British American Tobacco is the world’s most international tobacco group, successfully pursuing a consistent strategy that is building long term shareholder value. Their goals are to grow their brands and the value of their business, to improve productivity and to embed the principles of corporate social responsibility Group-wide. Through more than 100 years of operations, they have built a strong international reputation for high quality tobacco brands to meet consumers’ diverse preferences. Today, they are recognized as one of the world’s leading Fast Moving Consumer Goods companies. It has grown significantly over the last decade, delivering to our shareholders a total return that has outstripped the FTSE 100 over the last one, five and ten year periods.
The general purpose of this study is to determine the satisfactory level of job among the employees of British American Tobacco Bangladesh.We have selected British American Tobacco because this company has a multinational job environment and ensures the maximum level of efficiency among the employees.
This report is basically covering the HR perspective of British American tobacco. In this report, according to the objective and gathered documents,
we will entrust the occupation trough the following process: i) About British American Tobacco ii) processing the information Human Resource management strategy and problem related to this faced by the company iii) applying the theoretical knowledge to solve some of the problem faced the company. Here basically we will survey the employee from marketing and finance.
Job Satisfaction is key component of HRM. Through this a company can ensure the efficiency of works to obtain its goal in a structural and organized way. It is definitely very important and essential for us since we are students of MBA which would help me a lot to build up our career.
We have used different types of research methods. One of the methods is interview method which will be supported by a well-structured questionnaire. In the interview method, we have interviewed 15 employees of Finance department. We have also done some research on secondary data from books, magazine and different related case study.
– We have faced difficulties on getting enough information about the company.
– We had time constraints.
– The sample size might not be very representative.
2.1 British American Tobacco Bangladesh Company Ltd.
British American Tobacco Bangladesh is a member of the British American Tobacco Group that is based in UK and one of the leading players in the global tobacco business. With a long established reputation for providing its consumers with consistently high quality brands, British American Tobacco Group was formed at the turn of the 20th century with the objective of establishing a worldwide business. British American Tobacco is World’s most global tobacco company. BAT has 85,000 employees selling more than 300 brands in more than 180 markets worldwide. Today, the company produces some 2 billion cigarettes every day. More than a billion people across the globe enjoy smoking tobacco. One in every eight chooses a British American Tobacco brand.
In order to support the company’s business goals, the merger of British American Tobacco with Rothmans International had been announced on 11
January 1999. This global merger was completed on 7th June 1999. This brings together the number 2 and 4 players which together will boast a combined volume exceeding 900 billion cigarettes around the world with some 120,000 employees and a world-wide market share of 16 percent (Phillip Morris has a 17 percent share). The merger is a major step forward in British American Tobacco’s vision of becoming the world’s leading International Tobacco Company.
British American Tobacco Bangladesh Company Limited, a market leader in the country, is a subsidiary of British American Tobacco PLC and is one of the 66 countries in which the British American Tobacco Group has manufacturing plants. British American Tobacco Bangladesh has operated in Bangladesh since pre-independence and has it’s headquarter in Dhaka, with a tobacco leaf processing operation in Kushtia. It is one of the oldest, largest and most respected multinational companies operating in Bangladesh.
BATB markets major international cigarette brands like Benson & Hedges, State Express 555, John Player Gold Leaf and Pall Mall, which are complemented by local brands such as Capstan, STAR and Scissors. The company also exports processed tobacco leaf in the international market, mainly in the European Countries with its effort to create an international market of its products.
British American Tobacco Bangladesh currently employs more than 1,300 people and provides indirect employment to a further 24,500 farmers, distributors and suppliers.
Currently, British American Tobacco Bangladesh has two factories in Bangladesh. The Cigarette Manufacturing Factory (Dhaka Factory) is located on the same premises as the Head Office in Mohakhali, Dhaka. The Green Leaf Threshing Plant (GLTP) is situated in Kushtia.
In line with the global identity change of British American Tobacco PLC, BTC was renamed as British American Tobacco Bangladesh Company Limited (BATB) in 1998. The Company is listed on both the Dhaka and Chittagong stock exchanges in the country.
2.2 The Vision and Mission of BATB
The vision of the organization is:
To Extend Our Leadership through World-Class Performance
There are certain missions the organization is heading to accomplish. They are:
❖ Double the net revenue by 2006
❖ Growing our share of the total tobacco market
❖ Dominating key identified segments
2.3 Historical Background of BATB
The journey of this company started long back. BATB was established back in 1910 as Imperial Tobacco Company Ltd. with head office in Calcutta. In the very beginning, Imperial Tobacco Company (ITC) launched a branch office at Moulivibazar, Dhaka in 1926. Cigarettes were made in Carreras Ltd., Calcutta. Imperial and Carreras merged into a single company in 1943. After the partition in 1947, cigarettes were coming freely from Calcutta, but introduction of customs barriers in 1948 between India and Pakistan interrupted the smooth flow of cigarettes from Calcutta to East Pakistan.
In March 1, 1949, Pakistan Tobacco Company (PTC) came into existence with head office in Karachi; with the assets and liabilities of ITC Limited held in Pakistan. The then East Pakistan Office was situated in Alico Building, Motijheel. In order to meet the increasing demand, the first factory in the then
East Pakistan was established in Chittagong in 1952. From this time, onwards requirements for cigarettes for East Pakistan markets were met from products manufactured in Karachi. In 1954, PTC established its first cigarette factory although high-grade cigarettes still came from West Pakistan. The Dhaka factory of PTC went into production in 1965. After the war between India and Pakistan in 1965; the import of tender leaf from India for the production of Biri was stopped. This gave a big boost to cigarette business. It was at that time the East Pakistani entrepreneurs set up 16 cigarette factories in this region.
After independence, Bangladesh Tobacco Company (Pvt.) Limited was formed on 02 February 1972 under the Companies Act 1913, with the assets and liabilities of PTC. Shareholding position for GOB and BAT was 1:2. BTC (Pvt.) was converted into a public limited company on 03 September 1973. British American Tobacco played a pivotal role in BTC’s creation in 1972 and since then has been involved in BTC’s development every step of the way. To pronounce the successful relationship with British American Tobacco, BTC has changed its name and identity to British American Tobacco (BAT) Bangladesh Company Limited on March 22, 1998. The company changed its identification to establish commitment to the highest international standards. |Timeline |Incident | |March 1949 |Formation of Pakistan Tobacco Company (PTC) | |1954 |PTC opened its first factory in Fouzdarhat, Chittagong | |1962 |Opened a branch in Moulavibazar, Dhaka | |1965 |Building of a factory in Mohakhali, Dhaka | |February 1972 |Incorporation of BTC with a paid up capital of Tk. 400 million | |March 22, 1998 |Changed its identity from BTC to BATB |
Table 2A: History of BATB
2.4 Relationship between BAT & BATB
The parent company of BATB is called BATCO or British American Tobacco Company. They are the major shareholders of BATB. The operations of BATB are regulated according to BATCO regulations and BATCO looks after the management aspects of BATB. BATB management is trained by BATCO and in many occasions. BATCO sends over their own management to work in BATB. BAT industries are widely known as BATCO and has two major divisions: ❖ Tobacco Division
❖ Financial Division
The following organogram shows the relationship between BATCO and BATB very clearly:
Illustration 2A: BATCO Organogram
Currently British American Tobacco Bangladesh is retaining 63% of the cigarette market in Bangladesh. British American Tobacco Bangladesh is a sister concern of British American Tobacco Company (BATCO). The cigarette division is known as British American Tobacco Holdings (BAT Holdings), which operates in more
than 78 countries. BAT Holdings is a sister concern of BAT industries – a London based world famous business house. BAT industries operate in financial services, paper manufacturing, and tobacco sector. BATCO divided its cigarette operation in five regions. They are: ❖ North and Central America
❖ South America
❖ Asia Pacific
BATB actually maintains a relationship with BATCO through AMESCA. It is actually a region of BATCO to which BATB reports. AMESCA is made up of: A = Africa, ME = Middle East, S= Subcontinent, CA = Central Asia.
2.5 Structure of BATB
BATB is a public limited company. Management Director is the operational head and appointed by the British American Tobacco. Head of every department carries out their functions with the help of line managers. Different departments have different structure according to their function and responsibility.
The Board of Directors and Executive Committee (ExCo) govern the overall activities of the company. The Board of Directors is composed of 10 members who are called Directors. The Chairman heads the Board of Directors. Chief Executive of British American Tobacco Bangladesh is called the Managing Director, who is normally appointed by BAT Holdings. Managing Director of the
company is the chairperson of the Executive Committee. This committee includes the head of all the functional departments.
2.6 Ownership Status of the Company
British American Tobacco Bangladesh is listed in the Dhaka Stock Exchange (DSE). It has an authorized capital of Tk. 400,000,000 of 40,000,000 ordinary shares of Tk. 10 each. British American Tobacco Bangladesh, which encompasses 62% of the shares of the British American Tobacco, London. The Government held 32% of its shares. Subsequently the government has gradually sold its holdings to different organizations of the country. The composition of shareholders on December 31, 1999 was:
|Investing Organization |Percentage
| |Raleigh Investment Co. Ltd. UK |65.91 % | |Investment Corporation of Bangladesh |26.99 % | |Sadharan Bima Corporation |2.86 % | |Investing Organization |Percentage | |Bangladesh Silpa Rin Sangstha |0.84 % | |Government of Bangladesh |0.65 % | |Sena Kalyan Sangstha |0.52 % | |Others |2.23 % |
Table 2B: Ownership Status of BATB
2.7 Employee and Trade Union of BATB
The employees of the BATB are dynamic, self-motivated and energetic to perform any assigned job, because they are selected based on excellent academic and experience records. The company employs 1,244 permanent employees and varying number of seasonal and temporary workers as required. Each permanent employee receives remuneration in excess of Tk. 36,000 per annum. Remuneration depends on the nature and conditions of work. The workers are labeled in the following categories: ❖ Permanent
❖ Temporary (seasonal)
Trade union is established in the following company’s working locations: ❖ Head Office and Dhaka Factory
❖ Chittagong Factory
❖ Rangpur Leaf Factory
There is a positive relationship between the company and the trade union based on mutual trust and respect. All the employees of the company belong to the trade union. When a worker becomes a member of the union, according to his request a certain amount of his wage is deducted as the union subscription fees on a check off system. Trade union election is held after every two years and governed by their respective constitutions. The terms and conditions of services of the employee are negotiated and determined through a process of collective bargaining between the company and the union.
2.8 Physical Infrastructure of the Company
The infrastructure of the company has a broader field where the company plays its important role. BATB has six Regional Trade Marketing Offices (RTMOs), 12 Regional Sales Depots, 1 Factory, 1 Green Leaf Threshing Plant, 7 Leaf Depots and a Head office consisting of Corporate Head Office and Production Head Office. The Company’s Head office and Cigarette factory are located in Dhaka. A Green Leaf Threshing (GLT) Plant has been set up in Kushtia and it has started operation from April 1995.
The company’s products are manufactured in the factory at Mohakhali, Dhaka. The Plant Manager who reports to the Production Director at the Head Office heads Dhaka factory. The company’ procures tobacco leaf maintaining the international standard and it imports processed tobacco leaf for its international brands. It procures green tobacco from the registered farmers of the leaf area mainly for its local brands.
The company’s authorized leaf areas are located in Kushtia, Chittagong and Manikgonj. However, bulk of tobacco leafs comes from Kushtia region. The Chittagong area is under development process and it now covers Rangunia and Lama. The company operates seven leaf depots in the leaf area. Four of them are located in Kushtia region, two of them are located in CDA and other one is in Manikgonj, The Company provides all sorts of supports to the registered growers through its depot personnel. This includes technical know
how, agricultural inputs and financial assistance.
The company performs its sales and distribution operation all over the country through its six regional sales offices. They are located in Dhaka, Khulna, Chittagong, Sylhet, Bogra and Mymensingh. Each of the regions is again divided into operational areas, each of which in turn is divided into territories. To
perform its sales and distribution smoothly, the company operates 10 sales depots in different locations of the country and it has 63 authorized distributors.
2.9 Functional Areas
BATB has been operating its business under the following major functional areas: ❖ Production
❖ Human Resource
❖ Information Technology
❖ Corporate and Regulatory Affairs
❖ Business Development
Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s job; an affective reaction to one’s job; and an attitude towards one’s job. Weiss (2002) has argued that job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of cognitive evaluation which are affect (emotion), beliefs and behaviours.This definition suggests that we form attitudes towards our jobs by taking into account our feelings, our beliefs, and our behaviors.
3.2 Different Model of Job satisfaction:
Models of job satisfaction
Edwin A. Locke’s Range of Affect Theory (1976) is arguably the most famous job satisfaction model. The main premise of this theory is that satisfaction is determined by a discrepancy between what one wants in a job and what one has in a job. Further, the theory states that how much one values a given facet of work (e.g. the degree of autonomy in a position) moderates how satisfied/dissatisfied one becomes when expectations are/aren’t met. When a person values a particular facet of a job, his satisfaction is more greatly impacted both positively (when expectations are met) and negatively (when expectations are not met), compared to one who doesn’t value that facet. To illustrate, if Employee A values autonomy in the workplace and Employee B is indifferent about autonomy, then Employee A would be more satisfied in a position that offers a high degree of autonomy and less satisfied in a position with little or no autonomy compared to Employee B. This theory also states that too much of a particular facet will produce stronger feelings of dissatisfaction the more a worker values that facet.
Another well-known job satisfaction theory is the Dispositional Theory. It is a very general theory that suggests that people have innate dispositions that cause them to have tendencies toward a certain level of satisfaction, regardless of one’s job. This approach became a notable explanation of job
satisfaction in light of evidence that job satisfaction tends to be stable over time and across careers and jobs. Research also indicates that
identical twins have similar levels of job satisfaction.
Core Self Evaluation model:
A significant model that narrowed the scope of the Dispositional Theory was the Core Self-evaluations Model, proposed by Timothy A. Judge in 1998. Judge argued that there are four Core Self evaluations that determine one’s disposition towards job satisfaction: self-esteem, general self-efficacy, locus of control, and neuroticism. This model states that higher levels of self-esteem (the value one places on his/her self) and general self-efficacy (the belief in one’s own competence) lead to higher work satisfaction Having an internal locus of control (believing one has control over her\his own life, as opposed to outside forces having control) leads to higher job satisfaction. Finally, lower levels of neuroticism lead to higher job satisfaction .
Two-Factor Theory (Motivator-Hygiene Theory)
Frederick Herzberg’s Two factor theory (also known as Motivator Hygiene Theory) attempts to explain satisfaction and motivation in the workplace.This theory states that satisfaction and dissatisfaction are driven by different factors – motivation and hygiene factors, respectively. An employee’s motivation to work is continually related to job satisfaction of a subordinate. Motivation can be seen as an inner force that drives individuals to attain personal and organization goals (Hoskinson, Porter, & Wrench, p.133). Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion opportunities. These motivating factors are considered to be intrinsic to the job, or the work carried out. Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.
Job Characteristics Model
Hackman & Oldham proposed the Job Characteristics Model, which is widely used as a framework to study how particular job characteristics impact on job outcomes, including job satisfaction. The model states that there are five core job characteristics (skill variety, task identity, task significance, autonomy, and feedback) which impact three critical psychological states (experienced meaningfulness, experienced responsibility for outcomes, and knowledge of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work motivation, etc.) The five core job characteristics can be combined to form a motivating potential score (MPS) for a job, which can be used as an index of how likely a job is to affect an employee’s attitudes and behaviors. A meta-analysis of studies that assess the framework of the model provides some support for the validity of the JCM.
Measuring job satisfaction
There are many methods for measuring job satisfaction. By far, the most common method for collecting data regarding job satisfaction is the Likert scale (named after Rensis Likert). Other less common methods of for gauging job satisfaction include: Yes/No questions, True/False questions, point systems, checklists, and forced choice answers. This data is typically collected using an Enterprise Feedback Management (EFM) system. The Job Descriptive Index (JDI), created by Smith, Kendall, & Hulin (1969), is a specific questionnaire of job satisfaction that has been widely used. It measures one’s satisfaction in five facets: pay, promotions and promotion opportunities, coworkers, supervision, and the work itself. The scale is simple, participants answer either yes, no, or can’t decide (indicated by ‘?’) in response to whether given statements accurately describe one’s job.
The Job in General Index is an overall measurement of job satisfaction. It is an improvement to the Job Descriptive Index because the JDI focuses too much on individual facets and not enough on work satisfaction in general. Other job satisfaction questionnaires include: the Minnesota Satisfaction Questionnaire (MSQ), the Job Satisfaction Survey (JSS), and the Faces Scale. The MSQ measures job satisfaction in 20 facets and has a long form with 100 questions (five items from each facet) and a short form with 20 questions (one item from each facet). The JSS is a 36 item questionnaire that measures nine facets of job satisfaction. Finally, the Faces Scale of job satisfaction, one of the first scales used widely, measured overall job satisfaction with just one item which participants respond to by choosing a face.