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A REPORT ON ORGANIZATIONAL STRUCTURE STUDY AT ASHOK LEYLAND CHENNAI, TAMILNADU

Submitted By S.SIBI PRASANNA REGISTER NUMBER: 1120334 I MBA SECTION D (2011-2013) CHRIST UNIVERSITY, INSTITUTE OF MANAGEMENT (CUIM) BANGALORE

Dear Professor Rahul Gupta and A.villas

I wish to inform you that your student Mr S Sibi Prasanna has undertaken a project on the Study of the Organization Structure from 10th May 2011 to 31st May 2011. He has submitted a project report capturing the major corporate processes.

Regards V Krishna Shankar

ACKNOWLEDGEMENT Project is the systematic study to gain knowledge. It is possible only in the light of guidance, advice and help from a number of sources, without which a learner is a soldier in the vast uncharted sea without radar. ORGANIZATIONAL STRUCTURE TRAINING was assigned to me by Christ University, institute of management as the part of the curriculum of 2 years Master of Business Administration. I would like to say thanks to my Project Supervisor Mr. KRISHNA SHANKAR, Training Head in Ashok Leyland, Chennai and Mr. Satish Kumar for giving me the valuable time, suggestions and technical guidance during my hard work without which my hard work would have been too far from the smart work which is new mantra of success in this centurys corporate world. I am also very thankful to my mentor Prof. A.VILLAS and Prof. RAHUL GUPTA for his valuable time, guidance, inspiration and continuous encouragement throughout the period of project. In the end I would like to thank all my friends and people who helped me in this project and also in regenerating my enthusiasm whenever I need it the most. I thank them again and again for letting me be where I am today.

TABLE OF CONTENTS S.NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. CONTENTS INTRODUCTION PROFILE OF THE STUDY MAJOR DEPARTMENTS HR DEPARTMENT FINANCE DEPARTMENT MARKETING DEPARTMENT PRODUCTION DEPARTMENT CSR SWOT ANALYSIS COMMUNICATION SYSTEMS FINDINGS SUGGESTIONS CONCLUSION PAGE NO. 5 6 15 15 23 29 37 41 43 44 46 46 46

1. INTRODUCTION An organizational study refers to the complete understanding of an organization in all dimensions. Ashok Leyland is a well known automobile manufacturing company in India. Ashok Leyland believes that its historical success and future prospects are directly related to combination of strengths. The referred unit is a core limb of Ashok Leyland, the nations pioneering automobile manufacturer. The study includes the brief study of the core departments of Ashok Leyland, Chennai. Different officials working in various departments have provided very important data in this report. Every effort has been made to understand the functions and activities of various departments as well as the manufacturing process. 1.1. OBJECTIVES OF THE STUDY To familiarize with business organization. Getting practical experience regarding the organization function. To understand the functions of HR, Finance, Production and Marketing departments. To understand the culture in the organization and its effect on employees To get industrial exposure and experience. 1.2. Methodology and SOURCES OF DATA The methodology that I used for the study is through the collection of primary and Secondary data. Primary data Direct observation by going to their training service center and analysed how people behave there, how people are trained .etc Live discussion with the managers, training heads and the staff members. Secondary data Annual Reports Business Journals Existing Records Website of the company

2. PROFILE OF THE STUDY 2.1 INDIAN AUTOMOBILE INDUSTRY: India is one of the fastest growing automobile industries in the world. After 1960, the automobile industry saw rapid growth and many automotive manufacturers started production. The automobile industry in India is the seventh largest in the world with and annual production of over 2.6 million units in 2009. In 2009, India emerged as Asias fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nations roads. INDIAN AUTOMOBILE MARKET: Many foreign companies have been investing in the Indian automobile market in various ways such as technology transfers, joint ventures, strategic alliances, exports and financial collaborations. The auto market in India can boast of attractive finance schemes, increasing purchase power and launch of latest products. Some vital statistics regarding the automobile market in India has been mentioned below: India ranks 2nd in the global two-wheeler market India is the 4th biggest commercial vehicle market in the world India ranks 11th in the international passenger car market India ranks 5th pertaining to the number of bus and truck sold in the world. HEAVY VEHICLES MARKET: Heavy vehicles market in India comprises of trucks, machines, ambulances and school buses. The popular heavy vehicle brands in India are Volvo, Eicher, Tata, Telco, Ashok Leyland and Swaraj Mazda. Following are the major players in the Indian Heavy Vehicles Market:

Tata Motors is the largest automobile manufacturing company in India that manufactures a wide range of heavy vehicles adhering to world class standards. It is the market leader in commercial vehicles in all the segments, be it heavy vehicles, medium size vehicles, small vehicles, buses or defence vehicles. The heavy vehicles manufactured by Tata Motors have highly developed braking structure, high ground authorization, better direction competence and a muscular body. The advanced engine imparted to these heavy vehicles makes them a class apart from the other heavy vehicles running on the Indian roads and Highways. Tata Motors leads this segment with a market share of 61%. Ashok Leyland is an exclusively heavy vehicle manufacturing company situated in Chennai and was initiated in the year 1948. It is one of Indias biggest producers of heavy vehicles such as trucks, buses, military vehicles and also the second biggest commercial vehicle firm in India heavy vehicle division with a market share of around 27%. Ashok Leyland is also renowned for producing auto spare parts and engines for marine and industrial submission. Eicher Motors was initiated in 3rd September, 1960. The first firm to manufacture the first tractor in India. The indigenously manufactured tractor was introduced in the Indian market straight from Eichers Faridabad factory. The history of the firm can be traced back to 1948, when Good earth Company was established for vending and repairs of imported tractors in the nation. Swaraj Mazda, a tie up between Mazda and Swaraj Enterprise, Swaraj Mazda represents advanced Indian expertise and manufacturing. The firm has Research and Development improvement edge on international scale. The firm manufactures various products such as Bus, Ambulance, and Trucks etc. The modern automobile market in India has been considering key issues in the process of growth: Customer care, and not just service. Domestic as well as multi-national investments Searing through cut-throat competition Road safety Anti-pollution norms Co-ordination with government to enable advancement Used vehicle trade

2.2. COMPANY PROFILE: Ashok Leyland has been a major presence in Indias commercial vehicle industry since1948, the year it was born. The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter automotive manufacturing. They are one of the Indias leading manufacturers of commercial vehicles and special vehicles, engines for industrial purpose, gen sets and marine requirement equipments. For over five decades, Ashok Leyland has been the technology leader in Indias commercial vehicle industry, molding the countrys commercial vehicle profile by introducing technologies and product ideas that have gone on to become industry norms. Ashok Leyland at the time of its inception was known as Ashok Motors. It was assembling Austin cars at the first plant, at Ennore, near Chennai. In 1950, the company started assembly of Leyland commercial vehicles and soon the local manufacturing under license from British Leyland, participation in the equity capital, in 1954, the company was re christened Ashok Leyland. In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND INTERNATIONAL HOLDINGS LIMITED) was taken over by a joint venture between the Hinduja group, the Non Resident Indian Transnational group and IVECO Fiat a part of the Fiat group and Europes leading truck manufacturing company. Ashok P.Hinduja is the chairman of the company. The Hinduja group also associated with Ennore Foundries Limited, Automotive Coaches and Components Limited, and Gulf Ashley Motors Limited. The subsidiary holdings are Ashley Holdings Ltd., Ashley Investment Ltd., and Ashok Leyland Project Services. The chief competitors of the company are; Mahindra Volvo Tata Motors

With a commanding strength of the about 12,000 employees the company is looking forwards to enhance the scope of its action. It is aiming at expanding its production operation overseas to make it a more globally accessible company. It is looking to acquire a small to medium sized commercial vehicle manufacturers in China and other developing nations, which have an established product line. An example would be the 2007 acquisition of the Czech based Avias truck business rechristened Avia Ashok Leyland Motors. From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage vehicles, from numerous special application vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a wide range of products. Ashok Leyland has seven manufacturing plants Ennore Plant, Chennai. Hosur Plants Unit I, Unit II and Unit II A. Alwar, Rajasthan. Bhandara, Maharashtra. Pantnagar, Uttarakhand In the popular metro cities, four out of five state transport undertaking buses come from Ashok Leyland. Statistics reveal that the company is Indias largest exporter of medium and heavy duty trucks. It sells close to 83,000 medium and heavy vehicles each year. The company has a near 98.5% market share in the Marine Diesel engine markets in India. At 60 million passengers a day, Ashok Leyland buses carry more people than the entire Indian Railway network. The Five AL Values are: 1. International 2. Speedy 3. Value Creator 4. Innovative 5. Ethical
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GROWTH MILESTONES OF ASHOK LEYLAND: 1966 Full air brakes introduced 1967 Double Decker buses introduced. 1968 Power steering offered. 1979 Multi-axle trucks introduced. 1992 Self-certification status for defence supplies. 1994 ISO 9001 Certification 1997 Indias first CNG powered bus. 1998 QS 9000 Certification 1999 CNG (Compressed Natural Gas) introduced. 2000 Euro-I, Engines/vehicles introduced. 2002 ISO 14000 Environment Management System Certification. 2002 Exclusive Machine line 2 for Hino cylinder. 2003 E-Comet launched. 2004 50,000 mark vehicle produced. 2006- ISO/TS 16949 Corporate Certification. ASSOCIATE COMPANIES: Automotive Coaches & Components Ltd (ACCL) Lanka Ashok Leyland Hinduja Foundries IRIZAR TVS Ashok Leyland Project Services Ltd Gulf Ashley Motors Ltd Ennore Foundries Ltd FACILITIES: The company has seven manufacturing locations in India 1) Ennore, Tamilnadu 2) Hosur: Unit 1, Tamilnadu 3) Hosur: Unit 2, Tamilnadu 4) Hosur: Unit 2A, Tamilnadu 5) Alwar, Rajasthan 6) Bhandara, Maharashtra 7) Pantnagar, Uttarakhand
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Ashok Leylands Technical Centre, at Vellivoyalchavadi in the outskirts of Chennai, is a state-of-the-art product development facility, that apart from modern test tracks and component test labs, also houses Indias one and only Six Poster testing equipment. The company has an Engine Research and Development facility in Hosur. The new plant in the North Indian state of Uttarakhand at Patnanagar is set up at an investment outlay of Rs.1200 crores. The company has signed an agreement with Ras Al Khaimah Investment Authority (RAKIA) in UAE for setting up a bus body building unit in the Middle east. CLIENTS (Not exhaustive): Indian Army. US Army. Tamilnadu State Transport Corporation (TNSTC). Metropolitan Transport Corporation (MTC), Chennai. State Express Transport Corporation (SETC), Tamilnadu. Kerala State Road Transport Corporation. Maharashtra State Road Transport Corporation (MSRTC). Andhra Pradesh State Road Transport Corporation (APSRTC). Parveen Travels. Sharma Transport. VISION Achieving leadership in the medium/heavy duty segments of the domestic commercial vehicle market and a significant presence in the world market through transport solutions that best anticipate customer needs, with the highest value -tocost ratio.

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MISSION -Identifying with the customer. -Being the lowest cost manufacturer. -Global benchmarking our products, processes and people, against the best in the industry. QUALITY POLICY Ashok Leyland is committed to achieve customer satisfaction by anticipating and delivering superior value to the customer in relation to their own business, through the products and services offered by the company and comply with statutory requirements. Towards this, the quality policy of Ashok Leyland is to make continual improvements in the processes that constitute the quality management system, to make them more robust and to enhance their effectiveness and efficiency in achieving stated objectives leading to 1. Superior products manufactured as also services offered by the company. 2. Maximum use of employees potential to contribute to quality and environment by progressive up gradation of their knowledge and skills as appropriate to their functions. 3. Seamless involvement from suppliers and dealers in the mission of the company to address customers changing needs and protection of the environment

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2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD(Departments).

MANAGING DIRECTOR

CFO

ED PRODUCT ED INTERNAL DEVELOPME AUDIT NT

ED HR

ED & COMAPANY SECRETARY

SPECIAL DIRECTOR BUSINESS PLANNING

ED CONSTRUCTION AND ALLIED BUSINESS

SPECIAL DIRECTOR PLANNNIG AND PORTFOLI MGMT

WHOLE TIME DIRECTOR 7 COO

ED MFG

ED MKTG

ED INTERNATIONAL OPERATIONS

ED PRODUCTION PLANNING

ED SALES & SERVICE

In Ashok Leyland the Organization structure consists of many divisions. Here Managing Director (MD) is the overall head. Under him there are nine different departments. They are Chief financial officer (CFO), Executive Director(ED) for internal auditing, ED for product development, ED for HR, ED & company secretary, Special Director for business planning, ED for construction and allied business, Special Director for planning and portfolio management, and the whole time director. Also under the Whole Time Director, Chief Operating Officer (COO) there are five sub divisions. They are ED for Marketing, ED for Manufacturing, ED for International Operations, ED for Production Planning and Ed for Sales and Service.
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2.3. ORGANIZATION CHART OF M/s. ASHOK LEYLAND LTD.

MD
WHOLE TIME DIRECTOR ED SPECIAL DIRECTOR GM DEPUTY GM

ASST. GM DIVISIONAL MANAGER SNR MANAGER MANAGER DEPUTY MANAGER ASST. MANAGER SNR OFFICER OFFICER

So for a particular department various grades of the officers are shown here from top to bottom. It shows who is superior to him and who have to report to whom. Here the basic level in their management is the officer which is at the bottom. And after that his superiors are ordered in successive manner to the top.

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3. FUNCTIONS OF THE MAJOR DEPARTMENTS SELECTED The major functional areas of the unit and the major departments which oversee those areas are catalogued as follows: a) HR Department b) Finance Department c) Marketing Department d) Production Department. A brief review of each department and its activities as follows:

a) HUMAN RESOURCE DEPARTMENT OF ASHOK LEYLAND LTD.


HUMAN RESOURCE MANAGEMENT Human resource management is defined as the managing function of employees, developing and compensating HR resulting in creation and development of human relations with the view to contribute proportionately to the organizational, individual and social goal. VALUE STATEMENT We consider our employees as our most valuable asset and are committed to provide full encouragement and support to them, to enhance their potential and contribution to the companys business.

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DEPARTMENTAL STRUCTURE:

ED HR
DIRECTORMGMT DEV. CENTREHOSUR GM - MGMT DEVPT. AGMOFFICE SERVICE MEDICAL OFFICER DGM- HR

DIV, MANAGER

SR MANAGER HR

CHIEF SECURITY OFFICER

MANGER, ASST MANAGER, OFFICERS

ASSST MANAGER, MGMT TRAINEE

OFFICER

FUNCTIONS OF HR DEPARTMENT: 1) HR ACQUISITON Recruitment Selection 2) HR DEVELOPMENT Training and development Organization development 3) PERFORMANCE AND COMPENSATION Performance appraisal Incentives and benefits 4) MOTIVATION Creating motivation environment Empowerment and participation HR Mobility
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1) HR ACQUISITION

RECRUITMENT Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. SOURCES OF RECRUITMENT The following are various external sources of recruitment: 1. Consultancies 2. Campus recruitment 3. Lateral entries 1. CONSULTANCIES The department heads where requirements are needed informs to the HR department about the requirement. The concerned person for recruitment gets approval for filling the vacancies. Then the consultancies are approached telling the requirements. The fit applications are mailed to attend the interview. If satisfied, they are called for the personal interview. 2. CAMPUS RECRUITMENT The recruitment panel goes to the reputed colleges to select the candidates. On the following basis they recruit the candidates GETs - Graduate Engineer Trainees DETs - Diploma Engineer Trainees ITI- Industrial Training Institute

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3. LATERAL ENTRIES They pick the experience candidates or people from other companies. The following is the process of lateral entry recruitment: 1. Sourcing 2. Interview 3. Written test 4. Technical round interview 5. Personal Interview PROCEDURE FOR LATERAL RECRUITMENT Pre-Selection Selection Post-Selection

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PHASE 1: PRE-SELECTION
Requirement requisitionFUNCTIONAL HEAD HR- APPROVING AUTHORITY Identification of prospective Candidate Initial HR screening

Salary and Grade Fixation by approved authority

Discussion & Final interview by the interview panel

Personal Interview

Screened resumes sent for further short-listing to Functional Head

Initial offer communicated to the candidate

Negotiation with the candidate

If offer accepted HR informs the Functional head about probable DOJ

HR issues offer letter

New Hires

Joining Formalities

STEPS IN SELECTION Receiving of application Preparing of shortlist by the department Verification of resume by department head Interview (one round) Psychological test Reference/Background information Final selection Placement
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2) HR DEVELOPMENT TRAINING Training is an on-going process aimed at capability-building of the employees at all levels. In todays competitive scenario, organizations are increasingly turning to training to capture the cutting edge. As they manage growth in a constantly changing environment. Purposive training and planned re-training have an acquired priority status on the corporate agenda. Centre stage in Ashok Leyland training endeavors is the management development centre, at Chennai and Hosur. Training program is classified into Skill Knowledge Attitude Training programs in Ashok Leyland are: Quad 1 executives Competencies and priority needs of departments/ units E-learning Induction for DET (2 years) GET (1 year), Laterals (7 days) GENMOD training program. General-Planning for retirement Budget spent for training (8hrs- 1day) middle managers (3 to 4 persons) is 3-4 lakhs.

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3) PERFORMANCE AND COMPENSATION PERFORMANCE APPRAISAL Performance appraisal is the systematic evaluation of the individual with regard to his or her performance on the job and his potential for development In Ashok Leyland graphical scale method is followed, it is also known as linear rating scale. In this, a printed appraisal form is used for each appraise. The form consists of various employee characteristics and his job performance. Various characteristics include initiative, leadership, dependability, creative ability, analytical ability etc.., The rating is done on the basis of scale which is in continuum representing various degrees of particular quality. Ashok Leyland use numbers say 5, 4, 3, 2 and 1 to denote points for various degrees of excellent-poor, high-low, good-bad and so on. Five point scale of Ashok Leyland showing levels of performance: 5- Exceptional -Consistently outstanding performance. 4- Superior -Performance which is consistently significant beyond job requirements contributes in related area also. 3- Good -Performance which adequately meets job requirements and occasionally produces good over and above requirements 2- Barely satisfactory-Just meets minimum job requirements 1- Unsatisfactory -Does not meet job requirement at all. The appraisal form also consists of customer satisfaction survey where the need, service provider and period of assessment are all identified. It also follows graphical scale method using a five point scale based on the criteria 1) Quality (Customer needs, service information, quality works, complaints etc..,). 2) Delivery (Delivery time, point of use, use or parts/service information) 3) Communication (Interaction with customers, listening to customer views, timely feedback, and review changes with the customer)
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4) Responsiveness (Responding to customer complaints, changes to customer needs) 5) Improvement (Positive attitude for improvement, implementation & effectiveness of improvement and improvements at the customer end) Overall Customer Rating = 1+2+3+4+5/5 INCENTIVES 1) Surcharge on Direct Booking Incentive. 2) Special Incentive Scheme. Employee welfare schemes The following are the welfare schemes available to the employees. Canteen facilities Medical claims Transport facilities Ashok Leyland school for their children Scholarship schemes Recreation facilities BENEFITS 1) Tuition fee refund 2) Major medical plan 3) Medical reimbursement 4) Domestic travel reimbursement 5) Conveyance reimbursement 6) Vehicle loan 7) Group term insurance 8) Sixth day compensation (i.e. Saturday) 9) Maternity leave 10) Leave 11) Retirement age

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HR MOBILITY PROMOTION OPPORTUNITIES Promotions is based on the seniority, eligibility for post, efficiency, skill, qualification etc.., The management decides whether to fill a post of outside recruitment or through promotion. Workman shall be considered for promotion to a post based on certain rules. He has rendered a minimum period of qualification service of five years. He possesses the qualification prescribed for the post to which he is to be considered. Fulfills prescribed attendance. SEPARATIONS Separation involves cessation of services of personnel from an organization. When people leave the organization, Exit interviews are usually conducted to know the reasons for leaving. The common reasons given are: Better opportunities Lack of growth ALLOWANCES House rent allowance Washing allowance Uniform and stitching allowance Night shift allowance Conveyance allowance Milk and vitamins allowances Flexibility allowance Quality certification allowance Direct production allowance

b) FINANCE DEPARTMENT OF ASHOK LEYLAND LTD.


Finance is considered as the life blood of business. This is because in the modern money-oriented economy, finance is one of the basic foundations of all kinds of economic activities. Finance function may be defined as the procurement of funds and their effective utilization.
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RESPONSIBILITIES OF FINANCE DEPARTMENT: The pricing department is responsible for the fixing of prices for sales of the vehicles and for buying of raw materials and semi finished goods. Treasury section is responsible for all kinds of funding managements such as investments. Taxation section is responsible for remittance of tax, filing of returns, handling of litigations etc.., Costing and Budgeting department is responsible for the unit costing of each product in particular, such as spare parts and a vehicle as whole. The FSG (Finance account Service Group) deals with the payables and receivables at regional offices. The Explore finance department deals with the FSG exporting of items. The same functions and responsibilities are allotted to the accounting and finance department of the manufacturing plants in Ennore, Hosur-1, Hosur-2,Hosur-2A, Alwar, Bhandara, Pantnagar.

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DEPARTMENTAL STRUCTURE:

MANAGING DIRECTOR

CHIEF FINANCING OFFICER

GM-FINANCE

DGM-FINANCE

AGM- FINANCE

DIVISIONAL MANGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ASST MANAGER

SNR MANAGER

OFFICER

Here the top superior officer Chief financial officer which precedes by 10 successive officers with basic level officer at the end.for every section in finance there are different deputy managers which followed by asst. managers at each end for the smooth running of this department ROLE OF FINANCE: Recorder (accounting) of all Financial Transactions Reporting of Financial Performance Arranging long and short term funds Capital and Debt Working Capital Management
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Compliance of tax and other corporate laws Risk Management Controllership function Audit coordination Investor Relations PROCESS & ACTIVITIES OF FINANCE: a) Financial Accounts Quarterly, Half-yearly and annual results published as per listing requirements Limited Review / audit coordination. Annual Reports Disclosures made are comprehensive; complied much before they become mandatory Early completion of accounts, audit process; forefront in adherence to accounting standards & other guidelines. Audit Committee comprises of Stalwarts from the profession. Automation of processes b) Financial Planning & Control Financial Planning includes estimating the amount of capital to be raised and laying down the policies as to administration of the financial plan. Monthly MIS: Very Comprehensive with wider coverage and highly informative. Monthly review covers business volumes, market share, physical and financial parameters including alerts on laggards, exceptions in all fronts. Exception reporting and Profit management measures form integral part of this process c) Treasury Management - Raising of Funds - Funds Management - Debt Servicing - Risk Management Financial instruments for Funds raising would depend on end use of funds; derisking is an important consideration in deciding the instrument. Capex and long term working capital requirements are funded through share capital and long-term debt.

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Funds Management includes managing collections and outflows and surplus/deficit management. Closer working with Marketing and Units is vital. Surplus management includes investment in Fixed Deposits, Mutual Funds, etc., Direct investment in equity avoided Debt Servicing includes repayment of principal and payment of interest on due dates and ensuring that commitments made are adhered to. Risk Management is vital since organization is exposed to both currency as well as interest rate risks. Risks offer both threats and opportunities (can increase income or reduce expenditure). d) Costing & Pricing Strategic pricing of products, quotes for various tenders. Special pricing for export contracts. Monitoring of cost of production of various models and for make or buy decisions e) Taxation Compliance with Direct (Income Tax Act, Wealth Tax) & Indirect Taxes (Excise, Customs, Service Tax, Sales tax etc). Tax planning is an important component of business decisions. Recent major developments include introduction of Service Tax legislation and VAT across many States. Aligning the business process across the organization and maximizing the benefits against such legislations is a major task handled by Finance. Regular tasks include remittance of tax, filing of returns, handling of litigations etc. f) Investor Relations In AL, Mutual Funds, FII etc.., hold 32% of shareholding besides public who hold 10% FII & Mutual Funds represent investment community who track companys performance continuously very closely. Dissemination of data relating to companys performance and developments very important and sensitive. Handled through presentations in periodic investor meet, web-cast, tele-conferences, individual meets, address in TV etc.

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PLANNING & MANAGING CASH FLOWS: 1.Planning cash flows Rolling Quarterly cash forecast prepared and monitored weekly seeking explanation for variance in order to control and direct operations. 2. Management of daily funds Collections from 49 locations pooled under cash management system in to centralized accounts with consortium banks at Chennai. Various payments reported are collated and funded for in the various bank accounts depending on the expected debits. Surplus for the day, if any, invested for tenor which is based on requirement of funds back in to the system. Deficit funded through short term loans from banks, availed based on best product available / rate offered FINANCIAL CHALLENGES AHEAD: Global slowdown challenging break even. Decrease in Margins due to inability to pass on cost increases due to competitive pressures partially compensated by increase in volumes. Profitability pressures due to changes in business mix and commodity price movements. Forex management unforeseen volatility in major currencies; particularly important with forex loans Supporting inorganic growth evaluation & funding of emerging options. Need to fund major capex & investments Rs.2400 cr in the next3 years; major investments in JVs Tackling financial covenant breaches. Increase in interest rates Business integration of overseas units. Managing expectations of stakeholders

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FINANCIAL RESULTS:
2007-2008 SALES VOLUME VEHICLE ENGINE SPARE PARTS NET SALES/ INCOME FROM OPERATION GROSS OPERATING MARGIN FINANCIAL EXPENSES OTHER INCOME GROSS PROFIT DEPRECIATION PROFIT BEFORE TAX PROFIT AFTER TAX PAID UP EQUITY SHARE CAPITAL( FACE VALUE PER SHARE IS RS.1 EACH) BASIC EARNINGS PER SHARE DIVIDEND PER SHARE 83307 11757 79124 774258 82038 4974 5760 82824 17736 65088 46931 13303 2008-2009 54431 21447 79969 598107 46944 11871 4962 40035 17841 20845 19000 13303 2009-2010 63926 19050 88506 724471 76284 8113 7045 75216 20411 54477 42367 13303

3.53 1.5

1.43 1

3.18 1.5

Comments: Significant reduction in material and operating costs supported by pricing action has improved margins in the year 2009-10.

c) MARKETING DEPARTMENT OF ASHOK LEYLAND LTD.


Marketing is concerned with the people and the activities involved in the flow of goods and services from the producer to the consumer. Ashok Leyland has been offering world class products to millions of customers to 40countries across the world. Its main product line includes Trucks, Buses, Defence vehicles and special vehicles and engines for Indian and Overseas market. Ashok Leyland is The market leader in Indian bus market offering CNG, Double Decker and Vestibule bus variants.
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The market leader and pioneer for multi-axle trucks and tractortrailers. Enjoys market supremacy in diesel engines for Industrial, Gen-set and Marine applications. Largest supplier of logistic vehicles to the Indian Army. Offers Total Maintenance Solutions through maintenance contracts for its products, relieving the customers of all maintenance worries. Departmental Structure
CHIEF OPERATING OFFICER

HEAD-DEFENCE SBU

HEAD ENGINE BUSINESS

ED- MARKETING

HEAD FULLY BUILT SOLUTIONS HEAD-VEHICLE SALES & SERVICE HEAD- PARTS 7 CUSTOMER SUPPORT

HEAD MKTG & CUSTOMER GROUPS

Here the chief operating officer who is the head has three successors. They are Head for defense sector and Head for engine business and the Executive for Marketing. Also Under the executive director there are four sections, one for Fully built solutions, another for marketing and customer groups, and for customer support there is also a head, and finally the head for vehicle sales and service.

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ADVERTISING: The need for advertising was felt by Ashok Leyland in 2006-07 when they had to project the transformation that has occurred within Ashok Leyland, but as yet not communicated to the public. They came up with a product related Ad campaign and a Corporate campaign. Their aim was to let their target audience perceive their brand as International, Innovative and Speedy, which has always been their core brand value. At the All India PR awards 2007 conducted by the Public Relations Society of India (PRSI). Ashok Leyland won the second prize for their corporate campaign. They gave a prelude to the campaign by exhibiting their product range and their field of pioneering. ASHOK LEYLAND- THE BRAND: ENGINEERING YOUR TOMMOROWS has been Ashok Leylands Brand promise. The tag line finds expression at two levels: on the hard core strategy level, that is the sum total of the essential values of vehicle technology-safety, comfort, economy and ecology; on the aspirational level, it denotes a warm and caring relationship with each stake holder in a unique way. Brand values The two most visible- and recognized- components of the brand are the dynamic L logo and the name of Ashok Leyland. The name has historic reasons- and timeless meanings. Ashok meaning Happy is the name of the companys founder Raghunandan Sarans son. The second part of the companys name has come to cue the international aspect while he first part, so unmistakably Indian, has undeclined the custom built relevance of the companys products and operations in the Indian context. Brand Ashok Leyland is essentially and experiential brand, its values felt in day to day life- more palpably by its immediate customers and end users. The core of the brand has always been innovative, international, speedy, moving with times- and often-even ahead of it. The innards of Ashok Leyland vehicles have always been

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contemporary. The core is now being matched by contours of the new, modern, future ready range of vehicles. In 2006, Ashok Leyland felt a need for change in perception of image among its public after its research feedback by its brand study. Though the company has pioneered many product concepts, and technologies, it was perceived to be a slow, elderly and not modern brand.As per the research, the company was a fairly strong brand with good recall value. It was seen as an experiential brand, where the public related to it thought very high of it but those away from the brand has only a fuzzy image of it. Thus emerged the new Ashok Leyland with a new face. The tangible shift began with a change in the typeface of the brand name along with a baseline. Also the company came up with a corporate identity manual which was strictly to be followed by all. The content specified brand name usage in various areas. Various advertisements were aired to promote the brand. The launch of a new website opened to doors to the world outside. Also screening of its corporate film helped them gain publicity.

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BUSINESS INTEREST: Medium & Heavy commercial vehicles. Defence Exports Industrial applications Spare parts Service products MARKETING STRATEGIES AND PLANS OF ASHOK LEYLAND: NEW PRODUCT LAUNCHES The company is expected to launch a slew of new products in the markets which is expected to propel the demand for its products. INCREASING GLOBAL FOOTPRINT The company is now targeting new strategic markets with increased thrust on the Asian and African countries.
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PLANS TO MEET THE GROWING NEEDS OF THE MARKET The company is constantly reviewing their strategies. They are moving into higher value added jobs because it becomes very important to engage workmen fully and also their efficient utilization. FACTORS AFFECTING GROWTH: Infrastructure development Overall economic growth Restrictions on overloading Better operating economy of new trucks Restrictions on the age of vehicles Replacement demand due to changes in emission norms CURRENT PLAYERS IN THE COMMERCIAL VEHICLE INDUSTRY: Ashok Leyland Tata Motors Eicher Motors Swaraj Mazda Volvo Tatra Udyog Force-MAN Asia Motor Works Mercedes Benz. ASHOK LEYLAND- MARKETING NETWORK: Regional offices- 10 Areas offices- 18 Regional sales offices-19 Parts warehouse-7 Main dealers- 43 Dealer outlets- 177 Authorized service centres- 145 Service bays- 2352

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PRODUCT PROFILE : Ashok Leyland offers a comprehensive product range with trucks from 7.5 tons GVW to49 tons GVW (Gross Vehicle Weight). From 19 to 80 seaters in passenger transport, a host of special application vehicles and diesel engines for industrial gensets and marine application. Product profile can be broadly split into five categories viz. Buses, Trucks, Defence vehicles, Special Vehicles and Engines. BUSES LYNX BS-II, Viking BS-II,12 M Bus-BS II, Cheetah (Front engine),Viking BS-III Viking AL, Airport Tarmac Coach, Vestibule Bus, Panther (Rear engine),Cruiser, Viking CNG BS-III, Falcon (Front engine),Stag BS-II, Double Decker TRUCKS 4x2 Haulage models, Ecomet,4x2 and Multi-axle Tipper Tractor, Multi Axle vehicles DEFENCE VEHICLES Short Chassis Bus, Field artillery tractor, Comet 4x4,Top chi field Artillery tractor ,Long Chassis Bus, Stallion 6x6,Stallion truck fire fighting SPECIAL VEHICLES Hippo tractor , Stallion Mk III Tipper, Hippo Tipper, Beaver tractor Rapid Intervention Vehicle, Beaver Haulage, Hippo Haulage ENGINES Genset application, Marine application, Industrial application, DG sets for exports
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VEHICLE SALES, SALES TURNOVER & PROFIT:

Ashok Leyland registered a sales turnover of Rs.7729.12 crores during 2007-08 compared to Rs. 7168.17 Crore in 2006-07 showing an improvement of 7.8% After a sluggish start in 2008, the sales turnover improved by 21% touching Rs.7244.71 crores in 2009-10 compared to Rs.5981.07 crores in the 2008-09. The net profit rose by 6.4% in 2007-08 to touch Rs.469.31 crores compared to Rs.441.28 crore in 2006-07. Similarly the net profit improved to 123% to touch 423.67 crores in 2009-10 against Rs.190 crores in 2008-09

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d) PRODUCTION DEPARTMENT OF ASHOK LEYLAND LTD. Production is an organized process of manufacturing/producing goods and services through the use of input resources of men, materials, money, machine, methods. PRODUCTION MANAGEMENT STRATEGIES: Long range strategies Effective management of technology. Innovation in product management and process technology. Globalization in industry. Goodwill inside and outside the organization. An aggressive marketing strategy and risk taking ability. Short range strategies Location and layout. Product selection and technology. Capital selection and investment. Flexible strategy of production. Standardization of design. Economy of size and variety. PRODUCTION SYSTEM: Ashok Leyland employs a continuous production system, making use of special purpose machines and produces standardized items in large quantities. Characteristics Standard products are manufactured. Small work in progress in involved. More maintenance is required. Minimum cost of production per unit Division of labour is made more efficient

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DEPARTMENTAL STRUCTURE:

EXECUTIVE DIRECTOR

PLANT DIRECTOR

GENERAL MANAGERMANUFACTURING

DGM- MFG

DGM- CHASSIS

DGM= MFG SERVICE

AGM - ENGINES

AGM- CHASSIS

AGMMACHANICAL

DIV- MGR ELECTRICAL

DIV- MANAGER MECHAYRONICS

DIV- MNGR

DIV- MANAGER

DIV- MGR MECHANICAL

SNR MANAGER

SNR- MANAGER

SNR- MANAGER SNR- MANAGER SNR MANAGER EXECUTIVES EXECUTIVES

EXECUTIVES EXECUTIVES EXECUTIVES ASSOCIATED & DAILY RATED WORKERS ASSOCIATES & DAILY RATED WORKERS

ASSOCIATES & DAILY RATED WORKERS

ASSOCIATES & DAILY RATED WORKERS

ASSOCIATES & DAILY RATED WORKERS

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Here under the executive director the plant director and the general manager for the manufacturing section. Also under him there are three major sections which comprises of Deputy Manager for manufacturing, and chassis building and for the servicing. Again there are different levels under these three sections which will end with the basic level workers. PLANT LAYOUT: Product layout is employed in chassis assembly and engine assembly where in the facilities are arranged in a line as per the process sequence of the component manufactured. Characteristics Mechanized material handling. Lesser work in progress. Special purpose machines are used. There are three major assemblies in the production of the vehicle. They are
ENGINE ASSEMBLY FRAME ASSEMBLY CHASSIS ASSEMBLY

PDI (PRE DELIVERY INSPECTION): Testing of vehicle on real road conditions The following are the various tests done to test the vehicle: 1. Speed test 2. Acceleration test 3. Vibration test 4. Torque tightening 5. Oil level and water level checking 6. Electrical components checking 7. Air leakage test 8. Grease level checking 9. Road test
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PLANT ENGINEERING: Plant engineering is responsible for proper functioning of the plant by carrying out maintenance operations such as electrical and electronics equipments maintenance, forklift charging and its repairing, repairing of pneumatic circuits etc.. It is also responsible for maintenance works carried out in the organisation. The following are the various types of maintenance: Predictive maintenance Preventive maintenance Breakdown maintenance Routine maintenance

1. PREDICTIVE MAINTENANCE: Predictive maintenance is done on assumption by experience before the occurring or by any symptoms of occurring.

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2. PREVENTIVE MAINTENANCE: Preventive maintenance is work directed to the prevention of failure of a facility 3. BREAKDOWN MAINTENANCE: Breakdown maintenance is work which is carried out after a failure, but for which advanced provision has been made in the form of spares, material, labour and equipment 4. ROUTINE MAINTENANCE: Routine maintenance is done on even time or on routine basis. It includes machine lubrication, replacement of bulbs throughout plant to arrest building deterioration. DIVISIONS: Plant engineering is divided into 4 divisions to carry out its functions. The following are divisions of plant engineering: Electrical Mechanical GWE(General Works Engineering) Civil PERIOD OF MAINTENANCE: Period of maintenance is done on the basis of VED analysis. It is also known as time based maintenance. Here VED stands for V - Vital E - Essential D Desirable 4. CORPORATE SOCIAL RESPONSIBILITY Ashok Leyland defines CSR as: "Our commitment to improving the quality of life of our employees, their families, the driver and the local communities around our units, and the society." With CSR as an integral part of Ashok Leylands activities, all social initiatives are structured and focused to enhance the commitment of employees and stake holders.

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CSR ACTIVITIES: 1) Fun Bus Fun Bus is a gift from Ashok Leyland exclusively for free users round the year by children of orphanages, corporation primary schools and physically/ mentally challenged children in Chennai. 2) Green Mission In 2002, all the vehicle manufacturing units of Ashok Leyland were ISO 14001 certified with Environmental Management System. The Ennore unit was recently identified as one of the model energy- efficient units by a CII-TNEB organized Energy Conservation (ENCON) mission. Systematic management of all energy resources from the 1980s through better housekeeping and awareness has made this possible. 3) Effluent Treatment The plant can do primary, secondary and tertiary treatment operations. About 55,000 liters of effluents flow into the plant every day. Five kilograms of solid hazardous waste is stored as per Pollution Control Board standards and the rest water portion is treated and used for organic farming. On an average, 2,50,000 liters of recycled water is pumped into garden saving Rs.1.5 million per annum. 4) Greening The Ennore unit is known for its lush green cover. Almost 10% of the total ground area 53.41 hectares is covered by greenery creating an oasis in the arid zone of Ennore. 5) Aids Awareness In the mid-90s, the department of International Development, British High Commission, formed the Truckers Interim Coordination Unit (TICU) for a focused programme among truck drivers. Ashok Leyland was one of the first organizations to associate itself by becoming an intervention centre. 6) Driver Training Centre Ashok Leylands Namakkal Driver Training Centre near Salem in Tamil Nadu was started in 1995 to ready a driver for life on he road and off the road. From the very beginning, the curriculum had included, besides functional subjects, health education including yoga and AIDS awareness along with the education on the vehicle and traffic rules cum sessions on physical fitness, personality development and health risks like smoking.
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7) Community Welfare Started in 1994, the Dharam Hinduja Matriculation and Higher Secondary School, Thiruvottiyur, Chennai, is managed by a Board of Trustees consisting of senior executives and workmen of the company. The company contributed one crore rupees in aid of relief operations for the Tsunami victims. In addition, employees contributed another 15 lakhs separately. Ambulances are donated for worthy causes. Substantial relief material was distributed in the worst affected districts of Tamilnadu through NGOs. 8) Sludge disposal A natural by-product of the painting process, sludge disposal has always been a problem faced by the auto industry. 5. SWOT ANALYSIS STRENGTHS 1. Good Training System. 2. Good Organizational Climate. 3. High Market Share 4.Skilled Employees 5.Standard Quality Product WEAKNESSES 1. High price 2. Sales representatives are less OPPORTUNITIES 1. Demand for heavy vehicle has stepped up all over the globe. 2. Company provides better credit facility to dealers. THREATS 1. High competition 2. Promotional programmes of other brands 3. Complicated national market 4. New players entering the market.

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6. COMMUNICATION SYSTEM AT ASHOK LEYLAND LTD. The Corporate Communication department in Ashok Leyland started in 1997. Previously, a part of marketing communications, the department has come a long way. It came into existence when the management realized the need for a media friendly department to communicate with its external public. Also there was a need to communicate extensively to its internal public. INTERNAL COMMUNICATION: Employees form a vital part of any organization, thus it is required to establish and maintain mutual understanding with them. This will help the organization to increase efficiency and productivity in the long run. Continuous communication with the employees will facilitate the organization to keep them updated on the current happenings. Downward Communication: MDs Letter This letter is addressed to the internal public of the company by the Managing Director, This letter is drafted by the Corporate Communications Department with inputs from the MD and is circulated only internally once in three months. Managing director holds a meeting with the executives of the company every year in a 5-Star Hotel communication Meet The communication meet is one of those events where the top management communicates directly with various departments of the company. Here the top management addresses the employees and makes a presentation which discusses the future plan. Circulars E-mail Telephone. Ashley News
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Upward Communication: AL PORTAL INTRANET-MDs Portal This link allows employees to post queries to the Managing Director. The MD then goes through them and either replies to it or forwards it to a functional head. A copy of the reply by the functional head is sent to the MD. Any employee can ask any question related to the company and its functions. Soap box It is a raised platform on which employees can give in suggestions and feed back such as cost saving techniques, new technologies etc., and discuss over it. Any employee having companys e-mail id can access to this link through AL-Portal for counseling.

Communication media Website Annual Report Customer Journal-Moving Force Operators Meet Vendors & Suppliers Meet Dealers Meet Exhibitions Media Relations Shareholder Relations

The Annual General Body Meeting.

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7. FINDINGS 1. In this organization there is good employer-employee relationship. 2. It targets 100% of its employees to be involved in its continuous improvement activities by motivating them through various financial and non-financial incentives. 3. There is a well integration of all the functional departments which facilitates the use of software like ERP. 4. To solve work related problems, QC (Quality Circle) and cross functional team are made effective. 5. Ashok Leyland has not got a foothold in the luxury trucks segment in its domestic market. 6. Advertisement is not given much importance. 7. The company is increasing its global foot print by entering Asian and African markets. 8. SUGGESTIONS The company should concentrate more on the luxury truck segments to keep a strong hold in the market The company should earmark more money for the advertisement and sales promotion of its products. It helps to increase the brand awareness and image. The company should concentrate on markets in the international arena where its competitors are less powerful. 9. CONCLUSION The Organization study training and the resulted report have been of great help to the researcher, as an aspirant manager, to understand the functioning of a major establishment like Ashok Leyland. This study has also revealed many unknown facts about the working of a manufacturing unit and familiarize about the assembling of commercial vehicles.

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10. BIBLIOGRAPHY 1) L.M. Prasad, Human Resource Management, 2nd edition, New Delhi, Sultan -Chand & Sons. Yr.2005. 2) Philip Kotler, Marketing Management, Millennium edition, New Delhi, Prentice Hall of India (P) Ltd., Yr. 2001 3) Ashok Leyland In- House Journal Ashley News 4)www .ashokleyland.com

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