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National Institute of Business Management
Advanced Diploma in Business Management (15.2 F)
Group Assignment – Principles of Management (ADBM 1411)
Industrial Analysis Softlogic Holdings PLC
Name Index Number
Prabhath G.I ADBM-F-152113
Navarathna R.B ADBM-F-152098
Fernando P.M.M ADBM-F-152039
Rodrigo B.K.I.H ADBM-F-152107
De Silva S.H.S.L ADBM-F-152019
Date of submission: 30th April 2016
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Table of content
Contents 1 Introduction to the organization .................................................................................................... 1
1.1 Values of the company ........................................................................................................... 2
2 The management process ............................................................................................................... 3
2.1 Planning and decision making ................................................................................................. 3
2.2 Organizing ............................................................................................................................... 4
2.3 Leading .................................................................................................................................... 5
2.3.1 Employer motivation ...................................................................................................... 5
2.3.2 Communication process.................................................................................................. 6
2.3.3 The Group Dynamics (Team work).................................................................................. 7
2.4 Control mechanism ................................................................................................................. 8
3 SWOT Analysis ................................................................................................................................. 9
3.1 Strengths of the company ....................................................................................................... 9
3.2 Weaknesses of the company ................................................................................................ 10
3.3 Opportunities ........................................................................................................................ 11
3.4 Threats .................................................................................................................................. 11
4 Managerial issues .......................................................................................................................... 12
5 Recommendations for improvement............................................................................................ 12
6 Conclution ..................................................................................................................................... 13
3
Table of Figures
Figure 1 Orgnization structure of the Softlogic Holdings (pvt) Ltd ......................................................... 4
Figure 2 Communication Model ............................................................................................................. 6
Figure 3 Main sectors of Softlogic Holdings PLC. ................................................................................... 9
List of tables
Table 1 maturity profile of the Group's Financial iabilities ................................................................... 10
1
Softlogic Holdings PLC
1 Introduction to the organization
Softlogic Holdings PLC, rated as one of Sri Lanka’s most dynamic and aggressive conglomerates,
commenced operations in 1991 as a software developer with just 12 employees with turnover of
USD 25,000; now has expanded its footprint holding leading positions in domestic growth oriented
sectors such as ICT, Healthcare, Retail, Financial Services, Automobiles and Leisure. The Group now
provides employment to over 6,000 individuals generating a turnover of more than USD 160 million.
The Group’s representations and strategic alliances with reputed global institutions and large
multinational corporations confirm its unparalleled local stature.
The Beginning of softlogic form 1991 to 1996
The story begins when a young enterprising IT executive with his group of friends started a business
of their own in a small office outfit and they recruited 12 employees to spearhead their plans. The
troupe ran on a secret formula of success placing greater weight on their ability, determination and
wit so as to be the best in business. Softlogic’s fast traction into growth areas catapulted Mr.Ashok
Pathirage to establish an empire in the corporate world with diversified business interests by
strategic decision making and acquisitions.
The Group’s IT sector was the first to be born, with Softlogic being successful in obtaining the Dell
authorised distributorship which Softlogic has retained over the years.
Board of Directors
Mr.Ashok Pathirage, MD / Chairman of Softlogic Group
Having served in the Softlogic Group Board as the Managing Director from inception, he was
appointed as the Chairman of the Group in 2000. The Group which commenced with just twelve
employees 23 years ago and with a small turnover now it manages a multibillion turnover across
various economic growth sectors. Along with Softlogic Holdings, six other firms, which are managed
by Mr. Pathirage, are listed. His role as the MD/Chairman of Asiri Group, has led the healthcare
sector to be the leading private healthcare provider in Sri Lanka. He is also the Chairman of Softlogic
Capital Limited, Softlogic Finance PLC, Asian Alliance Insurance PLC besides being the Chairman of
many other Group Companies that operate in Leisure, Retail, Automobile and ICT industries. He also
serves as the Deputy Chairman of the National Development Bank PLC Board and is the Chairman of
NDB Capital Holdings PLC Board.
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Hemantha Gunawardena - Executive Director
Haresh Kaimal - Executive Director
Ranjan Perera - Executive Director
Roshan Rassool - Executive Director
Prashantha Lal De Alwis - Non-Executive Independent Director
Dr. Sivakumar Selliah - Non-Executive Independent Director
Desamanya Deva Rodrigo - Non-Executive Director
1.1 Values of the company
Vision
To be the most preferred and trusted product and service provider delivering high quality solutions
to the corporate and retail sector through adoption of global management, innovation and integrity
to enhance shareholder value and revolutionize industry competencies so that we hold inimitable
leadership position.
Mission
“To be the best, employ the best and reward the best with a view to reach the highest market
expectations and become the most valued corporate enterprise.”
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2 The management process
2.1 Planning and decision making
Corporate planning and decision making are done by the director board and this information is
transferred to each sub organization’s CEOs/Directors. Afterwards within the sub organization
CEO/Director creates a plan and the decision is taken with the divisions within his sub organization.
E.g.: Setting the target for new financial year for the ICT sector.
Expected net profit from the ICT sector – Rs.500, 000,000 as per the decision taken from the director
board.
ICT sector has six separate organizations. And shown below is how the expected net profit is
distributed among these.
o Softlogic Information technologies – Rs.100,000,000
o Softlogic computers – Rs.50,000,000
o Softlogic communications – Rs.75,000,000
o Softlogic International – Rs.100,000,000
o Office automation - Rs.75,000,000
o Softlogic Australia – Rs.100,000,000
Divisional distribution of SIT
o Corporate/government division – Rs.25,000,000
o Private sector division – Rs.50,000,000
o Network division – Rs.25,000,000
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2.2 Organizing
The organization structure
Financial
Retail
Healthcare
Automobile
ICT & Others
Leisure
SOFTLOGIC HOLDINGS PLC
Softlogic Capital PLC
Softlogic Finance PLC
Softlogic Stockbrokers
(Pvt)Ltd
Asian Alliance
Insurance PLC
Capital Reach Portfolio
Management (Pvt)Ltd
Softlogic Retail (Pvt)Ltd
Softlogic Distribution
(Pvt)Ltd
Dai Nishi Securities
(Pvt)Ltd
Asiri Hospitals Holdings
PLC
Asiri Hospitals Kandy
(Pvt)Ltd
Asiri Surgical Hospital
PLC
Central Hospital (Pvt)
Ltd
Asiri Central Hospital
PLC
Asir Diagnostic
Services (Pvt)Ltd
Asiri Hospitals Mathara
(Pvt)Ltd
Future Automobile
(Pvt)Ltd
Softlogic Automobiles
(Pvt)Ltd
Softlogic Informational
Technologies (Pvt)Ltd
Softlogic International
(Pvt)Ltd
Softlogic Communication
(Pvt)Ltd
Softlogic Computers
(Pvt)Ltd
Softlogic Australia
(Pvt)Ltd
Softlogic Solar (Pvt)Ltd
Softlogic Communication
Services (Pvt) Ltd
Abacus International
Lanka (Pvt)Ltd
Nextage (Pvt)Ltd
Softlogic Corporate
services (Pvt)Ltd
Softlogic Destination
Management (Pvt)Ltd
Softlogic Restaurant
(Pvt)Ltd
Softlogic Properties
(Pvt) Ltd
Softlogic City Hotels
(Pvt)Ltd
Ceysand Resort Ltd
Figure 1 Orgnization structure of the Softlogic Holdings (pvt) Ltd
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2.3 Leading
The Leader ship is having a great idea, and assembling a team to bring that concept to life is the first
step in creating a successful business venture. While finding a new and unique idea is rare enough;
the ability to successfully execute this idea is what separates the dreamers from the entrepreneurs.
At softlogic Mr.Pathirage has taken the first steps in becoming a powerful leader. When money is
tight, stress levels are high, and the visions of instant success don’t happen like softlogic thought but
with the key qualities having with Mr.Pathiraga softlogic was success.
Key qualities of the softlogic leader
1. Honesty
2. Ability to delegate
3. Good communicator
4. Confidence
5. Commitment
2.3.1 Employer motivation
A motivated staff is the cornerstone of quality customer service and product innovation. By
acknowledging employees' achievements, the top management know employers contributions are
integral to the organization's success. Softlogic use below methods to motivate the employers.
Personal thanks Give praise in public Promote two-way communication Feedback and respond Tailor your reward Happy environment Clear direction High involvement Reasonable rewards Sense of ownership Employees' development Celebration
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2.3.2 Communication process
The goal of communication is to convey information—and the understanding of that information—
from one person or group to another person or group. This communication process is divided into
three basic components: A sender transmits a message through a channel to
the receiver. (Figure shows a more elaborate model.)
The sender first develops an idea, which is composed into a message and then transmitted to the
other party, who interprets the message and receives meaning. Information theorists have added
somewhat more complicated language. Developing a message is known as encoding. Interpreting
the message is referred to as decoding.
The other important feature is the feedback cycle. When two people interact, communication is
rarely one‐way only. When a person receives a message, she or he responds to it by giving a reply.
The feedback cycle is the same as the sender‐receiver feedback noted in Figure: 03. Otherwise, the
sender can't know whether the other parties properly interpreted the message or how they reacted
to it. Feedback is especially significant in management because a supervisor has to know how
subordinates respond to directives and plans. The manager also needs to know how work is
progressing and how employees feel about the general work situation.
Figure 2 Communication Model
7
2.3.2.1 Methods of Communication used at Softlogic
E mail
Memo
Letters
Oral
Most effective methods are email and oral. Form top management to middle management 90% of
the communication is done by emails. From middle management to lower management/line
management both email & oral is used equally. Memos are used only for communication general
information such as chairman/HC division massages.
2.3.3 The Group Dynamics (Team work)
Team work is one of the secrets of success of the Softlogic group. An example that can be given from
the ICT sector is that even though they have separate divisions to cater to separates solutions,
Softlogic can provide any kind of solution required by the customers by acting as one team.
Divisions of the ICT sector
1. Desktop computer division
2. Network division
3. Server division
4. Data storage and data security division
5. Power division
6. Office automation division
Apart from the above a sister company named Soflogic Lifestyle can provide computer furniture to
any required customer thereby providing a total solution to the customer.
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2.4 Control mechanism
The control mechanism is very practical at softlogic all the activities and the process are controlled
by the deferent level of managers with the suitable authorities given by the top management.
Responsible team for controlling
1. Top management
2. Internal audit team
3. Risk management team
4. Central procurement unit (CPU)
5. Finance control team
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3 SWOT Analysis
3.1 Strengths of the company
Softlogic being a strength-based organization has resulted in a number of positive outcomes for both
the employee and the organization. Softlogic not only leads to greater levels of employee
engagement in the workplace, but also increases productivity, customer service scores, safety,
profitability and even employee retention in the long run. Relying upon the strengths of those in the
company who were doing something differently than everyone else, the company's division that
utilized this process Softlogic grew very fast.
The main strength of the Softlogic group is the diversification of the deferent sectors. Group labour
strength is over 6000 and the annual turnover is USD 160 million.
Main sectors of the company
Figure 3 Main sectors of Softlogic Holdings PLC.
SOFTLOGIC HOLDINS PLC
Financial
Retail
Healthcare
Automobile
ICT
Leisure
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3.2 Weaknesses of the company
Weaknesses are areas where improvements need to be made because the company’s current
situation leaves you vulnerable to economic pressures, market forces or aggressive competitors. In
short, these are the things that hurt long-term, sustainable profitability.
Here are some weaknesses Softlogic should avoid;
No proper documented systems and procedures (ERP System)
Business is TOO dependent on one key person
No proven methods for revenue growth
Wrong people supporting the business
Lack of cash
Business is highly depend on the borrowings and the mortgages ( below table is from
2014-15 annual report)
The table below summaries the maturity profile of the Group’s financial liabilities at 31 March 2015
based on contractual undiscounted payments.
Within 1
year
Between 1-
2 years
Between 2-
3years
Between 3-
4 years
Between 4-
5years
More than
5 years Total
Interest bearing
loans and
borrowings
4,616,956,512 7,840,463,194 3,383,374,968 3,139,491,673 4,091,400,830 4,389,560,757 27,461,247,934
Other non
current financial
liabilities
- 31,710,620 - - - - 31,710,620
Trade and other
payables 7,041,840,113 - - - - - 7,041,840,113
Amounts due to
related parties 15,970,784 - - - - - 15,970,784
Short term
borrowings 14,787,184,778 - - - - - 14,787,184,778
Public deposits 9,838,760,403 1,037,598,357 976,766,009 199,931,421 - - 12,053,056,190
Bank overdrafts 1,658,001,636 - - - - - 1,658,001,636
37,958,714,226 8,909,772,171 4,360,140,977 3,339,423,094 4,091,400,830 4,389,560,757 63,049,012,055
Contingent gross
commitment on
put option
- 1,812,828,000 - - - - 1,812,828,000
Table 1 maturity profile of the Group's Financial iabilities
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3.3 Opportunities
With the type of background of the company it is clear that they have opportunities in starting a
local manufacturing plant for consumable products that will in return facilitate the nation and assist
in reducing the unemployment rate of the country.
With 200 retail outlets, Softlogic can sell any brand related to their category.
3.4 Threats
The main threat to the Softlogic group is their competitors and the share price drop. Main
competitor in the retail sector is Abans and Singer.
Abans is having over 200 showrooms island-wide and 450 approved dealers across Sri Lanka. Singer
distribution network is over 300 Retail Outlets, Over 100 Singer exclusive dealers and close to about
300 independent dealers all around Sri Lanka.
Because of extend of the coverage both Abans & Singer have more selling power than Softlogic.The
risk is very high in the Automobile sector.
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4 Managerial issues
Managerial issues mean mainly get from customers, Customers problem is not sold on time. Then
company conduct the customer, get exact problem what it is and before it exculpate to the next
level softlogic company management level try to solve them. Before it exculpate to top level it
solve by CEO.
Mainly issues are getting from customers.
On the other hand, there are employees’ issues, there are some employees are not team players,
then Softlogic Company conduct orientation programme to those employees. Then they will got to
now hierarchy level of the organization, what sector are softlogic company, what are the products
we do, what are the substariares we are, like that entire range will cover by the orientation
programme.
When employees conflict come, whether it is sales issues or whether it is personal issues of
employees. Employees come with lots of excuses, softlogic company talk to them initially
5 Recommendations for improvement
Softlogic has to implement more CSR projects along with employer welfare projects. Currently
Softlogic is having only five welfare activities such as medical insurance/personal loan with 0%
interest with limited amount.
Suggested employer welfare activities;
1. Cash incentive for employer wedding
2. Cash incentive for first baby
3. Cash incentive for death of employer or close relations
4. Reimbursement of educational expenses related to the organization
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6 Conclution
Softlogic is a proactive, demand driven and constructive organization whose foresight and strategy
focus on meeting business challenges. Softlogic also capitalize upon new ventures to exceed their
stakeholder expectations in the medium term. The company’s single minded belief is that tangible
success stems from their focused approach. Softlogic harness all resources to achieve value creation
for their shareholders, employees, partners, customers and the community at large. Softlogic is truly
ardent about today’s business opportunities.
The main challenge Softlogic is facing is to increase their share price at least up to the Initial Public
offering (IPO price Rs.29/-) price to get more attraction from investors. The current share price is
Rs.8.00 to 10.00 on average.
The main risk to the investors is that most of their assets were mortgaged and the borrowings are
very high.
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References
Annual report 2014/15– softlogic Holdings PLC
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Group members
Name Index Number Contribution to the Group
(Task Undertaken) Signature
Prabhath G.I ADBM-F-152113
Visit to the company Analyze the data from annual report Made the figures of the report Make the presentation
Navarathna R.B ADBM-F-152098
Visit to the company Type the report Analyze the data form interview Support to the presentation
Fernando P.M.M ADBM-F-152039 Visit to the company Analyze the data Support to the presentation
Rodrigo B.K.I.H ADBM-F-152107 Visit to the company Analyze the data Support to the presentation
De silva S.H.S.L ADBM-F-152019 Visit to the company Support to the presentation
