ORGANIZATIONAL DESIGN

and CHANGE
PIDILITE INDUSTRIES LTD.
MODULE 4:
Section 1: CASE STUDY
PIDILITE – Building Bonds
We are a part of you

Group 7 – Section C

Abeer Prateek Om – 18P122

Aman Jain – 18P125
Ankit Kumar Periwal – 18P128
Avni Bhasin – 18P131
Vikram Challa – 18P175
Vivek Goyal – 18P178
1.0 COMPANY BACKGROUND
Pidilite is a consumer centric company committed to quality and innovation. For decades, it
has been pioneering products for small to large applications, at home and industry, which
have forged strong bonds with people from all walks of life. [1] From adhesives, sealants,
waterproofing solutions and construction chemicals to arts & crafts, industrial resins,
polymers and more, its product portfolio is as diverse as it is ever-evolving. Today, its brands
are trusted household and industrial names, and it is the market leader in adhesives.
FEVICOL
The Ultimate Adhesive
Loved for its superior
quality, ease of
application and iconic
advertising, this synthetic
resin adhesive has made
its way to the hearts and
minds of millions.
Fevicol is India’s Most
Trusted Brand of
Adhesives
Pidilite’s biggest bond is
through the Fevicol family
of products. Fevicol has
become a household
name that is today
synonymous with
adhesives. The brand has
introduced many
innovative products
which have transformed
the way carpentry trade
operates in India.
M-SEAL
India’s leading epoxy
putty.
M-seal is a multi-purpose
sealant with 4 main
applications – sealing,
joining, fixing and
building. Its versatility and
ease of application makes
it commonly used across
multiple industry
segments, as well as
households (DIY) who can
use it to mend broken
articles, fill gaps, cracks
and plug leaks in pipes
and joints.
M-Seal is a great asset to
the plumbing industry
and is used by plumbers,
plumbing contractors,
TOP BRANDS (table 1) [2]
FEVICOL MR
Fevicol MR’s biggest
strength is its high bonding
strength. It is used to bond
a variety of substrates like
cardboard, paper,
polystrene, wood and other
material. Loved for its
superior quality, ease of
application and
distinguished advertising,
this synthetic white
adhesive has made its way
to the hearts and minds of
millions. The iconic brand is
trusted by consumers of all
age groups, and suits the
needs of children, offices
and households.
Fevicol is available in over 5
lakh outlets in India, and on
an average, 4 units of
Fevicol MR are sold per
second!
FEVISTIK
Fevistik pulls consumers out
of sticky situations.
There was a time when
adhesives were only
available in liquid form and
paper-to-paper sticking
meant sticky fingers and an
overall messy experience.
Pidilite, being the pioneers
in adhesive segment,
addressed these issue 20
years back through the
launch of Fevistik.
Fevistik made sticking clean
and convenient through its
innovative rotary gluestick
form. Today, Fevistik is
India’s highest selling glue
stick and is synonymous
with the category. It is
DR. FIXIT
Dr. Fixit offers comprehensive
system solutions for
Waterproofing a new home or
Repairing an existing one. The
product range includes wide
variety of new construction and
repair waterproofing solutions
for all critical surface areas like
Roof, External Walls, Structure,
Foundation, Internal Walls,
Bathrooms and Water Bodies.
This expert line of solutions,
supported by wide retail
availability, on-ground technical
team and easy-to-reach brand
helpline, aims to deliver on the
brand vision of Creating a Leak-
free and Damp-free India.
HOBBY IDEAS
A unique and complete
experience for art & craft
enthusiasts
There was a time when art &
craft lovers across India had to
make do with substandard
products to fulfil their creativity.
Good quality products were
either rarely available or
overpriced as these were mostly
imported. To fulfil this gap,
Pidilite launched Hobby Ideas in
February 2002 as India’s first
chain of art, craft and hobby
stores offering over 2500
products, expert advice and
exciting workshops.
It currently has 5 stores across
Mumbai and Pune. Hobby Ideas
enjoys a strong online presence
FEVIKWIK
This adhesive glue works
within seconds to repair
broken items, regardless
of what material it is,
metal, wood, plastic or
paper. Fevikwik is also a
perfect partner for all
home DIY and arts and
crafts projects. The best
part is, this instant
bonding adhesive even
works wonders on
expensive items like
jewellery, antiques and
electronics. Little wonder
that Fevikwik is the
country’s largest selling
instant adhesive
FEVICRYL
Fevicryl serves the needs
of hobbyists in their
creative pursuits
The race to win has
become so dominant in
our lifestyles, that this has
made us forget devoting
time to doing the things
we really love, our
hobbies. Fevicryl, one of
India’s biggest art & craft
brand, aims to rekindle
this passion with a wide
range of innovative
products that include
colours and accessories.
Fevicryl has been working
with women who have a
passion for art and have
helped convert some of
 auto mechanics and available in four convenient too via its them into successful
households (DIY) for pack sizes of 5g, 8g, 15g and website www.hobbyideas.in and professionals, or
repair and new 22g YouTube, Instagram, Twitter “artepreneurs”.
construction segments.

2.0 STAKEHOLDERS
The total number of employees as on 31st March 2018 was 5382. [3]

Pidilite’s major Stakeholders consist of:

2.1 USERS – It has the largest & most comprehensive influencer connect program in the
world. 95,000 furniture contractors are associated across 950 clubs in 821 towns. Field
marketing team meets ~2,000 contractors every day. Fevicol Champion’s club (FCC) is a
place for users to connect [4]
2.2 INFLUENCERS – It has a Digital portal to connect consumers with designers and
contractors. A Platform for sharing design ideas from contractors and interior designers
is used. Pidilite hosts 1L+ design ideas [4]
2.3 CONSUMERS – Pidilite is the most Trusted Brand 2016 (4th in Household). It is the
Buzziest brand of 2014. Abby Awards 2016 - Silver in Events and Experiential Public
Relations. Pidilite has two business segments – Consumer & Bazaar and Industrial
products. Through its products, various stakeholders of Pidilite include Woodworking,
plumbing, Home, office, Waterproofing, Stationery, Packaging, Labelling [4]
2.4 SHAREHOLDERS – Since Pidilite is a listed company, the company’s equity and
preferential shareholders are also its stakeholders
2.5 EMPLOYEES – The values and family culture of Pidilite is very prevalent in the Indian
context. Pidilite exhibits high ethical standards and promotes empathy towards its
employees.
2.6 DOMESTIC JY & SUBSIDIARIES – ICA, Nina Waterproofing, CIPY, Jowat, BESI,
PWSL [5]
2.7 Various people and societies Pidilite touch via its CSR activities

Pidilite is built on a philosophy that binds its people together. Pidilite’s growth is a “A story of
growing together”. Pidilite believes that together, it can create a high performance, innovative
Indian multi-national where it is a pleasure to work. At a professional level, people are constantly
encouraged to learn and think beyond convention. Responsibilities and challenges are handed over
at an early stage to spur their career graph. Individual differences are celebrated and encouraged.
The company’s values encourage every individual associated with the company to act as owners. [6]
The company encourages and celebrates cultural diversity. Whether it’s Navratri, Diwali or
Christmas, every festival is celebrated with equal gusto. All birthdays are celebrated by team
members. There is a special birthday lunch with the Directors where they spend time to interact
with Pidilitians and take their suggestions into consideration. Thus, all stakeholders are of equal
priority for Pidilite and they work in conjunction to provide solutions to its consumers and solve their
problems. [6]
The proof that Pidilite is maintaining its stakeholders is visible via the company’s performance. On a
comparable basis after reflecting accounting impact of GST, net sales grew by 17.0% (excluding sales
of Cyclo division which was sold by Pidilite USA Inc. in June, 2017). Pidilite’s Market Cap growing @
27% CAGR / Steady dividend pay-out. The financials show the company is undergoing robust
growth. Also, the attrition rate is very less in Pidilite. (Jayshankar Bhai, at the age is 86 is still working
at Pidilite. He has been with the company for 70+ years) [4]
 3.0 MANAGEMENT
3.1 Senior Management (TABLE 2)
Madhur Balvantray Parekh Chairman
 Mr. Bharat Puri Managing Director
Mr. Apurva Parekh Whole Time Director
Mr. Vivek Subramanian CEO Special Projects
Mr. Salil Dalal Chief Operating Officer, Emerging India
 Mr. Yogesh Anand President – Consumer Products, Maintenance Division
Mr. Sanjay Bahadur CEO, Construction Chemicals
Mr. Rahul Sinha President – HR
Mr. Sanjay Kumar Panigrahi Chief Customer Officer
 Mr. Prabhakar Jain CEO – International Business
Mr. Vivek Sharma Chief Marketing Officer
Mr. Manish Modi Chief Operating Officer - Special Projects
Shri Sabyaschi Patnaik President (Operations) and Director
 Mr. Nitin Chaudhry CEO – FV
Mr. Amol Ubhayakar President - Commercial & Purchase
Mr. Atul Bhatia President - Research & Development
Mr. Nilesh Mazumdar Chief Executive Officer, Construction Chemicals Retail
 Mr. Shree Nabar President – Research & Development (USA)
Mr. Pankaj Bhargava Chief Information Officer
Mr. Rajesh Balakrishnan Chief Executive Officer - Industrial Products Division
Mr. Rajesh Joshi Chief Executive Officer - ICA Pidilite
 Mr. Ajith Vasudevan Senior Vice President – Strategy
Mr. Chandramouli Venkatesan CEO, Special Projects
Anubhav Saxena President designate – Research & development
Mr. Giridhar Seetharam President – Sales & Marketing, Fevicol
 Pravin Digambar Chaudhari CEO – Special Projects
Shantanu Bhanja Chief Executive Officer – Consumer Products

(EXHIBIT 1) [7]

TABLE 3
Shri. Bansi S. Mehta Independent Director
Sanjeev Aga Independent Director
Uday Chander Khanna Independent Director
Meera Shankar Independent Director
A. B. Parekh Whole-time Director
Vinod Kumar Dasari Independent Director
A. N. Parekh Whole-time Director
Sabyaschi Patnaik Whole-time Director
Piyush Pandey Additional Director (Independent)

3.2 Organizational Mission & Values

3.2.1 Organizational Mission [8]
The company is built on a philosophy that binds its people together.
Its values are regarded highly and are followed to the T.
High Ethical Standards
Fairness & Transparency
Empathy & Respect
Act like owners

3.2.2 Firm Values

Pidilite has built the repute of a professional international organisation with the strength and values
of an Indian market leader. Whatever the endeavour, it is implemented the right way, with a thinking
that transcends short-term quarterly results to a sustainable long-term vision.

The 4 core values Pidilite believes in are:

1. High Ethical Standards

A zero tolerance to unethical dealings mandates that all legal and company laws, rules & regulations,
policies and procedures are scrupulously adhered to.

2. Fairness & Transparency

All information, communication and expectations are openly and honestly shared at all levels. This
creates mutual trust and respect.

3. Empathy & Respect

Be sensitive to, and listen and learn from people across all levels. Respect time and opinions.
Reprimand actions, not people.

4. Act Like Owners

Use the company’s resources wisely. Contribute to its growth as if it is your own. Focus on long term
goals rather than short term one.

These values are the basic, strong pillars on which the company operates and hence all employees
behave in unison of these. Pidilite provides work culture where everyone is respected and valued,
performance is nurtured, creativity and excellence are encouraged, leadership and teamwork are
rewarded. The management team is approachable, which makes it easy for people to work together
as one team and focus on the business and clients.

Pidilite is built on a philosophy that binds its people together.

At a professional level, people are constantly encouraged to learn and think beyond convention.
Responsibilities and challenges are handed over at an early stage to spur their career graph. Individual
differences are celebrated and encouraged. Every moment is invested in helping every employee
grow into an enterprising business leader.

The way and manner of functioning with clients, suppliers, all the inside and outside stakeholders, is
done in a fair and a transparent manner. There is no compromise with the ethical standards of the
company and every employee is to take care of the same.

4.0 JOURNEY OF PIDILITE [9]

THE BIRTH OF FEVICOL – 1959
Everything great starts small and Pidilite is no exception. The company started with a single factory
that manufactured only one product, Fevicol. This white synthetic resin adhesive was primarily
launched to make the lives of carpenters and woodworkers easy. Up until then, animal fat, which was
clumsy and cumbersome, was the only glue available.
COMMISSIONING OF MANUFACTURING PLANT – 1963
Barely four years after starting the company, the first modern manufacturing plant was established in
Kondivita Village, Mumbai. Today, this building houses the Corporate Head Office

ESTABLISHING BRAND PIDILITE – 1990

The name, Pidilite Industries Private Limited, was incorporated, thus taking the first step towards
brand recognition.

PIDILITE GOES PUBLIC – 1993

Pidilite was listed on the Bombay Stock Exchange.

FEVICOL MAKES IT TO THE TOP 15 – 1997

There’s no stopping now! Fevicol continues to win hearts, and market share, and is ranked amongst
the Top 15 Indian brands by FE Brandwagon Year Book 1997.

M-SEAL IS ACQUIRED. A NEW DIVISION IS SET UP - 2000

M-seal, a leading brand of epoxy compounds was acquired. This laid the foundation for a new
division, the company’s Maintenance Division.

DR. FIXIT – THE WATERPROOFING EXPERT! - 2001

Pidilite launched Dr. Fixit, an extensive range of Construction Chemicals, thus diversifying its product
range. Dr. Fixit was specially developed as a waterproofing solution to be used in new constructions,
or in the repair of old ones.

TRULY A WINNER – FEVICOL WINS AT CANNES - 2002

The famous Fevicol 'Bus ad' not only won the hearts of the Indian people but also the world, going
ahead to win the Silver Lion award at Cannes Lions International Festival of Creativity 2002.

HITS THE RS.1000 CRORES TURNOVER MARK! - 2004

Just over 4 decades after its launch, Pidilite declared a turnover of Rs.1000 crores. The company had
grown 1000 times in just 45 years.

EXPANDING THE GLOBAL FOOTPRINT - 2006

Pidilite USA Inc., acquired businesses and assets of Sargent Art Inc., makers of art materials which had
been selling world-class art materials in USA for over 50 years.
Pidilite acquired Tristar Colman, now known as Colstar, a market leader in brushes, canvases and
colours.
Pidilite established its Singapore R&D centre to attract international talent and expand its product
innovation strategies.

ANOTHER YEAR, ANOTHER AWARD - 2016

Pidilite Industries received the 'Most Promising Company of the Year Award' at the CNBC-TV18, 11th
Indian Business Leader Awards (IBLA). The award is a tribute and testimony to the diligence of
Pidilitians all over.

5.0 DIVISIONS
The organisation has been differentiated into various business units based on the product or service
delivered by the segment. Thus the organisation follows a complex horizontal differentiation
structure. Pidilite has ventured into various business segments and maintains different segments for
handling each of these varied businesses e.g.: Industrial Adhesives, Pigments & Preparations etc. all
have their own hierarchy and structure. The different business segment as disclosed in the company
report are as follows: (EXHIBIT 2)
Figure 1

5.1 Product Solutions

- Adhesive Technologies
- Wood Finishes & Paints
- Waterproofing Solutions
- Automotive
- Technical Textiles
- MEP
- Tile Adhesives & Tile Grouts
- Wood Working

5.1.1 Adhesives Technologies:

Pidilite has been spearheading the market of adhesives with its water-based, solvent-based and
hot melt technologies. It caters to customers in the industry of packaging, book binding, tapes
and labels, cigarettes, product assembly, flexible packaging as well as footwear and accessories.
The products meet stringent regulatory and compliance norms like FDA, REACH, and ROHS
amongst others, which help make their customer base strong not only in the Indian subcontinent,
but also in the Middle-East and Africa.

They have a team of experienced technical service professionals working full-time to help give
hassle free solutions to their customers. The tie-ups with leading OEM suppliers, book-binders
and converting machinery manufacturers also help it offer customised solutions to every
problem.

5.1.2 Wood Finishes & Paints:

5.1.2.1 Wood Finishes:

Pidilite has a wide range of solutions for wood finishes needs of multiple categories of users and
consumers. The product portfolio ranges from basic wood polishing needs to advanced wood
coating solutions. The products cover the entire spectrum of wood coating process like
preparation of wood, sealing, tinting, and top coats.

Products targeted at mass market of wood coatings consists of anti-termite treatment, wood
fillers, sanding sealer, stains, and Melamine and PU top coats in single as well as two component
system. These cover the needs for good quality wood coating at affordable cost. Apart from
coating wooden furniture, many of these products are also used by handicraft units as well as for
DIY application by consumers.
5.1.2.2 Paints:

The range of painting solution for walls is specially targeted at semi-urban and rural India. They
have a good mix of product to offer for this consumer segment in India that wants value for
money solutions without compromising on quality. It offers premium distemper, lime binder and
strainers for giving these consumers a fresh and colourful look in their homes that is pleasant to
eyes but very affordable.

5.1.3 Waterproofing Solutions:

Solutions with the latest construction technology the Waterproofing Solutions Business caters to
customers seeking expert execution and proven integrated solutions for large scale projects. The
Large Users Business (PLUB) not only provides a range of innovative products and systems but
also specialized services. These are aimed at enhancing skill sets, knowledge capabilities and right
construction practices.

5.1.4 Automotive:
Autocross is an essential brand of Pidilite and offers a range of adhesive solutions for the
automotive as well as general industries. These water based adhesives are MDC free as well as a
great replacement for solvent based products for application to foam-to felt and foam-to-foam.
The polyurethane adhesives for headliner, glass and panel bonding applications are excellent and
the anaerobic adhesive solutions for gasketing, thread locking and thread sealing applications are
of superior quality.

High demand for automotive components which are pre-coated with anaerobic adhesives has led
Pidilite to cater to this demand. Continuous training of its partners has enabled a high precision
application of adhesives on various components. AutoPro is ready to use, water based and a high
temperature resistant product.

5.1.5 Technical Textiles:

The comprehensive brand, Teknotex, includes binders, dispersants, thickeners, cross linkers,
finishing agents and aids used in coatings as well as adhesives for lamination. These are used in
segments of technical textiles like Hometech, Packtech, Indutech, Geotech, Sportech, and
Protech. Pidilite’s extensive range of products is designed to impart special attributes and
functionalities necessary for technical textiles. Besides this, we have a robust range of flame
retardant (FR) binders that meet international FR standards for automotive nonwovens.

5.1.6 Mechanical, Electrical & Plumbing :

From ultra-strong insulation adhesives to innovative low VOC and non-flammable lag coatings,
the Large Users Business (PLUB) offers a wide range of insulation adhesives, coatings, sealants
and solvent cements specially designed for commercial and industrial markets.

Over the years, Pidilite has gained a reputation for executing challenging projects in India and
abroad. Today Pidilite’s clients for MEP solutions include some of the most renowned
corporations from various industries across the globe.

5.1.7 Tile Adhesives & Grouting:

A pioneer in the area of tile adhesive manufacturing, Roff has a complete range of products for
various tile applications and care. From fixing tile-on-tile, fixing new tiles, different shades of
grouts for filling tile joints to tile cleaners. The range includes various adhesives that can be used
for high strength bonding of tiles on various surfaces like marble, glass, granite and stone.
 We know the importance of using the right type of grout with correct ancillary products and have
designed a wide range of solutions that perfectly complement any and every tile and surface

5.1.8 Wood Working:

In today’s fast paced world, the demand for mechanized furniture units has increased manifold.
This is mainly due to buyers’ time constraints, house renovation timings in urban societies, the
need for a hassle and dust free environment and easy funding available for setting up furniture
units. The products are used in joineries ranging from chair and sofa manufacturers to modular
kitchen producers. It offers a variety of adhesive solutions for surface lamination, edge banding,
PVC membrane and solid wood bonding. The brand, Fevicol SWR, is the first choice for joineries
which makes it the market leader in the ‘D3’ category of adhesives. In a short span of 3 years,
Fevicol Hot melts has been approved by major machine manufacturing companies, gaining their
loyalty.

For PVC door manufacturers, Fevicol Membrane has proven to be the perfect solution. It also
provides adhesives for WPC/PVC applications, D4 grades for solid wood bonding and products for
specialized niche applications. Another product which has proven its performance in all chair and
sofa manufacturing problems is FEVICOL FASTTAK.

5.2 Service Solutions

- Waterproofing
- OEM

5.2.1 Waterproofing:

Pidilite’s Large User Business offers a range of products that provide comprehensive system
solutions, ensuring durable construction. The Large Users Business team offers a range of
customizable System Solutions under the brand name of Dr. Fixit that addresses almost every
surface such as basements, podiums, wet areas, water-bodies, terraces, roofs and external walls.
It also offers Green Building Solutions that permanently weatherproofs roofs and acts as an
insulation from outside which in turn leads to high energy savings. Pidilite is also the foremost
expert for providing solutions for Water Bodies and Clean Room Applications in Waterproofing.

5.2.2 OEM:

There is an increasing requirement for OEM components which are pre-coated with anaerobic
adhesives. At Pidilite, it caters to this shift in customer demand by working closely with
component manufacturers and equipping them with state-of-the-art infrastructure. Continuous
training and skilling of our partners enable high precision application of adhesives on various
components.

Pidilite has launched pre-applied products which are being used by most automotive and tractor
manufacturers. AutoPro pre-applied benefits are superior to the existing technologies that are
ready to use and high-temperature resistant to work under varying conditions.

6.0 ORGANIZATIONAL HIERARCHY & STRUCTURE

Pidilite follows a hierarchical organizational structure. The Board of directors comprises of 12 Board
members with 3 full time directors, 5 independent directors, 1 additional director, 1 managing director,
1 vice chairman and 1 executive chairman.
Mr Bharat Puri is the CEO and Managing Director of Pidilite Industries Limited and leads a team of 25
senior management members in charge of the various businesses and departments of the Pidilite
company.

Each senior management personnel lead his own team of subordinates within his vertical.

Pidilite Industries Limited was started in 1959 as a single factory producing Fevicol for the local market.
In 1990, The name, Pidilite Industries Private Limited, was incorporated, thus taking the first step
towards brand recognition.

Since its inception, the company has maintained a fairly simple hierarchical structure with deeply
rooted family value base system. As the company grew, it diversified into different chemical products
and verticals and realised the need to incorporate a more robust hierarchical structure in order to
manage the complete business. The current organizational setup is a result of various iterations to the
structure of the company which has been in sync with the growth and the vision of the company.

Pidilite Industries Limited has a Hybrid structure (Functional & Product Division). Being a vast Indian
company, a single organizational structure cannot be applied and followed, hence, a Hybrid structure
is followed and implemented.

Figure 2

Pidilite has a perfect structure playing well for it. The kind of growth and stability that the company
has seen over the last so many years is unmatched in the industry and even post a few decades, it
maintains its leader position in the industry.

Such a vast and complex company cannot have a single or unified structure. Due to its various
divisions and numerous products, the hybrid structure that it follows suits it and hence works well for
it. However, if something has to be suggested, we suggest that the company follow a multi-divisional
structure.

Pidilite is known for its to brand divisions. To maintain the market position that it has, it needs to
continually revise and update its brands and products. For this, each separate division should hence
be monitored. Brands like Fevicol, Fevikwik, etc. should have their separate divisions so that focus is
solely on them.
7.0 INTER-ORGANIZATIONAL LINKAGES

Figure 3

7.1 Pidilite Industries Ltd, has entered into a collaboration with Jowat SE, a German family-owned
enterprise and one of the leading suppliers of industrial adhesives worldwide. As part of the
collaboration, Pidilite will now exclusively handle sales and distribution of the entire range of Jowat
adhesives in India and other neighbouring countries including Sri Lanka, Bangladesh, and Nepal. In
addition to this, the two companies have also entered into a technical collaboration encompassing the
high growth, specialised category of Hot Melt adhesives. This will provide a comprehensive range of
Thermoplastic Hot Melt adhesives for use in several industrial, and modular and other wooden furniture
segments.

7.2 ICA, an Italian leading manufacturer of high-end wood finishes, formed a 50-50 JV with Pidilite, with
the aim of manufacturing and distributing wood finish products and accessories. ICA’s technological
expertise combined with Pidilite’s sales and marketing would offer the best-quality wood finishes.

7.3 Nina Waterproofing Systems Pvt. Ltd., a subsidiary of Pidilite, is India’s largest turnkey specialist
waterproofing solutions provider, with over five decades of experience & expertise in providing cutting
edge technology.

7.4 Pidilite along with Fevicol Company Ltd. (wholly owned subsidiary of the Company) jointly acquired
70% Stake in equity shares of CIPY Poly Urethanes Pvt. Ltd (‘CIPY’) is engaged in the business of
manufacturing and selling of floor coatings using polyurethanes, epoxies, polyurea and polyaspartic
polymers. This acquisition will help to participate in the growth of the resin flooring and floor coatings
market.

7.5 Building Envelope Systems India (BESI) is a subsidiary of Pidilite, specializing in polyurethane foam
and self-adhesive membranes for waterproofing. They have two manufacturing units in India in Kochi
& Vizag.

7.6 Percept Waterproofing Services Limited (PWSL) is a subsidiary of Pidilite. It provides waterproofing
and heat insulation services to the construction industry, including both new projects and maintenance
services for buildings, factories, institutions, industries and infrastructure.

Over the years, Pidilite has collaborated with leading suppliers in order to remain a leading player in
most of the product categories it operates in. These strategic alliances have been in sync with Pidilite’s
long term strategy of becoming one of the biggest names in specialty chemical business.

We believe that the organization has selected relevant linkage mechanisms which allow it to grow both
organically as well as inorganically. It has acquired companies, which it believes will help it foray into a
new business segments. On the contrary, it has ventured into a partnership with certain international
companies in order to expand its presence in different markets as well as make use of the expertise of
these companies in order to develop new and innovative solutions.

Apart from this, Pidilite, prides itself in having strong relationship with its suppliers and distributors.
Some of the relationships it shares with such different stakeholders, dates back to 50 years. Pidilite is
built on a philosophy that it binds its people together and this has been deeply engrained in its
relationships with its suppliers and distributors.

8.0 ORGANIZATIONAL STRATEGY

Pidilite Industries, one of the biggest companies in the adhesives industry, has stuck to its core
competency of manufacturing various kinds of adhesives used across different industries. With a
portfolio of brands including Fevicol, Dr Fixit, M-Seal and Fevistik, the company has been able to carve
out a market share of lose to 45% in the adhesives and sealant market.

Functional Level Strategies:

Figure 4

Business Level Strategies: Pidilite possesses deep and wide moats in its core consumer bazaar
business, with brand Fevicol enjoying generic status in the adhesive’s category. Near-monopoly
position (with 70% market share in adhesives), unmatched brand equity and recall, innovative
advertising campaigns and strong influence over trade bestow superior pricing power to Pidilite.

Pidilite’s success, is the result of a clear three-pronged focus—on brand-building, on the spirit of
innovation and on maintaining strong relationships with customers. Simply put, Puri has inherited a
strategy that works—one he has to continue to employ and build on.

Ways to improve its core competences:

 Be prepared to take on headwinds of Rupee Depreciation and Higher prices of vinyl acetate
monomer or VAM
 Innovate and follow product development strategies to cater to the needs of people
 Reduce dependency on Fevicol and focus on other products as well for sustainability
 Leveraging its JVs and subsidiaries to expand into global regions and reach out unexplored
markets
 Build brand equity and be irreplaceable to its customers

Yes, Pidilite is pursuing product development strategies to fill in the gaps in the market and innovate
to make these products available to the consumer.

 Textile and Paper Chemicals

 Industrial Resins
 Leather Chemicals
 Industrial Adhesives
 Footwear Adhesives
  Organic Pigments and Preparations
 Industrial Bonding Solutions
 Maintenance, Repair and Overhaul

So, Pidilite continues to innovate and bring new products in the markets. Further, its marketing
teams does justice with the product by catchy advertisements and promotion activities.

9.0 ORGANIZATIONAL CULTURE

At PIL-IP, they share close bonds not just with our customers but with each other too. We celebrate a
culture rooted in openness and mutual respect. Close collaboration and teamwork play an integral
role in our company’s performance, our every achievement being the direct result of these core
values.

As an equal opportunity employer, Pidilite recruits people purely on the basis of merit. We recognise
that a diverse workforce will deliver diversity in thought, innovation, and customer care. We welcome
the exchange of diverse ideas for this only enriches our performance and boosts our growth. Attracting
and retaining talented individuals of all backgrounds is important for us. And so, we take care to create
an all-inclusive culture that provides ample opportunities for career development and success for all.

At a social level, we constantly add newer facilities and attractions to ensure a day at work is far from
monotonous. From recreational facilities to a convenience store, we try to make life easy. Every
department within the company also organises an annual informal gathering to encourage interaction
between team members.

 Time Out - Play makes work more fun.

People at Pidilite find much needed relaxation and rejuvenation within the premises itself. The
Kondivita office complex in Mumbai houses a recreational centre that includes a host of recreational
activities
 Stay Fit
Work hard. Work out harder. A fully-equipped gym on the premises ensures that you don’t skip your
fitness regime.
 Make a splash
There’s nothing like a dip in the pool to start your day. Or to dissolve your stress at the end of it.
 Get sporty
From table tennis to carom, test your sporting skills with your colleagues’. Rest assured, there’ll never
be a dull day at work.
 Make new bonds
With a multi-cuisine canteen that seats 250 employees at a time, making new friends and building
lasting bonds becomes that much easier.
 Knowledge Is Power
Interesting reading creates engaging conversations. A vast repertoire of fiction and non-fiction books
spanning across various genres, topics and subjects keeps our people entertained and updated.
 Daily Essentials in The Compound
A convenience store that offers everyday essentials to save your trip to the grocery store.
 Celebrating Togetherness
When it comes to celebrations at Pidilite, all are welcome.
We encourage and celebrate cultural diversity. Whether it’s Navratri, Diwali or Christmas, every
festival is celebrated with equal gusto. All birthdays are celebrated by team members. There is a
special birthday lunch with the Directors where they spend time to interact with Pidilitians and take
their suggestions into consideration.

Pidilite has the soul of an Indian company, and believes that the past is just as important for growth as
the future. While it continues to nurture its employees, it also values the contribution of those who
no longer work with it. Every two years we organize Smriti Milan – a celebration of those individuals
whose were once part of the Pidilite family, and who have played a role in making the company what
it is today.
Pidilite is also known for its vigorous trainings and programs.
Training is of growing importance to organisations seeking to gain an advantage among competitors.
The most positive benefit of training is the creation of a workforce that is better equipped to handle
their responsibilities. Employees are more loyal to companies that value their growth and give
importance to cultivating it. This ensures better employee performance and a decrease in the rollover
rate at any company, no matter how small or large.

10.0 FUTURE IMPACTS IN THE INDUSTRY

The business environment of Pidilite Industries Limited is quite dynamic, vast and complex. Yet, the
company has been able to take care of it quite well.

The factors that affect the company are:

External and Internal Factors [10]

i. Economic environment
ii. Political Environment
iii. Manufacturing Industry
iv. Adhesive Market
v. Indian & International Subsidiaries
vi. Growth rate
vii. Capital markets
viii. Inorganic growth plans
ix. Statutory provisions and guidelines
x. Dividend pay-out ratios across industries
xi. Working capital requirements
xii. Business expansion and growth
xiii. Company’s liquidity position and future cash flow requirements
xiv. Additional investments in subsidiaries and associates of the Company
xv. Current year’s profits and future outlook in light of the development of internal and
external environment
xvi. Prevailing Taxation Policy or any amendments expected thereof, with respect to Dividend
distribution ix. Operating cash flows and treasury position keeping in view the total debt
to equity ratio
xvii. Providing for unforeseen events and contingencies with financial implications xii. Such
other factors and/ or material events which the Company’s Board may consider
xviii. Etc.

All these factors, along with others, together form a complex business environment for Pidilite. The
effect of these forces on the complexity and dynamism of the environment is quite severe and
essential. All these factors, in different ways, have a cascading effect on the company. For example,
the political environment could affect the tax rate on the manufacturing industry as well as on the
corporate tax rate. Similarly, the international economic growth rate as well as the export/import
conditions and regulations also determine how the international subsidiaries of Pidilite will perform.

The competitors [5] such as UltraTech Cements, Ambuja Cement, Shree Cement, etc.; customers,
distributors, suppliers, unions and the Government form the task environment of Pidilite

The:

1. Economic
2. Technological
3. Political, Legal, Ethical, Environmental
4. Demographic, Social, Cultural

Forces form and affect the General Environment of Pidilite Industries Limited.
We will quickly have a brief outlook of the environment that the company operates in currently and
how different forces are affecting Pidilite.

- The GST regime is stabilizing and is expected to have a positive influence on the Company’s
business in the long run. [10]
- The prices of raw material and packing material have further increased. The Company will
take necessary steps to mitigate this increase. [10]
- The major subsidiaries in India are taking initiatives to improve the market shares in their
respective businesses. [10]
- The Company’s major international subsidiaries are in USA, Brazil, Thailand, Egypt, Dubai and
Bangladesh. The business environment in some of these countries remain subdued. However,
the management is taking various steps to improve the performance of these subsidiaries. [4]
- The Indian economy provides a large opportunity to the Company to market its differentiated
products. [10]
- Higher growth in select global economies could provide a boost to exports. Slower growth of
the Indian economy could impact the performance of the Company. [10]
- Overseas subsidiaries by virtue of their relatively smaller size remain vulnerable to the
political and economic uncertainties of their respective countries. [10]
- With the Goods & Services Tax (GST) now getting streamlined, management expects
conversion from unorganized to organized trade to be faster in adhesives than in staples.
Strict tax compliance norms are expected to test the survival of unorganized (~30% of the
market) and even smaller players. Margins might come under pressure in the near term
owing to commodity cost inflation. [11]
- Although the furniture replacement cycle has come down to 5-7 years, penetration of
furniture in India – more so in smaller cities and rural areas – remains relatively low compared
to global standards. However, rising disposable income of the fast-increasing middle-class
population is likely to drive demand for panelling, wardrobe, and cupboards, among others.
This, in turn, could boost demand for adhesives.
- On the international business (10% of sales) front, the company intends to learn from its
business experience in the US and Brazil. PIDI will not be making further investments in its US
and Brazil businesses. Against this backdrop, PIDI will now be focusing on emerging markets
like South East Asia, Middle East, Bangladesh and Thailand. [11]
- The company’ overseas subsidiaries posted a subdued revenue growth of 3% YoY on constant
currency. [12]

Some of the other uncertainties and threats include: [12]

- Low growth in adhesives sector: Pidilite has over-dependence on the adhesive and sealants
sector which has registered an annual growth of 4 percent on 2016 and this is expected to slow
down since it has been impacted by the fluctuations in the macroeconomic environment.
- Low Growth in chemical industries segment: Sales growth in other segments like paint chemicals
and art & craft supplies have also declined which indicates that the company may need to look
at newer product categories for survival.
- Real Estate Slump: Sales growth in the domestic subsidiaries in the waterproofing solutions
indicated a sharp decline because of the real estate slump.
- Dependence on other low growth sectors: Many of the product categories of Pidilite are
dependent on sectors like manufacturing and construction which are facing periods of
low demand lately. These can become threats to the company eventually.
Evaluating the current happenings and the effect that they have on the company, it is safe to say that
Pidilite has a moderate level of uncertainty in the business environment. Over so many years, it has
learnt how to mitigate its risk and take care of how to cushion any blow.
EXHIBIT 1
EXHIBIT 2
REFERENCES (CASE)
[1] http://www.pidilite.com/about-pidilite/
[2] http://www.pidilite.com/our-brands/
[3] http://www.pidilite.com/wp-
content/uploads/2018/08/ANNUAL-REPORT-2017-
18.pdf
[4] file:///C:/Users/ankit/Downloads/SE-Intimation-
Investor Presentation_19.09.2018%20(1).pdf
[5] http://www.pidilite.com/subsidiary-companies
[6] http://www.pidilite.com/about-pidilite/
[7] http://www.pidilite.com/leadership-team/
[8] http://www.pidilite.com/why-pidilite/
[9] http://www.pidilite.com/about-pidilite/
[10] -
https://www.nibusinessinfo.co.uk/content/organisation
al-structure-product
[11] - http://www.pidilite.com/wp-
content/uploads/2018/08/ANNUAL-REPORT-2017-
18.pdf
[12] - https://www.business-
standard.com/company/pidilite-inds-3219/peer-
comparisons/competition/7
[13] -
https://www.motilaloswal.com/site/rreports/63657305
3254242094.pdf
[14] - https://www.fundsindia.com/blog/wp-
content/uploads/2018/02/Research-Report-Pidilite-
Industries-Ltd..pdf?x96223
 MODULE 4:
Section 2: ANALYSIS

11.0 INTRODUCTION
The purpose of this section is to analyse the information gathered about Pidilite and analyse it with
the help of frameworks that help us analyse Pidilite as an organizational theorist.

The Frameworks being used as part of our analysis of HDFC bank are mentioned below:

1. McKinsey 7 S Model
2. The Star Model by JAY R. GALBRAITH
3. Greiner’s model – Analysis of Firm growth
4. Bureaucratic theory by Max weber

11.1 McKinsey 7 S Model

The McKinsey 7-S model involves seven interdependent factors which are categorized as either
"hard" or "soft" elements:

HARD ELEMENTS SOFT ELEMENTS

Strategy Shared Values
Structure Skills
Systems Style
Staff

"Hard" elements are easier to define or identify and management can directly influence them: these
are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more
influenced by culture. However, these soft elements are as important as the hard elements if the
organization is going to be successful.
The model is based on the theory that, for an organization to perform well, these seven elements
need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to
be realigned to improve performance, or to maintain alignment (and performance) during other types
of change.

11.1.1 Strategy: The changes in leadership, innovation and advertising can be described as
evolutionary as it is a gradual change and the approach was built collectively. In an
evolutionary change, the senior management needs to be engaged, but they are not driving
the change. Leadership tends to empower people all through the organization to take on the
change. The change occurs in small chunks, and every person is to understand the change and
embrace it.

11.1.2. Structure: Pidilite Industries Limited has a Hybrid structure (Functional & Product Division).
Being a vast Indian company, a single organizational structure cannot be applied and followed, hence,
a Hybrid structure is followed and implemented.

11.1.3. Systems: The “Graduate Engineer Training Program” and “Young Leadership Program” are
used to induct the new employees into the organization and hence reward them basis their
performance.

11.1.4. Shared Values: Pidilite’s core 4 values discussed above in section 1 (3.2.2) are deeply
integrated in the organization and hence all business strategies and processes are built accordingly.

11.1.5 Skills: A certain set of skills and qualities are desirable by the organization while employing
people. These skills are to be portrayed at all times to be in alignment with the requirement and
values of Pidilite.

11.1.6 Style: An oriented leadership style is followed wherein the employees are given the freedom
and space to take decisions and give ideas and hence innovate, thereby empowering them.

11.1.7 Staff: As per the annual report, on 31 March 2018, 5382 employees are currently working with
the organization.

The ‘Shared Values’ segment is in the middle because everything else in integration with these set of
values. After thorough analysis of the organization, we see that the 7S framework is in good alignment
with each other.

11.2 The Star Model by Galbraith

The organization design framework portrayed in Figure 1 is called the “Star Model™.” In the Star
Model™, design policies fall into five categories. The first is strategy, which determines direction. The
second is structure, which determines the location of decision-making power. The third is processes,
which have to do with the flow of information; they are the means of responding to information
technologies. The fourth is rewards and reward systems, which influence the motivation of people to
perform and address organizational goals. The fifth category of the model is made up of policies
relating to people (human resource policies), which influence and frequently define the employees’
mind-sets and skills.
11.2.1 Rewards: Fevicol Champions' Club (FCC) Is A Platform for Wood-Working Contractors to Come
Together as A Community for Their Personal & Professional Growth, Be Recognized for Their Efforts
and to Learn New Methods Bringing Them Growth, Both Socially & Professionally. Other than this, for
the employees, there are performance linked reward systems and bonus as well.

11.2.2 Processes: Information Flow is such that since the organization structure is Hybrid, both
product leaders and functional heads need all the information. However, for innovation based
thinking, the flow of information is relaxed and ideas can be taken up by anyone.

Also, for recruitment, the following procedure is followed:

a) Young Talent Management Program – a flagship program of Pidilite

b) Graduate Engineer Training Program
c) Internship
d) Management Trainee Program
e) Continuous Engagement

11.2.3 Strategy: The strategic goals of Pidilite involves change in innovation and leadership at a
dynamic level and keeping up with the pace of technology, customer demands and business
environment.

11.2.4 Structure: Pidilite Industries Limited has a Hybrid structure (Functional & Product Division).
Being a vast Indian company, a single organizational structure cannot be applied and followed, hence,
a Hybrid structure is followed and implemented.
11.2.5 People: Innovation drivers and change masters are required for Pidilite. Desirable qualities are:
a) Aptitude for independent and Innovative Thinking
b) Ability to build strong working relationships with team members
c) Enthusiasm to learn and improve
d) Passion to strive for excellence
e) Commitment to high ethical standards and the company’s goals
11.3 Greiner’s model – Analysis of Firm growth

Pidilite Industries was set up in 1959 by Mr. BK Parekh. The first phase of the organization was
characterized by creativity and direction. In this stage, the emphasis of the company was to create a
different product and add value. They didn’t want to go for something easy, but for things that were
difficult. Therefore, they decided to get into adhesives and dyeing products. There was a crisis of
leadership in this phase. Madhukar Parekh joined and headed the company in 1971 and today much
of the credit goes to him for turning a utilitarian product into one of India’s top brands.

The next stage of Pidilite was during 1975-85. The company had developed clear goals and direction.
Communication and control during this stage was mostly informal. The company didn’t have much of
a talent pipeline and were looking for professionals. This crisis called for need of delegation. They
came to a conclusion that the role of professionals from family should be at the strategic and
directional side and on the operational side, they would have a set of professionals.

The next stage of Pidilite was characterized by numerous acquisitions. In India, they acquired

companies such as M-seal, Steel Grip and Ranipal. On the overseas front, they acquired three

construction companies in Brazil, Singapore and Bangkok. All of them had technology that they
needed. These acquisitions also helped them establish a presence in these countries.

Currently, they want to grow in their core areas of business - adhesives and dyeing. There are enough
opportunities in Africa, Brazil and the Middle-East. They are specifically interested in emerging
economies. They are not interested in projects that are resource intensive.
11.4 Bureaucratic Theory:

A brief analysis of bureaucratic principles adopted by HDFC bank in designing their organization
structure is shown below:

1. Task specialization:

Job description of each position is clearly defined. Each department has a specific set of activities to
perform and decision making powers across departments are clearly defined.

Even within the department tasks are divided among the employees based on their functional
specialisations. The same is reflected in the Job listings submitted by Pidilite across various sites.

However, there is sufficient freedom, autonomy and scope for employees to go beyond their assigned
tasks and roles to innovate and grow.

2. Formal selection:

As an equal opportunity employer, Pidilite recruits people purely on the basis of merit. It
recognise that a diverse workforce will deliver diversity in thought, innovation, and customer
care. And so, we take care to create an all-inclusive culture that provides ample opportunities
for career development and success for all. Not just that, no matter if you’re fresh out of college
or a seasoned professional, at Pidilite we appreciate the knowledge and expertise every member
brings to the team.

3. Hierarchical authority:

As mentioned, Pidilite has a set reporting structure for all their employees, the performance of each
level in the organization is in the hands of the management directly supervising their activities. This is
reflected in the performance management system of Pidilite. The company has laid down guidelines
for employees to fill their KRAs. The supervising manager is also responsible for tracking the fulfilment
of required targets, rate the employee accordingly and identify training needs.

4. Rules and requirements:

HR and administrative policies of Pidilite are well defined and present in written format. There are also
set administrative procedures for employees that guide flow of information within the organisation and
work procedures. Policies for code of ethics/conducts, code for corporate governance, compensation
policy, HR policies etc. are present on the Pidilite website for public view. A review of these policies
highlights the company’s inclination towards this bureaucratic principle.
5. Impersonal:

A review of code of conduct/ethics shows how Pidilite has defined expectations and qualities from its
employees. The code of conduct clearly mentions that Pidilite expects their employees to not indulge
in any form of nepotism or favouritism, non-ethical or non-transparent and asks them to maintain a
working environment which is fair and non-discriminatory. It also lays down guidelines for tackling and
reporting any conflict of interest that may arise while performing one’s duties. These steps show the
focus of the organization in creating a work environment that is free from emotions, feelings and
personal involvement.

6. Career orientation:

As previously mentioned, the selection of new employees in Pidilite is based primarily on merit and
educational qualifications. The same is reflected in how employees are promoted within the
organization.

Pidilite as an organization has followed some principles of Weber’s theory of management also called
bureaucratic theory. His theory stresses on strict rules and a firm distribution of power.

"Precision, speed, unambiguity, knowledge of files, continuity, discretion, unity, strict subordination,
reduction of friction and of material, and personal costs – these are raised to the optimum point in
the strictly bureaucratic administration," said Weber.

But Pidilite believes in an open organization as mentioned by its founder, Shri Balvantray Kalyanji
Parekh. Some of the testimonials by the employees working at Pidilite show how flexible the work
culture is, how open they are to new ideas and how every employee’s voice is heard.

Testimonials by the employees:

“Great and unique feature of Pidilite is voice of an employee at any level is heard by even senior team
and the implementation is quick”

- Anita Pillai, Team Head, IT Applications

“Collaboration is a Super-skill, I learned here, where the ability to pick simple ideas and make them
concrete, accessible and incredibly powerful”

- Dr. Ashish Chamankar, Chief, Technical Services

“Pidilite provides work culture where everyone is respected and valued, performance is nurtured,
creativity and excellence are encouraged, leadership and teamwork are rewarded.

The management team is approachable, which makes it easy for people to work together as one team
and focus on the business and clients.”

- Sushant Bhagat, Team Head – Marketing Manager,

International Operations

Not all principles of Bureaucratic theory apply to Pidilite, though there is a hierarchy in terms of defining
the roles of employees, independence is given to them to foster innovation.
Pidilite also has a Young Talent Management(YTM), a structured platform which enables talented
students from diverse fields like Business, Research and Technology to work on live projects within
the realms of Marketing & Sales, Supply Chain Management, Finance as well as Research.

So with these Pidilite can be said to be least bureaucratized organization which has a role to play in its
success story.
REFERENCES (ANALYSIS)
[1]
https://www.mindtools.com/pages/article/newSTR_91
.htm
[2]
http://www.jaygalbraith.com/images/pdfs/StarModel.
pdf
[3] http://www.pidilite.com/wp-
content/uploads/2018/08/ANNUAL-REPORT-2017-
18.pdf
[4]
https://www.toolshero.com/management/bureaucrati
c-theory-weber/
[5] http://www.pidilite.com/working-with-us/
[6] https://www.business.com/articles/management-
theory-of-max-weber/