ORGANIZATIONAL BEHAVIOR (565)

AKNOWLEDGEMENTS

First of all, we are indebted to Al Mighty Allah who gave us courage and insight to
complete this assignment to the best of our capabilities and knowledge. The assignment
has been compiled throughout by experienced and intellectual support of officers & staff,
which readily and so kindly provided their guidance and assistance. Every ingredient of
this assignment bears the imprints of their suggestions and comments. We wish to express
our wholehearted gratitude to them for their timely & valuable assistance enabling us to
complete the assignment as per deadline.

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INTRODUCTION

Communication can be defined as a process through which organizations are created and
in turn create and shape events. The process can be understood as a combination of
process, people, message, meaning and purpose.
The term “communication” has been derived from the Latin word “communis” which
means common. It was Aristotle who, for the first time, brought about a systematic study
of the communication process. According to him, there are three essential elements in a
communication system, namely, the speaker, the speech, and the audience.
Communication strictly stands for sharing of ideas in common. The word
“communication”, however, has many and varied meanings. Popularly speaking, it refers
to the various means of transmitting information from individual to individual, individual
to a group of individuals or from one place to another. It is a transmission of messages,
ideas, methods, skills, and thoughts between two or more persons. It is a mutual exchange
of facts, thoughts, opinions or emotions by the use of symbols, words, pictures, figures,
graphs and so on.
Communication is the chain of understanding which permeates an organization from top
to bottom, from bottom to top, and from side to side, and which moves the organization
ahead towards its stated objectives. It is the cohesive force which holds the group
together.
Vardaman and Halterman opine: “Communication is the flow of material, information,
perception and understanding between various parts and members of an organization.”

In the words of Allen, “Communication is the transfer of meaning from one person to
another.” Mitchell goes a step further and observes, “Communication involves more than
just having the right information — the information should be believed, weighed
correctly, reach the right decision-makers and result in the appropriate action.” Rogers
and Rogers have reiterated this point of view. They opine “Communication is a process
by which an idea is transferred from a source to the receiver with the intention of
changing behavior.. ..Communication is made with the intention of achieving
results/change in knowledge, attitude and overt behavior.”

Communication is a process in which senders and receivers of messages interact in a

given social context. Interpersonal communication refers to the exchange of information
and transmission of meaning between two people. Organizational communication is the
subject that deals with the exchange of information and transmission of meaning
throughout the organizational hierarchy.

Since the leader or the manager accomplishes organizational objectives through people, it
is essential to communicate what the leader or the manager wants people to accomplish,
how to accomplish, where to accomplish and more important, why to accomplish. To
communicate the organizational philosophy, objectives, procedures, and practices to all
employees is not easy, because communication is a very complex phenomenon.

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In communication, the people must understand what they are trying to communicate; they
must be willing and able to understand them; they must accept their communication or
message or information or goals. Thus, all social phenomena are a function of
communication.

FUNCTIONS OF COMMUNICATION:

Communication serves four major functions within a group or organization: Control,

motivation, emotional expression and information.

Communication acts to control member behavior in several ways. Organizations

have authority hierarchies and formal guidelines that employees are required to follow.
When employees, for instance are required to first communicate any job related grievance
to their immediate boss, to follow their job description, or to comply with company
policies, communication is performing a control function. But informal communication
also controls behavior. When work groups tease or harass a member who produces too
much (and makes the rest of the group look bad), they are informally communicating
with, and controlling, the member’s behavior

Communication fosters motivation by clarifying to employees what is to be done, how

well they are doing, and what can be done to improve performance if it’s sup bar. The
formation of specific goals, feedback on progress toward the goals, and reinforcement of
desired behavior all stimulate motivation and require communication.

For many employees, their work group is a primary source for social interaction. The
communication that takes place within the group is a fundamental mechanism by which
members show their frustrations and feelings of satisfaction. Communication, therefore,
provides a release for the emotional expression of feelings and for fulfillment of social
needs.

The final function that communication performs relates to its role in facilitating
decision making. It provides the information that individuals and groups need to make
decisions by transmitting the data to identify and evaluate alternative choices.
No one of these functions should be seen as being more important than the others.
For groups to perform effectively, they need to maintain some form of control over
members, stimulate members to perform, provide a means for emotional expression, and
make decision choices. Almost every communication interaction that takes place in a
group or organization performs one or more of these four functions.

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THE COMMUNICATION PROCESS:

Before communication can take place, a purpose, expressed as a message to be

conveyed, is needed. It passes between a source (sender) and a receiver. The message is
encoded (converted to a symbolic form) and passed by way of some medium (channel) to
the receiver, who retranslates (decodes) the message initiated by the sender. The result is
a transference of meaning from one person to another.

The exhibit above depicts this communication process. This model is made up of
seven parts: (1) the communication source, (2) encoding, (3) the message, (4) the
channel, (5) decoding, (6) the receiver, and (7) feedback.

The source initiates a message by encoding a thought. The message is the actual
physical product from the source encoding. When we speak, the speech is the message.
When we write, the writing is the message. When we gesture, the movements of our arms
and the expression on our face are the message. The channel is the medium through
which the message travels. It is selected by the source, who must determine whether to
use a formal or informal channel. Formal channels are established by the organization and
transmit message that are related to the professional activities of the members. They
traditionally follow the authority chain within the organization. Other forms of messages,
such as personal or social, follow the informal channels in the organization. The receiver
is the object to whom the message is directed.
But before the message can be received, the symbols in it must be translated into a form
that can be understood by the receiver. This step is the decoding of the message. The final
link in the communication process is a feedback loop. Feedback is the check on how
successful we have been in transferring our messages as originally intended. It determines
whether understanding has achieved.

DIRECTION OF COMMUNICATION:

Communication can flow vertically and laterally. The vertical dimension can be
further divided into downward and upward directions.

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Downward
Communication that flows from one level of a group or organization to a lower
level is a downward communication. When we think of managers communicating with
employees, the downward pattern is the one we are usually thinking of. It’s used by group
leaders and managers to assign goals, provide job instructions, inform employees of
policies and procedures, point out problems that need attention, and offer feedback about
performance. But downward communication doesn’t have to be oral or face-to-face
contact. When management sends letters to the employees’ homes to advise them of the
organization’s new sick leave policy, it is using downward communication. So is an e-
mail from a team leader to the members of her team, reminding them of an upcoming
deadline.
Upward
Upward communication flows to a higher level in the group or organization. It’s
used to provide feedback to higher-ups, inform them of progress toward goals, and relay
current problems. Upward communication keeps managers aware of how employees feel
about their jobs, co-workers, and the organization in general. Managers also rely on
upward communication for ideas on how things can be improved.

Some organizational examples of upward communication are performance reports

prepared by lower management for review by middle and top management, suggestion
boxes, employee attitude surveys, grievance procedures, superior-subordinate
discussions, and informal “gripe” sessions in which employees have the opportunity to
identify and discuss problems with their boss or representatives of higher management.
For example, FedEx prides itself on its computerized upward communication program.
All its employees annually complete climate surveys and reviews of management. This
program was cited as a key human resources strength by the Malcolm Baldrige National
Quality Award examiners when FedEx won the honor.

Lateral
When communication takes place among members of the same work group,
among members of work groups at the same level, among managers at the same level, or
among any horizontally equivalent personnel, we describe it as lateral communications.
Why would there be a need for horizontal communications if a group or organization’s
vertical communications are effective? The answer is that horizontal communications are
often necessary to save time and facilitate co-ordination. In some cases, these lateral
relationships are formally sanctioned. More often, they are informally created to short-
circuit the vertical hierarchy and expedite action. So lateral communications can, from
management’s viewpoint, be good or bad. Since strict adherence to the formal vertical
structure for all communications can impede the efficient and accurate transfer of
information, lateral communications can be beneficial. In such cases, they occur with the
knowledge and support of superiors.

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But they can create dysfunctional conflicts when the formal vertical channels are
breached, when members go above or around their superiors to get things done, or when
bosses find out that actions have been taken or decisions made without their knowledge.

Diagonal Communication
This occurs when communication occurs between workers in a different section of the
organisation and where one of the workers involved is on a higher level in the
organisation. For example in a bank diagonal communication will occur when a
department manager in head office converses with a cashier in a branch of the bank based
on the high street.

INTERPERSONAL COMMUNICATION:

How do group members transfer meaning between and among each other? There
are three basic methods. People basically rely on oral, written and non-verbal
communication.

Oral Communication

The chief means of conveying messages is oral communication. Speeches, formal

one-on-one and group discussions, and the informal mill or grapevine are popular forms
of oral communication.

The advantages of oral communication are speed and feedback. A verbal message
can be conveyed and a response received in a minimal amount of time. If the receiver is
unsure of the message, rapid feedback allows for early detection by the sender and,
hence, allows for early correction.

The major disadvantage of oral communication surfaces in organizations or

whenever the message has to be passed through a number of people. The more people a
message must pass through, the greater the potential distortion. For example, if you ever
played the game “telephone” at a party, you know the problem. Each person interprets the
message in his or her own way. The message’s content, when it reaches its destination, is
very often different from that of the original. In an organization, where decisions and
other communiqués are verbally passed up and down the authority hierarchy, there are
considerable opportunities for messages to become distorted.

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Written Communication.

Written communications include memos, letters, electronic mail, fax transmissions,

organizational periodicals, notices placed on bulletin boards, or any other device that is
transmitted via written words or symbols.

Why would a sender choose to use written communications? They are tangible and
verifiable. Typically, both the sender and the receiver have a record of the
communication. The message can be stored for a indefinite period. If there are questions
concerning the content of the message, it is physically available for later reference. This
feature is particularly important for complex and lengthy communications. The marketing
plan for a new product, for instance, is likely to contain a number of tasks spread out over
several months. By putting it in writing, those who have to initiate the plan can readily
refer to it over the life of the plan. A final benefit of written communication comes from
the process itself. You are usually more careful with the written word than the oral word.
You are forced to think more thoroughly about what you want to convey in a written
message than in a spoken one. Thus, written communications are more likely to be well
thought out, logical and clear.

Of course, written messages have their drawbacks. They are time consuming. You
could convey far more information to a college instructor in a one-hour oral exam than in
a one-hour written exam. In fact, you could probably say the same thing in 10 to 15
minutes that it would take you an hour to write. So, although writing may be more
precise, it also consumes a great deal of time.

The other major disadvantage is feedback, or lack of it. Oral communication allows the
receiver to respond rapidly to what he thinks he hears. Written communication, however,
does not have a built-in feedback mechanism. The result is that the mailing of a memo is
no assurance it has been received, there is no guarantee the recipient will interpret it as
the sender intended. The latter point is also relevant in oral communiqués, except it is
easy in such cases merely to ask the receiver to summarize what you have said. An
accurate summary presents feedback evidence that the message has been received and
understood.

Employees’ Handbook: As business grows in size, management often turns to the use of
an employee handbook as a communication tool to inform employees on issues such as
company history and products, human resource policies, employee compensation and
benefits, training assistance, health services, safety, security, employee responsibilities,
and work standards. Handbooks are also useful to supervisors and administrators for
ensuring consistent implementation and enforcement of company policies.

These are intended to help in the induction of newcomers and to provide all the
employees with a clear-cut understanding not only of the general policies of the
management but also of the nature of the business, its sources of supplies, its customers,

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its products and the range of benefits and services available to its employees. Many
organizations publish illustrated handbooks, depicting cartoons, charts and photographs.

House Magazines and Newspapers: Some organizations maintain one or more

employee magazines or journals. These are meant to keep employees well informed of
the development in the business and to acquaint them with the personalities and activities
of the organisation. It can explain the policies of the management in easily understood
terms. House magazines contain news, and personal and social items. There may be
references to parties, marriages, births, retirements, honours and awards.

Financial Reports: Such reports describe the essential facts concerning the conduct
of business, its expenses and profits, its income and distribution of financial standing. of
the organisation and create understanding between the management and its employees.

Bulletin Boards: Usually, big organizations keep a bulletin board for 50 to 100
employees in attractive colours, types and formats. These boards contain a wide range of
material such as someone’s choice of cartoons from newspapers and magazines, pin-up
photographs, events in the lives of present or former employees and other items of
common interest.

Audio-Visual Aids: Sound films, movies, slides, tapes may be played back to the
workers. Such audio-visual aids have an obvious advantage of describing a company’s
range of operations and products, in illustrating how financial and other decisions are
made, or in explaining work rules.

Notice Boards: Notices are often pasted o the factory walls or gates or placed in glass
covered notice boards, and these are hung at appropriate places in the premises of an
organisation, near the canteens or factory gates. These notices usually depict abstracts as
desired under the various statutes as well as notices of the various institutions in the
establishment such as the sports club.

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Suggestion System: The suggestion system is designed to enlist the co-operation of

subordinates in effecting improvements and in eliminating waste and to provide an
avenue for a working communication with the management. Rewards are offered for
suggestions which results in greater productive efficiency. In some organizations,
“suggestion boxes” are located at convenient places throughout the plant.

Communication with Public and Government: Organisations educate the

public about their various activities through advertising, campaigns, meetings and
conferences. Organisations also establish and organize special groups to communicate
with the important segments of government.

Proper communication plays an important role in a large organization, and there has to be
a proper balance between the oral and written forms of communication. It need hardly be
said that the choice of any method depends upon the purpose to be accomplished and the
likelihood of its success. Quite often, it is better to use more than one method to convey
the same information so that one can reinforce the other.

Nonverbal Communication

Every time we verbally give a message to someone, we also impart a nonverbal

message. In some instances, the nonverbal component may stand alone. For example, in a
singles bar, a glance, a stare, a frown, and a provocative body movement all convey
meaning. As such, no discussion of communication would be complete without
consideration of nonverbal communication-which includes body movements, the
intonations or emphasis we give to words, facial expressions, and the physical distance
between the sender and receiver.

It can be argued that every body movement has a meaning and no movement is
accidental. For example, through body language we say, “Help me, I’m lonely”; “Take
me, I’m available”; “Leave me alone, I’m depressed.” And rarely do we send our
messages consciously. We act out our state of being with nonverbal body language. We
lift one eyebrow for disbelief. We rub our nose for puzzlement. We clasp our arms to
isolate ourselves or to protect ourselves. We shrug our shoulders for indifference, wink
one eye for intimacy, tap our fingers for impatience and slap our forehead for
forgetfulness.

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The two most important messages that body language conveys are (1) The extent
to which an individual likes another and is interested in his or her views and
(2) The relative perceived status between a sender and receiver. For instance, we are more
likely to position ourselves closer to people we like and touch them more often.

Similarly, if you feel that you’re higher status than another, you’re more likely to display
body movements-such as crossed legs or a slouched seating position-that reflect a casual
and relaxed manner.

Body language adds to, and often complicates, verbal communication. A body
position or movement does not by itself have a precise or universal meaning, but when it
is linked with spoken language, it gives fuller meaning to a sender’s message.

If you read the verbatim minutes of a meeting, you wouldn’t grasp the impact of
what was said in the same way you would if you had been there or saw the meeting on
video. Why? There are no records of nonverbal communication. The emphasis given to
words or phrases is missing.

Facial expressions also convey meaning. A snarling face says something different
from a smile. Facial expressions, along with intonations, can show arrogance,
aggressiveness, fear, shyness, and other characteristics that would never be
communicated if you read a transcript of what had been said.

The way individuals space themselves in terms of physical distance also has meaning.
What is considered proper spacing is largely dependent on cultural norms. For example,
what is considered a businesslike distance in some European countries would be viewed
as intimate in many parts of North America. If someone stands closer to you than is
considered appropriate, it may indicate aggressiveness or sexual interest; if farther away
than usual, it may mean disinterest or displeasure with what is being said.

It’s important for the receiver to be alert to these nonverbal aspects of communication.
You should look for nonverbal cues as well as listen to the literal meaning of sender’s
words. You should particularly be aware of contradictions between the messages. Your
boss may say she is free to talk to you about a pressing budget problem, but you may see
nonverbal signals suggesting that the is not the time to discuss the subject regardless of
what is being said, an individual who frequently glances at her wristwatch is giving the
massage that she would prefer to terminate the conversation. We misinform others when
we express one message verbally, such as trust, but nonverbally communicate a
contradictory message that reads, “I don’t have confidence in you.”

COMMUNICATION TYPES:

Internal/Organizational Communication

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This is communication that takes place within (or across) an organization. In addition to
the usual face to face, telephone, fax or mail; modern organizations may use technology
to communicate internally. Technology may be used for e-mails or a linked internal
communication system such as the intranet which is an internet system designed solely
for use by those working for the organization.

External communications

Conversely external communication is communication between the organization and

those outside the organization. Modern organizations may design technological systems
so that they can communicate with customers and undertake e-Commerce. Alternatively
they communicate with other businesses through the internet or similar systems and
undertake e-Business.

Functions of Internal and External Communications;

Technology has rapidly expanded the types of internal and external communication
available to organizations. The diagram illustrates the vast array of internal and external
communication available. Combined together internal and external types of
communications allow various sectors of the local, national and international community
to interact, liaise and conduct business.

OBJECTIVES OF COMMUNICATION

Communication is not an end in itself. There is no use of communicating just for the
sake of communicating. It is a means and a very effective means for the solution of
managerial problems and for attainment of managerial objectives. Since managers
work through others, all their acts, policies, rules, orders and procedures must pass
through some sort of communication channel. The purposes of communication are:
1 To develop information and understanding which are necessary for group effort?

2 To provide an attitude which is necessary for motivation, co-operation and job

satisfaction?

3 To discourage the spread of misinformation, rumours, gossip, ‘and to release the

emotional tensions of workers

4 To prepare workers for a change by giving them the necessary information in

advance.

5 To encourage ideas, suggestions from subordinates for an improvement in the

product and work conditions, for a reduction in time or cost involved and for the
avoidance of the waste of raw material.

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6 To improve labour-management relations by keeping both in contact with each

other.

7 To satisfy the basic human needs like recognition, self-importance and sense
of participation.

8 To serve auxiliary functions such as entertainment and the maintenance of social

relations among human beings.
The purpose of communication is to establish asocial environment that supports
effective interaction and to ensure that the workforce has the skills to share
information and co-ordinate their achievements efficiently

IMPORTANCE OF COMMUNICATION

Organizations cannot exist without communication. If there is no communication,

employees cannot know what their respective associates are doing, management
cannot receive information on inputs, and management cannot give instructions. Co-
ordination of work is impossible, and the organisation will collapse for lack of it. Co-
operation also becomes impossible, because people cannot communicate their needs
and feelings to others. Every act of communication influences the organisation in
some way or the other.
As such effective communication tends to encourage better performance, improves
job satisfaction, creates proper understanding, and develops feeling of involvement
among the people.
Chester Bernard (1938) has considered communication to be the “very first function”
of a manager and has viewed it as the shaping force which links people and purposes
together in any co-operative system. In the practice of management, Peter Drucker
(1954) has observed that the manager’s main instrument for operating his affairs is
information. The management process has widely been discussed as one which
embraces the functions of planning, organizing, leading and controlling, which are
intimately involved with and dependant on, communication. Organisational structure
is definitely tied to the communication systems. Communication is the key to
effective teamwork, for both are based on the common fundamentals of information,
understanding, consultation and participation. Communication is an essential skill at
every level of organisational functioning and for organisations of all types, whether
social, governmental, or commercial.
According to Miner and Miner’ there Ware four basic types of communication
network: (a) the regulative network ensures security, conformity to plans and the
achievement of productivity through the communication of policy statements,
procedures, and rules; (b) the innovative network is concerned with problem-solving
and change through such techniques as suggestion systems and meetings; (c) the
integrative network is directly related to consideration of employee morale and
organisational maintenance; and (d) the informative network relates to employee’s
effectiveness and productivity through a direct dissemination of information and
training programmes.

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RULES FOR COMMUNICATION :

A few basic rules should be followed in planning for and carrying out
communications of all kinds, written and oral, regardless of form or format.

• Clarity: To be effective, communications must be understood, and

to be understood, they must be clear.

• Brevity : It makes both written and oral communications easier to

understand. Only one idea should be used in a sentence.

• Simplicity: Short, simple words, phrases, and sentences should be

used. Every word should count. Extra words only serve to confuse.

• Precision: Precise words should be used.

• Integrity: Communication should always be used as a means,

never as an end.

During any major change programme, internal communication in an organisation is

extremely. Important. It must be borne in mind in this context that communication is
more than a dialogue. It builds on trust and openness among colleagues, and results
in common understanding of the organisational issues that have a long-term bearing
on the future of the organisation.

FORMAL AND INFORMAL COMMUNICATION

Basically, the two most important media of communication in an organisation are formal
and informal communications. Formal communications are those that are “official”, that
are a part of the recognized communication system of the organisation. A formal
communication can be from a superior to a subordinate, from a subordinate to a superior,
intra-administrative, or external. These communications may be oral or written. Informal
communication is those that are “outside” the formal, recognized communication system.
Informal communication originates spontaneously outside the formal channels and is the
natural responses to the need for social interaction.
Within the organisation, whatever its style or form, cohesive informal groups develop.
Extensive research has shown that these informal work groups have tremendous power in
shaping attitudes, behaviour, and consequently, production. They share a set of beliefs,

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values, and socially acceptable behaviours. In other words, group members come to
think and act in similar ways, and this encourages feelings of closeness among them.
In industry, at every level of organisational life, employees are bound together in
informal groups and develop a common set of norms. It is important to remember
that these groups are not established by the management. They are generally beyond
the control of the management, and they do not appear on the organisation charts.
The influence of informal work groups is pervasive, and they are vital parts of the
total organisational environment. They can work for or against the management, by
encouraging cooperation and increasing production or by sabotaging management
and slowing production. A major finding of Hawthorne studies was the revelation of
the ways in which these groups operate.
One of the characteristics of informal work groups is leadership. There are many
opportunities for conflict between the needs and goals of the informal work group
and the needs and goals of the organisation. If management is to deal effectively with
the informal groups, it must recognize their existence and try to understand them.
The informal group serves many needs of the workers. It can serve the needs of the
organisation as well, or it can defeat them. Often, the ideals and standards of these
groups conflict with those of the formal organisation. New employees who do not
conform to the group norms may be ostracized.
The information actually transmitted through the informal channels may be
inaccurate, distorted, a half-truth, a rumour, a gossip, or a private interpretation. It
spreads with an amazing speed like a wild fire. Davis observes: “It (grapevine)
cannot e abolished, rubbed out, hidden under the basket, chopped down, tied up, or
stopped.
If we suppress it at one place, it will pop up in another If we cut off one of its
sources, it merely moves to another one — quite similar to the way we change from
one channel to another on a television set....In a sense, the grapevine is man’s
birthright, because wherever men congregate into groups, the grapevine is sure to
develop. It may use smoke signals, jungle toms, taps on the prison wall, or ordinary
conversation, or some other method, but it will always be there.” No management
can ‘fire’ it because it does not hire it. It is simply there.
Though the grapevine thrives on rumours, it does serve some useful purpose. A
manager can utilize the grapevine as a positive aid, for a grapevine may turn out to be
a barometer for the management as to what is ailing the employees and what ought to
be done about it. It may be utilized to clarify and spread messages which the
management wishes to convey to its employees and to counter rumours and half-
truths by feeding them the real facts. Though they serve many useful functions, at
times, they become detrimental to the organisation.

FORMAL SMALL GROUP NETWORKS :

Formal organization networks can be very complicated. They can, for instance, include
hundreds of people and half-dozen or more hierarchical levels. To simplify our
discussion, we’ve condensed these networks into three common small groups of five
people each (as shown in the exhibit below). These three networks are the chain, wheel

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and all-channel. Although these three networks have been extremely simplified, they do
not allow us to describe the unique qualities of each.

The chain rigidly follows the formal chain of command. This network approximates the
communication channels you might find in a rigid three-level organization. The wheel
relies on a central figure to act as the conduit for the entire group’s communication. It
stimulates the communication network you would find on a team with a strong leader.
The all-channel network permits all group members to actively communicate with each
other. The all channel network is most often characterized in practice by self-managed
teams, in which all group members are free to contribute and no one person takes on a
leadership role.

As the exhibit below demonstrates, the effectiveness of each network depends on the
dependent variable you’re concerned about. For instance, the structure of the wheel
facilitates the emergence of a leader, the all-channel network is best if you are concerned
with having high member satisfaction, and the chain is best if accuracy is most important.
The exhibit below leads us to the conclusion that no single network will be best for all
occasions.

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PRACTICAL STUDY

Organization Introduction

Lever Brothers Pakistan Limited is a multinational organization. Unilever PLC London is

its parent company. Unilever is a European based company with headquarters in London,
and their shares are quoted at the stock exchange of several European countries. They
deal in all kinds of products from animal foodstuff to foods and detergents plus other
personal and consumer products. Unilever has its subsidiaries in over 80 countries of the
world, to which it spreads its vast knowledge and resources.
William Lever (its originator) commences business in England as a grocer. He
established Lever Brothers in 1827 in England Sunlight was the first product of Lever
Brothers, which makes the beginning of the marketing of branded products at the same
time Margarine Uni was established in Nether Land by Simon Van Berg and Anton
Jurgens. These two companies in term of:

· Buying raw material

· Selling finished goods

Consequently both the companies loosing out money in term of profit. These problems
led to think of the mergers in 1930. These two companies merged together and renamed
the business as Unilever PLC / the word UNI is taken from margarine Uni and Lever is
taken from Lever Brothers. Its head quarter was established in England and Rotter Dam.
Unilever has 500 operating companies in 80 countries. It has 0.3 million employees and
turnover of sales in 23000 million pounds. The global business proportion is 60% in
Europe 20% in North America and 20% in rest of the world. An identified board of
directors control the activities of subsidiary companies throughout the world. Lever
Brothers Pakistan Limited started its operations in 1948. A merger of Sadiq Vegetable
Oils and Allied Industries existed in Rahim Yar Khan was taken place with Lever
Brothers and HVM company based at Karachi. As a result of merger Lever Brothers
Pakistan Limited was incorporated as an independent Unilever operating company in
1955. The company is quoted on the Karachi, Lahore and Islamabad Stock Exchanges.
Lever Brothers Pakistan Limited has around 1900 employees in Pakistan. Lever Brothers
Pakistan Limited played a dynamic role in boosting consumer products market. It stand at
a unique position due to its honesty and integrity. Lever Brothers Pakistan Limited’s main
divisions of business are:
Merger With Brooke Bond

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Brooke Bond Pakistan Limited was incorporated in 1948. Company’s 40% shares are
held by Unilever, 21% by financial institutions, 24% by individuals, and 10% by
insurance companies. The company is quoted on Karachi and Lahore Stock Exchange
market. The company is manually engaged in the blending, packaging and marketing of
tea. It also has a small business in the sale of packing apices. The company employ
around 850 persons. And has three manufacturing locations situated in Karachi and
Khanewal. It also have three regional sales offices. The head office of the company is
located in Karachi.
After the amalgamation of Lever and Brooke Bond, Unilever will have a majority
shareholding in the combined company and it will provide a comparable level of
technical, management and financial resources. The proposed merger will benefit the
consumer in term of price and quality.

Acquisition

Lever Brothers Pakistan Limited acquire the shares of Pakistan Industrial Promoters
Limited, Mehran International Limited and Ambrosia International Limited, which is
known as Polka Group of Ice Cream Companies.

Product Mix
At present Lever Brothers Pakistan Limited is engaged in marketing of diversified

varieties and classes of products and playing a dynamic role in boosting consumer
product market. It stand at a unique position due to its honesty and integrity. Lever
Brothers Pakistan Limited has both product length and depth i.e. it has by length a largest
of product lines available and under each product line there are lots of variants like
different weights, 100mg, 500mg, 1000mg, sache pack, family pack or in case of ice
creams different brands have lots of flavor available which determines its product depth.
So different no of product lines are called product length and no of products in each
product line are called depth of product line. Lever Brothers Pakistan Limited’s main
product groups are listed below:

Vision Of Lever Brothers Pakistan Limited

The vision of Lever Brothers Pakistan Limited is driven by is the commitment to excel
and we are here to sell aspiration not brand. So, the core vision is integrating and that is to
excel in every field whatever Lever Brothers do to provide customer delight and value.
The Lever Brothers have been able to follow the track set by their vision and to achieve
the standards set by their customers.

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Mission Statement of Lever Brothers Pakistan Limited

Lever Brothers Pakistan Limited will be the foremost consumer company in Pakistan
with the dominant position in laundry, personal wash, skin, ice creams and spreads: a
leading position in tea, hair, dental and household care and a sustainably profitable
position in cooking oil and fats.

1. We will aim at delivering a 15% UVG rate, hence doubling the size of our
business over 5 years and thereby delivering superior value creation.

2. We will achieve this by adopting a broad view of our market by seeking the new
opportunities in the core categories of Unilever and by staying closer to all consumers
than competitors, understanding their evolving needs and focusing on constant delivery of
superior value for our brands through innovation.

3. Competitive advantage will also be developed by driving down relentlessly on

relative cost positions and outpacing competition in operational efficiency improvement.

4. We shall build on our strong network of distributors to maximize penetrations

and visibility in existing channels and to develop all new channels relevant to our
consumers.

5. We shall establish Unilever’s core brands in Afghanistan, building brand loyalty

and strong distribution in the market.

6. To achieve these standards of performance, Lever Brothers Pakistan Limited

will develop a strategically focussed organization and will motivate its personnel to use
its full potential of creativity and commitment. It will also leverage Unilever’s best
practices and maintain the highest standards of operational control.

1. Through its commitment to high levels of care and safety for its employees, its
consumers and the environment, Lever Brothers Pakistan Limited will be
exemplary and will participate in the dissemination of such practices in Pakistan

Analysis Of Mission Statement

Mission Contents

Organization Philosophy

People

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Peoples are key to strengths of Lever Brothers Pakistan Limited. The development of
their potential is core to Lever Brothers Pakistan Limited business.

So they provide extensive attention to developing human resources.

Customers
Lever Brothers Pakistan Limited is the customers focus organization. They do
delight customers with their products and service. Their brands always deliver the
high quality as they premise. Lever Brothers Pakistan Limited pays extra attention to
the complaints of consumers.

e.g. if the consumer complaints that detergent harmed any cloth or skin they send the
sample for lab test a team analyzes that customer complaint is right or not and then
they send the detailed response to customer along with gift of their products. With a
questionnaire for suggestion for further improvement on the top of which is written
“WE CARE ABOUT YOU”.

Suppliers
Suppliers are considered the partners of Lever Brothers Pakistan Limited and Lever

Brothers Pakistan Limited maintain mutually beneficial relationship with them.

Integrity
Lever Brothers Pakistan Limited never compromise on integrity management adhere
to high standards in all they do.

Environment responsibility
Management adhere to all national and Unilever standards to ensure health, safety and
protection of the environment in which they live and work.

Profit
It is considered to be the ultimate measure of Lever Brothers Pakistan Limited’s
performance and it is required to maintain and grow their business.

Product Market Domain

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This factor indicates where they are going to compete. Lever Brothers Pakistan
Limited’s field of operations is the consumer products and business and this is very
clearly stated in their mission statement

Lever Brothers Pakistan Limited AND Employee Relationship

Lever Brothers Pakistan Limited recognized that the customer
satisfaction begins with employee satisfaction . The believe that communication openly
and act consistently with all the employees, then they will commit to you company’s
services goals and objectives . This is turn will guarantee profits for the company. A
employee can not do his best unless he does not has a clear vision of organization
strategic objective . stratiging objective can be cleared by mean of communication .”. In
support of their stated “people first” philosophy, the company’s organization structure is
itself flat and non-hierarchical. They have an inverted pyramid structure with only five
levels of management between their senior vice president and front-line employees. It is
the job of management at every level to support the people they manage rather than the
traditional approach which maintains that employees are there to support their manager!
DIRECTION OF COMMUNICATION:

Communication can flow vertically and laterally. The vertical dimension can be
further divided into downward and upward directions.

Downward
In Lever Brothers Pakistan Limited Communication flows from one level of a group
or organization to a lower level is a downward communication. It is responsibility of
managers of Lever Brothers to communicate employees. Managers are very kindly tells
their employees abut strategic objectives and value of the company . they also
communicate employees about the expectation of upper level management and how to
fulfil their desires .But downward communication doesn’t have to be oral or face-to-face
contact. When management sends letters to the employees’ homes to advise them of the
organization’s new sick leave policy, it is using downward communication. So is an e-
mail from a team leader to the members of her team, reminding them of an upcoming
deadline.

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Upward
Upward communication also exists in Lever Brothers that flows from downword
to higher level in the company. The purpose of the upward communication is to note the
response of employee against instruction og manager and to provide feedback to higher-
ups, inform them of progress toward goals, and relay current problems.

FUNCTIONS OF COMMUNICATION:

As maintain earlier Communication serves four major functions within a group or

organization: Control, motivation, emotional expression and information in Lever
Brothers Pakistan

Manager of Lever Brothers Pakistan control member behaviour of their employees

in several ways. Manager use authority hierarchies and formal guidelines that employees
are required to follow. They provide the employee job related grievance to their
immediate boss, to follow their job description, or to comply with company policies,
communication is performing a control function. They also use informal communication
also to control behaviour. When work groups tease or harass a member who produces too
much (and makes the rest of the group look bad), they are informally communicating
with, and controlling, the member’s behaviour

Lever Brothers Pakistan managers uses Communication to motivate the employees

what is to be done, how well they are doing, and what can be done to improve
performance . The formation of specific goals, feedback on progress toward the goals,
and reinforcement of desired behaviour all stimulate motivation and require
communication.

. Lever Brothers Pakistan uses communication to make employees feel fee to expresses
their frustrations and feelings of satisfaction. Communication, therefore, provides a
release for the emotional expression of feelings and for fulfillment of social needs.

The final function that Lever Brothers Pakistan uses to perform though
communication relates to its decision making. Lever Brothers Pakistan tries to get
maximum information that can te helpful making decisions by transmitting the data to
identify and evaluate alternative choices.
.

The SWOT analysis of Lever Brothers Pakistan Limited are

as follows:

Strengths

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1. Unilever PLC England the parent company all over the world gives
assistance to Lever Brothers Pakistan Limited so Lever Brothers Pakistan Limited
enjoys a high level of support from Unilever.

2. Another major source of strength for Lever Brothers Pakistan Limited is its
product targeting all income groups. Lever Brothers Pakistan Limited is providing
products total income groups i.e. providing quality with economy as well e.g. Wheel
washing powder, Breeze beauty soap, Taza Chai, etc.

3. Lever Brothers Pakistan Limited is the oldest company operating in Pakistan

which gives him a commanding position is Pakistan to certain extent.

4. Lever Brothers Pakistan Limited enjoys the services of highly professional

management in the area of sales, marketing, technical and production.

5. Lever Brothers Pakistan Limited has such a strong goodwill in the market
that some of its brand names has become the generic names for those products such as
Surf for detergents and Dalda for ghee.

6. Lever Brothers Pakistan Limited is the largest producer of consumer

products in Pakistan and has strong brands in every field such as Close Up, Dalda,
Surf, Lifebuoy, Lux, etc.

7. Lever Brothers Pakistan Limited having the biggest shares in tea market
having the biggest brand Lipton and Brooke Bond.

8. They are market leader in ice cream business of Polka i.e. horizontal
integration with hostile takeover they have captured their competitors thereby
reducing competition.

9. The company has the assets of more than 5 billion. So, it can invest further
product innovation and development.

10. It has the largest and efficient distribution network then any its competition.

11. Lever Brothers Pakistan Limited is the only company in Pakistan which has
its own corner research department.

12. The company is very strong financially.

13. The company is working for almost 50 years in Pakistan. That’s why it has
many advantages. Which other do not have. They have know how of the market.
They understand the market very well. Similarly during this period they have
developed a very organized distribution network all over the country. Another
advantage is there wide range of products, which give them a position to monopolize

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the retailer’s shop. It is estimated that over more than 30% of a retailer’s shop items
are by this single company.

Weaknesses
1. Lever Brothers Pakistan Limited unable to capture shampoo and toothpaste
market i.e. low market share.

2. New variants of the company were not able to sustain in the market such as
harmony.

3. Lever Brothers Pakistan Limited is relatively week in their innovation

department i.e. being first to introduce Surf but after that has no major innovation.

4. Emphasizing only few products while ignoring others which could give
them potential market shares e.g. beverages section.

5. Lever Brothers Pakistan Limited go for long term strategies for all their
product categories which prove to be a weakness with change in the circumstances
and taste, trends of people

Opportunities
1. With the help of further advertising their non competing brands can increase
their market share i.e. market penetration strategy. People will definitely go for these
products as Lever Brothers Pakistan Limited has a sound image in people’s mind.
Whatever the brand is being sold is mostly on the basis of brand loyalty.

2. They have capital to invest they can explore new product categories e.g. in
food and beverages they can develop new products like Rafhan has launched custard,
jelly, kheer mix, rasmalai mix, etc. through it again will broaden their product
categories and will make their operations complex but this could be avoided with
“sub contracting” i.e. strategic partnership with their suppliers. These products can
prove a “cash cows” as customer in Pakistan always welcome food items especially
they will welcome due to brand image of Blue Band and Dalda ghee in food category
and due to Lipton and Supreme in beverages category.

3. Lever Brothers Pakistan Limited relaunches most of its products with same
name or little change in the name e.g. Surf Micro to Surf Extra, ,then to Surf Ultra
and then to Surf Excel, with little change of name and little changes in its formula. If
Lever Brothers Pakistan Limited launch its products with in prevailing product
categories, with entirely new name and new formula then they can capture new
market shares as it will gain capture the attention of its target market more as
compared to existing one. Though apparently it will increase the advertising cost but
it will be compensated with exciting sales as you have to advertise more even in case
of relaunch of products with little change in names and formulas. So why not to go

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for new name and new formula as it will increase your brand portfolio, it can satisfy
the needs of customers which were unsatisfied with the previous brands, its names, its
formula, e.g. people used to say Surf fades the clothes, they changed formula and not
name only gave it a suffix of Excel i.e. Surf Excel now the people who developed this
perception that it fades the color, remain reluctant for long time even after its relaunch
and heavy advertisement.

Threats
1. P&G is giving very serious threats to Lever Brothers Pakistan Limited in the
business of detergents and personal wash and shampoos.

2. No of local companies producing detergents and market them at very low

prices which is a threat to Surf.

3. In the case of ghee and oil business Habib is giving very tough competition
to Lever Brothers Pakistan Limited by introducing its variety of products.

4. Treat is promoting Bodyguard very much and trying to produce a

competition in the carbolic soap market.

5. Increasing inflation in the country, persistently reducing the purchasing

power of the people and dropping people from high price products to low price
products e.g. the detergents and providing fuel to the expansion of unorganized
sector.

6. Increased import duties are also adding to the prices of the products and in
Pakistan which is a very price for all the firms not only Lever Brothers Pakistan
Limited who are using imported raw material.

2. Threats of new entrants are also present. As ICI is a potential threat in detergents
industry, because they are already involved in chemical business and providing
raw material for detergent production to different manufacturing companies like
Lever Brothers Pakistan Limited and Colgate Palmolive.

Conclusions:

Important unintended consequences need to be accounted for when mergers are planned.
Mergers can cause considerable disruptions to services, and require greater management
support than previously acknowledged. Other organizations undergoing restructuring,
such as primary care groups developing into primary care trusts and health authorities
merging into strategic health authorities, should take these findings into account.

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