Orange is a leading manufacturer of electrical accessories in Sri Lanka with a 65% market share. It was originally a joint venture with Clipsal but became fully Sri Lankan owned in 2005. Orange pioneered many standards in the industry including being the first to receive local and international quality certifications. It has grown significantly in recent years through strategic investments and consolidating its manufacturing facilities into a new industrial park. The company utilizes management practices related to planning, organizing, leading, and controlling to achieve its goals and objectives.

1. Master of Business Administration (MBA) – 2013/2015
MBA – 530
Management Process & Practice
Group Assignment
Submitted by
Group Number - 10
Group Members:
2013/MBA/WD/50
2013/MBA/WD/54
2013/MBA/WD/55
2013/MBA/WD/56
Faculty of Management & Finance
Postgraduate & Mid-career Development Unit
University of Colombo

2. Executive summery
Orange is a role model company pioneering in engineering sector component manufacturing
ranging from light meter to light bulb for domestic and industrial applications. Orange has
become market leader in many of their products such as switch and socket in domestic
market and a strong base in export market in South East Asia.
Orange is the leading Electrical accessories manufacturer in Sri Lanka with a commanding
market share of 65%. The 20 years of manufacturing expertise-the company posses has
given them core competitiveness in terms of undisputable product quality. It is viewed by
the public and the Industry as the leader in benchmarking.
Orange has been the first to set standards in this industry on many fronts. The brand was the
first local brand to receive certification from key certification bodies both local and
International that proved beyond doubt the quality standards of all Orange products and
also helped the organization to successfully export to over 15 countries. The company also
introduced individual packaging for each unit that not only protected the product in transit
but also provided a means to communicate the products features and specifications, and
provide a warranty certificate to the public through this means. Seeing the advantage this
feature was soon adapted by their competitors. The company was also the first to launch an
Electrician club through which a loyalty scheme was launched to gain the loyalty of a key
influencer group. Catering to the quality conscious consumer and identifying the need for
“lasting quality” the life time warranty offered by them for their products endorsed this
aspect and helped strengthen our differentiation. The key competitors such as Kevilton,
Clipsal, Clickon, Kripton and Hager has aggressively challenged them from time to time but
due to the strong quality perceptions and public confidence being built we have been able to
withstand this pressure and remain the market leader.
2

3. CONTENTS
1.0 Introduction of selected organization…………………………………………………………………
05
1.1 Introduction of the entity – Orange Cooperation (Pvt) Ltd ………………………………
05
1.2 Snapshot of financial performance ………………………………………………………………….
05
1.3 Product Sales Analysis ………………………………………………………………………………………
08
2.0 Historical Changes and Major Events of the Company …………………………………….
11
2.1 From Clipsal to Orange …………………………………………………………………………………..
11
2.2 New factory location at Meegoda (Umbrella Concept) ……………………………………
11
3.0 Literature review ……………………………………………………………………………………………….
12
3.1 Planning …………………………………………………………………………………………………………..
12
3.2 Organizing ……………………………………………………………………………………………………….
13
3.3 Leading ……………………………………………………………………………………………………………
14
3.4 Controlling ……………………………………………………………………………………………………….
14
4.0 Planning …………………………………………………………………………………………………………….
14
4.1 Strategic planning in theoretical aspects …………………………………………………………………….
14
4.2 Strategic planning in Orange ………………………………………………………………………………………
14
4.3 Decision Making ………………………………………………………………………………………………………..
15
5.0 Decision Making …………………………………………………………………………………………………….
16
6.0 Organizing ………………………………………………………………………………………………………….
18
6.1 Lean Manufacturing ……………………………………………………………………………………………………
19
6.2 Total Productive Manufacturing and Maintenance …………………………………………
20
6.3 Rapid Quality Improvement Team (RQIT) …………………………………………………………………
22
6.4 Production Planning Process ……………………………………………………………………………
22
6.5 Cellular Layout Plan ………………………………………………………………………………………..
23
7.0 Leadership ……………………………………………………………………………………………………………
23
3

4. 8.0 Motivation ………………………………………………………………………………………………………
24
9.0 Controlling ………………………………………………………………………………………………………..
25
10.0 Analysis of the Business environment from Macro to Micro …………………………………….
27
10.1 Internal Analysis …………………………………………………………………………………………………….
27
10.2 External Analysis …………………………………………………………………………………………………….
29
11.0 How management practices support for the organizational performance at Orange.
35
12.0 Recommendation and Conclusion …………………………………………………………………………
36
4

5. To: Dr. Tissa Ravidra Perera
From: Students of Team 10 from Group 2
Date: 31st December 2013
Subject: A Group study on Management practices in Orange Corp (Pvt) Ltd.
1.0 Introduction to Orange Electric (PVT) Ltd
ORANGE ELECTRIC (Pvt) Ltd (Hereafter referred to as Orange) possesses a rich legacy of
entrepreneurship and innovation harking back three generations. The story of a humble but
determined family of entrepreneurs from the south of Sri Lanka. The group initially
diversified into the electrical business with the acquisition of Morris Roche & Company, a
leading electrical-appliance outfit at that time, which represented world-renowned brands
such as Philips and Marconi.
Organization culture
Orange has provided an excellent friendly focus on its customers and a family culture to all
employees. Orange has launched many community development projects, particularly for
educational, health and religious sectors.
In 1999, with the introduction of the ISO 9001 Quality management system to organization,
Orange formalized its’ Vision, Mission and Values. Since then Orange has been developing
these concepts with the involvement of all their stakeholders. Current statuses of those
concepts are given below.
Purpose for existence
To give total solutions not only for electrical, lighting and communication needs but also for
building, security and energy needs of homes, offices and industries. While bringing a whole
new meaning to the tag "Made in Sri Lanka" and help bridge the trade deficit of our country.
Vision
“To create a billion dollar global electrical brand”
5

6. Mission
“To help people add more, to life with electricity”
Core Values
Seeking, innovation, always pursuing excellence and integrity above all.
Following are the list of core values declared and observed by Orange to its stake holders
of the business.
a) Values to customers and end users
Orange shall ensure that our customers will make good profit by selling our products and
services and Orange shall excel in giving them an unmatched, on time in full delivery service
every time. Orange will play an integral role in the upliftment of our customers and their
families.
To our end users, Orange will continually provide products that are innovative,
technologically advanced, aesthetically pleasing and value for money.
b) Values to our suppliers
Orange believes that our suppliers keep us competitive in the market and thus building
Win/win partnerships with them, is key to our survival. Orange shall ensure that our
suppliers
Make reasonable margins and that their payments are made on time
c) Values to our share holders
Orange will ensure that our shareholder/partners wealth is not lost but continuously
increase. Orange will not engage in business that deals in or relate to arms & ammunition,
alcohol & tobacco, livestock or gambling.
d) Values to the public
Orange will bring nationalistic pride to our country’s citizens through our operation by
providing high quality electrical & lighting products to the international arena and carrying
out meaningful CSR projects in the country.
6

7. Figure 1.0: Orange Electric head office building
1.2 Snapshot of financial performance
Figure 1.1: Financial Performance
Finance
Monthly sales
Gross Profit
Net Profit
Financial Cost
Creditors
Debtors
Admin Cost
Admin Cost against sales
Performance Projection
2010
2011
2012
125 Mn
150 Mn
171 Mn
28.8 Mn
36.8 Mn
42.8 Mn
11.0 Mn
24.4 Mn
30.4 Mn
11.1 Mn
5.0 Mn
4.6 Mn
220 Mn
270 Mn
300 Mn
350 Mn
300 Mn
332 Mn
7.9 Mn
8.7 Mn
9.1 Mn
6.4 %
5.8 %
5.3 %
Cost of Sales
Cost of sales against monthly sales
Area
97.0 Mn
77. Mn
KPI
114.0 Mn
76.0 %
129.0 Mn
75.4 %
Source: (Orange, 2012)
a) Orange has increased their sale volumes significantly since year 2009 onwards.
b) Due to that increase, Orange has rapidly increase their GP level
c) While increasing GP level company has maintained low financial cost, it has had a very
positive impact on net profit level of the company.
d) In our observation we found that company had increased its creditability to its suppliers
and debtor’s level has also gone up.
7

8. e) Increasing of administration cost on 2009 onwards drastically has impacted negatively
on net profit.
f) Cost of sales against monthly sales has decreased due to proper measurements on cost
of sales.
Projected performances are determined through various approaches shown in the
following table:
Figure 1.3: Project Performances
Key Factors
Customer feedback analysis
Data Source
Customer feedback form
Technological developments
Through benchmarking and JV partners, foreign
visits of senior leaders
‘Electricians club’, market research, sales forc
feedback, customer inquiries
Public Media
Changing market demands
Benefits given to the manufacturer by
the government
Important restrictions of countries
where we sell our products
Competitor analysis
Statutory and regulatory requirements
Long term sustainability of the
organization
Company’s ability to execute the
strategic plan
Public media, customers information
Competitor intelligence, Market research
Through company representatives in
government authorities, Public media
Monitoring and control mechanism set out by
organization.
Trends of performance including financial
performance.
Products and Sales analysis
Orange is pioneering in engineering sector component manufacturing ranging from light
meter to light bulb for domestic and industrial applications. Orange’s operations can be
sectorized into two basic product lines and 3 product ranges in below mentioned brands.
Sri Lankan owned brands under the Orange umbrella are;
1. Leading Brand as Orange
2. Budget brand as Wireman.
Under those brands, main product lines are:
a) Switches in all kinds
b) Sockets in all kinds.
c) Domestic Wiring Cables.
d) Conduits for electrical Wiring.
e) Low voltage switches for safety applications. (MCBs, RCDs, Isolators).
8

9. Other than the above mentioned brands and product lines, Orange is into, Original
equipment manufacturer (OEM) services to cater Austrian and Australian markets under the
brand names such as, HPM industries (Australia) and PCE (Austria). Product ranges in OEM
service are Industrial Plugs and Sockets for highly demanding and harsh environments and
country specific Socket Ranges.
Orange is catering almost all the requirements of the electrical industry to fulfill the product
line, recently Orange ventured with another renowned local brand MAGLINE, with this new
venture Orange product line is now complete with ;
01. Domestic and Industrial panel boards;
02. Industrial Enclosures for Large scale wiring needs.
03. Information technology server racks and modular server cabinets
Panel wiring and testing were also added into the Orange product and service line as a
result.
Orange contains and serviced by two other sister companies. Orange SLK for local trading
operations and Orange International for International Sales, Marketing and delivery
operations. Total local product delivery is controlled and managed by Orange SLK with a
dedicated sub division named Orange distribution systems (ODS). ODS operates with a
dedicated work force for “Warehouse to end user” distribution management. ODS is
managed with geographic as well as product reseller network and projects network
separately. Product reseller network consist of 3 staff layers internally and 2 external layers.
Internally it is Regional manager; Territory manager and Sales representatives and externally
distributors and dealers.
Their distribution network can be figured as below:
9

10. Fig 1.4: Orange Electric distribution network
Dealers
ORANGE
SLK
Own outlets
Large scale
Projects
OS Projects
ORANGE
International
Project
Dealers
Foreign
distributors/
Agents
Foreign or local customers
ORANGE ELECTRIC
ORANGE
SLK ODS
JV Partners
Designing
Center
Project delivery staff is a second sub unit under OSP and their main concern is to deliver and
service one time projects and project companies with Orange products and other services.
Distributed technical knowledge service is a unique area which orange specialized with years
of manufacturing and technical support experience. Orange services all kind of electrical and
wiring requirement both domestic and industrial sectors.
Orange market share for switches & sockets is given in preceding figure, for past 3 years.
These were based on import statistics obtained from Customs and industry sources.
Figure 1.5: Orange market share
Source: (Orange, 2012)
10

11. 2.0 Historical Changes and Major Events of the Company
2.1 From Clipsal to Orange
Electrical-accessories business had commenced 20 years ago as an Australian-Sri Lankan
joint venture with Clipsal, with a simple assembly line, producing a limited range of switches
and sockets. From then on, the company had experienced phenomenal growth and market
leadership, manufacturing a complete range of electrical products. The sale of Clipsal
Australia to the French multinational company Schneider Electric was the turning point in
the history of Orange, as this twist of fate had led to the birth of Orange Electric in 2005. At
that crucial juncture Mr. Kushan Kodituwakku(Son of late proprietor) had decided to resist
against the sale of the company to a multinational company. This situation presented with a
golden opportunity to Sri Lankan talents to demonstrate their knowledge with the global
competition. It had become an overnight success, securing market leadership within a short
period.
2.2 New factory location at Meegoda (Umbrella Concept)
Orange was operating with geographically distributed factories/plants at following locations:
a) Navinna-manufacturing facility (Plant 01)
b) Navinna-manufacturing administration facility with support services.
c) Boralesgamuwa-manufacturing facility (Plant 02).
d) Meegoda-industrial park (Plant 03) joint venture manufacturing.
e) Pitipana-central supply chain management centre.
f) Katubedda-Magline Plant.
Orange has made significant capital investment over last few years consequent to that total
assets base has increased as shown below:
Fig 2.0: Total assets 2004/2007
Source: (Orange, 2012)
11

12. This had resulted, the Company management taking a radical decision to move all these
facilities to industrial zone in Meegoda (called Meegoda Techno Park) leading to umbrella
production floor concept by investing Rs. 212Mn. in 2006 & 2007 respectively.
3.0 Literature review
The figure below illustrates the management process of an organization to achieve the
organizational goals through the functions of planning, organizing, leading, and controlling.
Figure 3.0: Management process of an organization
Source: Daft, 2012
3.1 Planning
Planning means identifying goals for future organizational performance and deciding on the
tasks and use of resources needed to attain them. In other words, managerial planning
defines where the organization wants to be in the future and how to get there. (Daft, 2012)
The preliminary function of management is planning at present. It has been highly
questionable to plan for the future in ever changing environment. Eventually as coping with
the vibrant environment organizations plan their activities at least for year or two
Plan is a blue print for goal achievement and specifies the necessary resources allocations,
schedule tasks and other actions. (Daft, 2012)
12

13. The future state that the organization hopes to achieve is the vision of the organization. The
mission statement describes the reasons of an organization existence. (Daft, 2012)
Management by objective (MBO), Contingency plans and standing plans are few approaches
to planning. MBO is a process where the managers and employees are involved in setting
the goals and monitoring the performance accomplishments.
The below figure depicts the planning process in a nutshell.
(Cole, 1996) Illustrates the basic model of the planning process as follows;
Figure 3.1: Basic model of the planning process
Review external environment
Review internal resources
Establish/Redefine
aims/goal and objectives
(Ends)
Plan how aims and
objectives to be achieved
(Means)
(Ends)
Agree organization
policies
(Conduct)
Take appropriate action
(Results)
Review results regularly
(Feedback)
Source: (Cole, 1996)
3.2 Organizing
Organizing typically follows planning and reflects how the organization tries to accomplish
the plan. Organizing involves assigning tasks, grouping tasks into departments, delegating
authority, and allocating resources across the organization. (Daft, 2012)
13

14. 3.3 Leading
Leading is the use of influence to motivate employees to achieve organizational goals.
Leading means creating a shared culture and values, communicating goals to people
throughout the organization, and infusing employees with the desire to perform at a high
level. One doesn’t have to be a well-known top manager to be an exceptional leader. Many
managers working quietly in both large and small organizations around the world also
provide strong leadership within departments, teams, nonprofit organizations, and small
businesses. (Daft, 2012)
3.4 Controlling
Controlling is the fourth function in the management process. Controlling means, monitoring
employees’ activities, determining whether the organization is on target toward it’s goals,
and making corrections as necessary. Managers must ensure that the organization is moving
toward its goals. One trend in recent years is for companies to place less emphasis on topdown control and more emphasis on training employees to monitor and correct themselves.
However, the ultimate responsibility for control still rests with managers. (Daft, 2012)
4.0
Planning
4.1
Strategic planning in theoretical aspects
Strategies are general programs of action and deployment of emphasis and resources to
attain comprehensive objectives; the program of objectives of an organization and their
changes, resources used to attain these objectives, and policies governing the acquisition,
use, and disposition of these resources; tile determination of the basic long-term objectives
of an enterprise and the adoption of courses of action and allocation of resources necessary
to achieve these goals.
14

15. Figure 4.0 : The TOWS Matrix: A Tool for Situational Analysis
4.2 Strategic planning in Orange
During our study it was found that strategic planning in Orange involved divisional and
functional structures.
Figure 4.1 Management Hierarchy
Managing
Director
CEO
MANUFACTURING
DIVISIONAL
MANAGER
SUPERVISOR
DIVISIONAL
MANAGER
SUPERVISOR
CEO
SHARED SERVICES
CEO
SALES
DIVISIONAL
MANAGER
SUPERVISOR
DIVISIONAL
MANAGER
SUPERVISOR
DIVISIONAL
MANAGER
SUPERVISOR
DIVISIONAL
MANAGER
SUPERVISOR
15

16. Profit, revenue growth, GP/NP level of the organization per annum would be decided by the
top management. Aligning with those expectations, three layers of business plans are
formulated by manufacturing, Sales, and Shared service CEOs. CEOs conduct direct and two
way communication/coordination between the top management and among parallel levels.
Sales CEO would prepare business plan according to the target set by Managing Director
(MD), later it might be changed after consulting other respective CEOs in manufacturing and
shared services. The business plan prepared by sales CEO, contain existing business plan,
diversification for new markets, monthly distribution, promotions expected, marketing
expectations, staffing, training, etc.
Manufacturing CEO would prepare his own business plan based on sales CEO’s business plan
which would include the cost of manufacturing, technology, machinery requirements and
other concerns.
Shared services CEO prepares his own business plan according to the given budget,
availability of funds, material cost for Accounts, HR, Procurement and Stores divisions.
Finally, all those business plans are integrated and developed as a single business plan after
the consultation of the Managing Director in a common forum. That particular business plan
would be freeze after agreeing on cross functional KPIs. It would serve as the planning
document for the particular financial year. According to this document all other divisional
heads and respective sub divisions develop their plans. Ultimately it would be trickled down
to individual production line level.
5.0 Decision Making
In the strategic management process, taking the right strategic decisions to optimize
company performance is vital.
16

17. Figure 5.0: Six steps of the decision making process (Daft, 2012)
6 steps in decion making
Step 1 - Recognition of the
need-
Step 2 -Diagnosing causes
Step 3- Developing
alternativesStep 4 - Selecting an
alternativeStep 5 - Implementing the
alternative
Step 6 - Evaluation and
Feedback
Orange has used vertical functional approach to departmentalize its employees. Due to the
nature of operations they are required to use this approach as work groups and positions
are based on similar skills, expertise, work activities and resources used.
Basically, Orange is governed by centralized decision making process due to the inherent
single owning layout. As long as the top management/ownership of the company is a single
entity, we found that the organization structure, strategic plan, roles and responsibilities are
decided by the same.
The company, sales plan and turnover would be decided by top management after the
consultation of CEO levels. In our observation, we found that, there is some intent of
participative leadership in their monthly meetings and operating level discussions.
Hence, at operating level certain autonomy has been granted to divisional heads to decide
operating team level goals, tasks, performance OEE (Operating, Effective and Efficiency), and
to take remedial actions for the drawbacks of the process.
17

18. 6.0 Organizing
Organizing is the function of management which follows planning. It is a function in which
the synchronization and combination of human, physical and financial resources takes place.
All the three resources are important to get results. Therefore, organizational function helps
in achievement of results which in fact is important for the functioning of a concern.
According to Chester Barnard, “Organizing is a function by which the concern is able to
define the role positions, the jobs related and the co- ordination between authority and
responsibility. Hence, a manager always has to organize in order to get results.
During our study we observed that Orange has implemented ERP (Enterprise Resources
Planning) system connecting all its individual systems.
Figure 6.0: Enterprise Resources Planning
Source: http://www.rkvitsolutions.com/
18

19. Fig 6.1: Enterprise Resources Planning
Source: http://www.abubakershekhani.com/
ERP serves as the glue that binds the different computer systems for a large organization.
Typically each department would have their own system optimized for that division's
particular tasks. With ERP, each department still has their own system, but they can
communicate and share information easier with the rest of the company. (Shekhani, 2013)
6.1 Lean Manufacturing
The core idea of lean process is to maximize customer value while minimizing waste. Simply,
lean means creating more value for customers with fewer resources.
A lean organization understands customer value and focuses its key processes to
continuously increase it. The ultimate goal is to provide perfect value to the customer
through a perfect value creation process that has zero waste.
To accomplish this, lean thinking changes the focus of management from optimizing
separate technologies, assets, and vertical departments to optimizing the flow of products
and services through entire value streams that flow horizontally across technologies, assets,
and departments to customers.
19

20. Eliminating waste along entire value streams, instead of at isolated points, creates processes
that need less human effort, less space, less capital, and less time to make products and
services at far less costs and with much fewer defects, compared with traditional business
systems. Companies are able to respond to changing customer desires with high variety,
high quality, low cost, and with very fast throughput times. (Compton, 2009)
House of Lean explains how the lean principles have been collaborated together to be a hig
performer in the market place .
Figure 6.2: House of Lean
6.2
Total Productive Manufacturing and maintenance (TPM)
TPM Systems Making production more economical by eliminating accidents, quality defects
and breakdowns Meeting demanding customer requirements by eliminating losses, allowing
the production of a high variety of products in small batch sizes that equal consumer
demand.
Reducing costs by maximizing equipment efficiency, raising labor efficiency, improving
resource consumption and building a flexible production system that is responsive to
changes in demand.
20

21. TPM is a particularly useful approach to improvement in high volume, highly repetitive
organizations such as process industries and equipment-orientated mass-production
environments.
‘Poka Yoke’ Technique
Japanese approach to 'mistake proofing' in all aspects of manufacturing, customer service,
procurement, etc. It employs visual signals that make mistakes clearly stand out from the
rest, or devices that stop an assembly line or process if a part or step is missed.
Three levels of Poka-Yoke:
1) Elimination of spills, leaks, losses at the source or prevention of a mistake from
being committed.
2) Detection of a loss or mistake as it occurs, allowing correction before it becomes a
problem
3) Detection of a loss or mistake after it has occurred, just in time before it blows up
into a major issue (least effective). (Anon., 2005)
Lean Manufacturing Process and other practices at Orange
Orange has implemented Lean Manufacturing principles supported by various techniques
like “lot size of one”, “continuous flow”, and “pull production”, “TPM”, “Poka Yoke”, “5S”,
“Continuous Improvement” to eliminate any form of non-value adding activity to its output.
Lean Manufacturing has primarily been associated with the factory floors of short run. It was
revealed that application of lean manufacturing principles and associated other practices in
Orange had resulted in lots of positives both directly and indirectly.
Listed below are few operational optimizations Orange has achieved by practicing lean
management and other associated practices.
Basic 5S implementation in the assembly and other departments had made the things easier.
1. Continual improvements & Waste reductions were done through the Work
Improvement Team concept had improved the performance of the work done.
21

22. 2. Reduction in Work In Progress inventory by 30% in moulding department
through the implementation of KANBAN system.
3. Reduction in raw material stock by 25% in assembly department
4. Through the implementation of OEE in Eubama section machine break downs
has been reduced by10%, Quality has been improved and Productivity has been
improved by 25%
5. Efficiency has been improved by 10% in the assembly department.
7. Assembly culture of traditional assembling has been changed to efficient
production lines by implementing line balancing techniques
6.3 Rapid Quality Improvement Team (RQIT):
Rapid quality improvement team comprised of employees of various departments including
research and development unit has been deployed by Orange to attend to real time issues of
the productions and quality issues of the end products. Maintaining RQI team has
augmented the company objectives of maintaining high quality customer corrective and
preventive measures by keeping cost, quality, delivery (flexibility) at an optimum level.
6.4 Production Planning Process:
Three types of different plans are being adopted by Orange to achieve their goals and
objectives in production process.
a. Short three months rolling forecast
b. The intermediate business plan
c. Short term planning
The rolling forecast is mainly prepared for material booking and sales planning/forecasting
purposes based on material requirement Plan (MRP), They adopt long lead material
arrangements. Hence, by verifying balance stocks and remaining sales items, Orange has the
capability of forecasting upcoming sales.
22

23. 6.5 Cellular Layout Plan
Fig 6.3: Cellular Layout Plan
Process (Functional) Layout
Group (Cellular) Layout
Source : http://www.cemag.us/
This type of plant layout is useful when the production process is organized in batches.
Personnel and equipment to perform the same function are allocated in the same area. The
different items have to move from one area to another one, according to the sequence of
operations previously established. This will have lot of advantages in the form of reduced
material handling activities, work in process almost eliminated, minimum manufacturing
times, simplification of the production planning and control systems and tasks simplification.
(Stevenson, 2012)
At Orange, row materials, manufacturing floors, machinery, working personnel and other
physical resources are organized according to the cellular layout explained above.
7.0 Leadership
Leadership development program has been launched at Orange to unleash the potential
leadership qualities hidden among the employees whom they had thought that they can
groom as future leaders. This has commenced in 2007 and up to now about 20 prospective
leaders have been identified under that scheme. Under this program, developing certain
identified components of the entire process has been delegated to identify personnel.
23

24. Figure 7.0: Projects completed under the leadership program:
8.0 Motivation
Orange Company’s motivation strategy of their employees is based on the policy that the
employee shall be a person who is happy and strong both physically, mentally/spiritually so
that he/she will impart maximum to the system. In order to achieve these expected capacity
enhancements
various
programs
are
in
place
which
are
being
continuously
monitored/reviewed at CEO level.
Employee performances are evaluated on continuous basis. Those who perform well would
have a chance to climb up in career. In the management point of view , the systems are in
place to quantify the performance level of each employee and reviewing of these are being
done at team level discussions and divisional heads/CEO level discussions taking place
weekly. Incentives and annual bonus depends upon to performance of the individual.
Employee will have a clear idea about his relative performance and the subsequent reward
scheme.
From the point of the employee, if accepted performance level is maintained the carrier
advancement is in offer, in the form of promotions, specialized training, overseas exposure
and increased monitory gains. A training department has been established to look in to the
training needs of the entire working population. Continuous training programs are
implemented to impart them the knowledge and to develop necessary skills to perform.
24

25. Capacity enhancement programs:
1. Meditation program
Batches of 10 employees are sent on compulsory meditation training and employees are
encouraged by awarding monitory benefit of 100000/= for the completion of the program.
Underlying expectation of the management is that individual mindfulness and maintaining of
continuous concentration developed through this program would lead to enhancement of
the efficiency at work.
2. Karate and Yoga program
These two programs are conducted to enhance the physical strength of the work force.
Expenditure of all these programs are borne by the company
3. Compulsory holiday on poya day
It is observed that the poya holiday is reserved and it is observed in such a manner that even
if there is an urgent requirement of labor is required to meet the impending production
requirement, extra work on poya days are not expected from the employees.
4. Employee well-fare programs
Lunch is being provided by the company to all the employees. Employees, irrespective their
ranks, mingles and enjoys this facility. Through this Orange has created an atmosphere of
equality within the factory premises. Transportation is provided by the company covering
two major cities where the most employees concentrated.
While providing in-house recreation facility a picturesque play ground with an open air
theatre has been constructed for outdoor recreational activities. It was revealed that this
facility is being used by the employees frequently.
Welfare shop- provides day to day essential commodities at lower prices when compared to
common market prices. The excess is borne by the company. Planned annual excursion is
decided by the employees. It could either be a trip sponsored by the company or might be
an event like a concert where a platform is provided to show talents/ artistic skills of the
employees.
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26. At the beginning of year stationeries likes school books/bags are provided with discounted
rates to the employees. Those who have children who are new entrants to grade 1 will
receive book list required with the bag sponsored by the company.
Loan facilities are available for the employees who will be provided in case by case basis.
Close rapport maintained by the ownership with the employees is also seen as another
factor of motivation.
9. Controlling
Control mechanism of this organization, is a two way process.
9.1 Communication MIS (Management Information System)
Communication
At the top level of this organization, they are carrying out two monthly meetings, targeting
fund allocation at divisional level and reviewing for KPIs in the preceding month.
The first meeting is dedicated for fund allocation purposes. In that, they balance their input
and output cash flows, based on availability of funds. The significance we found in our
observation was that their reluctance for short term lending.
Basically, they have two approaches such as cut down in expenses and increasing sales
volumes.
Second monthly meeting dedicated for to review KPIs for proceeding month. Cost center
wise performance analysis is taking place at that meeting. Respective divisional heads
present their P&L and balance sheets in this.
Management information system (MIS)
Orange uses cutting edge information technology called palm top technology for the
purpose of getting relevant, real time and accurate sales feedback.
Divisional KPI Meeting
Weekly basis, respective divisions carry out KPI review meetings to evaluate their
performances. As an outcome of these meetings particular divisions could change their plans
towards in achieving their divisional KPI targets.
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27. Quality review meeting
Orange carries out quality review meeting as a part of control tool in the organization. This
helps them to review their quality of the products in continuous basis. They have adopted
Kaizan concept (Japanese concept for quality improvement) for quality improvement.
10. Analysis of the Business environment from Macro to Micro
10.1 Internal Analysis:
Figure 10.0: Mc Kinsey’s 7S framework
McKenzie’s 7’s (systems, shared values, strategy, systems, style, skills, staff) model can be
used to analyze internal environment of the company. McKenzie’s 7’s model helps us to do a
deep and broad analysis of the internal environment of the organization.
Source: www.whittblog.wordpress.com
Structure
In our observation we have found that, Orange has a flat organization structure. The
organization structure simply as it is from top management to CEO level towards to
operational and divisional level. It was observer that there was no any middle management
layer (second line management layer) in Orange.
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28. Strategy
The company has developed strategies to gain more market share and to meet the
competition. Quality is the key factor of Orange success and they have developed Wireman
brand to attract low budget customers who are not much concerned about the durability of
the product. The successfully implementation of the balance card is one of the key pillars of
Orange strategy.
Systems:
Orange has built up their entire system centered on the managing director or the owner of
the company. From business plan to divisional/operating line level systems are flown from
his office. We can simply say that the entire system is the managing director. High marketing
skills, dynamic technology orientation, high level of wastage recovery and high concern on
quality are some key motives coming from the system.
Style
Orange shows certain degree of autocracy, while, they practice participatory leadership in
certain cases where necessary.
Staff
Orange consists of 60% of permanent staff and rest as out sourced. Their CEO level is the
backbone of the organization is highly facilitated by the top management. Further, due to
the lack of middle management layer, staff has to wait, over the period of time to climb up
the corporate ladder.
Skills
The entrepreneur has started his career as an apprentice under the shadow of his father.
Later, he had been sent to USA to further studies where he obtained a masters degree in
manufacturing engineering. He is known to be a technocrat who took over his father’s
business with a solid educational back ground required for the industry he manages. Other
than that, the entrepreneur has hired three exceptional personalities for CEO level who are
qualified and well experienced in the trade. Employees’ skills are developed through
continues training programs.
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29. Shared values
Orange has developed an organization culture to deliver high quality products on time.
Orange has maintained their credibility among their suppliers, customers in their respective
interests.
10.2 External analysis
Industrial analysis by Porters 5 forces
Apart from the factors of the macro environment a business also faces elements of force
from the immediate industry and competitive environment. This is depicted in Figure 10.1,
in which Thompson (2010) links the components from the macro environment to the
immediate industry and competitive environment using the elements of Porter’s forces.
Figure 10.1: The Components of A Company’s Macro-environment
Source: Thompson (2010)
Competitive rivalry
Orange has faced severe competition due to arrival of low quality low cost products through
rivalry. However, the company had introduced Wireman brand to counter that effect. The
environment of the organization is highly vibrant. Therefore they have planned for the
contingencies. The company maintains brand name “Orange” as a high quality and high
priced product keeping the high end customer base intact.
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30. Power of the customers
Customers are having different options due to many similar brands available in the market,
Orange has been able to develop the image as Sri Lankan producer who provides
international quality standard products at competitive and at reachable prices.
Power of the suppliers
The company enjoys a strong supply network for their raw materials such as copper and PVC
from local and foreign suppliers from India, Malaysia and China. Furthermore company is
very much strict on inventory management of raw materials by using just in time concept.
Threat of substitutes
The companies producing similar types of products pose a threat to the business. Orange
has been successful enough to understand this fact and has been able to counter these
threats by diversifying the products and entering into new markets of the electrical
appliance.
Threat of new entrants
Due to high profitability of this industry there exists potential threat form new entrants.ACL
cables has developed their own socket ,switches and CFL bulbs with comparatively lower
prices and are in the process of introducing to the local market. It has become a threat to
the market share of socket and switches. Sales of Orange
Macro external environment analysis -PESTLE
Having identified such a marketing opportunity a firm gears its self to deliver that value
proposition to the market as a form. Enroute to doing so a firm in business is exposed to
internal and external forces that may complement or deter it from delivering that value
proposition to the market as a form. In order to keep the firm on track to deliver the
conceived value proposition the firm requires a strategy. Strategic management is to do with
the conception and management of such a strategy, where it directly impacts the
operational and market viability and sustainability of the firm. This intern has a
corresponding impact on the firms financials.
There are many parallel models, where most of the elements are conceptually similar, to
perform an analysis of the business environment and the internal and external forces
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31. impacting the business strategy. The most commonly used for a macro analysis is the PESTEL
model as depicted in Figure 10.2.
Figure 10.2 PESTEL Analysis
Source: Abilitysuccessgrowth.com
Political environment
There is no any visible political influence to this company. However, the entrepreneur
tactically manages to keep away political influences to Orange. As per available information,
he used to fund both ruling and opposition parties during the elections. Hence, the
entrepreneur never enjoys any list of recruitments coming from local politicians by keeping
good rapport with national level of politicians.
Economic environment
With the rapid growth in construction projects in Sri Lanka since 2005, the company has
gained huge demand for their products such as cables, switches and sockets. Most of these
products are heavily used in both domestic and industrial levels.
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32. Social environment
The entrepreneur developed his image in the society as a true Sri Lankan company with the
theme of “Ganna ape de (buy Sri Lankan products)” contributing to many social, public
projects to enhance Sri Lankan life standard. Meanwhile, Orange has contributed to beat
unemployment, earn more foreign currency and enhance GDP.
Technological environment
The research and development facility in Orange is in continuous process of improving
technological aspects of their products with Kaizen concept under the guidance of the
technocrat entrepreneur. In recent past, Orange has done a revolution in esthetic
appearance of their products especially of switches adhering to the cutting edge
technologies.
Legal
The company has been registered under no.7 company act 1987 and the same company has
fulfilled all the requirements related to the local legislation. At the same time, the company
has become a reputed member in Ceylon Chamber of Commerce.
The company is enjoying BOI privileges due to high turnover maintained in foreign currency
as well as there are no any legal boundaries to import raw materials from foreign sources.
Environmental
The waste management system of the company is been checked regularly by environmental
authorities in Sri Lanka to check the adherence to local regulations. The company maintains
a highly effective waste management system for solid waste management and mercury
recycling. Orange is the one and only owner of mercury recycling plant in South Asia which
resulted in making a eco-friendly image in the whole region.
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33. Internal and External Analysis of the Orange Corp.(Pvt) Ltd – SWOT Analysis
A SWOT analysis is the prudent method for investigating the internal forces that impact the
business strategy. Figure 10.3 below denotes such an analysis for Orange Electric.
Main strength of the company is high quality manufacturing capacity can be utilized with the
opportunity of assembling LV switch gear and CFL bulbs. That turnover could utilize to
increase working capital management while balancing with highly matured core product
range.
Strong leadership qualities can be utilized to improve poor strategic focus, to enhance new
market while balancing with new entrance of foreign investments to Srilankan Markets.
Figure 10.3: SWOT analysis
Strength
High quality
Manufacturing
capacity
JV partners
& strong
leadership
qualities
Product
portfolio
Low cost
operation
Skill work force
Brand name
Proven process
Distribution
net work
Innovation
ability
Product &
Process
reengineering
ability
Weakness
Opportunity
Threats
Poor working
capital
management
Poor strategic
focus
Assembling of LV
switch gear & CFL
bulbs
New arising
market of North &
East, Tamilnadu
Highly matured
core product range
Poor customers
service mind
set
Lack of team
spirit
Poor HR focus
Low cost product
range
Poor focus on
new products
Poor focus on
management
accounting
High
distribution
cost
Multiple plants
Colombo Dock
yard project
replaceable
switches for
installed other
brands
New foreign
investments for Sri
Lankan electrical
field
Foreign currency
fluctuation
Bank interest
fluctuation
Low cost product
in the market
Material prices
fluctuation
Global recession
Poor adaption
on new process
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34. 610 M facility
Marketing
Product
portfolio &
positioning
Market
intelligence
Interrogation
sales & MFG
Speed ,
Flexibility &
service level
Internal &
external
communication
New product &
events
To be profit
oriented
Poor inventory
management
High cost of
quality
Operational
Center
On time
materials
availability
Suppler
negotiation
terms, price
Transparency
of procument
information
Reduce MOQ
Information
technology
Reliability of
information
Reduce logistic
cost
Establish 2-3
suppliers for
A,B product
category
Introduce
materials
tracking
mechanism
Continuous
follow up
Un full fill
orders
Technical
purchase cycle
to be reduce
Human Resource
JD, Responsibility &
authority
Customized
reports
Clear Designation
Better service on
S/W & H/W users
Performance
measuring
Update technology
for current trends
Training &
development
Improve
performance of
intranet
Implement Bann
on all other dept
Improve Welfare
facility
Eliminate
inconsistence in
costing (MAUC)
Organize annual
events
Eliminate using
risk of pilot copies
Reward &
recognize
Grievances
handling
Improve working
safety & health
Improve accuracy
of time &
attendance system
Focus on Exe &
Managers appears
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35. 11.0 How management practices support for the organizational performance at Orange
Orange develops their strategic business plan at CEO's level based on targets set by
Managing Director. However, it should get more involvement of operational level staff in
this process which will be more practical at the execution level of the plan. Our study at
Orange revealed that this has created a fraction of negative impact on achieving
company goals and expected outcome towards the Vision, Mission and Objectives of the
company.
“Orange has developed "Hybrid or Linear" organizational hierarchy which is not much
healthy for a rapidly growing institute in its long run.
Lacking of a middle management layer and non availability of trained backup staff at
CEO's level of the organization could create huge impact on Orange in case of a sudden
departure of the above level staff. Furthermore, it could create bottle neck situation at
the higher level of the management. Decision making process in Orange is much more
centralized. Therefore it will create negative impact on decision making process to
achieve company goals and objectives. Orange has to developed more HR approached
leadership than more target oriented leadership.
Orange has facilitated their staff by strong welfare scheme. This motivates their staff to
a higher level with non financial benefits. However when we analyze job turnover ratio
and the percentage is higher, in comparative with other institutes in same industry.
Therefore company has to come up with suitable financial benefits which are similar or
higher than the industry.
Orange has developed more nature friendly environment at their main factory premises
at Meegoda and has become role model in waste management. They have solid waste
recycle process and maintain the largest mercury (CFL Bulbs) recycling process in South
East Asia. It shows their commitment and social responsibility for a global issue like
environmental pollution. It helps them to develop their image in the market indirectly to
achieve company objectives.
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36. 12. Recommendations and Conclusions
a) Orange has to implement bottom line approach in preparation of Strategic plan of
the company which will be more practical and democratic.
b) Orange has to develop more participatory approach in planning level where they can
improve Organizing function more practically with the help of junior, operation and
even line staff.
c) Orange has to decrease dependency on single person by creating less centralize
control or operational knowledge and practice. They have to create a middle level
management layer for the sustainable future of the company.
d) Orange has not developed "Pyramid Structure" in organizational hierarchy. Orange
has to develop flat organization structure to improve their productivity, efficiency,
and effectiveness further.
e) Job turnover ratio of the Orange is comparatively high due to various facts. However
they maintain 60% of their work force as a permanent staff category rest of them
has been outsourced. However, they should further evaluate selection and
recruitment process of the company and motivate their staff to be in good level of
job satisfaction, job involvement and job engagement.
f)
Consequently, the company has taken initiatives to improve its performance
through appropriate planning in quality and cost concern. The prime objective of
the company is to acquire export market in Indian sub continent.
g) The SWOT analysis of Orange has been carried to identify their strength and
opportunities to deal with their threats by minimizing weaknesses. In fact Orange
can use their stability in Finance to diversify their market further by using advertising
as a tool.
h) Product specification and uniqueness in the packaging can be utilized to develop
their image in further to develop their market share in local as well as foreign.
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37. References
Anon., 2005. Poka Yoke (Mistake Proofing). [Online] Available at:
http://www.siliconfareast.com/pokayoke.htm [Accessed 7 January 2014].
Cole, G.A., 1996. A basic model of planning process.
Compton, C., 2009. Transformational Leadership. [Online] Available at:
http://www.lean.org/Workshops/WorkshopDescription.cfm?WorkshopEventId=43&Worksh
opId=43 [Accessed 7 January 2014].
Daft, R.L., 2012. New Era of Management. 10th ed. New Delhi: Cengage Learning India
Private Limited.
Orange, 2012. Annual Report. Colombo: ORANGE Electric.
Shekhani, A.S., 2013. Enterprise Resource Planning. [Online] Available at:
http://www.abubakershekhani.com/blogs/technology/enterprise-resource-planning
[Accessed 5 January 2014].
Stevenson, W.J., 2012. Operations Managemen. 11th ed. McGraw-Hill.
Weihrich, H., 2000. A Tool for Situational Analysis. [Online] Available at:
http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf [Accessed 4 January 2014].
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