1. He is the present CEO and chairman of the company. the startup aimed to sell IBM PC- compatible computers .2 Dell Dell. USA develops. and supports personal computers and other computer-related. TX. manufactures. sells. Michael Dell founded the company as PC's Limited with capital of $1000 in 1984.2 The SWOT analysis of HP STRENGTH y y y y Leadership position Consumer centric brand Strong after sales service Design strategy: strategy looks cost y y WEAKNESS y Low flexibility: it does not have high customization available Decline in digital entertainment market Software service OPPORTUNITY y y PC business Service industry: bought THREAT y y y Pricing pressure Component pricing Slow revenue growth world¶s No 2 Service provider EDS 1.5. Operating from Michael Dell's offcampus dorm-room at Dobie Center.Michael Dell started trading in the belief that by selling personal 24 .700 people worldwide.1. Based in Round Rock. a multinational technology corporation with its head quarters in Round Rock. Dell employs more than 82. Texas.5.

input and storage devices. Dell provides both servers and storage systems. etc. Overall.1 Dell¶s Product Line PCs (60% of revenue) Dell produces several lines of consumer and commercial PC systems. such as productivity software. Dell sells various accessories and electronic devices. Software. Dell became the first company in the information technology industry to establish a product-recycling goal (in 2004) and completed the implementation of its global consumer recycling-program in 2006.2. Aside from PC-related items. and MP3 players.5. Dell also sells customized servers and enterprise systems designed to meet the specific needs of certain customers. Dell offers a variety of products and services.computer-systems directly to customers. digital cameras. including LCD monitors. PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. and Accessories (16% of revenue) Dell sells various software programs with its PC systems. such as LCD televisions. including both desktop and notebook models. technical support services. Dell holds about 14% of the worldwide PC market. Within the PC segment. 1. and corporate servers and storage systems. Among its offerings are a wide array of desktop and notebook computers. The company changed its name to "Dell Computer Corporation" in 1988. Dell also sells a number of computer-related peripherals. and notebooks accounted for 28%. security programs. Peripherals. and games. 25 . printers. desktops contributed 32% of Dell¶s Fiscal 2008 revenue. peripherals and software. Servers and Storage (15% of total revenue in 2008) For its corporate customers.

4 billion. The company recorded net income of $351 million for the fourth quarter ended Jan. In Fiscal 2008.1 billion.Technical Support and Services (9% of total revenue in 2008) Dell also sells technical support services for its products.2 SWOT analysis of Dell STRENGTH y y y y Inventory turnover rate is 6 days. a 48 percent drop from the $679 million it recorded in last year's fourth quarter. Revenue growth at 100% Cost efficiency Direct to customer business model: minimum credit risk y y Latest technology customization Internet sales leadership: $5M y Weakness y y No proprietary technology High dependency on component suppliers Lack of software support for customers everyday worldwide Opportunity y y y y Network service in B2B Strong potential in china and India Low costs and advanced technology Growth in business. providing customers with assistance after they purchase their systems. 1.2. education and government markets y Threat y y y Dell¶s market share is very less Price range considered premium Currently instability Tariff trade barriers fluctuation policy 26 . a 16 percent drop from a year ago. 30.18. Net income per share was $0. Revenue fell to $13. revenue increased 6% yearover-year to $61.5.

with the fastest growth among the top-five players. Other (3% of revenue): Acer offers information security management. Netbook (9% of revenue): Netbooks are an emerging type of scaled-down portable computer.3. For example. overall notebook shipments grew 33. light weight. Focused on marketing its brand-name IT products around the globe. the company is targeting businesses and governmental agencies for volume sales. data center services. Originally named Multitech.1 Acer¶s product line Notebook (71% of revenue): Notebooks are Acer's most profitable product. in 2007. Within the past decade.5. Acer is the #1 producer of netbooks worldwide by unit sales. Desktop (12% of revenue): Annual revenue growth in desktop sales has slowed from 50. and other IT support services.8%. his wife Carolyn Yeh. it was founded by Stan Shih . in 2008. 3 vendor for total PCs and No. and projectors. easy to use products. while desktop shipments grew only 4. HDTVs. generating NT$417 billion in revenue in 2008.2% from 2004 to 2005 to 3. with a 38% market share. Multitech was eventually renamed Acer in 1987. and a group of five others in 1976. 2 for notebooks. growth in notebook sales has far outpaced growth in desktop sales.8%. a Taiwanese manufacturer of Pocket PC phones and PDAs. 27 . Acer ranks as the world's No.8% in 2008 as consumers demand more laptops. and easy to use. In addition. Acer is renowned for the development and manufacture of sophisticatedly and intuitively designed. that are designed to be cheap.5.3 Acer Acer Incorporated is a Taiwan-based multinational electronics manufacturer. The company expects desktop sales growth of 3-4% from 2009 to 2011. Acer acquired E-Ten. 1. Display (5% of revenue): Acer manufactures LCD monitors.1. In addition to consumers. software systems development.

3. y Profit margin squeezed by sales to telecom service provider. Which Contributed 40% of Acer's Total Mobile-PC Revenue in 2008 y y Dell's Expansion Into Indirect Sales Samsung¶s entering into consumer mobile PC s. Due in Part to Mini- notebooks.5. Which Increase Costs and Dilute Resource Brand perception as Low-Cost PC Provider Insufficient Attention to the Particularly Suitable to a Time of Economic Recession y y Strong global logistics Strong relationships with suppliers y Chinese Market Largest in the World Limited Product the Second- Portfolio for Midsize Business OPPORTUNITIES y Economic Downturn.1.2 SWOT analysis of Acer STRENGTHS y Operational Efficiency ² Tight Control on Overhead Costs y y Improved Economies of Scale Fast Reactions to Market Changes After Cautious ROI Evaluation y Aggressive Price Strategy ² y y WEAKNESS y y Low Profit Margins Multiple Brands. Customers by Targeting Various Segments Through Multiple Brands 28 . Which Erodes Margins and profitability y Excessive Reliance on Western Europe. Which Favors Low-Price Products y Growth of Mobile PCs in Homes in Emerging Markets. Where Brand Preferences Are Weaker y y Growth Into the Chinese Market Growth Markets y Reaching Larger Numbers of Into Midsize-Business THREAT y Continued Price Decline in Mobile PCs.

CHAPTER 2 COMPANY PROFILE 29 .

2003: The Company changes brand name to Lenovo from Legend to avoid infringement of overseas brands. each at an average rate that roughly quadruples. 2001: Dell takes the largest share of the worldwide PC market for the first time. The US remains the world's largest PC market. The company says it is preparing for expansion outside China. Lenovo's sales of services and hand-held electronics grow the fastest of all its products in the most recent two fiscal years. It is the first Chinese company to become a computer technology equipment partner of the IOC.75 on March 6. Lenovo becomes an Olympic worldwide partner. Time Warner Inc. China accounts for 99 percent of Lenovo's sales in fiscal year ended March 2004 and 98 percent in the previous 12-month period.2 billion in the fiscal year ended March 2000 and decline to HK$23. 2004: The Company changes its name to Lenovo Group. Lenovo decides to develop the rural market by launching the "Yuanmeng" PC series designed for township home users.2. compared with 52 percent for Dell. Lenovo's first-quarter PC shipment growth in China lags rivals such as Dell. Lenovo and IBM announce an agreement by which Lenovo will acquire 30 .9 percent share of the Asian market excluding Japan. compared with 7. Lenovo has a 10.2 billion in the most recent fiscal year ended March 2004. Lenovo's Asian shipments rise 19 percent. according to market researcher IDC Corp.1 Company History The following is a brief history of Lenovo: 2000: Legend shares peak at HK$14. Legend sales reach a peak of HK$27. which has overtaken Japan to become the world's second-largest PC market. on January 7 exits a US$50 million Internet venture in China with Lenovo.3 percent for Dell. the world's largest media company. Computer sales rise at an average rate of 9 percent in the same period.

Lenovo also hosts seven Internet i. Lenovo technology flawlessly supports the 2006 Olympic Winter Games in Torino. 2006: Lenovo introduces the first dual-core ThinkPad notebook PCs.. Lenovo becomes the world's largest provider of biometric-enabled PCs by selling its one-millionth PC with an integrated fingerprint reader. Amelio is appointed as CEO and President of Lenovo. Lenovo introduces the industry's thinnest. Researchers.IBM¶s Personal Computing Division. the ThinkPad X41 Tablet. General Atlantic LLC and New bridge Capital LLC. N. Lenovo announces the closing of a US$350 million strategic investment by three leading private equity firms: Texas Pacific Group. available for the first time with a titanium cover. solution providers and independent software vendors to collaborate on new personal computing solutions. business partners. scientists and product design teams from around the world combine Lenovo's heritage in enterprise and consumer PC technology to design the Lenovo 3000 product line. to enable customers. 31 . lightest and most secure Tablet PC.000 desktop PCs. supplying 5. The first Lenovo-branded products outside of China debut worldwide.000 notebook computers. improving productivity and extending battery life for up to 11 hours. Lenovo introduces the first widescreen ThinkPad with embedded wireless WAN. the ThinkPad Z60.lounges for use by Olympic athletes and visitors. 350 servers and 1. Lenovo establishes a new Innovation Center in Research Triangle Park. which features new desktop and notebook models specifically designed to provide worry-free computing to the small business market segment. its global PC (desktop and notebook computer) business. 2005: Lenovo completes the acquisition of IBM's Personal Computing Division.C. making it a new international IT competitor and the third-largest personal computer company in the world. The acquisition forms a top-tier (third-largest) global PC leader. Italy. William J.

and coordinated. the decision making power is distributed and the departments and divisions have varying degree of autonomy.2 Organizational Structure It is the formal and informal framework of policies and rules. In a centralized structure. and responsibilities are delegated. controlled. and allocates rights and duties. and how information flows between levels of management. within which an organization arranges its lines of authority and communications.2.71. Organizational structure determines the manner and extent to which roles. There are various functional departments likeHR Department Financial Department Marketing Department Transactional Department Relational Department Strategic Department Legal Department Chart 2. In a decentralized structure.Organizational Structure 32 . the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. power. This structure depends entirely on the organization¶s objective and the strategy chosen to achieve them.

Bangalore.Silver award b) Best Commercial Terms. the premier marketing trade publication in Asia has awarded Lenovo the µCommunicator of the Year¶ for this year¶s Asia-Pacific PR Awards.2. 2) MEDIA.3 Awards and Certifications: 1)"Client of the Year" in the Advertising Big Bang 08.Silver award c) Best Online Support ± Silver award 2. In particular. 33 . organized by the Ad Club. We operate as a company uninhibited by walls or organizational structures using world sourcing to harness the power of innovation across our global team. We design innovative and exciting products and services to meet our customers¶ needs. Lenovo¶s sophisticated usage of social media and willingness to blur the lines between conventional marketing and PR impressed the Media editorial team this year. 3)In DIGIT's cover story µIcons of Trust 2008 ± which brands can you rely on?¶: Lenovo/IBM beat all other brands to bag the top spot on the Trust Index Lenovo has been voted the most trusted brand in the Laptops category 4) Lenovo India wins three awards in the DQ Channels ³Channel Choice Awards 2009´ a) Best Marketing Support.3 Vision and Mission Lenovo strives to be a new world company that makes award-winning PCs for our customers.

2.4 SWOT analysis STRENGTH y y y y y Lean cost structure Effective business model Innovation leadership Event sponsoring Good marketing and distribution strategies y y y Strategic alliance with suppliers Quick responsiveness Strong R&D: taken over from IBM THREAT y Competition threat from both local and international markets y y y y product portfolios/ y Industry reaching maturity Software piracy and clone market Price war Emerging small firms International competitors forming alliances with local competitors. WEAKNESS y Unable to maintain sustained growth rate in all market segment y Ignoring potential market y Retaining of largest shares by competitors y Poor global perception y High delivery time:3 weeks OPPORTUNITY y y Increasing global demand for PC Specialty shops proving one stop platform for distribution y Government organizations increasing their spending on IT y y Internet boom Increasing product lines y y Netbooks Converting manual orders to automotive orders 34 .

2. and Lenovo authorized dealers across the globe. Lenovo also promotes environmental friendly µgreen¶ products. 4. time and quality. keeping the customer always in mind. Innovation leadership: Lenovo owns the greatest track record for innovation in the PC industry and remains committed to innovation in its products and technology. This has become more critical under the current economic conditions. Strategic alliance with suppliers: Since Lenovo is horizontally integrated. innovation can drive business and add value for customers.ThinkPad X300 series is the first notebook to earn µGreen Guard¶ certification 5. 3. 35 . Teleweb. Good marketing and distribution strategies: Promotion and distribution at Lenovo is done through a network of channel partners. services and business process around customer need and market segmentation. Lean cost structure: The Group¶s distinctive capability and expertise in managing costs and expenses allows it to achieve high efficiency and has been one of the most important factors for its success. Effective business model: Lenovo¶s dual business model sets its products. it depends on the outsourced suppliers for in time delivery of quality products. While it needs to be cost-effective. end toend model allows the Group to quickly react to market dynamics and changes in the back-end. retail stores. This tightly integrated. like many companies.STRENGTH 1.

OPPORTUNITY 1. Event sponsoring: Lenovo was the TOP Sponsor of the Olympic Games and provided the technology hardware for these Games in 2008. Government organizations increasing their spending on IT 5. 8. 7. Increasing global demand for PC: 2. Nearly every aspect of the management of the Games. Strong R&D: taken over from IBM: Acquiring a reliable/well-known company such as IBM has helped boost its products. Netbooks 8. It gave Lenovo an upper edge as compared to other competitors.6. from gathering and storing participant data to displaying the scores. Internet boom 6. Specialty shops proving one stop platform for distribution 4. Increasing product portfolios/product Lines 7. Converting manual orders to automative orders 36 . was dependent on hardware provided by Lenovo. Quick responsiveness: The company has Best-in-Class Service. especially ThinkPad and IdeaPad. Signing of memorandum of understanding: The company can develop their market in US by signing a memorandum of understanding with the US 3. It has 24/7 Technical/Sales Support centers across the globe.

Retaining of largest shares by competitors: Lenovo¶s competitors have larger number of shares in the market. 37 . Acer(9. This results in customers waiting for a longer time. Unable to maintain sustained growth rate in all market segment: Lenovo is heavily weighted showed significant slowdown in the second half of the fiscal year under the economic crisis because it has not adequately addressed the worldwide transaction segment outside China. 3. Emerging small firms 6. Software piracy and clone market: 4.WEAKNESS 1. Industry reaching maturity: 3. High delivery time: The order delivery time in Lenovo is around 3 weeks.4)% give Lenovo a tough competition. Poor global perception: In China. HP (18. Price war 5. in particular the consumer market. the customers perceive Lenovo as a premium brand. Ignoring potential markets: The main focus of Lenovo is on the established markets and they lack marketing strategies to enter into the untapped markets. 4. but Lenovo has to reinforce this perception to its global brand.6)%. Dell (15. 5. Competition threat from both local and international markets: 2. International competitors forming alliances with local competitors.1%). 2. THREAT 1.

Post.6 Policies Lenovo has staff welfare policies and some Business guidelines for all employees. Loan Policy: The Company provides its employees with various kinds of loans such as Car Loan. 2.e. 1. their performance orientation and customer focus is imperative. Company¶s commitment to their people is reflected in the sense of belonging and pride they feel towards the company and the passion and commitment they bring to their work. forward-looking initiatives and goals are fully communicated to all the employees and that they understand and relate to these. The company believes that only where people grow. Leave Policy for regular employees i. Maternity leave. They believe that the ³biggest brands´ they stand for today are a consequential of our ³best people´.2. The company has measurement systems and recognition schemes to identify and encourage individuals and teams demonstrating customer service excellence. Leave of Absence. Sick leave. The company ensures that all of their policies. protection and use of Lenovo assets etc. People are the biggest asset of the company. Apart from welfare policies company also has some conduct guidelines for the employees such as legal remedies. Rewards.maternity leave. promotions and growth opportunities at Lenovo are based on performance. privacy in workplace. 38 . Housing Loan etc. Casual leave.5 People Company believes that their people provide them the cutting edge and for the sustainable success. the organization grows´. 2. Privilege leave. CLC scheme 3.

2. with distinctive designs and features for entertainment and multimedia. light widescreen designs Extra long battery life Advanced mobile workstations IdeaPad Notebooks Engineered for a great user experience Perfect for home/home office. 39 . cost-savings Industry-leading capabilities that dramatically increase productivity and reduce cost. Features:     Business class technology Thin.7 Lenovo Products Notebooks ThinkPad Notebooks Track record of success.

Features:  Roomy. new models ideal for home/home office.Features:      Home/office versatility 11.1 to 17 inches widescreen displays Dolby home theatre audio Touch sensitive controls VeriFace face recognition securities Lenovo 3000 Notebooks Worry-free computing at a great value A smart choice for business computing needs and budgets. support and services 40 . widescreen displays  Stylish silver colored top covers  Preloaded small business softwares  LenovoCare tools. Plus.

Features:     Energy efficient desktops Security on a corporate level at a small business price Dual Independence Display (DID) The ThinkCentre Energy Calculator IdeaCentre Desktops New PCs for home/home office Loaded with features for everything from family finance to multimedia and entertainment. Features:     VeriFace face recognition Automatic brightness adjustment Antibacterial keyboard OneKey convenience 41 .Desktops ThinkCentre Desktops Award winning quality and innovation Industry-leading capabilities that dramatically increase productivity and reduce cost.

Workstations ThinkCentre Workstations Features:     User centric design Cool and quiet ISV certifications Environment-friendly Servers Tower Servers Features:     Single and dual sockets Easier cooling Existing-network scalability Hard disk drive optimization 42 .

Rack Servers Features:     Single and dual sockets Space-optimized design Centralized cable management Centralized server management Accessories and Upgrades 43 .

The more traditional usage within corporations and businesses refers to the individuals within a firm or agency. training. etc. life insurance. commission-based programs.8. typically referred to as 'human resources management. salary ranges for job descriptions. y The development and integration of the organization as a whole is another important function performed by the senior management. and to the portion of the organization that deals with hiring. health life insurance. There are altogether 10 structures in the organization. Employee benefits typically refer to retirement plans. The field draws upon concepts developed in Industrial/Organizational Psychology and System Theory. 44 . The original usage derives from political economy and economics. and can go beyond just organizations to the level of nations. Benefits are increasingly expensive for businesses to provide to employees." the people of an organization. firing. flexible benefit plans. where it was traditionally called labor. bonus-based programs. one of four factors of production although this perspective is changing as a function of new and ongoing research into more strategic approaches at national levels.8 Departments 2. and other personnel issues. merit-based programs. for example.1HR Human resources are an increasingly broadening term that refers to managing "human capital. This first usage is used more in terms of 'human resources development'. so the range and options of benefits are changing rapidly to include. The field has moved from a traditionally administrative function to a strategic one that recognizes the link between talented and engaged people and organizational success.2. vacation etc. Functions of Senior Manager. disability insurance.Talent Management/C&B/Partner y Compensation and Benefits: Compensation includes topics in regard to wage and/or salary programs and structures. for example. Human resources have at least two related interpretations depending on context.

executed and proper follow up is done. y Statutory related aspects: As per the laws. reduced costs and aligns the organization directly behind the CEO¶s goals.Talent acquisition/L&D/ E. The other advantage is the firm gets motivated workforce. with a focus on active learning etc. It is an outcome of effective management. with the amounts due to each and also the total sum of money to be paid out to employees at a given time. which optimizes incentive plans to specific goals for overachievement. The benefits of performance management are: Direct financial gains results in growing sales volume. The other feature being maintaining a database of list of employees receiving wages or salaries. the database and other records are to be maintained in accordance. and cannot be viewed as independent of either component. bonuses and deductions.y Various individual development plans and strategies are planned. Functions of Senior Manager ± HR Operations/ Performance Management y HR Operations: The Human Resource operations include Payroll is the sum of all financial records of salaries..engagement y Talent Acquisition: The Talent Management Systems or "Strategic Human Capital Management Applications´ are the next-generation extensions of traditional Human Resource Management Systems (HRMS). not just business as usual. creates transparency in achievement of goals. wages. a culture where the predominate method of building habits of success involving knowing when and how to ³carve mistakes in sand and success in stone´ (Benjamin Franklin quote). performance is the sum of behaviour and results. Manager. Also helps the other departments for example assists in auditing process and compliance with legislative requirements.Talent acquisition 45 . creating a culture of respect and commitment. Functions of Asst. Performance Management is found in the success of its employees in serving customer needs. y Performance Management.

Talent acquisition takes a long term view of not only filling positions of today. but also identify talents for future openings. motivation. and is almost impossible to evaluate. Training is basically considered to be of short term or task specific education but the organisation aims and has built a scientific learning process among the employees. y Training (Learning and Development): Training and development is the field concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings.involves all the sub processes around finding. and is evaluated against those jobs. These future positions may be identifiable by looking at the succession management plan or by analyzing the attrition. the job that an individual currently holds. y Employee Relations: Employee Relations involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity. Talent acquisition is part of a broader strategic approach in the quest to gain and sustain a competitive advantage. Essentially. Development: This activity focuses upon the activities that the organization employing the individual. or that the individual is part of. Learning and development encompasses three main activities: Training: This activity is both focused upon. which helps them (employees) to achieve knowledge at the workplace. attracting and engaging highly talented individuals into the organization. 46 . may partake in the future. Employee Relations is concerned with preventing and resolving problems involving individuals who arise out of or affect work situations. and evaluated against. and morale. Education: This activity focuses upon the jobs that an individual may potentially hold in the future.

Advice is provided to supervisors on how to correct poor performance and employee misconduct. traditional days etc. In such instances. one must debit a receivable and credit a revenue account. Companies can use their accounts receivable as collateral when obtaining a loan (assetbased lending) or sell them through factoring.. This is typically done by generating an invoice and mailing or electronically delivering it to the customer. like kids at work. while minimizing the costs involved. who in turn must pay it within an established timeframe called credit or payment terms. one debits cash and credits the receivable in the journal entry. accounts receivable is the amount that customers owe to the company. 2. The firm is continuously engaged in building employee and employee relations and also has many activities running to help the workers have a high standard social life.8. progressive discipline and regulatory and other requirements must be considered in effecting disciplinary actions and in resolving employee grievances and appeals. Sometimes called trade receivables.8. On a company's balance sheet. 47 . including components such as the contact centre. companies today are turning to customer-based service applications such as Web self-service and online communities for customer-to-customer support. When the customer pays off their accounts. To increase customer satisfaction.3 Customer Service and Support Customer service and support (CSS) is the part of a company's customer relationship management (CRM) department that interacts with a customer for their immediate benefit. Pools or portfolios of accounts receivable can be sold in 2. To record a journal entry for a sale on account.2 Accounts Receivables Accounts receivable (A/R) is one of a series of accounting transactions dealing with the billing of customers who owe money to company or organization for goods and services that have been provided to the customer. and the call management system. they are classified as current assets assuming that they are due within one year. the help desk.

for Indian operations its Mr. The balance between these forms the company's capital structure. Long term funds are provided by ownership equity and longterm credit. Rama Subramanian. Pricing is generally accepted as a core business practice. 2. In case of Lenovo India Pvt. 2. It involves balancing risk and profitability. basic software problems can be addressed over the telephone or. The culture of the organisation is such that the best person in the job is allotted the work. Ltd. For example.8. often in the form of bonds. On the important part of Lenovo¶s finance team was when the company acquired the IBM¶s PC division the accounting department was not transferred along with some other teams. and implement solutions from a specialized pricing team can see a effective contribution on the profit side.Technical support may be delivered by different technologies depending on the situation. Hence it was both a challenge and an opportunity for the Lenovo team to build a finance team which would see that they grow up from the scratch. while more complicated problems with hardware may need to be dealt with in person. while attempting to maximize an entity's wealth and the value of its stock. but the process the companies use varies and also sometimes it is arbitrary. which contributes majorly to the both long term as well as short term financial requirements.5 Pricing team Pricing is the last bastion of guesswork in global business. as a result the efficiency and employee morale is high. 48 . determines the requirements of peers and develops a system. sometimes as high as 20 percent. increasingly. E-mail or Fax. direct questions can be addressed using SMS.4 India Finance Corporate finance is the task of providing the funds for a corporation's activities.. but researches shows companies that make pricing a priority. it¶s the holding company Lenovo Group Ltd. Online chat.. by using remote access repair services. Short-term funding or working capital is mostly provided by banks extending a line of credit. a strategy and work in co-ordination with other teams in the organisation.8. The finance team which is headed by CFO.

As such. AP enables an organization to accomplish its objectives by bringing a systematic. workflow system solutions.6 Accounts Payable Team / Disbursement Team Accounts payable is a strategic. the AP operation plays a critical role in the financial cycle of the organization. Maximize long-run profit Increase Market share and Company growth Obtain or maintain the loyalty and enthusiasm of distributors and other sales personnel. value-added accounting function that performs the primary non-payroll disbursement functions in an organization. today's AP departments have taken on much wider roles including fraud prevention. etc. Consumer price elasticity and price points.8. y y To enhance the image of the brand and get competitive edge Social. marketing and strategic objectives of the company.Pricing policy is defined as a standard procedure used by a firm to set wholesale and retail prices for its products or services. vendors.) are recognized and paid based on the credit policies agreed to between the company and its suppliers. When deciding on pricing the important features considered are: y y y y y y The overall financial. competitors¶ pricing and market and economic trends. determining the objectives is the first step in pricing. Pricing Objectives: Pricing objectives or goals give direction to the whole pricing process. or ideological objectives 2. In addition to the traditional AP activities whereby liabilities to third-party entities (suppliers. taxing authorities. cash49 . price planning takes into view factors such as a firm¶s overall marketing objectives. disciplined approach to evaluate and improve the effectiveness of the entire payables process. consumer demand. cost reduction. In other words. The objectives of your product or brand. product attributes. ethical.

50 . The scope of internal auditing within an organization is broad and may involve topics such as the efficacy of operations. people and management information systems. safeguarding assets. internal or business control is defined as a process affected by an organization's structure.. both physical (e. deterring and investigating fraud.8. However. Internal auditing frequently involves measuring compliance with the entity's policies and procedures. internal controls and vendor (supply chain) financing.g. internal auditors are not responsible for the execution of company activities. As a result of their broad scope of involvement. It plays an important role in preventing and detecting fraud and protecting the organization's resources. However. coming next financial year the operations of the team will be completely carried out in SAP. machinery and property) and intangible (e.flow management. work and authority flows. 2. Large firms like Lenovo are using specialized Accounts Payable Automation.g. It does this by using a systematic methodology for analyzing business processes. and compliance with laws and regulations. reputation or intellectual property such as trademarks).7 Internal Audit Internal auditing is a profession and activity involved in helping organizations achieve their stated objectives. 2.. internal auditors may have a variety of higher educational and professional backgrounds. The firm also uses PAW software which has been procured from IBM when the firm acquired the PC division. Professionals called internal auditors are employed by organizations to perform the internal auditing activity. the reliability of financial reporting. like SAP to automate the paper and manual elements of processing an organization's invoices.8. procedures and activities with the goal of highlighting organizational problems and recommending solutions.8 Business Control In accounting and auditing. designed to help the organization accomplish specific goals or objectives.

9 Claims Team A claim is a legal action to obtain money. and society at large. as in shopping. conducting customer surveys. to find appropriate persons/ agencies to carry out the sales activities. branding. and processes for creating. 2. set of institutions. There are several issues of concern when filing a statement of claim. The main function of a sales department is to co-ordinate sales activities. communicating. often expressed in amount of money the party should pay/reimburse. Marketing is defined by the American Marketing Association as the activity. to meet the customer demand with appropriate supply. A Claim is a Legal statement made to alert the accused of the legal implications. property. and exchanging offerings that have value for customers. It can be any communication notifying the addressee of alleged faulty execution which resulted in damages. or going to a market to buy or sell goods or services. partners. marketing division is responsible for marketing strategy. promoting. delivering.8.8. 51 . Although to file a Statement of Claim is fairly straight forward. to increase the sales volume considering a particular period of time. advertising. All these responsibilities can be gathered in several main functions of the marketing department. public relations and creating of corporate style. or the enforcement of a right against another party. to help marketing department in meeting the sales volume forecasted by them. clients. The term developed from the original meaning which referred literally to going to market.2.10 Marketing and sales Marketing is an integrated communications-based process through which individuals and communities discover that existing and newly-identified needs and wants may be satisfied by the products and services of others. researching. it is important it be done properly or you may lose your case due to a simple technicality. In Lenovo. The legal document which carries a claim is called a Statement of Claim.

PART-B Chapter-3 Research Design 52 .

3.2 Statement of the problem Measuring employee performance has come a long way from the annual performance appraisal to an ongoing performance management system.1. Performance Management is one of the key processes that. Management desires information on the perception of the employees towards the existing performance management system and hence wants to gauge its effectiveness.what do you need to be able to do and how can you do things better? Managing performance is about managing for results.but not just looking back at past performance. helps employees know that their contributions are recognized and acknowledged.´ 53 . But at times it gets diverted from its objectives. Hence this study is being conducted and therefore the statement of the problem is: ³To study the Effectiveness of the Performance Management System at Lenovo (India) Pvt. when effectively carried out. Introduction to the Project Topic: Performance management is the activity of tracking performance against targets identifying opportunities for improvement . There is a need that the opinion of the appraisees about the Performance management system be discussed with the management so as to make the system highly effective. Performance-based management at any level in the organization should demonstrate that: y y y y You know what you are aiming for You know what you have to do to meet your objectives You know how to measure progress towards your objectives You can detect performance problems and remedy them 3. The focus of performance management is the future . Ltd.

54 . y The questionnaire contained Twenty Five questions and it was a mix of open ended and close ended questions. y To come out with solutions that will help the organization in formulating better strategies for the development of the employees and the organization. 3.1 Sources of Data For the purpose of the study. Ltd.3 Title of the study: The project is titled as ³A Study on the Effectiveness of the Performance Management System at Lenovo (India) Pvt.3. Each respondent was interviewed and data was collected. company web link. y To understand the shortcomings of the Performance Management System at Lenovo (India) Pvt. Ltd. who have undergone at least one appraisal cycle. from the perspectives of the employees. 3. The study is conducted to analyze and obtain their insights about the Performance Management System. Ltd.5 Scope of the study: The study is exclusively conducted on the employees of Lenovo (India) Pvt. Ltd. y Primary data is collected through self administered structured questionnaire. 3.6 Research Methodology: 3. It was carried out within the Lenovo office at Ferns Ikon in Bangalore city over a period of six weeks. Newspapers and magazines.4 Objectives of the study: y To study the Effectiveness of the Performance Management System at Lenovo (India) Pvt. y Secondary data is collected from Internet.6. both primary and secondary data are utilized. Ltd. from the perspectives of the management. y To study the Effectiveness of the Performance Management System at Lenovo (India) Pvt.

6. The survey was conducted to know about their perception towards the Performance Management System. This is usually an extension of convenience sampling y Sampling Unit: The study is conducted on the employees of Lenovo (India) Pvt.4 Research Instrument The main tool that has been used in data collection is questionnaire that has been constructed for this purpose.5 Data Collection Method The survey was conducted by way of personal interview wherein the researcher gave the respondent the questionnaire and initiated a two-way conversation to obtain information from the participant.6.2 Research Type: The type of research adopted for the project is descriptive research. Descriptive research basically means discovery of association among different variables.3.3 Sampling Plan: y Type of sampling: Judgment sampling is a common non-probability method. Ltd. The main motive behind the survey is to study the effectiveness of the PMS from the employees¶ perspective. 3. y Sample Size: A sample of thirty respondents was considered as sample size for the research. 3. It refers to those studies used to describe phenomena associated with a subject population or to estimate proportions of the population that have certain characteristics.6. who have at least undergone one appraisal cycle. Ltd. The researcher selects the sample based on judgment. 55 .6. who have at least undergone one appraisal cycle. Primary data was collected by means of questionnaire which was distributed to the employees of Lenovo (India) Pvt. 3.

HR. It is an ongoing process that takes place throughout the year. who have at least undergone one appraisal cycle. The communication process includes clarifying expectations.7 Operational Definitions a) Performance Management System Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year. identifying goals. in support of accomplishing the strategic objectives of the organization. y The study was done for a short period of time. Ltd. non-random sampling has been used which is a non probability sampling method. which might not hold true over a long period of time. The cycle includes Planning. It¶s a 4 step process. He is the key driver of his own performance management system. setting objectives.6. and Assessment.6 Limitations of the Study y In the project. it therefore does not provide estimates of precision. with discussions varying year-to-year based on changing objectives.Incumbent/Appraisees. He also helps manage performance & provides continuous feedback and coaching. 3. c) Manager/ Appraiser An Individual who helps plans performance and assesses the performance of one or more appraisees that report to him/her. Manager/ Appraiser.3. Checking-In. The Performance management process is a cycle. Reviewer.6. and evaluating results. who is assessed as part of the performance cycle. b) Incumbent/Appraisee Appraisee is an individual. 56 . y The sample size is restricted to only those employees of Lenovo (India) Pvt. providing feedback. It includes: .

They are responsible for the normalization of the scores and will facilitate the process and ensure sanctity of implementation. especially toward difficult to quantify knowledge-based goals.would ensure adherence to guidelines. and dispute resolution and modify design aspects to align with organization requirements. e) KPI A performance indicator or key performance indicator (KPI) is a measure of performance. The act of monitoring KPIs in real-time is known as business activity monitoring (BAM). 57 . support. KPIs are typically tied to an organization's strategy using concepts. typically in terms of making progress towards its long-term organizational goals. KPIs may be monitored using Business Intelligence techniques to assess the present state of the business and to assist in prescribing a course of action. engagement. Such measures are commonly used to help an organization define and evaluate how successful it is. process rigor and quality. "What is really important to different stakeholders". KPIs can be specified by answering the question. service. and satisfaction. The KPIs differ depending on the nature of the organization and the organization's strategy.d) HR HR to function as a facilitator in the process. KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development. They help to evaluate the progress of an organization towards its vision and long-term goals.

Chapter-4 Data Analysis 58 .

1 Showing frequency of the respondent¶s familiarity with the process of Performance Management System A formal PMS 100 80 Percent 60 40 20 0 Yes No Up to some extent A formal PMS Inference: 87% of the respondents said YES when asked whether they were familiar with the process of Performance Management System.7 6.1.0 Graph 4.7 6.7 6.1 Showing frequency of the respondent¶s familiarity with the process of Performance Management System Frequency Percent Valid Percent Valid Yes No Up to some extent Total 26 2 2 30 86.7 100. Analysis and Interpretation Table 4.0 86.7 100.4. 59 .7 6.

0 Valid Cumulative Percent Percent 70.3 3. 60 .3 3. 14% of respondents were not agree and 14% of respondents were agree up to some extent.0 Graph 4.2 Showing perception of employees regarding PMS¶s simplicity 60 Percent 40 20 0 Yes No Up to some extent Can't say Is PMS simple? Inference: Majority of the respondents (70%) feel that PMS is simple.3 100.3 100.0 13.3 13.2 Showing perception of employees regarding PMS¶s simplicity Valid Yes No Up to some extent Can't say Total Frequenc y 21 4 4 1 30 Percent 70.Table 4.0 70.3 83.3 13.0 13.0 96.7 100.

61 .0 50.0 20.0 Graph 4.0 20.0 70.3 Showing percentage of employees satisfied with the current PMS 50 40 Percent 30 20 10 0 Yes No Up to some extent Can't say Satisfied with the current PMS Inference: Half of the respondents (50%) are satisfied with the current PMS.0 Valid Cumulative Percent Percent 50.7 3.0 26.0 96.7 100.7 3.3 Showing percentage of employees satisfied with the current PMS Valid Yes No Up to some extent Can't say Total Frequenc y 15 6 8 1 30 Percent 50.3 100. 27% of respondents are satisfied up to some extent and 20% of respondents are not satisfied with it.3 100.Table 4.0 26.

0 93.7 6.Table 4.7 20.7 100.3 100.4 Showing percentage of employees satisfied with rating system 60 50 40 Percent 30 20 10 0 Yes No Up to some extent Can't say Satisfied with the rating system Inference: Majority of the respondents are satisfied with the rating system and some of them are satisfied up to some extent only a few (20%) are not satisfied and have given some suggestions to improve the rating system.7 6.0 76.7 16.0 Valid Cumulative Percent Percent 56.7 20.7 56. 62 .7 100.0 Graph 4.4 Showing percentage of employees satisfied with rating system Valid Yes No Up to some extent Can't say Total Frequenc y 17 6 5 2 30 Percent 56.0 16.

3 79.0 Graph 4.Table 4.5 Showing percentage of employees.9 100.3 13.7 96.8 93.3 100.7 13. 63 .0 100. who gets motivated from the recognition given to high performers 80 60 Percent 40 20 0 Yes No Up to some extent Recognition given to high performers motivates Inference: Majority of the respondents gets motivated when the recognition is given to the high performers.0 Valid Missin g Total Yes No Up to some extent Total 100 Percent 76.1 6.3 6.5 Showing percentage of employees. who gets motivated from the recognition given to high performers Frequenc y 23 4 2 29 1 30 Valid Cumulative Percent Percent 79.7 3.

3 .3 100.7 100.7 26. ¥¤£¥ £ £ ¦¨ ¥   © ¨£ Valid 13.3 53.6 Showing percentage of employees who feel that the PMS is biased Is i bi s d? Cu ula iv P rc 13.0 Is it Biased? 64 ¥¤£ £ ¥¤£ £ ¤£ Fr qu £ § cy 4 16 P rc Valid P rc 13.6 Showing percentage of employees who feel that the PMS is biased 60 50 40 Percent 30 20 10 0 Yes No Up to some extent Can't say Inference: Majority of respondents feel that PMS is not biased and some of them (13%) feel that it is biased.3 53.3 66.7 26.3 6.0 £ ¥¤£ ¥ ¦ £ ¢ ¡   Ca ' ay T al ¨ ¥¤ ¥ Graph 4.7 100.Table 4.7 73.0 2 8 30 6.

0 $ & '  " !  "  "   !        i g Cu ula iv P rc 63.0 100.0 .7 20.7 20.0 Sufficient opportunity to take part in goal setting &%$ $ &%$ $ &%$ $ %$ Fr qu $ ( cy 19 5 6 30 P rc Valid P rc 63.0 100.3 80.3 16.7 Showing responses regarding getting opportunity to take part in goal setting 60 Percent 40 20 0 Yes No Up to some extent Inference: Majority of the respondents gets opportunity to take part in the goal setting. while some of them (20%) feel that they get opportunity up to some extent and some of them don¶t get sufficient opportunity to take part in goal setting.Table 4.7 Showing response regarding getting opportunity to take part in goal setting  #   u i i pp u iy k p i g s T al &1 Graph 4. 65 &%$& $ $ '1) 1& 32 4 10 )$ Valid 63.3 16.0 100.

5 10.0 2.0 Count 7.Table 4. 855 9 6 A L v l 5 5 8 5 E l y Ma ag r @ 4 0 4 13 0 13 5 3 8 8 1 9 Level 66 79 5 7 79B 5 V ry ru 7 5 Tru Par ly ru 85 7 @ 7 9669 5 568 7 @ 5 9 8@9 7 7 A 5 8 7 6 55 T al 30 4 34 Career paths are laid down with opportunities and limitations clearly specified Very true True Partly true Not true .8 Showing response of employees and HR manager regarding career paths Car r a h ar laid d w wi h ru ii li i a i cl arly cifi d 5 7 7 5 a d ru @ T al 79 Graph 4.5 5.0 Employees Managers Inference: Majority of employees are sure that career paths are laid down with opportunities and limitations clearly specified while on the other side HR Managers fell that it is partly true.8 Showing response of employees and HR manager regarding career paths 12.5 0.

Table 4.9 Showing response of the employees and HR Managers regarding Goal setting FE FD CF ED F E DED G FFED G al C T al FC Graph 4. DEE C I P L v l E E D E E l y Ma ag r G 1 2 3 21 1 22 6 1 7 2 0 2 Level 67 FC E F FCQ E F E E V ry ru F E Tru Par ly ru FP E F CF DE F i g rci ca abili i I E E H ar u d h li i r ch ru T al 30 4 34 Goal setting exercises are used to stretch capabilities to the limit Very true True Partly true Not true .9 Showing response of the employees and HR Managers regarding Goal setting 25 20 Count 15 10 5 0 Employees Managers Inference: Both the employees and HR Manager feel that goal setting exercises are used to stretch capabilities to the limit.

USS W V T L v l S S U S E l y Ma ag r R 4 2 6 16 2 18 8 0 8 2 0 2 Level 68 XW S X XWY S V ry ru X S Tru Par ly ru US R T W SV UU W X U UXS U X U S R T SR T al 30 4 34 Line managers always discuss performances and targets with you Very true True Partly true Not true .10 Showing response of employees and HR Managers regarding targets Line managers always discuss performances and targets with you Li a ag r alway di cu rf r a c arg wi h y u S X X S aa d ru R T al XW Graph 4. Only some of the employees (33%) feel that it is partly true.Table 4.10 Showing response of employees and HR Managers regarding targets 20 15 Count 10 5 0 Employees Managers Inference: Majority of employees feel that line managers always discuss performances and targets with them and Managers also feel the same.

organize and do their work Very true True Partly true Not true . which shows a level of comfort among the employees. organize and do their work.Table 4.11 Showing response regarding autonomy to plan. rga iz a d d h ir w rk y T al 30 4 34 ru Employees are empowered and have the autonomy to plan.11 Showing response regarding autonomy to plan. d c Ma ag r e dcc b a ` L v l c c E l y 5 1 6 17 3 20 6 0 6 2 0 2 Level 69 fb c f fbg c f f c c V ry ru f c Tru Par ly ru `bebf b c fc c fb e e c c c e ba`c c b e a bf dcc b a ` E l y ar w r d a d hav h au la . organize and do the work T al fb Graph 4. organize and do the work 20 15 Count 10 5 0 Employees Managers Inference: Majority of employees and HR Managers both feel that employees are empowered and have the autonomy to plan.

12 Showing response regarding the expectations from the employees 12 10 8 Count 6 4 2 0 Employees Managers Inference: Employees and HR Managers both of them feel that PMS gives an idea what is expected from employees and a very negligible number of employees disagree.Table 4. ihh t s u L v l h h i h E l y Ma ag r p 7 1 8 11 3 14 8 0 8 2 0 2 Level 70 qt h q qtv h q q h h V ry ru q h Tru Par ly ru ut ihh t s uh h p ih PMS giv a id a wha i l y h q hs h i q r c d fr ru T al 28 4 32 PMS gives an idea what is expected from employees Very true True Partly true Not true .12 Showing response regarding the expectations from the employees T al qt Graph 4.

Table 4.13 Showing response regarding PMS whether it allows employees to express their developmental needs PMS all w d v l y y ‚ xxy  y w‚ xyy w  €y x ƒ l y r h ir ru T al 3 0 3 ‚w T al ‚w Graph 4.13 Showing response regarding PMS whether it allows employees to express their developmental needs 12 10 8 Count 6 4 2 0 Employees Managers Inference: x y Ma ag r „ xyy w  € L v l y y E l y 6 1 7 11 3 14 7 0 7 Level 71 y ‚ ‚w… y ‚ ‚ y V ry ru ‚ y Tru Par ly ru x yy„ ‚„y €w y y w al d 27 4 31 PMS allows employees to express their developmental needs Very true True Partly true Not true .

Table 4.14 Showing response towards quality of work
A L v l T al
‘‰ ‡ ‡

Graph 4.14 Showing response towards quality of work

20

15

Count

10

5

0 Employees Managers

Inference: Majority of employees feel a sense of pride in quality of work except a few. HR Managers also feel the same way.

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10 3 13

3 1 4

1 0 1

0 16

Level

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Par ly ru

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f rid i

h quali y f w rk ru T al 30 4 34

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A sense of pride in the quality of work Very true True Partly true Not true

Chapter-5 Findings, Suggestions & Conclusion

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5.1 Findings:
a) Majority of the employees are familiar with the process of Performance Management System in Lenovo (India) Pvt. Ltd. Although 7% employees do not know that company has a formal system for Performance Management. b) Opinions of the respondents about the simplicity of the PMS are mixed. Majority of the respondents (70%) find it simple whereas others consider it to be moderately complex. c) It was found that half of the employees (50%) are satisfied with the current Performance Management System (PMS) whereas others are satisfied up to some extent or not satisfied. d) Majority of the employees feel that they get sufficient opportunity to take part in goal setting whereas 15% do not feel so. e) PMS is considered time consuming only by 20% of the employees whereas 67% employees do not consider it to be time consuming. f) Employees believe that PMS does not distract them from the other important activities whereas only 10% employees do not agree to it. g) Majority of the employees is satisfied with the rating system and some of them are not satisfied and have given some suggestion to improve it. h) Recognition given to high performers motivates the employees. i) Employees also have enough courage to discuss all the matters of their goals with the manager. j) It was also found that superiors help their subordinates at the time of need. k) Employees at Lenovo (India) Pvt. Ltd. believe the PMS is not biased. Majority of the respondents in the survey gave a negative response when asked whether it is biased whereas 10% of the respondents consider it to be biased. l) Employees consider it to be true that career paths are laid down with opportunities and limitations clearly specified.

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m) Employees also agree that line managers always discuss performances and targets with them. n) Lenovo (India) Pvt. Ltd. follows the process of performance management system effectively and efficiently. Most of the respondents agree that the appraisers communicate the expectations clearly and provide the role clarity which thereby reflects the effectiveness of the PMS. o) Employees are empowered and have the autonomy to plan, organize and do their work. It shows that employees have freedom to do their work in their own way. p) Respondents agree that total quality is the only key to sustained success. q) Employees get all sorts of feedback i.e. numerical, formal and informal. r) The most compelling factor for the employees¶ turnover was found to be the job insecurity and most to the employees gave more than one reason for the employees¶ turnover including unclear job role, less growth and dissatisfaction with pay. s) Employees also feel that work is not very well defined and some what it is defined. t) Some of the employees do not feel any kind of stress in the organization whereas others feel different kinds of stress i. e. work burden, less appreciation for work, criticism from superiors and less support from subordinates. u) A mixed response came with regard to the proper training, some employees agree that proper training is provided and some feel that it only fulfills the purpose. v) There is absence of 360 degree technique of appraisal. The relationship between employees and the executives is one sided. w) Extra achieved targets are being recognized and awarded at Lenovo (India) Pvt. Ltd.

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f) Peer evaluations conducted by the employee¶s co-workers may be initiated.2. The manual should spell out the complete guidelines of the performance management system. The management should provide with growth plan for each employee and follow it effectively and efficiently.5. The process. So management may conduct training programs based on the performance management system. appraisees. ·b) Performance appraisal should not be limited to incentives alone but should be made use for identifying training needs. e) Management should conduct regular sessions. c) The performance management system should spell out the growth curve of an employee. career developments and self improvement. g) In order to achieve better understanding and to develop skills. 76 . It should also be used for promotion and career growth. the role of the appraiser. HRD department and the reviewing officer should be made clear. h) The preparation of a comprehensive manual guideline giving the objectives of the system could be done. development and training programs are of absolute necessity. RECOMMENDATIONS/SUGGESTIONS: a) Special training and awareness programs should be conducted for the appraisers and the appraisees on the purpose and the benefits of Performance Management System. It should create consciousness and strive for self development. They are the ones who do the same work and must be aware of the co-workers performance. d) There should be a special committee which keeps a check on the Performance Management System and also address all the problems faced by the employees related to their performance management. group discussions and brain storming exercises with employees to know about their expectations from the PMS.

y Actual facts and figures should be considered for goal setting and there should be two way communications between manager and employees.5. peers and subordinates. y y Employees think that present PMS is subjective and it should be more objective. wherein ratings should be given by managers. y End date should be provided for the development plans. PMS should be more transparent as it is only one way now. 77 . The company should have a 360 degree appraisal system. There should be clarity of the parameters for ratings along with soft skills and hard skills specified.3 Suggestions from Employees Here are some of the suggestions given by employees y According to employees.

when effectively carried out. Performance Management is one of the key processes that. At Lenovo (India) Pvt. they should focus on certain aspects like societal perspective. If companies are to survive and prosper in information age competition.5. Performance Management system is commendable. Ltd. peer evaluations. It successfully recognizes and differentiates between high and low performance. The organization has a sound and effective Performance Management System. Increases the objectivity and accuracy of measurement of performance. Ltd. Hence. is effective as it incorporates the major aspects like direction. is indeed effective. Performance Management System drives Performance Excellence in the Organization. awareness. Performance Management system at Lenovo (India) Pvt. it is not considered as a mere routine affair but as a purposive developmental exercise. forming a special committee etc. 78 . However. It gives supervisors and subordinates an equal opportunity to express themselves under structured conditions. Thus. It is a key to Strategic success. Performance Management System at Lenovo (India) Pvt. Increases alignment between individual and organizational goals and increases the performance-reward linkage.4 CONCLUSION An organization's measurement system strongly affects the behavior of people both inside and outside the organization. Ltd. helps employees know that their contributions are recognized and acknowledged. Ltd.. brings about a feeling of transparency and fairness in the evaluation process. they must use measurement and management systems derived from their strategies and capabilities. Organization must keep up the good practices. It also helps in keeping a check on the performance by various follow up programs and provides various opportunities for self development. At Lenovo (India) Pvt. support and rewards.

My Learning 79 .

I learnt the complete process and gained a lot of useful insights on the performance management system. the various businesses of the organization and its various products and services. how they form their strategies.My Learning My internship at Lenovo (India) Pvt. My knowledge of subjects and books was not sufficient enough to provide me a clear view of what organizations are all about. Ltd was a great experience. Thus. Before starting the project I was totally naive of how complex the process of business world could be. how they achieve their goals and what possibly makes successful organizations. After a period of six weeks now I find myself in a much better position to explain what an organization and business is all about. I got an opportunity to work with the HR team. It was a great learning experience and also gained firsthand knowledge about the company and its activities from various top notches of the organization. which was very helpful and informative. the company. The study helped me to gain knowledge and exposure about the Performance Management System and its effectiveness. Here. the internship program provided me the platform to learn and experience the real business world and will now help me in better understanding of my academic subjects 80 . I learned about the personal computer industry. The company gave me an opportunity to do a study on the effectiveness of the Performance Management System. I learned to associate my academic knowledge with practical experience. It was indeed my fortune that I got associated with an organization which has a presence all over and is very much successful in its industry. During the study. I also got an opportunity to attend Open Forum in the company. In the internship program. I had hands on experience of various functions of the HR department.

where I would be able to associate them with reality. 81 . The internship program was an enriching experience indeed.

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