PRINCIPL

ES OF
MANAGE
MENT
TERM REPORT
Omair Khalid
Mustafa Siddiqui
Saifullah Tariq

Contents
QUESTIONNAIRE..............................................................................................2
LETTER OF ACKNOWLEDGEMENT.................................................................3
History.............................................................................................................4
Vision...............................................................................................................4
Mission Statement...........................................................................................4
PLANNING........................................................................................................6
TYPES OF PLANS AT LSM...............................................................................6
LSM GOALS & OBJECTIVES............................................................................6
Management by objectives...........................................................................7
DECISION MAKING AT LSM............................................................................8
Programmed Decisions.................................................................................8
Non-Programmed Decisions.........................................................................8
ORGANISING....................................................................................................9
DEPARTMENTS..............................................................................................9
LEADING........................................................................................................10
BASIC PRINCIPLES OF LEADING..................................................................10
CONTROLLING................................................................................................12
HR department at LSM...................................................................................13
Overview of Marketing at LSM .....................................................................14
Competition...................................................................................................14
APPENDIX.......................................................................................................15
Citations:....................................................................................................15
Indivisual Contributions:.............................................................................15
Conclusion..................................................................................................15
Business Card:............................................................................................15
Picture:.......................................................................................................15

QUESTIONNAIRE
1. How important is planning at LSM? And what sort of plans and goals does
LSM have at the moment?
2. Can we say you employ Management By Objectives at your organization?
3. How do you make decisions at LSM? Can you quote an example of when
you had to make an integral decision?
4. Can you tell us the types of Programmed and Non-Programmed Decisions
made at LSM?
5. How do you ORGANIZE the workforce in a way to achieve your
organizational goals?
6. How important is a LEADER at LSM?
7. How is the performance and quality of products of LSM CONTROLLED and
monitored?
8. Does LSM have an HR department? If yes, how does it operate?
9. How is marketing done at LSM? And how much competition does LSM
face in the market?

LETTER OF ACKNOWLEDGEMENT

Monday, May 12, 2014

Mr. Leon Menezes,
We would like to thank Almighty Allah for giving us the power and the
motivation to be able to produce a term report for our Principles of
Management course.
The report is paramount proof of the effort and commitment that Mr. Leon
Menezes has put in us, without whom the report would not have been a reality.
We acknowledge that his efforts and his words of guidance have made us
capable to achieve a challenge as strong as this. We would take this
opportunity to thank him for all this.
Besides, a word of gratitude to all the friends and family, whose support, both
moral and of actions enabled us to stand where we do today, and to complete
and achieve what we have accomplished today.
A special acknowledgement to Mr. Hanif Lakhany, Director at LSM, and Mr.
Hayat Memon, Legal advisor at LSM, for giving us the permission to visit and
entertained us. We all are very thankful to the managers at LSM, whose
cooperation and support were so evident and motivating, and for all the
occasions they guided us when we faltered and all the information and facts
they equipped us with to make this report a reality, thank you Sirs.
Sincerely yours,
Saifullah Tariq
Omair Khalid
Mustafa Siddiqui

History
In a span of 58 years Lakhany Silk Mills has travelled a long distance to achieve
the milestone and market reputation that it possesses now. Their CEO says: It
all started when we decided to get into this business with the vision to take a
splash in the industry. We have been working for 2 generations now and we are
regarded in the industry as those who understand textile in its most profound
form (http://www.lsmfabrics.com/lsmprofile.html)
After efficiently making a mark as the most fashionable style designers of
Pakistan, Uzma Mirza and Seema Sherazee collaborated with LSM back in 2006
to bring their House of Zunn brand to the market and transformed lawn that
was traditional into a work of fine art alongside a timeless appeal. Instituted in
1978, Lakhany Silk Mills is one of the oldest and most accepted textile houses
of Pakistan which provides high quality fabrics and sketches of elevated quality
fabrics and designs to the customers.

Vision
Our vision is to provide our consumers with the finest quality products &
reasonable prices. This sets us separately from our competitors and we will
always fight to uphold this rank keeping in mind client satisfaction and
production in a price competent, nature approachable and eco-friendly manner.
(http://www.lsmfabrics.com/lsmprofile.html)

Mission Statement
LSM is a firm that trusts in originality and character and quality as foundation.
It aims to satisfy customer wants and become a market leader by maximizing
its productivity and profitability level.
LSM commenced by producing elevated quality produce in 1952 alongside an
unmatched enthusiasm. Nowadays LSM stands as a cluster of companies- LSM
GROUP. Textile is not merely an instituted marketplace but additionally the one
whereas to make your mark, you've to be outstanding right from the outset.
The LSM cluster caters to the demand of a varied line of groups for this
demanding market. Be it dyed and printed 100% cotton, 100% polyester,
polyester viscose, polyester cotton, Garments producing, Bed-linen, drapes or
terry towels, the LSM cluster covers all at its vertically consolidated producing
facilities. Our state-of-the-art supplies & machinery makes sure that our
products are of the highest quality. In addition, LSM has been a chief player in
home textile and garments in Pakistan.
5

Product portfolio of LSM:

1. Women Lawn

2.Men Shirting

3.Terry

Towel

There are four basic Management functions that play a vital role in each and
every organization, without which attainment of goals would be next to
impossible.
These 4 functions include:
Planning: It involves choosing tasks that must be performed to attain
organizational goals, outlining how the task must be performed, and indicating
when they should be performed. Through this management function the
manager outlines exactly what organizations must do in order to be successful.
Planning is essential to get the right things done.
Organizing: Organizing can be thought of as assigning the tasks developed
under the planning functions to various individuals or groups within the
organization. It helps allocate resources so that the management process can
be done properly.
A manager at LSM says, LSM ensures that its organizing should not be rigid,
instead be adaptable and flexible to meet challenges as circumstances change.
These management functions are the activities that LSM carries out step by
step or simultaneously as they are all inter-related and inter-dependant.
Leading: It is the process of directing the behavior of others towards attaining
some goals. Directing, in a sense, means influencing an individual to act in a
certain way or to follow a particular course. Leadership is the prerequisite for
organizational success.
Controlling: It helps to check errors and to take corrective action so that
deviation from standards is minimized and stated goals of the organization are
achieved in a desired manner.
6

PLANNING
TYPES OF PLANS AT LSM
STANDING PLANS
Policies: At LSM, for upper and middle level management every person hired

must at least have a Bachelors Degree

Procedures: LSM has different procedures for its different department. For
instance certain procedures are set for its production department that outlines
the actions that must be taken for producing its fabric for lawn for women and
shirts for men
Rules: LSM has strictly prohibited its employees to smoke within the premises
plus they are not allowed to eat sweet tobacco (Gutka and Supari). Any
employee found performing such an act is fined.
Moreover, LSM workers are provided with a particular labor dress code that
they have to wear during working hours for production purposes.

SINGLE-USE PLANS
Budget: Every year LSM sets the budget for each and every department

which tells the department head how the funds will be allocated and obtained
for the purpose of meeting the organizational objectives
Programs: At LSM, there are fewer programs. For instance, 2 or 3 years
before LSM used to work with Sana Safinaz having hired her as their lawn
designer but now, LSM has signed a contract with Zunujj, a designer from
Lahore having very creative ideas and designs for fabric.

LSM GOALS & OBJECTIVES

Areas for organizational objectives:
1. Market standing LSM should keep in mind where it wants to stand in
relation to its competitors
2. Innovation- LSM should set objectives outlining its commitment to the
development of new methods of operations. LSM tries its level best to be
creative when it comes to production of its products. It wants to have a
competitive edge and a unique selling point.
3. Productivity The target levels of production should be highlighted- LSM
produces on a large scale as it has a local as well as an export market
4. Physical and Financial resources Capital and monetary resources need to
be monitored. LSM makes a budget plan and uses it effectively for this
objective.
5. Profitability Maximizing profitability is a byproduct for LSM. Its main focus
is on other goals like market share and consumer satisfaction.
6. Managerial performance and development Level of managerial
productivity and growth needs to be satisfied
7

7. Public Responsibility- LSM is an eco-friendly company that presents its

socially responsible report annually. Social Audit is conducted and that
highlights LSMs impact on the society and the environment.
8. Be efficient and effective efficiency is minimal input and maximum output
whereas effectiveness is the firms ability to achieve its goals. LSM tries to
be efficient and effective throughout the management process.

LONG TERM OBJECTIVES

1. Expansion of business in Middle Eastern countries
2. Opening of retail outlets in different regions of Pakistan
3. Increase in revenue in all areas of production i.e. Terry towels, Lawn and Men
Shirting

SHORT TERM OBJECTIVES

1. Meeting customer demands and high quality product requirements along
with delivery on time
2. To produce best quality in reasonable prices for all women/men of Pakistan
and foreign clients as well
3. Production of material that possess outstanding durability along with the
feeling that it is always soft and comfortable
4. Provide training to the labors for using the latest machinery to increase their
productivity
The HR manager at LSM says We have various goals and objectives. Once one
goal is achieved we move on to the next one as soon as we can. This way many
goals are achieved and this strategy really helps us in reaching the top

MANAGEMENT BY OBJECTIVES
MBO is a management tool that helps in managing and coordinating the goals
and objectives. When asked about the use of MBO LSM showed a positive
response towards it.
It has 3 basic parts that LSM also keeps in consideration:
LSM Managers and Subordinates set goals and objectives together- mutually
agreed upon decisions are implemented in LSM.
Time constraints and Time period is kept in mind so that effective and efficient
planning is conducted.
Periodically performance evaluation is done. Through this performance
appraisal rewards are given to those who help accomplish goals.

DECISION MAKING AT LSM

A manager at LSM says: We dont make decisions based on gut feelings
neither do we make decisions by getting influenced by those around us as that
is a very risky way of taking decisions hence we prefer a proper organized
system- a step by step way makes life easier
There are 3 decision making conditions:
Certainty
Uncertainty
Ambiguity
A manager at LSM said that they have been through all different sorts of
phases and they had to use a different approach of taking decisions in each of
the situations.
Example:
LSM had decided to enter the export market. It started off with exporting terry
towels- This was a decision with a risk condition as they were entering a new
market in another country with little or no knowledge about the foreign
customers. This proved to be a success therefore LSM also started exporting
women lawn and men shirting.

PROGRAMMED DECISIONS

Firstly, Lakhany Silk Mills makes programmed decisions which are repetitive
& routine in nature
LSM monitors the sale of a particular product through a survey which is
conducted to check that which fabric and designs are mostly purchased by
the customers.
On the basis of the feedback a decision is made whether to produce and
supply that particular fabric and design
Secondly, their pricing policy is decided according to the orders received
from the foreign clients who have their own standards/quality i.e. GSM
according to which prices are determined

NON-PROGRAMMED DECISIONS

These are the one time decisions

LSM has to maintain its quality and standards as per the requirements of its
clients. Therefore when a particular client changes the standard of the
quality required LSM has to figure out and make decisions for the materials
and processing that are applied to produce the product exactly as the client
requires.
Preventing unionizing of employees and managing human resource is
critically cared at LSM therefore HR managers decide actions to be taken for
employees according to what their psyche, behavior, performance and
turnover.
9

ORGANISING
As per the basic definition, organizing is how the management puts all the
resources together and how the resources aid the production process.
As earlier it can be seen, a proper hierarchy is visible at LSMs organizational
structure, with the top authority lying with the top management. A formal
structure is being followed at LSM, which has a proper chain of command being
practiced.

DEPARTMENTS
LSM have their departments according to the products they make which are as
follows:
1. Terry towels
2. Mens wear (both local and exports)
3. Women Lawn
Each department has a department head. Each department has its own
merchandiser, and it also have its own people for the sales sector, production
sector and marketing.

1. REFLECTION ON PLANS AND OBJECTIVES

LSM sets their plans according to their organizational objectives. Their main
purpose is profit maximization so they work according to customer
requirements. To be successful they follow the needs of their customers. If a
customer asks for 100% cotton the company makes sure that the terry towels
or any other product which is asked for is properly made.

2.

ESTABLISH MAJOR TASKS

LSM divides its major tasks or the jobs to be done among their workers. They
prepare their items according to the needs of the customers, because if they
exceed their limits and dont work according to the plan they will not break
even.

3.

DIVIDE MAJOR TASKS INTO SUB-TASKS

Then LSM breaks the major tasks into sub tasks. For example: a client requires
a product with a specific quality and design so the managers will not only
ensure materials to be perfect but also the processing of direct labor and
machines to be up to date in order to achieve their desired result and this is
done by dividing major tasks amongst workers.

4.
ALLOCATING RESOURCES AND DIRECTIVES FOR SUBTASKS
Then LSM allocates resources (4ms) in departments and gives directions to
workers who are going to fulfill the job. Sufficient amount of resources are
allocated in each area, not more not less, so that they do not go to waste.

5. EVALUATE THE RESULTS OF ORGANISING STRATEGY

10

After the product is ready then LSM has set a QC department which checks the
items to see whether they are properly made. They make sure that there is no
defect in the products that are made. The defected items are sent back and
corrections are made.

LEADING
BASIC PRINCIPLES OF LEADING
LSMs management pays important attention in guiding the activities of its
employees to enhance the accomplishment of its objectives. The management
influences its employees by strong leadership, motivation and through proper
communication.
Leading is the process of guiding the activities of organization members in an
appropriate direction. The appropriate direction could be any direction that
leads towards accomplishment of organizational goals. Leadership involves
activities such as influencing, motivating, considering groups and most
importantly communication.
The ability of influencing and its significance is that it develops a well
motivated, coordinated staff who are ready to employ all of their abilities at
work and this will make it more likely that organizational aims are achieved.
The strong ability of leading can be seen within the managers of LSM through
their well motivated workforce producing high quality products to gain
customer loyalty.
Leadership at LSM is mainly done through motivation and effective
communication. Communication at LSM is considered the main medium or way
to motivate employees because it involves the exchange of information
between people or groups, with feedback. LSM practices and encourages open
communication within the organization and this includes both formal
communication and informal communication. Formal communication is that
communication that follows the lines or routes of organizational chart and
formal communication of three types upward, horizontal, and upward
communication. Interpersonal or informal communication is also experienced
by LSM as they consider that all informal communication can help create the
important feeling of belonging, social cohesion and a friendly atmosphere. It
helps the management to test out new ideas and see what the reaction might
be if it is too negative, they never make an official announcement and clarify
official messages by talking them over as friends. For effective communication,
feedback is important, so the Director takes feedback from its workers regularly
and the LSM management willingly accepts and encourages both positive and
negative feedback from their employees.
LSM believes that leaders are made not born, they consider that leadership is
the art that can be learned by people, this means that LSM disagrees with the
trait approach to leadership that state leaders are born which means that they
possesses some inherited characteristics that successful leaders should have.
11

LSM supports the situational approach to leadership which states that different
leadership is required in different situations; different behavior of a leader is
needed in different situations. LSM management gives a lot credit for its
success to its leaders. Employees at LSM are annually given training sessions in
order to be better leaders.
The third activity is motivation; this is the internal and external factor that
stimulates people to take actions that lead to achieving a goal. Motivation is
very crucial for LSM as they need a well motivated workforce to produce quality
products because LSM is well known for its quality among its customers and
quality can only be brought through a skilled, happy, loyal, and motivated
workforce. Motivation is overall advantageous to the organization that results
in low labor turnover, low absenteeism, high productivity, suggestions for
improvements and readiness to accept responsibility. LSM has adopted several
ways to motivate its employees:

12

Personal Development Opportunities

LSM gives ample opportunities to its employees to grow and achieve more
and more and become outstanding at their work by giving them various
opportunities for training and workshops. Moreover they make sure that the
employees are promoted once they have shown the capability that they can
achieve the tasks that are expected from them.

Adequate Salary & Bonuses

At Lakhany, there is a basic salary for the employees plus there is additional
pay i.e. the piece rate given according to the quantity that employees
produce. There are also special bonuses for extra efforts made by the
employees to assure that employees morale remains at its highest level.
These occasional bonuses and increments keep the cash flows of employees
swift. This helps keeps the employees motivated so that they can give their
100 percent to the organization.

Moral Support & Monthly awards

Moral support here is done through communication and also through yearly
awards as the employees who have worked the hardest get bonuses at the
end of the year and also special recognition. This helps fills their need of self
recognition (intrinsic motivation). This makes them work even harder so that
they can retain the awards and their good reputation in the eyes of the
management.
Health, Safety and Hygiene Factors
At LSM special suites and gears are given to the employees for safety
purposes. They are also given guidelines to help them realize how to use the
equipments properly in order for them to be away from all the harmful and
unpleasant events. Also employees and their familys health is the
responsibility of LSM which provides the finances for employees for all their
medical purposes.

CONTROLLING
Controlling is the last step in the management process. Controlling is an
important process for LSM because it is a systematic effort by the

management to compare performance to predetermined standards, plans, or

objectives to determine whether performance is fulfilling the aimed
objectives or not. If not then this process allows the management to detect
errors and to take corrective action. This assists the management to
minimize errors and use the resources in the most effective and efficient way.
Even planning and controlling go hand in hand because the effectiveness of
plans are or either can only be identified through the controlling process. As
with planning, organizing, and leading, controlling can be viewed as a
subsystem.

MEASURING PERFORMANCE:
Before managers can determine what must be done to make an organization
more effective and efficient, they must measure current organizational
performance. For LSM, engagement of all employees is important to ensure
that employees have a clear understanding of the values, goals and priorities
at LSM. This step is aimed at enabling managers at LSM to document what
objectives and priorities they achieved during a particular time period and
how they achieved them .This process also forms the basis of the next year
planning process as well as a tool for assessing the increments and
promotions to be given out.

COMPARING MEASURED PERFORMANCE TO STANDARDS:

LSM has an effective internal quality control system which includes quality
circles, quality assurance and other quality control techniques. LSM carries
out checks at all stages keeping in mind customers awareness for quality of
products. Quality circles are groups that are responsible for checking the
quality of products. Agreed standards must be established at all stages of the
process from initial product idea to it finally reaching the consumer. These
stages include: product design, quality of inputs, production quality, delivery
systems and customer services and other techniques including prevention,
inspection, correction and improvements.

TAKING CORRECTVE ACTION:

After actual performance has been measured and compared with established
performance standards, the next step in the controlling process is to take
corrective action if necessary. Corrective action is a managerial activity
aimed at bringing organizational performance up to the desired level. For this
purpose at LSM each department has its own quality control personnel who is
involved at all stages of production such as fiber forming, spinning, knitting,
weaving, dyeing and stitching. LSM has its own lab test facilities to ensuring
the high quality of products with different test methods such as (IOS)
International Organization For Standardization and (ASTM) American Society
For Testing and Materials.

HR DEPARTMENT AT LSM
The scope of HR in a company is vast. When a vacancy is created at LSM, the
human resource department has to take into consideration the strategic
goals of the business and then find out what are the core skills missing in the
department which the new employee must fulfill.
Then they prepare a job specification keeping in mind the minimum
requirements support the accomplishment of the essential function.
Then LSM develops a recruitment plan. This recruitment plan outlines the
strategy for attracting and hiring the best qualified candidates and ensures
that no discrimination will be done in the case of women or a person with
disabilities. Then LSM selects a search committee. LSM does not allow only
one person to decide whether a person should be appointed for the job or
not so that there is no bias. A member of the committee will be appointed as
the compliance liaison so that he can monitor the affirmative action aspects
of the search committee. The advertisement is then placed and candidates
start applying for the job. Candidates from both inside and outside the
company can apply. The search committee of LSM then reviews and
considers all applicants and the process of short listing takes place. LSM then
prepares for the interview. After the interview the committee discusses the
interviewee. Members of the committee assess the extent to which the
interviewee met the selection criteria. The main objective during this
process is that they choose the candidate best suited for the job.
Upon completion of the recruitment process LSM sends the offer to the
finalist. The human resource department of LSM then determines the areas
where the selected candidate (employee) needs training. If needed LSM
human resource department design a training program for the new
employee and then the training of the new employee starts in form of
lectures or programmed learning. LSM provides its employees with on the job
training as well as off the job training. After the training season takes place
the HR management evaluates the effectiveness of the training program. If
the training program wasn't effective the company wasted the time and
money as during the training session the worker wasn't working which
decreases efficiency and money was also being wasted. The HR department
then evaluates the workers and gives them appraisals according to their
performance.

OVERVIEW OF MARKETING AT LSM

Marketing statement of LSM
We intend to target the sweet spot of customers
LSM's main product range is of clothes which cater to the male and female
market. The market is segmented on the basis of income and these clothes
cater to the upper middle class and the high class. LSM products are made
from the finest cotton fibers and then dyed to attain perfection.
The price of these products is kept high to persuade the individuals to buy
the products. The aim is also to maximize revenue at the same time.
LSM uses various channels of distribution in making its products available to
the market. The use of transport links such as delivery vehicles and air
transport to international destinations has made products available to its
customers.
LSM promotes its products through various
arranging fashion shows, using billboards,
commercials. Recently the company participated
fashion shows in New York and Lahore. These
promote LSM products but also increase sales.

means of promotion like

and making use of TV
and displayed its clothes at
sources of media not only

As LSM is a market oriented company, for it the consumer satisfaction is the

priority. It carries out surveys through questionnaires to keep up with what its
consumers want. Market research helps it in discovering new styles which
eventually make it the market leader.

COMPETITION
As we know that LSM is a huge and famous textile company. If the company's
growth is high in the market it gets tougher competition. LSM has also got
many competitors or we can say industrial rivals like GUL AHMAD and SANA
SAFINAZ.
Gul Ahmed gives unbearable competition to LSM as it has many market
shares and the company is doing its best in the market. Gul Ahmed is not

just making clothes but it also has other products like shoes, bags, and home
accessories. Gul Ahmed is known as the name of innovation, reliability, and
quality. They have built a relationship with their consumers by offering them
the best products in their range. For LSM, Gul Ahmed is a big threat as it can
take over LSM any time. Furthermore, SS is the luxury brand of Pakistan. SS
is the 2nd competitor of LSM. Though it is not as huge a brand as LSM and
Gul Ahmed but its attracting designs and brand image really gives a tough
competition to LSM.

APPENDIX
Citations:

http://www.lsmfabrics.com/lsmprofile.html

Individual Contributions:
M. Mustafa Siddique asked the first three questions in the questionnaire
and interpreted their answers in the report.
Saifullah Tariq asked the next 3 questions from the questionnaire and
interpreted their answers in the report.
Omair Khalid asked the last three questions from the questionnaire and
interpreted their answers in the report.

Conclusion

Visiting LSM was truly a precious experience. We analyzed all four functions
of management there and grasped the real concepts being practiced in a
manufacturing firm. This also enlightened us as to how important these
functions are to a company and without them a business entity can never
achieve its organizational goals. LSMs management is stable and focused
towards achieving its organizational goals and due to their set standards
theyve maintained a better workplace environment within the company.
All in all, this report was a team effort. Everyone contributed equally and we
hope that we exceeded your expectations. It was fun in your class and
hopefully we get a chance to take another course with you in the next 3
years.