Case Study on Bangladesh Edible Oil Limited

HR Practices

American International University-Bangladesh (AIUB)

REPORT ON
HR Practices: Case Study on Bangladesh Edible Oil Limited
An Report Presented to the Faculty of Business Administration in Partial Fulfillment of the Requirements of final examination in Human Resource Management & Practice (MBA), Fall 2010.

Date of Submission: 12 December 2010

Executive Summary
Bangladesh Edible Oil Limited (BEOL), established in 1993 in Bangladesh, has since been running successfully for the last 17 years. BEOLs success is shown by its capture of a quite a percent of the edible oil market and having the most preferred brand, Rupchanda, under its portfolio. Like all successful companies, BEOL must also have a competent workforce to achieve and maintain such success. This report is a description of the HR strategies being implemented at BEOL. Interview of a reliable source from BEOL, Mr. Daniel Mamun, Assistant Manager Organizational Development, was taken to get an idea about their HR practices. The information we received allowed us to assess the HR activities. At BEOL, HR strategies are being developed in relation to the business strategy. HR planning involves considering all factors associated with the business strategy. This is the starting point for all other HR strategies to be implemented throughout the year. HRIS is used quite effectively as it is used to assess many aspects like skills, training & development needs, recruitment and performance management. Recruitment & selection utilizes the benefits of HRIS and is effective but it may be made easier with a more interactive website where CVs can be submitted online. This will also avail a chance to candidates to update their own information whenever desired so that BEOL receives the most updated information to be evaluated for recruitment. It seemed that training & development at BEOL is a bit limited if external training is considered. However, this is fulfilled through training provided through seniors considered as their in-house resource. Performance management is an area where BEOL effectively assesses the skills of their HR supply to analyze and evaluate the competency of employees. All these areas of HR seem to be effective but one area that BEOL may need to improve is their organizational image. BEOL is more known for its brands rather than the organization itself but such an effective MNC deserves to be noticed by potential candidates much more. This means their external communication has to be improved and one way is by improving their company website so that it is more informational. Also to build up a good image, a company should be more involved in environmental activities which promote the

company not only to its customers but also to potential candidates. Such activities also makes current workforce feel proud to be associated with the organization, ultimately, motivating them. Therefore, a portion of the budget may be allocated for CSR activities. BEOL has been successful in the industry it serves and is a multinational that many want to be part of. Some aspects which may have been overlooked, as pointed out by this report, may be improved to attract and retain more potential candidates to achieve sustainable success in the future.

Table of Contents

Chapters

Contents
Letter of Transmittal Acknowledgements Executive Summary

Page
i ii

Chapter 1 Chapter 2

Introduction Profile of the Organization

About BEOL Initiatives of BEOL

1-2 3-6
3 5 7-15 7 8 11 13 14 15-16 15 16

Chapter 3
3.1 3.2 3.3 3.4 3.5

HR Practices of BEOL HR Planning HRIS Recruitment & Selection Training & Development Performance Management Recommendations & Conclusion Recommendations Conclusion Appendix - Questionnaire

Chapter 4
4.1 4.2

CHAPTER 1 Introduction
Human Resource Management plays a significant role in todays competitive market to rise over other competitors with a unique competitive advantage that cannot be duplicated. Competitive advantage can be achieved in many ways but the concern lies in making the advantage sustainable. Sustainable competitive advantage means being proactive, serving current needs adequately and setting a standard that is unique and unmatchable. That which is an advantage today may not be an advantage tomorrow. Therefore, it is becoming more and more difficult for companies to differentiate themselves from competitors and still maintain their position in the market. Making a unique product with unique features to achieve competitive advantage allows success until the next person copies it. As a result, companies now resort to the major strength of a company: the human resource. The human resource of an organization is what can set the organization apart from others as it cannot be duplicated. Hence, today organizations are more concerned about the effective utilization of their human resource. This involves inducing productivity to effectively and efficiently achieve the organizational goals with different HRM tools so that the human resource becomes an asset for the company rather than a cost. 1.1 Background of the Report The main idea of this report is to evaluate the HR practices of Bangladesh Edible Oil Limited (BEOL). Evaluation of the strategies and practices being implemented will give an understanding of how such a manufacturing company is managing its human resource to become on of the leading brands in the industry. 1.2 Objectives of the Report The main objective of this report is to understand the HR practices of BEOL. The secondary objectives stated as follows: To learn about BEOLs HR Planning To learn about BEOLs HRIS

 To learn about BEOLs HR Recruitment & Selection To learn about BEOLs HR Training & Development To learn about BEOLs HR Performance Management 1.3 Research Methodology The data for this report has been collected through an open interview to understand the scenario of HR activities at BEOL. A questionnaire was developed for the interview which consisted of open ended questions. The information was analyzed qualitatively to evaluate HR processes of BEOL. Literature study has also been done to have a clear idea about the topic. 1.4 Limitations This report includes information which is based on the interview and some external resources. There may be some deviation from reality as some information may not have been provided by the company to maintain confidentiality. 1.5 Organization of the report The main body of the report consists of five chapters. Chapter One is the introductory chapter where the topic of this report has been briefly discussed. Overviews of the objectives, the research methodology, and the sample have been given. Chapter Two gives an overview of the organization and its activities Chapter Three discusses the HR practices of BEOL in five areas: HR Planning, HRIS, Recruitment & Selection, Training & Development and Performance Management.
Chapter Four provides some recommendations suggesting areas of HR at BEOL

that may be improved. The conclusion explains the present state of BEOLs HR practices in relation to the recommendations. The appendix includes the questionnaire used for the interview.

CHAPTER 2

Profile of the Organization

About Bangladesh Edible Oil Limited (BEOL)

Bangladesh Edible Oil Limited (BEOL) is a 100% foreign owned company with head office situated in Singapore. The holding company, Leverian Holdings Pte Ltd is a join venture between Wilmar International Limited of Singapore and Sime Darby Berhad of Malaysia. BEOL was established in 1993 and has since been aggressive in the marketing of consumer pack edible oil in the well known household brand of Rupchanda. As per the recent AC Nielsen report, Rupchanda ranks number 1 in terms of the most preferred brand in the soyabean oil consumer pack category. From established till now, BEOL has continuously improved quality and introduced new products and packaging to bring in value added elements to the consumers of Bangladesh to consolidate our leading position in the market. Amongst them, BEOL is the first company to introduce packing of edible oil in PET bottles, and also the first to launch a sachet pack in mustard oil in Bangladesh. In the international front, the two joint venture companies are both well known in the international trade particularly the commodities. Wilmar International Limited Wilmar International Limited, founded in 1991 as a palm oil trading company, is today Asias leading agribusiness group. It is amongst the largest listed companies by market capitalization on the Singapore Exchange.

Their business activities include oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, and grains processing and merchandising. Headquartered in Singapore, our operations are located in more than 20 countries across four continents, with a primary focus on Indonesia, Malaysia, China, India and Europe. Backed by a staff force of about 67,000 people, over 160 processing plants and an extensive distribution network, our products are delivered to more than 50 countries globally. Today Wilmar International Limited is: The largest global processor and merchandiser of palm and lauric oils; One of the largest plantation companies in Indonesia/Malaysia; The largest palm biodiesel manufacturer in the world; A leading consumer pack edible oils producer, oilseeds crusher, edible oils refiner, specialty fats and oleochemicals manufacturer in China; One of the largest edible oils refiners and a leading producer of consumer pack edible oils in India; The largest edible oils refiner in Ukraine; and The leading importer of edible oils into East and South Africa.

Sime Darby Berhad Sime Darby Berhad is a successful Synergy Drive merger between Golden Hope Plantations Berhad, Kumpulan Guthrie Berhad and Sime Darby Berhad. The groups operations span across 20 countries and is supported by a team of over 100,000 people worldwide. In maintaining and extending the groups global presence, they are synergising the businesses for strategic positioning and determined to be a successful Malaysian-based multinational with our core businesses in plantation, property, motors, industrial, energy & utilities and with growing presence in China and healthcare.

BEOL aims to maintain Uncompromised quality control and flow of international experience. This is clearly publicized through with the tag line for their products: Each drop is healthy.

Website
www.beol-bd.com/

Initiatives of BEOL
Brands As a manufacturer of edible oil, BEOL has brought different brands to the market to serve the specific market needs adequately. The portfolio of products includes the following:

Rupchanda Soyabean Oil

Rupchanda Mustard Oil Meizan Vegetable Oil Simply Coconut Oil King's Soyabean Oil King's Sun Flower Oil King's Corn Oil King's Canola Oil Lucky Vegetable Oil Viking's Vanaspati Oil

Events BEOL arranges different events each year which are initiated as CSR activity. Through these events the company not only promotes itself to its consumers but also to its internal customers and potential internal customers which is their human resource. Some events taken up over the years are:

Rupchanda Food Carnival 2009, Barisal

2 3 4 5 6 7 8 9 10

Rupchanda Food Carnival 2009, Sylhet Rupchanda Cooking Competition (Potato Recipe) - 07-09 May 2008 Rupchanda Cooking Competition (Final Round) - 02 September 2006 Celebrating Agora's 4th Anniversary Rupchanda Cooking Competition - 26 August 2005 Monitor Chef of the Year - 13 April 2005 Rupchanda Heart Care Activities for World Heart Day 2007 (Free Blood Pressure Check Up) Donation of Books to City College in Cox's Bazaar - 06 January 2006 Sponsorship of Bangladesh Cricket Under-17 International Golden Hope Challenge, Malaysia Sponsorship of Bangladesh Cricket Under-15 to Srilanka - 02 May 2005

Appendix Questionnaire
Today HR managers are more into strategy formulation and implementation. How have you strategically developed HR in BEOL?

HR Planning
How do you carry out HR planning at BEOL? (Environmental scanning, Forecasting demand, Gap analysis, Documentation of plan) How do you assess the current HR capacity (skills inventory)?

How does external forces influence your HR needs? How do you deal with it?

What strategies do you implement to meet your organizations needs in the future? (outsourcing, restructuring, collaboration)

Who does the HR budgeting?

What is included in the documentation of the plan? What steps are taken to implement the plan?

HRIS

 What software do you use? For what solutions do you use HRIS?

How do you manage the current employee information? What kind of information do you

store about them for future reference? (training, rewards, performance)

To what extent does HRIS aid in the planning process?

Recruitment & Selection Process

Can you explain procedures taken in the recruitment process?

Internal Recruitment (job posting, moonlighting, employee referrals) External Recruitment (media, database, agencies, special events, internship)

What alternatives of recruitment do you employ? (Overtime, leasing, temporary)

After recruitment, what steps do you have in the selection process? Type of interview

How does the selection process vary for the level being hired?

Training & Development

Explain the orientation process for a new employee at BEOL.

 What kind of training do you provide employees? Management? (on-the-job, outside seminars, job rotation)

How do you assess the training needs?

Performance Management
How have you employed performance management at BEOL? How often is employee

performance evaluated? At what levels is performance evaluated?

 Do you evaluate employee satisfaction? How often is employee satisfaction evaluated?

How is the performance of HR department evaluated to show its contribution to the organizational goal? What objectives are set for it?