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Sintex
Containers (GH) Ltd is a Subsidiary Company of Mitsui Group of Company. Established
in 1992 by Mr. Ashok Budhrani, currently the chairman, initially the private
limited company was as a plastic manufacturing company operating on a small
scale. With a vision to become a first class company within its market and a
leader in quality, performance and customer service. With its headquarters
located in; Ghana, Accra, Sintex has had to face a lot of 3rd world
issue denying it from a sustainable growth.

 

Sintex is currently at its Growth stage within its business life cycle.
Initially meant to be a plastic manufacturing company, the firm now provides
consumers with a range of services: water storage tanks, preforms, packaging,
bottles & caps, lamination and many other products.

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Currently, the firm aims to diversify even further and incorporate
eco-friendly methods of production. However Most African countries such as
Ghana-visited and commented by Barak Obama in 2009- perform poorly in the “World Bank’s Ease of Doing Business
surveys” (The Obama Whitehouse,
2009). With this in mind, Ghana is estimated a rank of 120 out of 190 as
seen in Fig 1. This puts Ghana on the lower threshold when it comes to doing
business, lower than 60% of the world’s nations. (Kim, 2018)

 

 

 

Similarly, Sintex too faces its fair share of entrepreneurial obstacles
which strains its capacity to be as productive as similar businesses in other
countries. Rigid organizational structures, poor employee management, marketing
& commercialization and eco-unfriendly products are currently obstacles
being faced by the firm as of 2017. These issues are currently affecting the
company’s growth, development and market performance, currently putting the
CEO, Mr. Manoj Budhrani, in a position where health issues are arising from
constant stress- “always having to do things myself.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifying
Entrepreneurial Issues

Upon my interview with the Firms CEO, Mr. Budhrani, I was able to both
better understand the internal & external entrepreneurial challenges faced
by his firm currently as well as retrieve a market analysis of his firm’s
position currently.

 

Using an integrated model of corporate
entrepreneurship strategy to analyze Sintex, I further went on to conduct a
PESTLE, Porters 5 Forces and SWOT analysis. These strategic analyses showed
external & internal factors affecting the company and its position with the
plastic industry. And most importantly, the adverse implications on Sintex.
Seen in Fig.4 and Fig.5 respectively.

 

Firstly, the companies gap filled organizational structure as seen in red
in Fig 3. has proven to be a major burden on its growth and development.
With missing positions in between hierarchies, employees are disorganized and
each feel like a leader making it even harder to communicate, add new positions
in the company and, thus restricting it from being flexible.

 

 

 

With the right employee teams paired up together productivity levels will
increase while time and raw material wastage levels decrease. Grouping
employees into teams and delegating proper responsibilities to each individual
employee will expose their characteristics and personality traits which will
help improve employee management styles.

At the moment, the CEO has one financial accountant managing the whole
firm. He is singlehandedly controlling all four sections of his firm- some more
than others. With little to no HR management, it is understandable why
employees are not managed properly.

 

Furthermore, low employee management brings about recklessness at the
work place, severe injuries from heavy duty machinery, unproductivity and a
higher operational cost to the firm overall. According to the United Nations
Development program, Ghana’s Human Development index is 0.579 ranking it 139
out of 179 (Jahan, 2016) proving that majority of the population will
not be fit for operating advanced technology as education standards within
Ghana are not yet as advanced as Germany, India and China where all the
machinery is purchased.

 

Next, a company’s labour force is a factor of production that is key and
essential for every aspect of a firm’s goal. At Sintex, marketing is one of the
many key functions that is overlooked. Due to the lack of skilled labour within
Sintex, that is marketing, the CEO relies on personal relationships and
previously made advertisement campaigns (by the current Chairman) to spread the
word of Sintex. However, being amongst the initial companies established in
Ghana after independence, the name Sintex has been around for a while and is
known to majority of the population in Accra and Kumasi. However, with the
barriers to new entrants being rather low on the packaging and, the firm is
gradually losing more and more of its market share on its low end packaging and
PET performs for bottles and caps as competition is on the rise because of high
growth complementary good industries as seen in Fig xxx .

 

Even after rectifying all of Sintex’s internal weakest links, political
influences and corruption in Ghana puts majority of the ethical entrepreneurs
at risk. As seen in the PESTLE analysis in FIG X, evasion of tax and illegal bribery to ministers,
government agency and government officials in every aspect makes it harder for
businesses such as Sintex to stay ethical and succeed as they operate on a lower
profit margin by taking the extra burden of being gradually overtaxed, covering
for the illegal bribery pocketed by government official’s year after year as
basic electricity & utility cost gets inflated. With corruption already
reducing sustainable development in the Ghanaian economy, Sintex as well as
many other companies imports majority of its raw materials from nations across
the world as it is not supplied locally. Due to this, there is relatively less demand for its
currency worsening its exchange rate by 24.57% compared to the USD since 2014 (Bog.gov.gh,
2016) making imports of raw material more and more expensive
as time goes by because Sintex’s purchasing power is reduced as the Ghana Cedi
depreciation skyrockets. All these
factors as well other economic downturns bring about a lot of instability in
the country to the extent where there was power-outages for the last decade for
3.5 out of 7 days a week (Bax and Dzawu,
2015). Sintex had to incur additional costs over $1million USD per year for
buying, running and maintaining generators.

 

Similarly, due to the large amount of obstacles within the developing country’s
economy and lack of access to advanced technology, the government agencies in
charge of environmental protection are usually unaware of the long term social
costs incurred by the machinery pollution and end up settling for a minimum fee
and a heavy bribe. Even though Sintex strives to be more and more eco-friendly,
the extra costs incurred from being ethical and surviving in harsh business
conditions puts an additional strain on the company’s profits. And if it starts
to incorporate the more expensive 100% biodegradable raw material for
manufacturing, it would lose even more profits and possibly turn into an unprofitable
market for the firm.

 

 

 

 

 

 

How can Sintex enhance its growth, development
and market performance

 

 

Firstly, the CEO needs to approach employees as a potential strong suit.
In a country such as Ghana where majority of the production process in not
thoroughly regulated, producers prefer a more capitalistic approach to
production where majority of the manufacturing operation will be done
semi-automatically with little to no employee intervention due the unskilled
nature of majority of the staff. While this might be the easier approach in the
short run, Sintex has been operating for over 25 years and will befit much more
if employees were well educated on existing machinery and were more involved in
within the production process with the Law of Diminishing Marginal Returns
taken into account to better allocate resources. A study (Al-Rfou and
Trawneh, 2009) showed a significant correlation
between motivated and indulged employees and competitive advantage achieved by
the firms

 

To
engage staff, the CEO should initially apply Myers–Briggs Type
Indicator (MBTI) at
the work place. MBTI is a questionnaire that
examines one’s own conscious thoughts and feelings,
and how they recognize the world around them and make decisions.
Based on the results obtained from the questionnaire, the CEO and delegated HR
manager of Sintex should go on to apply Tuckman’s Teamwork theory.

Tuckman’s theory comprises of 5 key stages: Forming à Storming à Norming à Performing à Adjourning. Each
team consists of one team leader and several employees. As seen in Fig.6,
each stage is achieved only when progressed from the previous stage which has
its own set of challenges and difficulties. Eventually, after teams are
assembled, their effectiveness will build up over time. Simultaneously, as team’s
buildup chemistry and are more fluent with one another, the Managers of each
team leader should go on to empower them by teaching and informing them about
their expected responsibilities and giving them the ability to pass on the
information to team mates so that they feel more responsible for their actions
and thus feel a sense of belonging in the business. This will eventually lead
to an increase in the firm’s operations effectiveness.

However, even after restructuring the firms organizational structure into
more effective teams, the HRM needs to ensure that employees stay motivated on
a day-to-day basis to: gain a possible competitive advantage and ensure the
firm remains ethical and sustainable. Competitive advantage from the human
resource at Sintex depends on the employee’s attitude, competencies, ability to
generate trust and ability to work in complex relationships. For employees of
Sintex to play the part, the CEO of Sintex needs offer employees:

·     
High Job Security

·     
Above average wages

·     
Personal development programs

·     
Social relationships (such as a WhatsApp Groups for each Team)

·     
Involvement in the selection process for potential new employees

·     
Strong respect for individuals

·     
Job Analysis (specific roles for each individual employee that adds value to the firm, are rare,
cannot be imitated and are not sustainable) Wright, et al. 1994

·     
Job Description (In
order to accomplish the employment relationship effectively, work has to be
designed, programmed, costed, organised and co-ordinated. (Keenoy, 1992)

·     
Job Evaluation (working conditions, knowledge, skills and ability)

With the human
resources adding value to the firm, which is rare, cannot be imitated and is
sustainable (Wright,
et al. 1994) The
firm’s operations becomes more effective and the business will able to gain a competitive
advantage over majority of its competitors.

 

Secondly, with the amount off corruption within the Ghanaian economy as
well as the highly unregulated government procedures, Sintex should consider
implementing a onetime solar power investment to become more self-sufficient in
powering machines with a high power consumption. Implementing this solution
will result in a lower maintenance cost for business in overall as electrical
fluctuations result in both major and minor costs. Major costs such as broken
down machines leading to delayed orders for customers to leading to loss of
potential further orders, as well as minor costs such as broken lightbulbs and
fuel for powering generators.

With time Sintex will be able to cover the cost of installing a solar
power plant and will be able to gain a sustainable competitive advantage on a
cost leadership strategy by eventually lowering the cost per unit output.

Upon achieving this method of competitive advantage, Sintex will
eventually save up a lump sum amount of money year after year, which will allow the
firm to potentially invest in a more expensive yet eco-friendly such as a plant
cellulose based additive. As
competition for HPDE, LPDE, LLPDE and other non-biodegradable type of material production
increases, Sintex should consider exploiting a biodegradable additive solution
where the end products will be highly accepted by fluctuating government
policies. The greener
additive
will take roughly three to six months to decompose, ceteris paribus. This quality enhancement
strategy
will put Sintex’s
regular commodities such: plastic bags, PET bottles & caps and water
pouches at a greater position in terms of product differentiation where
majority of the rational consumers are not able to differentiate within the
industry. As
Ghana becomes more developed and eco-friendliness is more enforced the move to
a greener from of production should be made sooner rather than later

 

 

 

Recommendation

 

After analyzing Sintex’s integrated model for corporate entrepreneurship strategy,
it is clear that a bottom up strategy will be not be advisable at the moment in
Ghana’s economy. However, as seen in Fig.xxx individual’s cognitions are
directly linked to the company’s strategic vision. Should the CEO of Sintex aim
to invest in these individuals (employees), he would be the first within the
industry to achieve a difficult yet promising competitive advantage through his
labour force.

Similarly, Sintex may want to consider the most controlled strategy which
is converting majority of its business operations to a digital business. This
way buyers will have a platform where they will be able to build their own
product and design it as per their desire without having to visit the firm
similar to Nike’s” Nike-ID”. Operating in a 3rd world country ultimately
means that eventually majority of countries operations are developing into more
advanced methods and eventually the markets like most of the developed country
is held dominantly on a virtual platform such as Amazon. Adopting a strategy
such as this also means that most of the employees at sintex will be made
redundant, however the employees that are still maintained within the business
can still be invested in for a competitive advantage. This was Sintex will be able
to both reduce the amount of liabilities and risks in the business and improve
customer experiences.

While businesses that profit of digital
strategy are building up in developed countries, achieving it is more complicated
than simply creating an interface. An operational digital business strategy primarily
needs changes in business activities, culture, and the marketing within the
firm. Finally, it’s up to the CEO to agree if the technology strategy will lead
the way not make a significant impact at all.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limitations and Conclusion

 

In order
to achieve a competitive advantage, the firm is required to make a choice about
the type of competitive advantage it seeks to attain and the scope within which
it will attain it. Choosing the competitive scope or the range of the firm’s
activities can play a powerful role in determining competitive advantage
because it aims to establish a profitable and sustainable position against the
forces that determine your industry competition.

In Ghana
majority of the labour can be trained into a more useful tool within the
industry to achieve competitive advantage, however with the low trust the CEO
if sintex has for employees, it might be a rather lengthily and stressful
method to use human resources to attain competitive advantage. Similarly, as employee
contracts eventually end, a lot of uncertainty is brought about when planning
for the future as to whether or not employees will want to undoubtedly stay
loyal to Sintex even after undergoing costly training and educational programs.

 

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