Organization Structure and Design: Ali Gohar and Company

Organization Structure and Design:
Ali Gohar and Company
Submitted By:
Hassaan Elahi (28270)
Muhammad Zeeshan (27755)
Sabir Khan (27791)
Stafford Dcosta (27152)
Syed Nehal Hussain (28891)
A project report submitted in partial fulfillment of the requirements for
the Course of Organization Theory and Design to Sir Muntazir
Mehdi at the Iqra University, Main Campus
Karachi, Pakistan.
April 2018

Acknowledgments
First of all we would like to thank ALIMGHTY ALLAH for the successful accomplishment of
this task. Allah Almighty the merciful, the beneficent who help us in achieving our goals. We
would like to thank all our friends and parents whose constant support was helpful during our
research as their encouragement and facilitation gave us energy to complete this project
successfully.
We would also like to thank our project supervisor Sir Muntazir Mehdi whose guidance
enlightened our vision and made the work easier for us. We, the group members, feel honored to
work under his supervision. His supervision led us to the successful accomplishment of this
project.

Organization Structure and Design: Ali Gohar and Company
Contents
Description of the Company .........................................................................................................................1
Ali Gohar’s Qualifications include:..........................................................................................................1
Mission Statement.....................................................................................................................................1
Vision........................................................................................................................................................1
Policies and rules ......................................................................................................................................2
Goals and Plans.............................................................................................................................................2
Core Competency and Sustainable Competitive Advantage ........................................................................2
Technology at AG&C:..............................................................................................................................3
Hierarchy/organogram ..................................................................................................................................3
Key strengths of Ali Gohar Enterprises ........................................................................................................4
Number of employees and departments........................................................................................................4
Environmental uncertainty matrix ................................................................................................................5
Type of Environment....................................................................................................................................5
PEST Analysis ..............................................................................................................................................6
 Political Factors ................................................................................................................................6
 Economic Factors..............................................................................................................................6
 Social Factor .....................................................................................................................................6
 Technological Factors.......................................................................................................................6
Porter’s Five Forces......................................................................................................................................7
 Bargaining Power of Suppliers .........................................................................................................7
 Bargaining Power of Buyers.............................................................................................................7
 Threat of New Entrants.....................................................................................................................7
 Threat of Substitute...........................................................................................................................7
 Rivalry among Competitors..............................................................................................................8
Type of structure design................................................................................................................................8
Structure elements.........................................................................................................................................8
Departmentalization used in the company..................................................................................................11
Conclusion/ Recommendations...................................................................................................................11
References...................................................................................................................................................13

1
Description of the Company
Ali Gohar & Company was founded 62 years ago. It is Pakistan's premier one-stop distribution
company within the pharmaceutical industry. It distributes FMCG (Fast moving consumer goods),
surgical instruments, pharmaceuticals and health care products for multi-national companies. It
has the impressive development of refrigeration in the movement of all temperature-sensitive
products. Moreover, it is constantly moving forward and adapting its business models in response
to an acceleration of changing business conditions. Ali Gohar provides the complete line of storage
handling and delivery services. It has 18 branches in 15 cities of Pakistan. Its major competitors
include Abu-Dawood, Muller and Phipps, UDL Distribution PVT Limited, Burque Corporation,
and Premier Agency. Key businesss partners of Ali Gohar & Company include Cheisi Pharma,
ELI-Lilly Pharma, AGP Pharma, Roche Pharma, Alcon Pharma, Alcon Surgical, 3M Pharma,
Smith Medical and Master Pharma.
Ali Gohar’s Qualifications include:
 Over 6 decades of experience in distribution and marketing
 Fully computerized MIS tailored according to the needs of clients.
 Quality and safety programs in place
 Close check and balance of the whole distribution process (showing great attention to
detail; very careful and precise)
 All warehousing and delivery operations are in real-time (quick) and on time
 Customized delivery services for pharmaceuticals, healthcare and FMCG anywhere
Mission Statement
“To provide best available services”
Vision
Vision of Ali Gohar and Company is to be a dominant distribution company in Pakistan for
pharmaceuticals, healthcare and selective consumer products, providing high levels of services at
par with global quality standards.

2
Policies and rules
Policies and rules of Ali Gohar and company is mostly influenced by their core values which
provide clear directions to everyone in the organization to reach their common goals and
objectives.
These policies and core values include:
 Ownership (treating the company as if one was a founder)
 Working together as a team to solve problems and provide mutual success to the whole
organization
 Continuous Progress
 Transparency (Operating in such a way that it is easy for others to see what actions are
performed)
Goals and Plans
 Continuous Growth
 Continuous Teamwork
 Continuous Improvement
Ali Gohar’s strategic focus is to extend their business more in other cities of Pakistan and in other
countries as well. Moreover, they also want to provide highest quality services to national, multi-
national companies and consumers. Their plan is to satisfy their customers by their services and
bring peace in the environment and to maximize their profit by becoming a dominant distribution
company.
Core Competency and Sustainable Competitive Advantage
The core competency of Ali Gohar and Company is based on their high technology and specialized
employees. They prefer innovation in their services. This have given them a competitive advantage
as they are using high level of technology rather than old manual system. They compete with their
rivals with their employees who are specialized in their work activities and by using advanced
technology.

3
Technology at AG&C:
Ali Gohar and Company houses one of the most advanced IT infrastructures to support its
operations all over Pakistan. It is completely process driven and covers end to end processes
including entire field force operations. AG&C’s field force operatives are equipped with hand held
devices which allows AG&C to record the order and confirm the delivery of the product on real
time basis. With the help of GPS and GPRS enabled technology, AG&C sets all eyes on the
product when it’s on the move until it reaches its final destination.
AG&C’s financial and inventory management system is powered by JD Edwards’s enterprise
application, which is globally renowned for its extensive industry coverage.
AG&C operations are completely integrated through MIS (Management information system).
Their operations are streamlined which helps them to analyze business information separately in
detail on real time basis. AG&C provides access of its online module to the clients, where they
can monitor the movement of their product and generate reports and analysis based on various
categories like forecasting, demand analysis, sales analysis, etc.
AG&C help other companies’ length to enhance their country wide logistics and distribution, with
360 degrees coverage from warehousing, order processing, delivery, forecasting, demand analysis
and marketing.
Hierarchy/organogram
Ali Gohar & Company follows a tall structure with narrow span of control which includes different
line managers to control their respective groups and departments who work in small teams.
Moreover, traditionally they use to have small teams of specialized employees who use to work in
groups as well as individually to achieve their tasks and goals. Now there are different dedicated
departments for specialized work to be done. There is vast number of specialized departments
representing employees who are experts or specialists in their work to complete the entire process.
Moreover control and authority at Ali Gohar and Company is most held by top or middle
management, however AG&C follows centralized approach and there is a unity of command in
their organization so that each employee receive order from only one manager. Top and middle
management set goals and provide directions for employees in this organization while
subordinates/workforce have the responsibility to perform the tasks.

4
Key strengths of Ali Gohar Enterprises
 Ali Gohar Enterprises has a highly professional and advanced channels of distribution.
 They also have highly qualified and experienced employees and sales force.
 Strong emphasis on the skills and motivation of the employees.
 High emphasis to improve their distribution channels and IT continuously.
 High focus to fulfill the needs and demands of the customers on time.
 Clear goals, vision, objectives and policies that are shared across the organization.
 Good relationship with key partners
 Nationwide coverage and One Window Operation
 Strong focus on meeting short-term objectives as well as planning for long-term goals.
Number of employees and departments
Ali Gohar & Company is a medium sized business, having around one thousand employees and
each supervisor or manager have different numbers of sub-ordinates working under them
depending on their tasks and level in the organization. The departments at Ali Gohar & Company
are shown below in the following diagram.
Departments
Finance and
Accounts
Administration Procurement
and Inbound
Logistics
Marketing Supply
Chain
Human
Resource
Quality
Assurance
Quality Control
Manager
Procurement
Manager
Purchase Manager
Outbound LogisticsLogistic Officer Quality Assurance
Officer

5
Environmental uncertainty matrix
AG&C lies in “Complex, unstable environment” type of environmental uncertainly matrix
because of high certainty that persists in the environment. Moreover, majority of healthcare
systems and pharmaceutical industries belong to this type as the elements are changing rapidly. A
number of factors hoists the uncertainty for their company including:
1. Inflation and exchange rate
The drastic and adverse fluctuations in inflation and exchange rate drives the cost for this company
and exposes a risk making the external environment more volatile.
2. Population
Population rate is also increasing in Pakistan day by day which tempts to increase the usage of
pharmaceutical products making environment more complex.
3. New Technology
It is yet another big challenge for AG&C to become reactive as per new technology assertions into
the pharmaceutical industry. They need to hire trained and skilled personnel to operate the modern
equipment.
Type of Environment
AG&C’s organizational environment is dynamic as according to them it is quite complex, includes
a number of variables and requires a flexible planning to cope up with emerging threats and
availing opportunities. Since their company is in the environment where technology is constantly
changing and upgrading so the intensity of uncertainty is quite substantial too.
Besides this, the company is paying a heed to incorporate corporate social responsibility programs
to generate a better awareness pertaining to its environment.
AG&C’s organizational structure is the combination of both mechanistic and organic structure as
they focus on delegating work according to individual and joint specialization. When the task is
simple then a mechanistic approach is more preferable by them because it induces a proper control
whereas in case of group projects or when they encounter a complex task then an organic approach

6
sounds better to them because it enables them to organize work activities according to
specialization of team members and saves time.
AG&C’s organizational culture also purports their structure as it is innovative that supports
creative thinking and advances efforts to extract economic and social value from knowledge, and,
in doing so, generates new or improved products, services or processes.
PEST Analysis
 Political Factors
 Political instability
 Trade restrictions and tariffs
 Employment law
 Environmental regulations
 Tax law
 Economic Factors
 Interest rate
 Inflation rate
 Taxation
 Exchange rate
 State of the economy and economic growth
 Social Factor
 Growth rate of population
 Health and safety
 Age distribution
 Attitude towards career
 Distribution/Division of wealth in the society
 Technological Factors
 Degree of Automation
 Research and Development

7
 Innovation
 Technology incentives
 Recent developments in technology
Porter’s Five Forces
 Bargaining Power of Suppliers
As there are many suppliers in the industry and prices are also well known by everyone, suppliers
bargaining power is limited. This allows AG&C to gain the supplies on best prices. Moreover,
they are also able to adjust the quality of their products which they distribute and it also allows
them to reschedule their delivery timelines easily because of the large availability of suppliers. The
company also has a strong network of wholesalers and distributors in Pakistan. Furthermore, as
the company has a good reputation and long experience in the industry, this also allows them to
influence the competitive environment and manipulate profitability for the company directly.
 Bargaining Power of Buyers
AG&C has no direct link with final customers as they sell their products through wholesalers and
retailers who then sell the products to the final customers. As there are many other popular
distribution companies like AG&C in the market, so this has made the bargaining power of buyers
high.
 Threat of New Entrants
As large investment of capital is required in the distribution industry, the threat of new entrants is
very low. Only a few strong companies exist in this industry along with Ali Gohar and company
like Abu Dawood, Muller and Phipps and Burque.
 Threat of Substitute
Threat of substitute is high because AG&C faces direct competition from many competitors in the
distribution industry. Moreover, retailers and wholesalers can also shift their purchases from
AG&C to other companies because there is also a high chance for them to get better quality
products from other companies on relatively low prices. Switching cost is also low in this industry.

8
Furthermore, bulk quantity purchases by retailers and wholesalers also increases the threat of
substitute.
 Rivalry among Competitors
Rivalry among competitors is mostly influenced by the product quality and prices within the
distribution industry. In order to attract retailers and wholesalers, rivals often use the method of
discounts and frequent promotions. This increases the rivalry among competitors greatly.
Moreover, companies within this industry commonly compete by differentiating their prices.
However, to change the prices of the products, it is mandatory for the companies to get the approval
from the government authorities or regulatory bodies. Even though AG&C has many strong
competitors like Burque, Abu Dawood, and Muller and Phipps but AG&C have a competitive edge
over all its major competitors due to its efficient distribution network and strong supply chain
network which has also allowed AG&C to secure a large market share in the industry.
Type of structure design
AG&C have a centralized structure design in which important decision making is held with the
top management in most of the cases, however, for certain types of group projects, they also prefer
decentralized approach. Moreover, rules and policies are strictly followed by each and every
managerial and non-managerial employee of AG&C. So the degree of formalization is also high
in the company. An organization structure is the way in which the pieces of the organization fit
together internally, and for AG&C, the strategy and the structure are woven together seamlessly
to deliver its plans and reach its internal goals.
However, even though AG&C has a centralized structure, but their organizational culture is based
on innovation to support creative thinking and advances efforts of everyone in order to extract new
ideas and economic and social value from the knowledge and abilities of all the employees. This
enables the company to generate new and improved products, services or processes.
Structure elements
Organizational structure: An organization structure outlines how job tasks are formally
distribute, grouped, and coordinated while planning the organizational structure manager need to
report six key elements.

9
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization and decentralization
6. Formalization
Following is the illustration of elements in context of Ali Gohar pharmaceutical:
1. Work specialization
Contemporarily, AG&C prefers a high level of work specialization. Under its roof a team of
scientists, technicians and other specialists come together for representing virtually all the
sciences, along with the contribution made by the management executives, lawyers, accountants,
engineers, system analysts and may other whose abilities and talents maintains the viability of this
unique business enterprise. Current scenario demands for a different organizational structure for a
large scale pharmaceutical company and for a small scale pharmaceutical company. Earlier they
were having a common structure in which there used to be only one administrator and one or two
departmental heads. But now a days when the pharmaceutical companies are becoming gigantic a
need for new structure arises. In the new structure a specialist is needed for every individual job
because every job today demands for specialization.
2. Departmentalization
Following departmentalization has been in practice by AG&C:
 Customer departmentalization
 Process departmentalization
 Geographical departmentalization
 Functional departmentalization
3. Chain of command
Authority and unity of command are core concepts that defines reporting relationships. Manager
distributes authority among the jobs. Authority is the right to make decision without approval by
higher manager. As it has been said earlier that all jobs contain some degree of the right to make

10
decisions within prescribed limit. What is needed is an integrated plan for each key customer in
the context of the company’s portfolio, rather than the traditional plan for each sales force team.
At AG&C, there is a top-down chain of command where decisions are made by the top
management and then they are communicated down and implemented by the workers who are at
the bottom of the hierarchy.
4. Span of control
Ali Gohar & Company follows a tall structure with narrow span of control which includes different
line managers to control their respective groups and departments who work in small teams. This
allows the manager to closely monitor the work activities of their subordinates as the nature of
their product is quite sensitive so definitely a close supervision is mandatory.
5. Centralization and decentralization
AG&C follows Centralized approach and there is a unity of command in their organization so that
each employee receive order from only one manager. Top and middle management set goals and
provide directions for employees in this organization while subordinates/workforce have the
responsibility to perform the tasks.
Decentralization is also there but the extent is quite low which is limited just for specific tasks
which require formation of team to ensure a better collaboration. Inclination is more towards
centralized approach.
6. Formalization
Degree of formalization is also high. Written documents are formed. AG&C also prepares the
integrated plan. This integrated plan helps them to identify the company’s objectives for the
customer, their needs, how to address them and who will be responsible for doing so this will lead
the company to identify what type of sales people or teams it needs, what skills they should have,
what roles they should play, what tools they require, and what system will hold it all together and
provide support. Implementing this strategy requires new processes and technologies for
information sharing, which in turn requires a change in organizational structure and the breaking
down of information silos within the organization.

11
Departmentalization used in the company
Since AG&C is a distribution company, so it has the following types of departmentalization:
 Customer departmentalization: In this departmentalization, AG&C group the jobs on the
basis of common customers who have common needs or problems that can best be met by
having specialists for each.
 Process departmentalization: This departmentalization allows AG&C to group the jobs
on the basis of product or customer flow. In this approach, work activities follow a natural
processing flow of product or even customers.
 Geographical departmentalization: As AG&C have 15 branches which are located in
Rawalpindi, Peshawar, Karachi, Quetta, Gujranwala, Sukkur, Multan, Faisalabad,
Hyderabad, and Lahore, geographic departmentalization allows them to group jobs on the
basis of a specific territory or geographic region where they are operating and running their
distribution centers.
 Functional departmentalization: In this departmentalization, AG&C group jobs by its
functions (i.e., marketing, finance, human resources) that are performed in its organization.
However, when AG&C’s objectives and work activities are changed, then functions are
also changed accordingly to reflect the objectives of the organization.
Conclusion/ Recommendations
AG&C believes that changes in business processes and organization are necessary to meet
customer needs. When focusing on the customer and the intended interactions with them, many
companies will find that their existing processes and internal structures are ill-equipped to put the
new strategy into practice. Organizational silos may prevent the transfer of information, create
bureaucracy and lead to internal conflicts (over responsibility or authority) that get in the way of
engaging with the customer. Internal business processes needs to be developed that successfully
implement the selected strategy, and an organizational structure needs to be created in which these
can be implemented efficiently. Information needs to be gathered in a comprehensive and
systematic way, capturing what the company needs to know about its customers and its interactions
with them. The organization should be aligned around the customers, with all other functions and
processes supporting this structure.

12
For AG&C an organizational structure, like any plan, must reflect its environment. Just as the
premises of a plan may be economic, political, social or ethical, so may be those of an
organizational structure. It must be designed to work and to help people gain objectives efficiently
in a changing future. In this sense, a workable organizational structure can never be static. There
is no single organizational structure that works best in all kinds of situations. An effective
organizational structure depends upon the situation. The present situation demands for the
modification in the old structure that we have discussed.

13
References
Ali Gohar and Company. (2018). About Us. Retrieved from Ali Gohar and Company:
http://www.aligohar.com/about_us.php
Ameen, J., Siddiqui, R. A., Khan, M. R., Zakir, W., Abbasi, M. H., & Ashraf, M. N. (2016). Supply
Chain Management: Ali Gohar and Company. Karachi.
Raza, A. (2018, March 17). Organization Structure and Design at Ali Gohar and Company. (H.
Elahi, M. Zeeshan, S. Khan, S. N. Hussain, & S. Dcosta, Interviewers)

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