Management

Chaudhary Group’s

Changed Focus in Human Resourcing

When in need for manpower in senior managementpositions, many companies tend to go hunting for them in multinationals (MNCs). So did Chaudhary Group for some time. But as some recent developments indicate, it seems that this Group has become tired of managers from MNCs. Immediately after bidding ‘good-bye’ to some people who had come with a background in MNCs, the Group recruited some half a dozen of Deputy General Managers, all with non-MNC background.

According to Binod Chaudhary, President and Managing Director (P&MD) of the Group, it is because the experience of the Group with people who had MNC background was ‘not so encouraging’. However, Chaudhary also says that it is not because the managers from MNCs lack capabilities. "I give due respect to the talents of people from MNCs. But what we have found is that even a manager who is successful in an MNC, may fail totally in an organization like ours", he says.

Senior executives with background in companies like Union Carbide, UB Group, Pepsi Cola, etc. joined the Group’s Singha Brewery during start up and also subsequently to arrest the downward trend in the business last year, but could not deliver expected results due to one problem or the other. As a result the brewery had to temporarily suspend its operations after trying to compete with the leading brands. And Chaudhary’s analysis of the situation is like this: "Unless you have a team of specialists at all levels and in all the departments of your organization the managers from MNCs cannot deliver. They have the tendency of being dependent on their departmental heads totally. But in our environment the successful managers have to be not only the leaders but must be capable of working with each of the departmental heads to supplement their efforts. The MNC background proves less effective in such case."

chaudhary: A smile of his own management style

By "our environment", Chaudhary’s indication is towards the fact that his organization was developed in its own way - not in a format prescribed in a business school textbook. "I’m not an MBA from Wharton or Harvard. I’m a self-made man and so is our organization. We treasure the system that we inculcated with years of hard work", he says. Even Chaudhary’s critics are appreciative of the office layout in his head office.

Twenty-seven years ago when Chaudhary took over the organization he was a young lad of 18 and the business was limited primarily to a cloth shop in downtown Kathmandu. And now from the penthouse of Chaudhary Mansions, the Group Headquarters at Sanepa Heights, Lalitpur, overseeing most of the Kathmandu Valley and managing some 40 companies, Binod Chaudhary has a lot to feel proud of what he has achieved. But he is not staying relaxed at that.

In recent years, the Group has been coming out with one ambitious new venture after another. One such plan was to expand the market in India for its most successful FMCG brand - Wai Wai instant noodles. Back home, it just recently started apartment housing. And only last year, it had entered the cigarettes industry. All these add up to make the number of companies within the Group at around 40, with an annual turnover, as claimed in the Group’s corporate brochure, to have crossed US $ 100 million. Hydropower, drinking water supply, gas pipe line from Bangladesh to Nepal, telecommunications, information technology and dairy processing are some of the other various businesses it is planning to enter in the future. In the process, the Group has partnered, or is going to partner with some big global names like Gulf Oil of USA, RJ Reynolds of Switzerland, Independent Power Corporation of UK and Vivendi of France. "Now the Group is poised to become a truly regional company", boasts Chaudhary. But because the experience that the Group had with MNC professionals, this ambition has to be achieved with its own management style.

The Group’s experiment in employing MNC professionals started when it entered beer business under foreign collaboration for "Singha" brand. As Chaudhary recounts, the timing of the entry was such that two MNC brands - Tuborg and San Miguel - were reigning the market with about 80% of the market share between the two. And the other old timers like "Star" and "Iceberg" were experiencing steady decline in their sales. Thus the only distinguishing feature of the successful brands was that they were international brands. So, the Group went for another international brand - Singha - and logically, the management of the new company was to be matching to that of the competitors. Therefore, the Group invited Parthasarathy from Pepsi-Cola who brought with him ML Sapra. Added to them were some other professionals from San Miguel and Tuborg as well. But the venture was a failure to the chagrin of Chaudhary. And both of Parthsarathy and Sapra as well as others who came to the beer company later from MNCs have left or were asked to leave.

Though Chaudhary also attributes the failure of his brewery venture to the "unexpected and unjustifiable" withdrawal of the foreign collaborator (the dispute is still pending with the arbitrator), he also attributes it to the MNC professionals. But that is not because he has any doubt about their competencies, but because they are unfit in the environment that is prevailing in the country. "It was not their fault, rather it was a case of trying to fit a square peg in a round hole", he concludes.

True to his point so far, Chaudhary has not hired anybody from MNCs in his newest venture - the apartment housing, and he claims that the venture has been a resounding success. All the apartments that the Ansal Chaudhary Developers (P) Ltd. is constructing at Kathmandu Residency on the outskirts of Lalitpur are overbooked, he informs.

But the crocodile file in which the people with MNC background left the organization sent a warning signal outside the organization, and it was read as an indication of high employee turnover in Chaudhary Group. However, RP Gupta, Senior General Manager (Food and Beverage Division) in the Group says, "In a business house of Chaudhary Group’s size, the departure of some individuals cannot be regarded as an indication of high employee turnover." Gupta himself has been with the Group for 15 years. But he also gives examples of his colleagues, some of which have been with the Group even longer. Notable among them are Manohar Padhye, General Manager (LG Operations), Prem Shrestha, General Manger (Apollo Steels), and MR Maheswori, Vice President (now in-charge of Indian Operations). While Padhye has been with the Group for the last 20 years, Shrestha and Maheswori have been there for the last 15 and 27 years respectively.

Among the recent entrants into Chaudhary Group is Manoj Loya, the General Manager of Sales & Marketing of Food & Beverage business which contributes a substantial part in the Group’s turnover as well as to its fame because of several successful brands under it like Wai Wai, Kwiks Cheese Balls and the recently launched Wah Wah and Prawn Crackers. Likewise it has also launched its new beverages under the name "Rio" which is reported to be very well received in the market. In control of a team of over 50 sales and marketing personnel all over the country of Nepal, he also works closely with an equally big team in India, Loya says, he has seen the Group grow both vertically as well as horizontally. The capacity has been expanded in many folds for the existing products whereas new products line have been added. "My own department has more than doubled its strength during the last two years and have expanded into all part of India. Despite efforts to pull people from our department by all new comers, our team remains united and the most sought after", he claims.

Asked about how does the Group intend to meet the requirements to fill in key management positions for the future growth, Chaudhary says that the Group has strengthened its HRD department for that purpose. "For an organization which recruits anywhere from 50-100 executives every year, this is the greatest challenge, given the shortage of qualified, trained and experienced manpower, and with the present trend of brain drain from Nepal. However, we have strengthened our HRD department, which is constantly working for system development, such as performance development system, employees welfare scheme, skill upgradation and integration of talents from wherever available. "And perhaps we have very few organizations in Nepal which have specialized independent HRD department" Chaudhary says, his HRD department will play the roles of a change agent, a strategic partner, an administrative expert and champion of employees. The focus of HRD is to create a learning organization with an emphasis on Training and Development." The motto of HRD is "Hardwork does not kill you, what kills you is your laziness and complacency", according to Chaudhary. HRD will try to realize the employee’s ultimate potential and will create an environment which will encourage employees to be more aware of business situations, both in Nepal as well as in the world, - take more responsibility and be more committed in their works. Each and every employee should own the vision of the business house and be earnest in their effort and potential. Chaudhary wants to make his Group a model business house in next 10 year in South Asia by creating an appropriate working environment.

The Group is also criticized for being fond of employing foreigners, particularly Indian nationals, in senior managerial positions. But Chaudhary calls it as a ‘totally wrong perception’ and shows the directory of internal telephone system that lists down the names of the managerial employees and their assistants. While the departments like HRD/Corporate Planning, Administration, Publicity are manned by Nepalis, other departments have expatriates, mostly in senior levels. Explaining the situation, Chaudhary says, "We do employ expats where we find a constraint in getting indigenous manpower of the same caliber. We cannot compromise on quality of the leadership." Since, it is the leadership that develops the organization as well as the subordinates, Chaudhary argues: "If one expat helps develop 20 indigenous managers, it should be welcomed. If the competent people are available in Nepal we will prefer Nepalis over Indians even in senior positions in future."

-By Business Age Reporter

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