PISTOL Brand PVT (LTD)—A case study

Prepared By: Muhammad Waqas (LBS) Edited By: Moazam Rauf (LBS)

PISTOL Brand PVT (LTD), also known as Mukhtar & Company are renowned to produce a
number of hardware goods. They have been producing excellent hardware products in Sargodha
division since 1969. They supply their products all over Pakistan. They design their products in
the local and traditional taste and their products are well received and appreciated everywhere in
the country, especially in the areas surrounding Sargodha division.
Pistol Brand produces the following hardware products: Hasps, Windows Latches, Aldrops
Sliding Bolts, Handles, Stays, Pad-bolts, Tower-bolts, Hinges, and Spring-door-closers. The
business is run by Muhammad Farooq Shaikh, Muhammad Asif Vohra, Muhammad Azam
Shaikh, Muhammad Usman Shaikh, Muhammad Salman Shaikh- who are cousins and brothers.
The family-run business (since 1969) depends on a deep bound and trust that the aforementioned
individuals have on each other. Major organizational decisions are made by mutual consent. All
five-major decision-makers have had no formal education in business and they rely on
experience, intuition, and a traditional understanding of business. The success of the business can
be gauged by the fact that PISTOL Brand is the only successful hardware producing company in
entire Sargodha division since 1969. However, “I sometimes wonder if we could have achieved
more …” mulls Shaikh Farooq, who is the youngest and the most ambitious of the five cousins.
The question is interesting given how traditional and local business practices have overridden
best known managerial practices.
“The real problem lies with the confidence that traditional way of running the business is wise
and cannot be improved… For instance, the five of us oversee all the major functions of the
business. That leaves us a lot to do.” Confessed Muhammad Farooq Shaikh.
The fact of the matter is that the five cousins really do not trust anyone from outside of the
family with matters pertaining to management. Large businesses can experience the agency
problem when one has so much to do, there is no time left for expansion of the business. This
exact problem ails PISTOL Brand PVT. “We have often thought about embracing modern
practices but we often find ourselves juggling work-life balance. We recently developed a
website. But it didn’t seem to have much of an effect on our business. It was a futile practice,
really …” says Muhammad Asif Shaikh.
Instead of expanding the business, the cousins try to minimize cost. That strategy often comes
with a steep price. “We don’t like spending too much on human resource. We often have one
trust-worthy salesperson looking after our sales, in the Sargodha division. Mr. Salman, is our
salesperson. He is conscientious, honest, and upright… We trust him with sales recovery. He is
allowed to wave off 10-30% to retailers of his choice. He understands the market and we
completely trust his decisions. Dealing with the retailers is completely his headache. We
completely trust him with that.” claims Muhammad Farooq Shaikh.
PISTOL Brand PVT (LTD) believes that it mitigates cost by investing their trust in an individual
instead of hiring a competent team of sales. While the approach is safe and might work for a
limited geographical area and timeline, it hampers the growth of the business.
“We don’t have much of a competition”, says Shaikh Asif. “That is why we don’t need to spend
too much on HR and other managerial practices. But we understand that all that work will wear
us off eventually. And honestly, we are worried about it.”
The owners believe that these traditional practices will see them through; as they saw their
forefather through in former decades. However, this approach will also hamper expansion and
times have really changed. “Competition is inevitable and we understand that” confessed Shaikh
Asif. “However, at this point in time we don’t know where to begin with... honestly, our family
is a little scared of change. Change is risky. Change can be destructive. That thought keeps us
away from adopting the latest managerial practices. Besides, it is also difficult to convince the
elders that their wise ways of running a business traditionally might not be very effective against
modern challenges.”