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Saifullah Tariq
Omair Khalid

Mustafa Siddiqui


Monday, May 12, 2014

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

In a span of 58 years Lakhani Silk Mill has travelled a long distance to
achieve the milestone and market reputation that it possesses now. Their
CEO says: It all started when we decided to get into this business with the
vision to take a splash in the industry. We have been working for 2
generations now and we are regarded in the industry as those who
understand textile in its most profound form
After efficiently making a mark as the most fashionable style designers of
Pakistan, Uzma Mirza and Seema Sherazee collaborated their Zunn signature
alongside Lakhany Silk Mills (Pvt) Ltd method back in 2006 and crafted lawn
that is vintage into a work of fine art alongside a timeless appeal. Instituted
in 1978, Lakhany Silk Mills is an oldest and most accepted textile house of
Pakistan which provides best quality fabrics and sketches of elevated quality
fabrics and designs to the customers.
House of Zunn and Lakhany Silk Mills interlace a magic jointly yet once more
and raise their most motivated collection to date. Keeping their urbane
clientele managing who aspire to dress stunningly period afterward period,
this new scope introduces assorted new textures this summertime like
Cotton, Nets and Cutworks. Every single fabric is crafted and projected
prudently alongside an indefinable sense of glamour, therefore permitting
you to dress up the House of Zunn way.
A fabric that is woven alongside such loving, care and dyed in the gorgeous
shades of nature adds elegance and magnificence. Lakhany silk Mills is the
producer of such fabrics; fabrics that articulates unmatched quality &
unmatched comfort.

Our vision is to provide our consumers with the finest quality products &
reasonable prices. This sets us separately from our competitors and we will
always fight to uphold this rank keeping in mind client satisfaction and
production in a price competent, nature approachable and eco-friendly

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

Product portfolio and

Management process
Product portfolio of LSM:
1. Women Lawn

2.Men Shirting


LSM uses management ideas in the production of its goods. It uses the 4
common Ms i.e skilled labor that is man, imported as well as local raw
material that is material , imported and local machinery that is machine
and to obtain these 3 Ms it uses its financial resources efficiently that is
money to carry out the management process.
There are four basic Management functions that play a vital role in each and
every organization, without which attainment of goals would be next to
These 4 functions include:
Planning: It involves choosing tasks that must be performed to attain
organizational goals, outlining how the task must be performed, and
indicating when they should be performed. Through this management
function the manager outlines exactly what organizations must do in order to
be successful. Planning is essential to get the right things done.
Organizing: Organizing can be thought of as assigning the tasks developed
under the planning functions to various individuals or groups within the
organization. It helps allocate resources so that the management process
can be done properly.
A manager at LSM says, LSM ensures that its organizing should not be rigid,
instead be adaptable and flexible to meet challenges as circumstances
These management functions are the activities that LSM carries out step by
step or simultaneously as they are all inter-related and inter-dependant.
Leading: It is the process of directing the behavior of others towards
attaining some goals. Directing, in a sense, means influencing an individual
to act in a certain way or to follow a particular course. Leadership is the
prerequisite for organizational success.

LSM manager says, We ensure quality management process as
we know that all the functions are inter-related and
interdependent to some extent and our team is aware of the fact
that all the processes go simultaneously


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

Every year LSM sets the budget for each and every department which tells
the department head how the funds will be allocated and obtained for the
purpose of meeting the organizational objectives


At LSM, it has fewer programs, for instance, 2 or 3 years before LSM used to
work with Sana Safinaz having her as their lawn designer but now recently as
per the new trend of fashion, LSM has signed a contract with Zunujj, a
designer from Lahore having very creative ideas and designs for fabric.


Areas for organizational objectives:
1. Market standing LSM should keep in mind where it wants to stand in
relation to its competitors
2. Innovation- LSM should set objectives outlining its commitment ot the
development of new methods of operations. LSM tries its level best to be
creative when it comes to production of its products. It wants to have a
competitive edge and a unique selling point.
3. Productivity The target levels of production should be highlighted- LSM
produces on a large scale as it has a local as well as an export market
4. Physical and Financial resources Capital and monetary resources need to
be monitored. LSM makes a budget plan and uses it effectively for this
5. Profitability Maximizing profitability is a by product for LSM. Its main
focus is on other goals like market share and consumer satisfaction.
6. Managerial performance and Development Level of managerial
productivity and growth needs to be satisfied
7. Public Responsibility- LSM is an eco-friendly company that presents its
socially responsible report annually. Social Audit is conducted and that
highlights LSMs impact on the society and the environment.
8. Be efficient and effective efficiency is minimal input and maximum
output whereas effectiveness is the firms ability to achieve its goals. LSM
tries to be efficient and effective throughout the management process.
1. Short-term objectives aka tactical planning- targets that need to be
achieved in one year or less
2. Intermediate objectives- Targets that need to be achieved in 1 to 5 years
3. Long term objectives aka strategic planning- targets that have to be
achieved in 5 to 7 years.

Long term objectives

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

Short term objectives

Meeting customer demands and high quality product requirements along
with delivery on time

To produce best quality in reasonable prices for all women/men of Pakistan

and foreign clients as well
Production of material that possess outstanding durability along with the
feeling that it is always soft and comfortable
Provide training to the labors for using the latest machinery to increase
their productivity
The HR manager at LSM says We have various goals and objectives. Once
one goal is achieved we move on to the next one as soon as we can. This
way many goals are achieved and this strategy really helps us in reaching
the top

Management by objectives is a management tool that

helps in managing and coordinating the goals and objectives. When asked
about the use of MBO LSM showed a positive response towards it.
It has 3 basic parts that LSM also keeps in consideration:

LSM Managers and Subordinates set goals and objectives togethermutually agreed upon decisions are implemented in LSM.
Time constraints and Time period is kept in mind so that effective and
efficient planning is conducted
Periodically performance evaluation is done. Through this performance
appraisal rewards are given to those who help accomplish goals.

Rational Decision Making

A manager at LSM said that: We dont make decisions based on gut feelings
neither do we make decisions by getting influenced by those around us as
that is a very risky way of taking decisions hence we prefer a proper
organized system- a step by step way makes life easier
There are four decision making conditions:
Complete certainty- There is certainty and some level of assurance as to
what will happen in the future. Its the safest decision making condition
Risk condition-

Complete uncertainty- Future is unknown and unpredictable so some level of

uncertainty exists.
A manager at LSM said that they have been through all different sorts of
phases and they had to use a different approach of taking decisions in each
of the situations.
LSM had decided to enter the export market. It started off with exporting
terry towels- This was a decision with a risk condition as they were entering a
new market in another country with little or no knowledge about the foreign
customers. This proved to be a success therefore LSM also started exporting
women lawn and men shirting.

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

LSM have their departments according to the products they make which are
as follows:
1. Terry towels
2. Mens wear both locally and exports
3. Women Lawn
For all these departments they have different heads. Each department has
their own merchandiser, and they also have their own people for the sales
sector, production sector and marketing.


There are 3 functional departments in LSM which are as follows:








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

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

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

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



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


Programmed Decisions

Firstly, Lakhany Silk Mills makes programmed decisions which are

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

Non-Programmed Decisions

These are the one time decisions

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

LSMs management pays important attention in guiding the activities of its
employees to enhance the accomplishment of its objectives. The
management influences its employees by strong leadership, motivation and
through proper communication.
Leading is the process of guiding the activities of organization members in an
appropriate direction. The appropriate direction could be any direction that
leads towards accomplishment of organizational goals. Leadership involves
activities such as influencing, motivating, considering groups and most
importantly communication.

The ability of influencing and its significance is that it develops a well

motivated, coordinated staff who are ready to employ all of their abilities at
work and this will make it more likely that organizational aims are achieved.
The strong ability of leading can be seen within the managers of LSM through
their well motivated workforce producing high quality products to gain
customer loyalty.
Leadership at LSM is mainly done through motivation and effective
communication. Communication at LSM is considered the main medium or
way to motivate employees because it involves the exchange of information
between people or groups, with feedback. LSM practices and encourages
open communication within the organization and this includes both formal
communication and informal communication. Formal communication is that
communication that follows the lines or routes of organizational chart and
formal communication of three types upward, horizontal, and upward
communication. Interpersonal or informal communication is also experienced
by LSM as they consider that all informal communication can help create
the important feeling of belonging, social cohesion and a friendly
atmosphere. It helps the management to test out new ideas and see what
the reaction might be if it is too negative, they never make an official
announcement and clarify official messages by talking them over as friends.
For effective communication, feedback is important, so the Director takes
feedback from its workers regularly and the LSM management willingly
accepts and encourages both positive and negative feedback from their
LSM believes that leaders are made not born, they consider that leadership is
the art that can be learned by people, this means that LSM disagrees with
the trait approach to leadership that state leaders are born which means
that they possesses some inherited characteristics that successful leaders
should have. LSM supports the situational approach to leadership which
states that different leadership is required in different situations; different
behavior of a leader is needed in different situations. LSM management gives
a lot credit for its success to its leaders. Employees at LSM are annually
given training sessions in order to be better leaders.
The third activity is motivation; this is the internal and external factor that
stimulates people to take actions that lead to achieving a goal. Motivation is
very crucial for LSM as they need a well motivated workforce to produce
quality products because LSM is well known for its quality among its
customers and quality can only be brought through a skilled, happy, loyal,
and motivated workforce. Motivation is overall advantageous to the
organization that results in low labor turnover, low absenteeism, high
productivity, suggestions for improvements and readiness to accept
responsibility. LSM has adopted several ways to motivate its employees:

Personal Development Opportunities

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

Adequate Salary & Bonuses

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

Moral Support & Monthly awards

Moral support here is done through communication and also through yearly
awards as the employees who have worked the hardest get bonuses at the
end of the year and also special recognition. This helps fills their need of self
recognition (intrinsic motivation). This makes them work even harder so that
they can retain the awards and their good reputation in the eyes of the

Health, Safety and Hygiene Factors

At LSM special suites and gears are given to the employees for safety
purposes. They are also given guidelines to help them realize how to use the
equipments properly in order for them to be away from all the harmful and
unpleasant events. Also employees and their familys health is the
responsibility of LSM which provides the finances for employees for all their
medical purposes.


Controlling is the last step in the management process. Controlling is an

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

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


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


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

International Organization For Standardization and (ASTM) American Society

For Testing and Materials.

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

Overview of Marketing for LSM

Marketing statement of LSM
We intend to target the sweet spot of customers
LSM's main product range is of clothes which cater to the male and female
market. The market is segmented on to the basis on income and these
clothes cater to the upper middle class and the high class. LSM products are
made from the finest cotton fibers and then dyed to attain perfection.
As the price of this product is kept high onto a particular reason to persuade
the individuals to buy the products. The aim is also to maximize revenue at
the same time. Furthermore, high prices are also kept by LSM to attract
customers that the product is of high quality and this eventually develops a
high brand image for the product.
LSM uses various channels of distribution in making its products available to
the market. The use of transport links such as delivery vehicles and air
transport to international destinations has made products available to its
LSM promotes its products through various means of promotion like
arranging faishon shows, using billboards, and making use of TV
commercials. Recently the company participated and displayed its clothes at
fashion shows in New York and Lahore. These sources of media not only
promote LSM products but also increase sales.
Market research is conducting a survey in the market regarding the
consumer wants of a product also they may depicit things such as consumer
buying habits, the number of competitors and market growth rate etc.
As lsm is a market oriented company for it the consumer satisfaction is the
priority. It carrys out surveys by questionaires to see and keep up with what
its consumers want also doing market research helps it in founding new
faishons which eventually make it the market leader.


As we know that LSM is a huge and famous textile company. If the company's
growth is high in the market it gets tougher competition.LSM has also got
many competitors or we can say industrial rivals like GUL AHMAD and SANA
Gul Ahmed gives unbearable competition to LSM as it has many market
shares and the company is doing its best in the market. Gul Ahmed is not
just making clothes but it also has other products like shoes, bags, and home
accessories. Gul Ahmed is known as the name of innovation, reliability, and
quality. They have built trust on their consumers by offering them best
products in their range. For LSM Gul Ahmed is a big threat as it can take over
LSM any time -SS is the luxury brand of Pakistan. SS is the 2nd competitor of
LSM. Though it is not as huge company as LSM and Gul Ahmed but its
attracting designs and designs really gives a tough competition to LSM

Visiting LSM was truly a precious experience. We had analyzed all four
functions of management there and grasped their real concept being
practiced in a manufacturing firm. This also enlightened that how important
these functions are to a company and without them a business entity can
never achieve its organizational goals. LSMs management is stable and
focused towards achieving its organizational goals and due to their set
standards theyve maintained a better workplace environment within the
company. They keep their staff motivated and follow the functions properly;
this is the reason that LSM today is there at its peak where all the firms
desires to be.