Metro Cash And Carry: A case study
The root cause of the problem was the lack of time available for the Training Department to formulate a detailed and effective training plan. This is due to the hefty workload; Senior Buyers in Offer Management Division could not give sufficient time to the Training Department to design an effective training plan.
In 2011, in Management Trainee Officer Program was introduced at METRO – Habib Cash & Carry Pakistan. It is still in the initial developing stages but has improved a bit from previous year. Previously, the training plan was not at all comprehensive as there were no objectives defined. Thus the trainers and the trainees had no idea what their objectives were, and how do they achieve them in order to have a positive outcome. This has led to misunderstanding amongst the trainers and the trainees.
The timeline of the training plan was not defined and no formal or informal assessment was practiced. Hence, the training plan was unable to provide a proper direction and exposure to the trainee buyers. The trainee buyers acquired different levels of knowledge, worked on different tasks and had different exposure which ultimately resulted in unequal training for the trainees. Moreover, trainee buyers did not utilize the complete training period in getting trained for those particular tasks that would be helpful in improving their performance and future career growth. A lot of time is wasted especially in the store training where the trainee buyers remained idle hence performing those tasks that were not relevant to their future job responsibilities. We could conclude that the objectives of the training program were also not met.
This concludes that the training plan faces numerous problems which need to be identified and resolved in order to have a proper comprehensive and effective training plan which will benefit the trainees as well as the company for making such an investment. The research project concluded that lack of comprehensive training plan was one of the primary reasons for unsuccessful implementation of the Management Trainee Program. With the help of the research findings and other secondary data analysis, a number of recommendations are made to eliminate the problems. The recommendations will help eradicate, or at least minimize the problems and issues in the training program to make it more effective for the future Management Trainee Officer Program.
METRO Cash & Carry is the leading international player in self-service wholesale sector. Under the brands METRO and MAKRO it operates over 700 wholesale stores in 29 countries throughout Europe, Asia and Africa. The wholesale offer a broad range of products and services customized to the specific demands of professional customers, such as hotel and restaurant operators, catering firms, independent small retailers, institutions and offices. (METRO cash & Carry, 2012)
METRO opened its first cash & carry wholesale center in Pakistan in 2007 and then expanded to 5 wholesale centers in a short span of 18 months. After the merger with Habib Group, the local business partners in 2012, today the company is operating 10 wholesale centers in Lahore, Karachi, Islamabad and Faisalabad cities. (Metro Cash & Carry Pakistan, 2012)
The company has a simple and efficient business concept: cash & carry wholesale, which is defined through its customer base: only professional customers are allowed to purchase at METRO-Habib Cash & Carry, all of them duly registered and provided with a customer card. It is not a super- or hypermarket chain for private consumption, but a modern form of wholesale exclusively tailored to the needs of businesses and companies. The core customers are small and medium-sized retailers as well as hotels, restaurants and caterers. The company offers business customers a comprehensive product range both in food and non-food and efficient business solutions to enhance the customer’s competitiveness in their own markets. (Metro Cash & Carry Pakistan, 2012)
The company has merged with the local head to head competition in the field of wholesales as Metro AG (MEO), Germany’s biggest retailer, combined its wholesale operations in Pakistan with local competitor Makro-Habib Pakistan Limited. Metro holds a major part of the operational business while Makro have a majority in the real estate.
The company has planned to further expand in many large cities of Pakistan. The wholesale center offers a wide array of:
Non Food items
METRO Cash & Carry is the leading international player in self-service wholesale: customer-focused, international and innovative. The concept is oriented towards helping customers to successfully run their own businesses. (METRO GROUP, 2012)
METRO Cash & Carry in Figures:
METRO Cash & Carry
Locations as per 30th September 2012
Number of Countries as per 30th September 2012
Sales as per 31st December 2011
â‚¬ 31.2 bn
EBIT as per 31st Decemeber 2011
Headcount (full-time Equivalents as of closing date 31 December 2011)
Articles, Food assortment as per 31st Decemeber 2011
Articles, Non-Food assortment as per 31st Decemeber 2011
Source: (METRO GROUP, 2012)
Metro Cash & Carry looks back on a history of success in wholesale concepts. Founded in 1964 in Germany, the company quickly spread to many countries in Europe, Asia and Northern Africa. Its tradition in wholesale is accompanied by social heritage; a truly international corporate culture. (METRO GROUP, 2012)
International expansion is a significant element of the corporate strategy. In about four decades, Metro Cash & Carry has grown from a Western Europe-centred wholesale concept to a leading international player in self-service wholesale, operating 722 outlets in 29 countries. There, Metro Cash & Carry not only benefits from the dynamic economic development but also strives to promote local purchasing power and consumer demand. (METRO GROUP, 2012)
Specifically, Metro Cash & Carry is focused on the dynamic growth markets in Asia and Eastern Europe as well as in the Middle East and Northern Africa. The majority of all new business locations are established in these growth regions. Over three billion people, about the half of the world’s population, live in countries where the company is already present. (METRO GROUP, 2012)
When entering new markets, Metro Cash & Carry does more than securing its own future: it actively creates jobs and often pioneers the development of modern trade and supply structures. The company is committed to its social responsibility. Close cooperation with regional producers and suppliers builds up trust and increases the level of acceptance that Metro Cash & Carry enjoys in each of its locations. (METRO GROUP, 2012)
Today, the company has grown to become the leading international player in self-service wholesale. Much copied around the world, Metro Cash & Carry is once again setting itself apart from its competitors. The Metro Cash & Carry product range and services – from delivery to ready-made business solutions – is outstanding in its diversity, quality and excellent price-benefit ratio. It operates with an unparalleled expertise in providing fresh food products. (METRO GROUP, 2012)
Up to 50,000 different food and non-food products catering to the specific needs of national and local customer are always available in excellent quality at Metro Cash & Carry. Worldwide, Metro Cash & Carry is the first to offer regional products for regional professional demand: in China, specialties like dim sum are as much a part of its product range as köfte in Turkey or plum pudding in England. This implies a unique local sourcing system: up to 90 percent of Metro Cash & Carry goods are purchased from local producers and suppliers. (METRO GROUP, 2012)
“METRO will dominate the Cash & Carry wholesale segment internationally, through our unique business formula which improves the competitiveness of our customers all over the world.” (Doctstoc, 2011)
The Vision statement of METRO Cash & Carry is very simple, to dominate the wholesale segment internationally by becoming the market leaders. No matter where they operate, the common vision statement is shared amongst all the METRO Cash & Carry businesses. Therefore METRO – Habib Cash & Carry also has the same vision inherited by METRO AG.
The vision is achieved through formulation of unique strategies which makes its way forward by growth and expansion. It has become the fourth largest wholesale business in the world, wall-mart being on the top. Our competitors include wall-mart, Tesco, Carrefour etc. and the competition is immense amongst each other. But the vision to dominate the Cash & Carry wholesale segment internationally is what METRO Cash and Carry is all about.
Importance of customers all over the world is also clearly evident in the vision of METRO Cash & Carry. The main objective is not only expanding the wholesale business worldwide, but also to ensure the well-being of their customers. It is an excellent strategy as customers feel important and comfortable forming a partnership with METRO Cash & Carry.
“METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO provides quality products and business solutions at the lowest possible prices.” (Doctstoc, 2011)
The mission statement is all about how the company manages its operations and in which direction it is moving. Normally, there are nine important components which exist in a mission statement that make the mission statement strong and impactful.
These components include customer, products and services, markets, technology, concern of survival, growth & profitability, philosophy, self-concept, concern of public image and concern of employees. (MBA – Tutorials, 2012)
The mission statement of METRO Cash and Carry does not clearly include the nine components mentioned above hence it cannot be considered to be strong and impactful. It does tell us about its business operation’s model but more detail would have been appropriate. It does not explain what quality products and services it is providing, what market they are catering and targeting, what technology do they use, how they plan to survive and sustain in the industry and what are the strategies for growth and profitability in short-run as well as long run.
It can be categorized as not a very strong mission statement, which can be improved by including these characteristics and components in to it. Mission statements are usually more self-explanatory, which portrays a better picture of the company’s mission and objectives to its internal and external stakeholders. METRO Cash & Cary should amend its mission statement so that it can convey a positive impression of the company; hence it will result in being more purposeful for stakeholders.
METRO – Habib Cash & Carry Pakistan
Since the merger took place, METRO – Habib Cash & Carry has so far a total of 10 stores in Pakistan. For each 5 METRO stores it has invested 20 million Euros, taking the total investment to around 100 million Euros. They planned to grow in coming years by taking the total number of stores to 10, which has been achieved by the Merger with Makro Cash & Carry, owned by House of Habib.
The Head Office of METRO Cash & Carry Pakistan is situated at Thokar Niaz Baig, Multan Road, Lahore. There are approximately 300 employees in the Head office with an average of 235 to 245 employees per store. It is a unique business in Pakistan since there are no direct competitors of its scale. In Pakistan, 95% wholesale industry is unstructured and METRO – Habib Cash & Carry is considered to be the giant in the structured wholesale industry.
METRO – Habib Cash & Carry has invested 20 million Euros per store, thus contributing to the economy with large scale of Foreign Direct Investment. As per the Standard of procedures (SOP) proper invoicing is followed with separate tax column in place, in order to inform its customers about their contribution in national exchequer in every transaction. Proper Documentation of each invoice for tax purposes is also strictly followed.
According to the SOP, METRO – Habib Cash and Carry conducts business only with those suppliers that are registered with FBR for tax purpose. There is full transparency of transactions, whether they are imports or local. There is a joint effort made in order to develop exports with farmers and the Government which will ultimately result in prosperous future of the economy.
Figure 1: Source: MCC-PK Organizational Structure (METRO Cash & Carry Pakistan, 2011)
INDUSTRY & COMPETITORS’ ANALYSIS
Pakistan’s retail sector has always been dominated by the thousands of small corner shops nationwide. At present, it is going through a dramatic facelift as the consumers are becoming more discerning and demand greater choice.
The rise of wholesalers and hypermarkets such as METRO – Habib Cash & Carry and Hyperstar has given all the Pakistanis an opportunity for a more consumer preference driven shopping experience.
According to the Small & Medium Enterprise Development Authority, there are over 125,000 retail outlets all across Pakistan. Approximately 94 per cent of these are miniscule corner shops and small retail outlets in cities and villages. Perhaps most critically, there is no nationwide chain of retail or even wholesale outlets. This poses a significant challenge for most businesses looking to enter the food and agribusiness sector. Despite the fact that Pakistanis spend close to $36 billion a year on food and other retail shopping, businesses find it very difficult to reach the mass market of Pakistani consumers simply because it is not a single marketplace but tens of thousands of little shops. (Tirmizi, 2010)
Perhaps there is a more concentrated market in the urban areas of Pakistan still it does not have any chain of retail outlets that operates with its own supply chain.
Logistics is an exceedingly important cost component that eats away at the margins of most producers of retail consumer items. Take, for instance, Unilever, one of the largest consumer goods company in both Pakistan and the world. Logistics costs constitute close to 19 per cent of their revenues, which depresses the profitability of a machine. This distribution does not capture the fact that revenues themselves are depressed owing to the margins that the manufacturers have to give to hundreds of distributors throughout the country. While distributors are common in even developed markets, they work on thinner margins than Pakistani distributors. And the presence of large retail chains means that often producers can sell directly to retailers and wholesalers, which reduces overall distribution costs. (Tirmizi, 2010)
For decades, the large supermarkets such as Agha’s supermarket and Nadeed’s in Karachi, Al-Fateh and HKB in Lahore exist in Pakistan. But the origin of a retail revolution began by the advent of foreign players in the country. Such as a German wholesaler, Metro Cash & Carry has five stores in total across Pakistan and plans to grow its existence nationwide. Company such as Metro Cash & Carry is giving the Pakistani middle class an opportunity to choose between different alternatives which are available in the now developed markets.
Wholesale and retailing has over the years evolved as a major industry worldwide. Numbers of leading companies are retailers or wholesale businesses. The total size of retailing business was estimated to be over $8 trillion back in 2006, whereas over 50 of Fortune 500 companies belong to this industry. That means 10% of top 500 companies are from wholesale and retail industry. Wal-Mart is number 1 on that list, which is a leading retail chain in United States of America. The trend has been picking up in developing countries as well, and in Asia 25 of top 200 companies is from the same industry as well. This gives a clear idea of the growth in the industry and its importance. (Guhathakurta, The Great Indian Retail Story, 2006)
METRO – Habib Cash & Carry Pakistan operates as a wholesale and retail business. It has 10 stores in total but still possess a very small share in the wholesale industry due to a large proportion of unstructured market. When questioned the management of METRO – Habib Cash and Carry Pakistan about the major competitors of METRO the answer was that they do not have any direct competitors. It is true since their target market is completely different from other wholesale businesses present in the industry with an entirely different business model. Other wholesale businesses are small in size, specialize in specific commodities, and cater particular segment of the market.
METRO – Habib Cash & Carry faces competition from small and specialized wholesalers present in the market such as businesses in Akbari Market, Abid Market, Hall road etc. It is only METRO – Habib Cash & Carry which consists of an assortment of more than 56000 Stock Keeping Units (SKUs) whereas the businesses in unstructured markets either deal in specialized product range or possess huge assortment but in a very small scale.
After the Merger between METRO and Makro Cash & Carry, only one indirect competitor is considered important, namely Hyperstar. METRO – Habib Cash & Carry compare their prices and assortment levels with hyperstar frequently in order to make sure they are providing quality products in cheaper prices than hyperstar (which is basically a retail facility not wholesale facility).
Hyperstar concentrates more on end customers, unlike METRO – Habib Cash & Carry Pakistan which targets professional customers and businesses. Hyperstar do have some similarities as well with METRO Cash & Carry Pakistan.
Hyperstar is unique in its kind. It’s a hypermarket chain, concentation is totally on end consumers, currently operating with two stores in Pakistan, one in Lahore and the other in Karachi. The Lahore store started its operations back in 2009, where as Karachi store was opened in 2011.
Hyperstar introduced hypermarket retail concept in Pakistan, and is rapidly gaining popularity amongst end consumers.
Hyperstar is subsidiary of Majid Al Futtaim Hypermarkets, currently operating 38 hypermarkets across 11 countries. The group were the first ones to introduce hypermarket model in the Middle East back in 1995 and established themselves as the most active shopping concept developers. (Hyperstar Pakistan, 2011)
Hyperstar and Majid Al Futtaim Hypermarkets are franchise of Carrefour. Carrefour Group is France based, and for past more than forty years grown to become one of the world’s leading distribution groups. Carrefour has become the world’s second largest retailer, and the largest in Europe. Carrefour operates four different types of stores under its banner, including hypermarkets, supermarkets, convenience stores and cash & carry. (Carrefour, 2011)
In the financial year 2011, METRO GROUP sales declined by 0.8 percent to â‚¬66.7 billion. In local currency, sales rose slightly by 0.2 percent, nearly matching the previous year’s level. In Germany, sales declined by 1.0 percent to â‚¬25.9 billion and were affected by store divestments at Metro Cash & Carry and Real. International sales fell by 0.7 percent to â‚¬40.8 billion. In local currencies, however, sales increased by 0.4 percent. As a result, the international share of sales rose slightly from 61.1 percent to 61.2 percent. METRO GROUP’s EBIT declined by 4.4 percent to â‚¬2,113 million in the financial year 2011 compared to the previous year’s level. EBIT includes special items from Shape 2012 totalling â‚¬259 million. EBIT before special items declined by just 1.8 percent to â‚¬2,372 million. In 2011, net profit for the period (Group net profit) totalled â‚¬741 million and comprises special items totalling â‚¬238 million from Shape 2012. Earnings per share before special items, that is adjusted for the special items from Shape 2012, totalled â‚¬2.63. (Annual Report METRO, 2010)
In the financial year 2010, METRO GROUP sales rose by 2.6 percent to â‚¬67.3 billion (in local currencies +0.9 percent). International Group sales increased by 5.4 percent to â‚¬41.1 billion, bolstered by positive currency effects. In the financial year 2010, the international share of sales amounted to 61.1 percent. In Germany, sales adjusted for location and other divestments, matched the previous year’s level. METRO GROUP’s EBIT increased by 31.5 percent to â‚¬2,211 million in the financial year 2010. Special items include one-time expenses related to the efficiency and value-enhancing programme Shape 2012 totalling â‚¬204 million. EBIT before special items reached a new record of â‚¬2,415 million. This corresponds to earnings growth of 19.3 percent. Net profit for the period (Group net profit) totalled â‚¬936 million. It comprises special items from Shape 2012 totalling â‚¬203 million from Shape 2012. Earnings per share before special items totalled â‚¬3.12 (previous year â‚¬2.10). (Annual Report METRO, 2010)
Carrefour’s full year sales in 2011 including VAT was estimated to be â‚¬91.5bn. in the fourth quarter of 2011 it was â‚¬24.2bn only which was mainly due to a deteriorating envioronment that impacted non-food training. The food revenues generally resilient. In 2010 the sales including VAT were estimated to be â‚¬101.0bn. Basically the sales are being impacted by transportation and weather discruptions.
Since half decade now, Tesco’s sales revenue has grown consistently whereas the other competitors have experienced hurdles in sustaining their sales turnover. We can see from the above table how the net profit for the year has increased significantly for Tesco from 2009 to 2011. Regardless of consistent financial performance by TESCO over the years, its share price is vulnerable to economic and monetary downturns that might affect the consumer spending. However, the effect will be the same for all other competitors.
According to (Sum) training is a very powerful tool which plays an important part in improving the organizational performance, efficiency and competitiveness. By managing training it is meant to plan, monitor and evaluate the training program and implement strategically.
According to (King, 2011), the factors affecting the failure and success of wholesale businesses are various and range from a variety of factors. For a business to be competitive and successful in the market, experience is the most important factor according to the author. Further on the author states that like any other business, the passion to succeed is one of the major factors that contribute to the success of any company.
(Riemers, 1998) elaborates the significance of wholesaling in centres of distribution because they are the main link between retailers and manufacturers which is why they play such an important part in the channels of distribution where they get the products delivered to the final customers. The author has further asserted the link and significance of the geographical location of the wholesale business in the Netherlands and because of the findings, the wholesale outlets at first were located on the outskirts of the main cities and with time, their distance to the buyers have decresed but their distance to the suppliers has remained the same – which the author advocates is due to the increase in transportation costs over the years, the expansion of the cities and the improving infrastructure. Also, since the wholesale businesses have increased over the years, this has also given cause to the wholesale businesses moving to the outskirts.
Elaborating the wholesale industrys various economic phases which date back to the beginning of civilization, (Engle, 1933) has asserted that the industry of wholesale system has been facing hurdles due to the massive development of the system of chain-stores and diresct selling by the competing manufacturers. Specialisation on the other hand has brought hope to the industry since it has helped in the system of distribution and logistics and will survive the onslaught of competitors in the future as well. The author further advocates his opinion that due to the massive development in retailing and manufacturing, wholesale has been less thought of or has been ignored but nevertheless its significance cannot be put aside. The evolution of wholesaling has also been elaborated with the fact that the help small-scale manufacturers got when retailers marketed their businesses from wholesalers and retailers as well. The author has also divided the market into two segments – the first one of wholesalers who sell to other whole salers and the second segment of the wholesalers who sell to retailers.
According to (Toulme, 1949), the success of trade in the United States is because of wholesale grocers. Instead of just keeping grocery products, these wholesale grocers carried all sorts of different products at their outlets which catered to the needs and wants of the consumers. Further on the author advocates that a wholesaler is more efficient than a manufacturer because it provides more economic services ranging from assembling the products to the transportation of products. So much can be said about wholesaling that it contributes largely and benefits the whole economy by providing a range of services to the consumers.
(Zirram, 2011) explains an impression of the retail, trade and wholesale industry in Pakistan. Categorizing the whole industry of Pakistan in 9 different categories, retailers and wholesalers are amongst them. Wholesalers are few in number when equated to small retail shops, which is a queit obvious fact. It discusses the history in city of Karachi, in which they are mainly situated; in 2 areas (by the name of Jodia Bazar and Joona Market) from where all the retailers used to consume their products until 1970s. Finally, with the development of city, more wholesale centres were setup in various parts of the city. The story is the same for the rest of the country. Trends in consumer demands and taste often change and wholesale centres have advanced in to wholesale retailers like METRO – Habib Cash & Carry Pakistan which is a great leap forward.
(Bhatt, 2008) and (Guhathakurta, The Great Indian Retail Story, 2006) back up the (IBEF, 2009) report with their findings and analysis of retail business in India. The deomgraphics and economic conditions of India support the development of hypermarkets, cash and carry stores, and other branded outlets. METRO – Habib Cash & Carry can apply these dynamics to its benefit by certifying that it builds consumer loyalty towards its stores and secure a major market share. In Pakistan, METRO – Habib Cash & Carry brought the conception of cash and carry wholesale centres and modern trade. These facts and figures illustrate that, METRO – Habib Cash & Carry is becoming a major and player of wholesale and retail industry in Pakistan.
There are two types of training; general or specific according to (Barrett & O’Connell, 1999). General training is the training that helps the trainee to perform better on the job in their current organization as well as in the other organizations. On the other hand specific training helps the trainee to enhance and improve performance in the current job position and in the same organization. The results of these trainings illustrates that the general training plays an important role in the productivity growth but the specific training does not have positive effect on the productivity growth. The positive effect might be in the form of changes in work organization, size of the firm, level of human resource in the organization and corporate restructuring. Moreover, Barrett & O’Connel explains that if the trainee has positive impression about the training, the productivity would increase. If the trainee believes the structure of the training is to improve its performance in the organization as well as elsewehere, they will put more effort on acquiring knowledge and experienece from that training.
(Baldwin, 1999) in his research revealed that firms believes in developing competencies in wide range of areas in order to be more successful. The factor that differentiates fast growing companies from slow growing companies is improvement and innovation. The training helps in enhancing productivitry in larger organizations. It can be done through better Research and Development, adaptation of advance technologies and formulation of new processes which result in much improved efficiencies. On the contrary, smaller companies carry training sessions which help them in handling newly introduced equipment, machinery or technology. The training benefits all the organization in numerous ways, particularly in services sector, in order to aid and equip the workforce with new skills that help the organization to be more efficient. Innovation is linked back to training as through such trainings to the employees the companies are looking for innovative ideas in current processes.
International data set of five thousand and more companies across twenty six countries in used in the research of (Hansson, 2003). The research carried out explains that the company’s training provision depends upon the company specific factors; human resource management practices. Two measures of training which are widely used; incidence and intensity, are determined by various factores that cannot be attributed to the specific factors. Increase in staff turnover is majorly caused by lower profitability, as the companies consider it to be a loss which feeds on the profitability of organization. The money spent on trainings is usually linked with the profitability of the organization, which also states that the economic benefits of such trainings out weigh the price of staff turnover. It is an investment decision that whether training should be conducted or not as it results in the increase of profitability in the future and hence does not and should not consider the past profitability of the organization.
(Moreno, Bhattacharjee, & Brandon, 2006) carried out a research on the auditors to study the effectiveness of different training techniques on improving the analytical procedures performance. Problem solving training and worked out example were developed as mechanisms for acquiring the knowledge. These mechanisms are then combined with various levels of self-explanation. During the research, there was a baseline group of participants who were not provided any training, whereas there were other six groups of paricipants who were given six different training techniques which included worked out example, self-explanation, outcome feedback, problem solving, problem solving with self-explanation and worked-out example with self explanation. Later on, the participants were requested to complete a analytical procedures case. The results illustrated that problem solving training or worked out example combined with self-explanation out performed the other participating groups. The results are really important for the particular study, since it shows how the combination of techniques are compulsory in order to formulate an effective training program which will benefit in improving the decision making and analytical skills of the trainees.
(Balmaceda, 2006) through his research found out that the task specific trainings are not fruitful or very beneficial for the organization. The employee with is considered utilized if task specific trainings are provided considering the job responsibilities of the trainee only. In order to aviod under utlization of human resource and capital in the organization, Balmaceda explains that job designs shall be formulated in such a way that the risk is mitigated. Job rotation, task reallocations and felixible work practices should be carried out in order to best utilize human capital in the organization. Balmaceda’s research explains the very reason METRO – Habib Cash & Carry Pakistan introduced the Management Trainee Program. In Offer Management Division, there are buyers at different levels who are given task specific trainings and are specialized in their respective categories only. If they are transferred in to other category, it will take time for the buyers to adapt to the new category as the company will be required to provide them complete knowledge regarding the new category which ultimately puts burden on the company overall.
According to (Kirkpartrick, 1994) it is essential to conduct assessment and evaluations at the end of the training session. It is very important to measure the reaction of trainees. It provides valuable feedback which helps the organization to evaluate the program in order to improve future programs. By measuring their reaction it also informs the trainees that their trainers are always there to guide them do their tasks better and that the feedback is important to determine their effectiveness on the job. The evaluations also offer quantitative data which can be provided to their line managers and training department. It helps to establish the standard of performance for future. Kirkpatrick also explains that through learning the participants improve knowledge, change their attitudes towards work and increase their skills. And for learning trainings must be carried out frequently in the organization. It is also beneficial to run performance tests in order to evaluate the efficiency and increase in knowledge and skills.
METRO – Habib Cash & Carry Pakistan has introduced The Management Trainee Officers’ (MTO) Program in 2011. In every organization there is a need for managerial staff. From the top executives to first-line supervisors, managers direct and plan the work of their organizations, establish modes of communication, evaluate the work and set policies.
Individuals are trained for management responsibilities, for which companies use Management Trainee positions. The trainee is rotated among the various departments in order to deveop familiarity with the whole organization and its operations.
METRO – Habib Cash & Carry Pakistan initiated Trainee Buyers program which is similar to Management Trainee Officers Program. Trainee buyers are rotated among the various departments and are trained like Management Trainee Officers, the difference is that it has already been decided that after the training period they will be inducted in Offer Management Department not any other department.
Human Resource Department of METRO Cash & Carry Pakistan came to a conclusion in 2011 that there is a need to inject fresh blood in to the company, especially in the Offer Management Department who actually work on the negotiations with the suppliers and bring in the best business deals for the Organization. The First batch of Management Trainee Officers Program in 2011 was designed to hire and train future buyers for Offer Management Division at METRO – Habib Cash & Carry Pakistan. Five trainees who freshly graduated in their Masters in Business Administration (MBA) were hired as “Trainee Buyers”. They were trained for an initial period of one year after which they were designated in to different categories of Offer Management Division as assistant buyers also called Buying Executives.
Mr. Babur Shahid and Mr. Umar Jamal are the Training Managers at METRO – Habib Cash & Carry Pakistan. They are assisted with a team which comprise of Mr. Kashif Badar and Mr. Fatiq and are responsible for planning, designing and implementation of all sorts of training in the organization.
Mr. Umer Jamal is the Senior Manager Organizational Excellence at METRO – Habib Cash & Carry. His key responsibilities include ensuring the development and implementation of organization wide strategies, prioritizing organizational efforts and resources towards development of a culture which is high on employee engagement and performance, and central to METRO’s vision, values, and strategic priorities. He also assist, support and monitor the development activities of succession of candidates toward goal of developing ‘future generation’ leaders for all key positions.
Researcher’s discussion with Mr. Umar Jamal underlined the problems faced in the successful implementation of Management Trainee Program since last 2 years. Since the merger took place in previous year, all the departments have been busy in numerous tasks resulting in unstructured work load and agendas. Like last year, this time also there was little time span from the decision of initiating MTO program to hiring of trainee buyers. This year again, LSE was given preference as they had an excellent experience last year with trainee buyers now working as Buying Executives in their respective sub departments in Offer Management Department.
Mr. Kashif Badar assistant manager, organizational excellence, was given the task of designing and preparing the training program. Because of the shortage of time, Mr. Badar was allowed very little time to design an effective and comprehensive training plan again this year. A lot of improvements have been made from previous year but still time constraint was an issue in order to execute a comprehensive training plan.
Research Question: “What are the inherent problems in successful implementation of MTO Program at METRO – Habib Cash & Carry?”
In Mr Jamal’s opinion successful implementation of MTO Program at METRO – Habib Cash & Carry Pakistan would result when the training objectives are clearly defined, when the training plan is followed strictly without any interruption and delay within the departments and training sessions. How much time does a trainee buyer need to spend in a certain department is pre-decided and that should be strictly followed to complete the training program within scheduled dates. In what departments the trainees are rotated such as Offer Management Division, Data Analyst Department, Target Group Management Department, Supply Chain Department etc.
According to Mr Babur the key element for successful implementation of MTO Program is assessment of trainee buyers for what they have learned from the training. Last year five trainees were rotated in various departments but there was no assessment of trainee buyers with the respective trainers or senior staff to check it they have gained appropriate knowledge through training sessions. Another factor includes the form on training, what forms of training are used to train the candidates such as class room trainings, e-trainings, discussions, lectures, on the job trainings, hands on training etc.
The training program is designed to provide effective training to all the candidates in order to meet future requirements of the organization. An effective training would ensure that the objectives are being met and achieved. The main objective of training plan was to develop each trainee to become successful buyers at Offer Management Department in future. It allows them to handle stress where competition, direct and indirect, is intense since day one. Furthermore, to equip them with negotiating skills and knowledge that is required in their jobs on daily basis.
They were to be made master of performing tasks of a buying executive and Buyer, understand dynamics of all categories so they can perform their duties in any category. If these objectives are efficiently met, this means that the training was effective and purpose of the training program was achieved.
The main aim of the research is to identify organizational factors and other variables, including those of MTO Program which impede successful implementation of MTO Program.
This study adapts the qualitative approach and Interviews will are conducted for the better understanding of this phenomenon. Researcher chose to conduct survey questionnaires because they are used to defeat the limitations of the quantitative research.
Research is defined as the creation of new knowledge and/or the use of existing knowledge in a new and creative way so as to generate new concepts, methodologies and understandings. (What is research, 2012)
For effective research, right methodology should be elected which will produce reliable and accurate results. A right research methodology will result in credible, effective and accurate conclusions of the research study that is being conducted.
First of all, qualitative data on the company and its industry is gathered followed by detailed analysis of collected information. It is essential to understand in detail the nature of the business, industry dynamics and culture of the organization. Moreover, the literature review has been conducted on the area of study, which is primarily focused on training and its employees. The literature review is important when conducting this research, especially for the preparation of interview questions and questionnaires.
The data is analysed in order to identify various problems and limitations with MTO Program which also incorporate external and environmental factors that hurdle program implementation. This research is about the training plan of Trainee Buyers which is first of its kind in the wholesale industry.
The third phase of research includes collecting quantitative data. Quantitative research uses tools such as mathematical models to find out the results of the data collected by the researcher. The main purpose of applying quantitative methods is to determine whether or not the generalizations made about the problem hold true. The fundamental tool of survey research is questionnaire; it standardizes and organizes the collection and processing of information.
A questionnaire comprises of a series of questions asked to individuals to obtain statistically useful information. They should be properly conducted and administered in order to become a vital instrument by which statements can be made about specific groups or people or entire populations.
One survey questionnaire was floated to the first batch of MTO Program 2011, the five old Trainee Buyers. It is very important to get an input from the old trainee buyers on how they perceived their training last year, what were their learning outcomes and what issues they faced during the training tenure. Hence the whole population (Five Trainee Buyers) are selecting for conducting this survey.
The same survey questionnaire was floated to the fresh batch of MTO program 2012, the five new Trainee Buyers. It is again essential to get an input from the new batch in order to evaluate their training experience and conclude if the training plan has been improved from previous year or not.
Another survey questionnaire was prepared for the Trainers who were actively involved in the training plan of the trainee buyers which included Assistant Buyers, Buyers and Senior Buyers. The have years of experience in the relevant field and can easily highlight the problems in training plan of MTO program. Therefore target population for this second survey has also served as trainers for these Trainee Buyers.
Results from these three survey questionnaires are then tabulated in Microsoft Excel. Tables and graphs for these questionnaires are then generated through Microsoft Excel and are then used for the survey analysis. Results from the different sources are then compiled together for a final analysis and findings of this research study is prepared, conclusion is drawn and then recommendations are made on eliminating the problems in the successful implementation of MTO program at METRO – Habib Cash & Carry, Pakistan.
ANALYSIS & FINDINGS
Survey Questionnaires’ Analysis
As explained earlier in the research methodology, two survey questionnaires were floated for this research. There are three different sets of population for this study; one same questionnaire was floated to two different sets of population, the old trainee buyers and the fresh trainee buyers. Another survey questionnaire was conducted from a relevant population which included the trainers involved in the training plan.
The questions in the questionnaires were quite similar, focused on the similar aspects related to the training of trainee buyers. Therefore the two survey questionnaires were conducted from three sets of respondents, first being the old trainees, second being the fresh trainees and third being the trainers. The commonality in the questions asked in both survey questionnaires was addressed from a little different viewpoint and has different significances as well, thus the necessity for conducting separate surveys becomes reasonable.
One thing that needs to be brought into notice is that the same questions were also asked to the target groups in a focus group which was more of a general discussion. The researcher had casual conversations with the target population in order to get more insight views regarding the answers they gave in the questionnaire. It helped the researcher to get a clearer picture regarding the perception of old trainee buyers, new trainee buyers and the senior staff involved in the training processes. Their answers were kept in mind while tabulating the results of questionnaire and analyzing them which are discussed below in the analysis of survey questionnaire section.
Target Group 1 Analysis:
The first question asked from the old trainee buyers was whether there is a need of improvement in the MTO training plan prior to their experience. As we can see from the above graph all of the respondents believe that there is a need for improvement in the training plan. The result illustrates that the trainee buyers were not satisfied overall by the training plan.
The second question asked from the old trainee buyers was whether the induction training was well planned and coordinated prior to their experience last year. It is essential to understand the perception of old trainees on the planning of induction training so we can conclude if the training plan improved from previous year or not. The results depict that four trainee buyers strongly disagreed with the statement and believed it was not well planned at all, whereas only one out of five i.e. 20% of total population disagreed with the statement. Basically, the training is considered to be well planned when it’s effective and productive and by the results if can conclude that the training plan was not effective and well-planned.
This question was intended to ask the trainee buyers about their perception on whether the plan was followed as planned or not. The respondents did not agree with the statement as they believed the training plan was not followed as planned. They were not provided with any schedule which had to be followed. They were just sent to a particular department for couple of weeks and learned different objectives randomly. There was no plan structure provided to the departments which had to be followed. In a casual discussion with the total population it was concluded that the training plan was so dis-organized that most of the time they were free, with no monitoring and evaluation. They used to play games on their mobile phones in the training rooms where they were asked to do software trainings etc.
The old trainee buyers spent a year on their training and based on the duration trainee buyers spent this question was put to them. It is very important to know how much they learned during the one year tenure. Out of five, three trainee buyers disagreed with the statement which meant the time duration was long enough for training. 1 respondent agreed with the statement that the plan should be of longer duration in order to learn more. Whereas last trainee buyer was neutral which meant he believed one year tenure was good enough for training and learning in the company. When the old trainee buyers were asked some questions in a casual discussion it was found that they believe the training could have been done in much shorter time had there been a comprehensive and well-planned training plan prepared. They suggested that a structured training plan would have resulted in a lot of time saving for the company and trainees themselves.
The question is aimed at asking the trainee buyers about the effectiveness of the training plan whether the induction training provides an excellent opportunity for them to learn comprehensively about the organization or not. The total population believed that the induction training definitely provides an excellent opportunity for trainees to learn comprehensively about the organization. When asked them during a casual discussion they told the researcher that they do agree with the statement generally but in case of METRO – Habib Cash & Carry in particular, as the induction training plan was not very well co-ordinated and planned, they seemed to be a little dissatisfied.
This question was designed to ask whether the senior staff should take out more time to support and assist the training or not. It is again very essential to know since support and assistance by the senior buyers and assistant buyers on job will lead to trainees learning on the job. The results depict that the total population strongly agreed that there should be more assistance and support by the senior staff in order to learn more from them. In a discussion with the trainee buyers they told the researcher that trainees were inducted to random category departments where senior buyers, buyers and assistant buyers were busy with their daily routine work. They had to ask questions themselves in order to learn about the category and most of the time they had to sit and observe the senior staff only as they were busy working on their daily tasks.
Basically this question is related to the comprehensiveness of training program and is asked by the old trainee buyers to understand whether the training objectives were clearly defined for the training or not. All of the respondents disagree that their training objectives were clearly defined however one of them strongly disagreed with the statement.
In order to have a clearer picture on the clarity of training program, this question was put to the total population of old trainee buyers. We can interpret from the above graph that 40% strongly disagree that the training program was clear without any confusions or ambiguities whereas 60% of the total population disagreed from the given statement. Ultimately the end result that we can draw is that 100% of the total population either strongly disagreed or disagreed on this. This shows that the training plan for old trainee buyers was not clear and there was confusion and ambiguity present in the program.
Moving on for additional clarity on the training plan of old trainee buyers, the total population of five trainee buyers were questioned regarding whether their trainers were clear about how they need to train them and what were the procedures to follow. Results show that out of a total population of 5 respondents, two agreed with the statement, two were neutral and one of them believed that their trainers were not clear regarding their role and responsibilities. The results interpret that there is some ambiguity in the part of trainers as well. The trainers were not fully equipped with the training procedures which would have resulted in ineffective training plan.
This question was basically put on the total population to evaluate whether all the trainee buyers experienced equal training and share the same knowledge about the organization or not. All the respondents agreed to the statement which means that the trainee buyers think that they were equally trained and therefore are at par with each other when it comes to knowledge and know-how of job and organization both. This comes from their own self-assessment since they have discussions with each other on daily basis. This is because they were hired on the same date and the training plan started on a particular given date. The training plan was structured in such a way that all the five trainee buyers were inducted to same departments together and rotated to other departments together. They spent equal time in each department and were given tasks to complete in group. There were no individual assignments nor were they inducted in different stores for training purposes.
The last question was asked from the trainee buyers to get to know whether there has been any assessment and evaluation conducted by senior staff or not. Three out of five answered that there was no assessment and evaluation of their training throughout the training plan whereas two believed that the evaluation was done sometimes. After a discussion with the old trainee buyers, researcher came to the conclusion that there were no formal evaluations and assessments conducted to assess the training but sometimes the senior staff would have a brief discussion with the trainee buyers in order to know what they have learned so far and how the training plan is treating them so far.
Target Group 2 Analysis:
The Same questionnaire was put to the batch of new trainee buyers 2012 in order to comprehend the changes made in the training plan from previous year.
This question was intended to assess whether new management trainee buyers are satisfied from current training program or not and that whether they believe the training plan needs improvement or not. The results appear to be mixed as observed from responses. Out of a total population of five Trainee Buyers, two fall on the agreement side while other two fall in the disagreement continuum. One response falls in neutral category. Hence, we cannot deduce a final conclusion whether there is a need for improvement in the training plan or not. Prior to the results deduced from the population of old trainee buyers we can conclude that the training plan has been somewhat more effective as all the old trainee buyers strongly agreed that the training plan needs improvement whereas few new trainee buyers disagreed with the statement.
This question was asked to gauge feelings of new trainee buyers regarding scheduling and coordination of training plan. The results exhibited a skewed distribution as responses are totally on agreement side. No disagreement was observed and hence we can conclude that Trainee Buyers believe that training program is well planned and coordinated. On the other hand, when we see the results of the same question asked from the old trainee buyers we come to the conclusion that the results were totally opposite of each other. The old trainee buyers were totally on disagreement side hence proving that previously the training plan was not well-planned and co-ordinated.
When we see the results of previous batch of Trainee Buyers it was deduced that they believed that there training period was too long. The training program is a bit modified for new Trainee Buyers. The new batch of Trainee Buyers was put to same question and the response was totally opposite. All responses from new Trainee Buyers suggest that training period needs to be longer. Old trainee buyers training tenure was for one year long whereas the new trainee buyers training plan was for just three months. Hence the answers were totally opposite; the new trainee buyers believed that the training period needs to be longer in order to learn more about the organization and various departments whereas the old trainee buyers believed that the training period is too long for learning only.