Organization Culture

Of CTC

Nelunika Hapugoda
5/6/2013

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Unit Principles of Management
Assignment ID PM2
Assignment Title Culture
Author Ms. Shanika Wijenayake
Verifier Mr. C.A. Kankanamge


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Acknowledgement

I would like to express my gratitude to our Principle of Management lecturer Ms. Shanika
Wijenayake for the valuable guidance and advice. She inspired us greatly to work in this
assignment. Besides, I would like to gratefully acknowledge all the industry people who helped
us and supported me throughout this assignment. Finally, an honorable mention goes to my
family and friends for their understandings and supports on me in completing this assignment.


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Table of Contents
1. Executive Summary ............................................................................................................................... 5
2. Introduction .......................................................................................................................................... 6
2.1 Company History ................................................................................................................................. 6
2.2 Type of Business .................................................................................................................................. 6
2.3 Management and Staff ....................................................................................................................... 6
3. Organization Culture and Characteristics ............................................................................................. 8
3.1 Principles of organization culture ....................................................................................................... 8
3.1.1. Strength from Diversity ............................................................................................................... 8
3.1.2. Open Minded .............................................................................................................................. 8
3.1.3. Freedom through Responsibility ................................................................................................. 9
3.1.4. Enterprising Spirit........................................................................................................................ 9
3.2 Characteristics of CTC Culture............................................................................................................. 9
3.2.1. CTC-Then and Now ...................................................................................................................... 9
3.2.2. Communication ......................................................................................................................... 10
3.2.3. Common Facilities ..................................................................................................................... 10
3.2.4. Employee Involvement ............................................................................................................. 11
3.2.5. Teamwork ................................................................................................................................. 11
3.2.6. Collective Agreement (CA) ........................................................................................................ 11
3.2.7. Outsourcing Non-Core Areas .................................................................................................... 11
4. Organizational Culture and Performance ........................................................................................... 12
4.1 As a TEAM ......................................................................................................................................... 12
4.2 Sustaining its Culture ........................................................................................................................ 12
5. How Employees Learn About the Organizations Culture ................................................................... 13
6. Conclusion ........................................................................................................................................... 13
7. References .......................................................................................................................................... 14


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1. Executive Summary
Ceylon Tobacco Company is one of Sri Lankas most successful businesses and it caters to a
wide set of crowd from age 21 and above in Sri Lanka, Maldives and Middle Eastern countries.
It has being a distinctive member of British American Tobacco Company and operations span
from the growing and processing of Tobacco to distribution and marketing of cigarettes.
By being the solitary tobacco products producer, CTCs unique flat organizational structure and
HR platform provides the opportunity for the local professional talents to learn and grow into the
global professional British American Tobacco network. By providing the youth to guide to move
the business ahead, CTC motivates and empowers potential leaders to contribute in key and
tactical areas of business.
The scope of this report is to understand the theoretical elements on organizational behavior in
Ceylon Tobacco Company such as Management and Staff, Organization Culture and
Characteristics, How CTC works as a team, performance and sustainability of the company
through the culture that they are carrying out, and how employees learn the companys culture.
.








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2. Introduction
Ceylon Tobacco Company PLC has long been one of the nations most exceptional companies
distinctive yet understated, known for driving things one step further and for possessing the
quality of being unique. The confidences to go forward, the vision to see where opportunity lays,
the strength to deliver on promise are few qualities that have made CTC PLC a unique and
successful organization in Sri Lanka.
2.1 Company History
Now known as Ceylon Tobacco Company, was incorporated in 1932 in Sri Lanka, and took over
the operations of three separate tobacco businesses in the country at the time British American
Tobacco Company (Ceylon)Limited, Westminster Tobacco Company Limited, and Thomas Bear
& Sons Limited. The Company began growing Virginia flue cured tobacco in the early 1940s
with the assistance of the Department of Agriculture and British American Tobacco Company
London. CTC was listed on the Colombo Stock Exchange in 1954. The same year, the Company
acquired the business of Godfrey Phillips Limited (formerly Rothmans Limited), and obtained
the right to manufacture its brands in Sri Lanka.
2.2 Type of Business
Ceylon Tobacco Company Limited is the sole legal producer and marketer of tobacco products
in Sri Lanka. The Company serves the domestic cigarette market and exports to the Middle East
and the Maldives. It is a member of the British American Tobacco Group. The Companys
operations span from the growing and processing of Tobacco to distribution and marketing of
cigarettes. Its corporate offices and main factory are located in Colombo, and its leaf processing
plant is in the central city of Kandy, with tobacco cultivation and other activities being carried
out in various regions of the country. The Company produces and markets six brands of
cigarettes which are Benson &Hedges, John Player Gold Leaf, Paul Mall, Four Aces, 3 Roses,
and Capstan. In 2005 CTC launched Dunhill Signed Range cigars to the local market
2.3 Management and Staff
CTC has a unique HR approach that is best defined by the opportunities which it offers its
employees. The main thrust of CTCs HR strategy is focused on developing people to be world-
class professionals. With a strategic objective to be a key talent provider for BAT (British
American Tobacco), CTC adopts a people specific strategy that revolves around not only CTCs
human resource needs but also the requirement of the global network. Thus, recruitment and
retention strategies are invariably dependent on attaining a global it. As a multinational
company, CTC provides a platform for local talent to learn and grow into professionals with the
capacity to operate across the global BAT network. The flat organizational structure, progressive
work culture and a focused human resources development strategy have enabled CTC to produce
a cross-section of corporate successes internationally.
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The organization is currently led by CEO/Managing Director James Yamanaka followed by an
eleven member Board of Directors which they govern supply-chain, human resources,
marketing, legal, corporate and regulatory affairs, and finance departments. Likewise there are
approximately 300 executive Management cadre personals in the organization including trainee
executives and factory supervisors working under these sectors.





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3. Organization Culture and Characteristics
CTC has a unique corporate culture which is designed at inspiring and motivating from
surrounded by to take the Company to greater heights, where the sense of personal achievement
supersedes all else. CTC encourages cross-functional, cross-grade project work which brings
people together, letting them get to know each other, work with each other, and makes the
Company a home away from home. One key aspect of CTCs corporate culture is the non-
existence of hierarchical distinction. Everyone is on a first-name basis, and even the Company
parking lot has no held in reserve bays and allows anyone to park anywhere. All staff is served
the same choice of meals in the common canteen area, and every employee clocks in to work
from the CEO down to the shop floor worker.
3.1 Principles of organization culture
They following four guiding principles represent the organization culture:
1. Strength from Diversity

2. Open Minded

3. Freedom through Responsibility

4. Enterprising Spirit


3.1.1. Strength from Diversity
Strength from Diversity reflect the culture mix within the Company and a work environment that
compliments employees individual difference each other. It also reflects of harness diversity of
people culture viewpoints brands, markets and ideas to create opportunities and give them
competitive frame which flourishes and succeeds in an environment which values and cherishes
difference.

3.1.2. Open Minded
Open Minded reflects the openness to change, opportunities and new ideas, including ways of
addressing regulatory issues and changing social expectations. CTC PLC seeks to listen without
unfairness, actively and genuinely considering other viewpoints. This encourages everyone to
contribute, by being open to different perspectives and questioning and challenging the
conventional.

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3.1.3. Freedom through Responsibility

Freedom through Responsibility describes how CTC PLC make decisions as close to the
consumer as possible. It also affirms the belief that decision makers should accept
responsibility for their own decisions.

3.1.4. Enterprising Spirit

Enterprising Spirit has been a characteristic of CTC PLCs culture for more than a
century. It is reflect the capability to grow the business and its value within challenging
environments, in the confidence to seek out opportunities for success, to strive for
innovation and to accept considered risk taking as part of doing business which enables
them to do different things in deferent ways.
3.2 Characteristics of CTC Culture
3.2.1. CTC-Then and Now
As disclosed by both the management and operational level employees, there has been a
remarkable change in both behavioral aspects at CTC throughout the last 15 years. Further, they
have specifically mentioned that it is because of trust, confidence and collaborative teamwork in
and between the management and operational level workforce. Acc0rdingly, the following
significant differences as explained in Table 1 were quite apparent in 2013 compare to 1989 in
which year the company, industry and the economy as a whole were adversely affected. To have
such a remarkable change and productivity improvement, as both the management and
employees pointed out, there were several key initiatives throughout this period.
Then - 1989 Now - 2013
Expressing on of feelings Industrial action
Violent eruption
Police and armed force
protection
Factory closure
Fully supportive
Well-satisfied
Leader private sector Industrial turn oil
(how not to do
things)
Industrial peace (how
to do things)
Internal climate Suspicious
Confrontational inter-
departmental rivalries
Stock build-up to meet
Trust
Confidence
Teamwork
Stock determined by
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disruptions market needs
Productivity Lowest in sub-
continent
Highest in sub-
continent
External influence Greatly impacted Well-insulated
Achievements None
Fast disintegration
National awards
(HRM, productivity,
safety)
World-wide
recognition( MRP 2,
World aware award,
ISO 9001:2000)
(Table 1: CTC- Then and Now)
3.2.2. Communication
That is all the major plans and decisions from which employees are affected will be developed
and made by communicating those to them. Future, employees will be given the opportunity to
present their views on those certain plans and decisions. Further, it is believed by the
management that, keeping their employees fully informed probably would motivate them and
enhance their commitment towards the organizational goals to greater extent. In this
communication process each employee will be given the opportunity and responsibility to
present his or her ideas at small group meetings and it will be used by the operational and
executive committees which are middle and top levels respectively.
3.2.3. Common Facilities

As operational workers mentioned, there were four canteens, different car parks, executive
offices away from the factory and many ways of discrimination before the change. But, now
there is just one canteen and car park for everyone, open and factory offices to avoid this
discrimination. This could be verified as the researcher could observe it by participation.
Basically, IR managers and production managers seats are now located in the production floor
as to deal closely with employees. Further, as employees specifically mentioned and feel happy
about this change, it was quite apparent that these types of divergences have made this success to
CTC.



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3.2.4. Employee Involvement

This is not just employees, but also their families. CTC is now having different functions in order
to get together with employees and their families. One important function that CTC is having is a
gathering of the management and employees wives. This is to emphasis employees wives, how
important are their husbands to run this business successfully. Through this particular function
CTC management motivates their employees via their families.


3.2.5. Teamwork

From top to bottom at CTC, they are having different types of groups and discussions. These
meetings are convened daily, weekly, monthly, quarterly or annually according to the
requirement. The most important thing in this teamwork is all the employees involvement, plans
and decisions are used at these meetings.

3.2.6. Collective Agreement (CA)

This has been a crucial tool for both the management and the employees to implement and accept
the restructuring. In these CAs which are signed in every three years time, both the management
and employees discuss the current situation and the future requirement. Typically, in this CA
period, there are some decreases in the level of productivity because of the bargaining between
employees and employers. But, it prevails until the CA is signed. Therefore, this CA is being
used by both parties to bargain their demands. This has been initiated soon after 1989 industrial
turmoil period. According to the view of the employees, they perceive this CA as the
collaborative plan of the organization towards the future.

3.2.7. Outsourcing Non-Core Areas
After introducing business downsizing activities CTC has outsourced those non-core areas to get
rid of administrative burdens and long-term commitments. As these activities are contracted out
and those contracted personnel are responsible for another organization, an efficient service can
be expected for CTC.





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4. Organizational Culture and Performance
CTC is a cradle of excellence both from a corporate as well as from an individual advancement
perspective. The Companys internal working culture and modern management styles place it at
the forefront of management excellence in Sri Lanka. By giving young people the lead to drive
the business forward, CTC inspires and empowers future leaders to contribute in key and
strategic areas of business. This fosters independence and confidence, and prepares young team
members for key positions within the organization as their corporate maturity becomes more
evident to the company. With much of the second tier management consisting of young
professionals inducted from various other industries, CTC reaps the benefit of fresh thinking and
ideas. CTC as a company is the mixture of diverse individuals and their attributes, all which
synergies to drive the company forward. In addition CTC offers competitive remuneration
packages, employees receive a performance bonus that is based on the collective success of the
companys performance too.
4.1 As a TEAM
CTCs successes as a commercial enterprise are reliant on its exceptional and winning team. At
every level and across the length and breadth of the organization, individuals work together with
a fixed focus on a common set of goals. To sustain the value chain from seed to smoke, the CTC
team works with commitment and drive, accepting change and innovation as a way of life.
Though CTC is unionized, it remains one of the few organizations where change initiatives are
met with universal acceptance.

4.2 Sustaining its Culture
The Ceylon Tobacco Companys key HR strategy is to create an environment where there
employees are inspired to perform. "Your Voice Survey is a diagnostic tool designed to
measure organizational climate, employee satisfaction and morale in British American Tobacco
to identify & priorities action and behavior which would make the organization a 'Great Place to
Work'. It provides an opportunity to its employees to express their thoughts and feelings about
our workplace in many aspects. The aim of this survey is not only to identify and celebrate the
strengths as a Company, but also to identify improvements they can make across the company to
make CTC a Great Place to Work. Based on more focused and structured approach CTC has
undertaken to address the issues that been raised, resulting in number of initiatives and action
plans taken place at an organizational & functional level. As a result, CTC has achieved very
high response rates and sustained its culture as one of the highest rated in the BAT Asia Pacific
region.

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5. How Employees Learn About the Organizations Culture
CTC has a philosophy of developing its employees to win, to enhance their knowledge and skills
and develop their character with the aim of building and nurturing them to the finest leadership
capabilities across the organization. The Company employs a vast array of traditional and
modern learning tools from formal training to cross functional project work, virtual learning, 360
degree feedback, and events such as Annual Sports day, Christmas party, Avurudu day etc.
Moreover, it also have annual trips which with departments been mixed and henceforth. Hence
these activities expose the employees to the companys culture.

6. Conclusion
Most of the operational level workers believe that everything they have achieved so far both in
the job and personal life is due to the organizational business practices such as training and
development, culture and discipline, etc. Therefore, they believe that with that experience they
are in a position to develop their life properly even without this job. Additionally, some
employees believe that this personal development gained from the company is subject to
attitudes, degree of propensity to change and the personality traits of the individual. The
management and the operational employees have identified that, teamwork is one of their major
strategies of achievements. But, though the management was developing teamwork within the
organization, it is only for organizational achievements. For administrative purposes the
management would prefer an individualistic culture within and among employees as it would
probably ease the process of making employees self-retired without the consent of others. These
all job and personal life achievement have related with the culture of CTC PLC which has made
by them.
And also, between the management and operational level employees, there has been a
remarkable change in both behavioral and operational aspects at CTC throughout the last 25
years. Further, it is because of trust, confidence and collaborative teamwork which resulted in the
best organizational culture that an employee could work. The international know how and best
practices kept at CTC and its teams are front of corporate excellence, inspiring other corporate in
Sri Lanka and the region.






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7. References

1. CTC Profile & Executives - Ceylon Tobacco Co PLC - Bloomberg. (n.d.).Bloomberg -
Business, Financial & Economic News, Stock Quotes. Retrieved July 28, 2012, from
http://www.bloomberg.com/quote/CTC:SL/profile
2. Ceylon Tobacco Company Plc | Sri Lanka | Company Profile. (n.d.).Research, News,
M&A, Statistics, Economic Indicators, Islamic Finance - ISI Emerging Markets.
Retrieved July 27, 2012, from http://www.securities.com/Public/company-
profile/LK/Ceylon_Tobacco_Company_Plc_en_2313933.html
3. JICA | Technical Cooperation Projects | The Project for Establishment of Japan Sri Lanka
College of Technology to Strenghthen Technical Education in Sri Lanka. (n.d.). JICA-
Visit to Ceylon Tobacco Company (CTC) Retrieved July 27, 2012, from
http://www.jica.go.jp/project/english/srilanka
4. The Impact of Divergence in Internal Business Practices on Improving Productivity: The
Case of Ceylon Tobacco Company. (n.d.). Faculty of Management & Finance. Retrieved
July 27, 2012, from
http://mgmt.cmb.ac.lk/index.php?option=com_content&view=article&id=195:the-
impact-of-divergence-in-internal-business-practices-on-improving-productivitythe-case-
of-ceylon-tobacco-company-&catid=45:cbj