TERM PROJECT

Sales Force Management

Submitted By:

Atif Iqbal

Ahmed Shoib

Submitted To:
Sadiq
Date:

Babar Aziz

Mr. Imran

20 - 02 -2015

Disclaimer

This project report has been prepared by the authors as

Students of Sales Force Management in "University of
management and Technology Lahore" with co-operation of
the staff of International Petrochemicals Pvt Ltd, for
academic purpose only. The views expressed in the
report are personal to the students and do not
necessarily reflect the views of IPC or any of its staff or
personnel and do not bind IPC in any manner. This
report is the intellectual property of the university and
IPC and the same or any part thereof may not be used
in any manner whatsoever, without express permission
of the mentioned authorities in writing.

Acknowledgments

Our first and sincere appreciation goes to Mr. Imran Sadiq, our
subject
Instructor, for all we have learned from him and for his continuous
help and
support in this project. We would also like to thank him for being an
open person
to ideas, and for encouraging and helping us to shape our
interest and ideas.

Executive Summary

Organizational Structure is the base of any organization that plays a vital

role in the success or failure of any organization. Its like to old saying that
means that if the base is strong, the whole building constructed on it is
strong, but if the base is weak, the whole building is weak.
The
organizational structure can be tall or flat, complex or simple depending
upon the size of the organization, their business structure, the vision of the
management, etc.

In this project we would discuss the organizational structure of a company

called International Petrochemicals Pvt Ltd.
This company is a
multinational petrochemicals trading company that has offices in different
countries. We will also discuss their current sales force, sales revenue, etc.
At the end, we would provide some suggestions for the improvement in the
business structure to increase the sales. The project focus is mainly the sales
department.

Introduction
International Petrochemicals Pvt Ltd is a group of companies trading in raw
materials for various industries worldwide. It has been in this business since 1978
and it has offices and warehouses in Pakistan, Iran, Russia, U.A.E, China,
Mauritius, Seychelles, Vietnam and Brazil. The head office is in Pakistan where
they also have two fertilizer plants that are situated in Bhai Pheru and Multan. The
website address is www.ipchem.com.
Besides being a Fertilizers producer, IPC is involved in B2B business. In B2B, IPC
deals in petrochemicals that are obtained by cracking of Crude Oil. These
petrochemicals are used in the various industries including Tires, Rubber Products,
Leather, Plastic Pipes and Plastic Products, Lubricants and Greases, Fertilizers,
Paints, Varnishes, etc.

Overview of the Business Structure

Their offices in Iran, Russia, UAE, China and Vietnam act as sourcing offices who
purchase domestically produced petrochemicals and other industrial raw materials.
The head office in Model Town Lahore acts as the international sales office. The
other office is in Muslim Town Lahore that operates as the domestic sales office.
There are 30 sales persons sitting in the head office who are continuously engaged
in marketing and selling the petrochemicals purchased by the overseas offices. The
project focuses mainly on the International Sales.
The customers are established in the various countries including India, Bangladesh,
Malaysia, Indonesia, Philippines, Thailand, Turkey, South Africa, Kenya, Brazil,
Peru, etc. Once the deals are confirmed and the L/C is received, shipping orders
are sent to the related sourcing /overseas office who arrange shipments
accordingly.
Current Monthly Sales
The average monthly sales/revenue from the B2B business conducted by Model
Town office is about 8 Million Dollars/Month. The information of the sales of the
fertilizers that the company produces is handled by the domestic sales office in
Muslim Town.
Current Organizational Structure

The current organizational structure of IPC is extremely flat, in fact too flat to be
efficient enough to tackle the dynamic environment of the industry it operates in.
Just to give an idea, all the decisions from the hiring/firing of a sweeper to hiring
firing of a plant manager, from the purchase of a printer toner to the purchase of a
plant for factory, from the deal of $ 10,000 to the deal of $ 5,000,000, all the
decisions are taken by the Chief Operating Officer (CEO) of the organization. The
decision making power is not shared at all.
So, the rough structure of the organization is as follows:
Figure 1Current Organizational Structure

Chief Executive Officer

(CEO)
Country
Manager
(Iran)

Country
Manager
(UAE)

Country
Manager
(China)

Country
Manager
(Vietnam)

30 Sales Persons
(Head Office)

Plant
Managers
(2)

Issues in the Current Organizational Structure

Though the management is pretty much satisfied with the current structure as the
company is growing continuously, there are some critical issues that are being
faced because of such a flat structure.
As is apparent from the organizational structure, there is too much work to be done
by a single person (CEO). He is taking so much burden on himself that cant be
done efficiently and wrong decisions are made unintentionally which are strategic
for the most of times. The after effects of such decisions are felt for a long time
after the decisions are made. Some of those issues are as follows:
Lack of Proper Attention:
There are many aspects of the organization that are suffering because of the lack of
attention as the CEO has so much to do that some problems are bound to be
neglected. Since, the project is based on the sales of the organization; we would
focus only on sales.
The sales person has to approve the deal from the CEO no matter if it is minimum
quantity order or a very big one. In order to get the approval, the sales person has
6

to persuade the CEO in a face to face meeting that it is a lucrative deal and we
should grab this business. Only if the CEO approves, the deal is proceeded,
otherwise passed.
Now, the CEO is an extremely busy person, receiving calls from overseas offices,
plants, domestic office, and also he is having frequent visits from the 30 sales
persons from the international sales office. The most of the times, the sales person
has to wait outside his room and wait for his turn to talk to the CEO.
It is obvious that the CEO is tired of handling so many things at a time, and there
are people still waiting outside his room, there is too little time for the CEO to
listen to your complete proposal and make a decision based on complete facts and
figures. So what happens is, the deals are approved or rejected based on the mood
and the basic instinct of the CEO. It may sound unrealistic, but its true. If the
mood of the CEO is off, your deal is highly likely to be cancelled no matter the deal
is bringing a reasonable profit. And if the mood of the CEO is good, it is highly
likely that your deal is going to be approved on the minimum possible margins
(profit). Same is for the basic instinct, if the first feeling of the CEO is negative
about your deal, it is going to be rejected as you are not going to get option to
explain the details and persuade him.
No Standards of Profit and Payment Terms:
As mentioned above, there are no set standards for minimum profit or payment
terms for the deals to be approved. Many times, a sales person goes to the CEO
with full belief that the margin in his deal is good and the payment terms (L/C,
Advance, TT, etc) are also safe enough, but he gets a shock when the CEO
refuses to approve saying the profits are still low. So, the sales person is always
uncertain about the best price or the payment terms that results in the
communication gap between the customer and sales person and a lot of deals
are missed.
The Consequences of these Issues:
The above issues result in the following:

Loss of business deals

Low employee moral
Lack of motivation

Because of the above, the employee turnover rate in IPC is extremely high
because of which the experienced sales persons leave the organization which
could bring a lot of revenue on continuous basis. So, besides loss of current
business, the company is also losing the future business.
7

Recommended Organizational Structure

If we were the decision makers of IPC we would do the following:
Share the Responsibilities and Authority
We would hire some efficient and competent at the management level
(Directors) or we may promote some people from our current staff.
One Director would be handling the issues of all the overseas offices.
One Director would be handling the issues of both the plants.
We would also hire a Director of Admin with an authority of making
decisions involving a limited amount.
We would divide sales persons into teams of 10 persons each.
Each team would have a team leader and the team members would report
him.
Each team leader would report to the newly appointed Director Sales.
The team leader would be given the authority to approve deals of a limited
quantity/amount.
The Director Sales would be authorized to approve deals of a limited
quantity/amount that is higher than the limit of the Team Leader.
The deals that are bigger than the allowed quantity/amount for Director
Sales are to be approved by the CEO.
Standards of Profit Margins and Payment Terms:

We would specify a minimum percentage/amount of margin that is

must for the approval of any deal.
We would also specify some payment terms that is allowed to finalize
deals.
If any deal is having less profit than specified or different payment
terms, the approval would be needed from the CEO.

So, suggested organizational structure would be as follows:

Figure 2Recommended Organizational Structure

Chief Executive Officer

(CEO)
Directo
r
Admin

Director Overseas Offices

Country
Manage
r Iran

Country
Manage
r UAE

Country
Manage
r China

Country
Manage
r
Vietam

Director
Manufacturing
Plants
Plant
Manager
Bhai Pheru

Plant
Manage
r
Multan

Director Sales

Team
Leader
1

Team
Leader
2

Team
Leader
3

Sales
Persons
(10)

Sales
Persons
(10)

Sales
Persons
(10)

Since the project is based on the sales of the organization, the sales structure has
been explained in full details. However, the structure of the other departments can
also be changed following the similar criteria.
The Expected Results after the Changes in Structure
We believe that by following our recommended structure, the organization can
increase their sales by at least 25%. This is because of the following reasons:
Each deal would be given the maximum possible time and attention that
would ensure many more deals are saved from being lost.
The transparent set of rules of minimum margins and workable payment
terms would provide confidence to the sales persons while communicating
with the customers, enabling them to finalize more deals.
The motivation of sales persons would increase when they would be able to
finalize deals that were declined earlier, hence they would stay with the
organization and keep bringing in more revenue.