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Organisational Behaviour
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A Project
On
ITC LIMITED
Of
Organisational Behaviour
Submitted to
UNIVERSITY OF MUMBAI
Submitted By
MANDAR A. BHOIR
Roll No. 63
MASTERS IN COMMERCE - MANAGEMENT (Sem III)
UNDER THE GUIDANCE OF:
Prof. Anand Deshpande
RIZVI COLLEGE OF ARTS, SCIENCE, COMMERCE
Bandra (West), Mumbai
Academic Year
2014-2015
DECLARATION
Myself, Bhoir Mandar Ashok of Rizvi College of Arts, Science & Commerce studying
M.COM-Sem-III hereby declare that I have completed this project on ‘ITC LIMITED’ in
Academic Year 2014- 2015.
The information submitted in this project is true & original to the best of my knowledge.
Date-
Place-MUMBAI
(BHOIR MANDAR ASHOK)
CERTIFICATE
This is to certify that MANDAR BHOIR student of M.Com-III class, Roll No. 63 of the
academic year 2014-15 studying at Rizvi College of Arts, Science & Commerce, has successful
completed the project entitled ‘ITC LIMITED’
____________________ ______________________
Prof. Anand Deshpande Prof. Qamar Sir
(M.Com Co-ordinator)
___________________ ______________________
External Examiner Dr. Farooqui M.Z
(Principal)
ACKNOWLEDGMENT
I owe a great many thanks to a great many people who helped and supported me during
this project.
My deepest thanks to the Guide of this project Professor Anand Deshpande , for
guiding and correcting various documents of mine with attention and care. He has taken pain to
go through the project and make necessary correction as and when needed.
I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.
EXECUTIVE SUMMARY
ITC was established on Aug 24, 1910 as the Imperial Tobacco Company of India Ltd in
Kolkata and its name was changed to I.T.C. Limited in 1974 and finally they changed it to ITC
Ltd in 2001. ITC has diversified presence in tobacco, foods and confectionery, apparel, paper
boards, packaging and hotel businesses.
The Foods Division is the most recent diversification of the ITC group. They entered in this
business in 2001. They launched KoI brand under Ready to Eat segment .They expanded with
brand launches in the Confectionery, Staples and Snacks Food segments.
ITC has fulfilled all needs and requirements of the people. If the company maintains its standard
or increases it in the near future it surely will attain the no. 1 position in the market.
Here, through our report we have tried to study the environment in which ITC
foods operate. We have also analyzed the market of ITC foods and the
competition involved. We have also studied the various strategies adopted by
company to achieve its goals and the structure and the culture developed within
ITC to support its objective. Also, an effort has been made to project ITC’s
future prospects, sales and profits.
INTRODUCTION
ITC made its entry into the branded & packaged Foods business in August 2001 with the launch
of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with
brand launches in the Confectionery, Staples and Snack Foods segments.
For ITC, the packaged foods is an ideal business to utilize ITC's proven strengths in the areas of
hospitality, branded cuisine, contemporary packaging and sourcing of agricultural commodities.
ITC's world famous restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's
Hotels business, demonstrate that ITC has a deep understanding of the Indian taste and the
expertise required to translate this knowledge into delightful dining experiences for the
consumers. ITC has stood for quality products for over 98 years to the Indian consumer and
several of its brands are today internationally benchmarked for quality.
All products of ITC's Foods business available in the market today have been crafted based on
consumer insights developed through extensive market research. Apart from the current portfolio
of products, several new and innovative products are under development in ITC's state-of-the-art
Product Development facility located at Bengaluru.
ITC has over the last 98 years established a very close business relationship with the farming
community in India and is currently in the process of enhancing the Indian farmer's ability to link
to global markets, through the e-Choupal initiative, and produce the quality demanded by its
customers. This long-standing relationship is being utilized in sourcing best quality agricultural
produce for ITC's Foods business.
The Foods business is today represented in 4 categories in the market. These are:
1. Ready To Eat Foods
2. Staples
3. Confectionery
4. Snack Foods
In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged
in assisting outsourced manufacturers in implementing world-class hygiene standards through
HACCP certification. The unwavering commitment to internationally benchmarked quality
standards enabled ITC to rapidly gain market standing in all its 6 brands:
1. Kitchens of India
2. Aashirvaad
3. Sunfeast
4. mint-o
5. Candyman
6. Bingo!
Recently, on Aug 1, 2008, ITC Foods has drawn up plans to extend its Kitchen of India brand to
frozen foods.
ITC’s Branded Packaged Foods business continues to expand with sales growing by 23% over
the previous year. Apart from the development costs of new products, the business has had to
contend with the recent economic slowdown and severe cost increases in input commodities
including wheat, vegetable oil, maize and skimmed milk powder, in addition to the soaring fuel
prices. Having acquired reasonable scale in a relatively short span of time, the business is
progressively focusing on consolidating the portfolio in certain categories, improving market
servicing and driving supply chain efficiencies.
BACKGROUND NOTE (ITC)
ITC was established on August 24, 1910 as the Imperial Tobacco Company of India Limited in
Kolkata. Initially, the company was involved in the trading of imported cigarettes.
In 1925, in a backward integration move, the company started a packaging and printing
business.
The name of the company was changed to India Tobacco Company Limited (I.T.C. Ltd.) in
1974.
In 1975, I.T.C. Ltd., through ITC-Welcomgroup, tied up with the US-based Sheraton
Corporation to enter the hospitality industry. It acquired its first hotel in Madras (later renamed
Chennai) in Tamil Nadu and called it the Welcomgroup Chola Sheraton.
I.T.C. Ltd established ITC Bhadrachalam Paperboards Ltd. (IBPL) in 1975. The company started
production at its integrated pulp and paper/board manufacturing facility at Bhadrachalam,
Andhra Pradesh, in 1979.
In 1990, I.T.C. Ltd. set up an International Business Division (IBD) for export of
agricommodities.
I.T.C. started a greeting cards business under the brand name Expressions in the year 2000.
In the same year, I.T.C. also entered the fashion retailing business by extending its well known
cigarette brand Wills. The retail outlets were called Wills Lifestyle and offered premium leisure
wear for men and women under the Wills Sport brand.
In September 2001, the company was renamed ITC Ltd (without full stops, and with no meaning
attributed to the alphabets).
In 2001, ITC made an entry into the foods business.
In 2002, the company launched another clothing brand, John Players, which targeted the urban
youth.
In 2004, ITC was one of eight Indian companies to make it to the “Forbes ‘A’ List”8 which
featured 400 of “the world’s best big companies”.
In Oct 2005, ITC has launched an exclusive line of prestige fine fragrances and personal care
products under the Essenza Di Wills brand.
In late 2007, ITC launched Fiama Di Wills soaps and shampoos following the success of
Essenza Di Wills.
In Dec 2007 ITC launches ECF (Elemental Chlorine Free). ITC is the first and only Company in
India using the ECF technology.
Market and Competition
Indian Foods market is a monopolistic market. There are many competitors in all the categories
and although they all have similar products available at similar prices, they are trying to prove
themselves different through their marketing strategies. However, entry to this business is easy
and ITC has utilized this fact very efficiently to their benefit as they entered into the several
categories among this Foods business.
READY TO EAT
ITC entered into the branded and packaged foods business in with the launch of Kitchens
of India brand. In 2004, the company launched KoI brand fruits and spice conserves and cooking
pastes. The fruits and spice conserves, were developed jointly with Karen Anand, a food expert.
Priced at Rs. 70, these were targeted at the premium segment. The KoI cooking pastes, which
were priced at Rs.30 for a 100g pack, also targeted the high-end market. Multi-purpose cooking
pastes were also launched under the Aashirvaad brand and these were priced at Rs. 10 for 80g
pack. The manufacturing of these products was outsourced to contract manufacturers for saving
the operating cost.
ITC entered the branded spices market in 2005 and the Instant Mix segment in 2006, both under
the Aashirvaad Brand. As on April 2006, the total turnover in the Indian ready-to-eat and ready-
to-cook segments was only around Rs. 700 million, but it continued to post an annual growth of
20%. By early 2006, though ITC had captured a 35% market share in the ready-to-eat segment,
MTR was the clear market leader with close to 60% in market share. ITC exported 40-50% of
KoI brand products (in terms of volumes) to the US, Canada, the UK, Switzerland, and Australia.
In May 2006, ITC planned to introduce ten more varieties under the KoI brand within a price
range of Rs. 35 to Rs. 98. In 2007, some new products have been launched under Ready To Eat
category like chutneys, curries, conserves, biryanis (Noor Mahal, Bhori Biryani and some new
range of products under Gharana (Paneer Malai, Keema Mutter). After launching all these
products ITC FOODS is looking to share 50 to 60% of market by 2008-2009.Following are the
major competitors ITC is competing with in Ready to Eat category:
Brands Description
Gits
Gits produces the selected range of popular ready to cook and
instant foods that cover a range of ethnic Indian cuisine-and
where the recipes have "Global pallete acceptance".
Haldirams
Offers packaged Bhel puri chats such as Sev Puri, Chana
Masala, Samosa, Pakoras, Alu Tikki, Pao Bhaji, Gol Gappa,
Dhokla among others
Ethnic Kitchens
Offers packaged sweets,syrups,namkeens, cookies, pickles, aloo
Masala, Bhujia, Bhelpuri, Chana Dal, Kajui Ladoo and many
more items.
MTRMTR foods currently comprise twenty-two delicious and
completely authentic Indian curries, gravies and rice.
Priyafoods
Priya has a range of popular traditional recipes starting from Dal
Makhani, Navaratan Kurma to Palak Paneer, Paneer Butter
Masala, Punjabi Chhole and Rajma Masala along with true
southern delicacies like Andhra Veg Pulav, Mango Dal, Gongura
Dal.
Market Share - Ready To Eat
48%
35%
8%
9%ITC Ltd.
MTR
Kohinoor
Others(Gits, PriyaFoods etc.)
as on June, 2008
CONFECTIONERY
Confectionary market in India is about Rs.2500 crore. It is loosely divided into seven categories:
1. Hard boiled candies
2. Toffies
3. Eclairs
4. Chewing gum
5. Bubble gum
6. Mints
7. lozenges
ITC has currently in market with its two brands “Mint-o” and “Candyman”. ITC’s Mint-O
fresh secured a 17% share of Indian cough lozenges market ahead of former leader Perfetti
which only achieved 14.3% with chloromint. The Indian giant marked the confectionary sector
in 2002 and has only two brands “mint-o fresh” and “Candyman”. But in overall confectionary
market they are lagging behind having just 3% market share as compared to market leader
Perfetti with more than 37% market and providing larger number of brands.
Perfetti van melle ITC Ltd. Nestle Cadbury
Alpenliebe
Alpenliebe
Creamfills
Alpenliebe
Lollipop
Big Babol
Center Fresh
Candyman
Minto
. Kit Kat
. Kit Kat Lite
. Milky Bar
. Munch
. Milk Chocolate
. Fun Bar
. Polo
Bubbaloo
Dairymilk
Eclairs
% Star
Gems
Perk
Halls
Center Fruit
Center Shock
Chatar Patar
Chlor-mint
Chocotella
Cofitos
Fruittella
Happydent White
Protex Happydent
Marbels
Mentos
Chocoliebe
. Polo Power mint
. Munch Pop Choc
. Éclairs
Market Share - Confectionery
3%
37%
11%7%
42%
ITC Ltd.
Perfetti Van Melle
Cadbury
Nestle
Others(Parle,Joyco, HUL etc.)
STAPLES
ITC entered the staples market in 2002 with wheat flour under the Aashirvaad brand. In 2003,
ITC extended the Aashirvaad brand to edible salt. By early 2006, ITC had a 40% market share in
the Rs. 6 billion packaged flour business. Its closest competitor HLL’s Annapurna brand was
trailing behind with a market share of 18%. The market was growing at 12%. Under its
Aashirvad brand ITC FOODS also launched salt, mixers, ready to cook pastes. In the Rs. 4
billion organized salt market (as of 2006), Tata Salt was the market leader with a 28% market
share. ITC had only a 5% share of the market. Other players in this business are HLL (Knorr
Annapurna), Nirma (Shudh), Marico Industries (Saffola), etc.
Market Share - Staples
42%
21%
13%
24%
ITC Ltd.
HLL
Pillsbury
Others(Sri LalMahal, LocalBrands etc.)
BISCUITS:
Indian biscuit market is estimated to be around 5000 crore. Biscuit industry in India in the
organized sector produces around 60% of the total production, the balance 40% being
contributed by the unorganized bakeries. ITC with its premium product, SUNFEAST, is
acquiring a big share of market. Within few years, they are able to get 12% share of the market.
Britannia ITC Ltd
(Sunfeast)
Parle Priyagold
Tiger
Nutrichoice
Junior
Good Day,
50 50,
Treat
Pure Magic,
Milk Bikis
Good Morning.
Marie
Dream cream
Milky Magic
Fit kit
Choco Nut
Butter Nut
Parle-g
Krack-Jack
Monaco
Kreams
Hide and Seek
Milk Shakti
Butter Bite
Classic Cream
Butter Lite
Big Boss
Marie Lite
Magic Gold
Market Share - Biscuits
12%
10%
38%
32%
8%ITC Ltd.
Priyagold
Britannia
Parle
Others(Bonn,Anmol etc.)
SNACKS:
Snacks industry overview
Snacks industry in India is worth 1800 Crores of Rs. and growing at 10% is one of the largest
markets in the world, out of which potato chips holds the major market share of around 85%.
Product Price
(ITC Ltd)
Product Price
(Frito Lay)
Product Price
(Haldiram)
Bingo
Rs. 5
Rs. 10
Rs. 20
Lays
Rs. 5
Rs. 10
Rs. 20
Lehar Namkeen
Rs. 5
Rs. 20
Kurkure
Rs. 5
Rs. 10
Rs. 20
Namkeen
Rs. 5
Rs. 10
Rs. 20
Market Sahre - Snacks
16%
45%
27%
12%
ITC Ltd.
FritoLay India
Haldiram's
Others
SALES OF FOOD SECTOR AND ITS PROJECTION:
2006 2007 2008 2009(projected)
Sales (crores) 1230.54 1698.53 2526.60 3410
The foods business is expanding rapidly with sales growth of 35% in the year 2007. This range
of product includes more than 150 different products. The growth of this sector in terms of
product categorization is as follows.
Sales in biscuits category grew by 55%.
Sales in staples category grew by 52%
Sales in confectionary grew by 51%.
Sales in RTE grew by 35%
ITC Food is looking to expand its RTE category to maximize its profit.
ITC’S NEW CHALLENGES:
This food industry is the industry with very less profit margins. So low operation cost is the key.
Also, Indian middle class is price sensitive. In this area international, national and also regional
competition is very tough. With that wheat, petrol and labor cost is increasing day by day.
Different types of restrictions imposed by the government are also playing a vital role in
reducing profit margins. For example, exporting non-vegetarian foods out of India is restricted.
To cover this up, ITC is trying to reduce cost of its biscuits by acquiring mass production of
wheat directly from farmers through its E-chaupal initiatives. Also in this way ITC is able to
reduce the price of its staples. As far as Confectionary market is concerned, ITC is looking to
launch its brand of chocolate in collaboration with an American company. After analyzing the
food sector, one can say that it is one of the toughest market to compete in as all the market
giants are already there.
GROWTH AND INVESTMENT PLANS:
This food sector is the most promising field and has already overtaken IT and
PHARMACEUTICALS Sector of India. Even Indian Government is looking to develop this
sector. That’s the reason central Government has already passed several projects for food parks.
In this way FDI in this sector is possible. Also government in its 2006 budget has reduced
custom duty from 16% to 8% on packaged food and also excises duty on instant food mixes.
This will help ITC to be competitive in the market. Recently ITC has started exporting packaged
food from its Bangalore plant. It is also planning to open one more new plant in Calcutta for
Indian market. They are looking to add several products in their RTE list which will be exported
as well. Also in late 2007 ITC has acquired one Australian Plant and seed technology industry.
Through this they will provide highly valuable seeds and other solutions to farmers in India,
which ultimately will increase the productivity and cost effectiveness for their staples and
biscuits business.
Its turnover in the foods business was around Rs. 8 billion in 2005-06 which further increased to
Rs. 10.2 billion in year 2006-2007.
ITC has decided to make an investment of 300 crores over a period of 5 years. ITC Foods has
also decided not to make heavy investments in manufacturing unless volumes pick up. As of
today ITC has invested 20 crores in R & D and planning to invest further 15 crores to produce
new products in different categories.
Thus looking at all the strategy of ITC future investment and planning. The future investment
plan is as follows
Rate of Increase Sales Operating Profits Net Profit/loss
2010 18.07 18.30 37.58
2011 28.16 19.15 2.01
2012 26.34 18.90 20.79
2013 12.76 11.31 15.56
2014(Projected) 21.33 16.92 18.98
Major Strategies Adopted by ITC Foods
Entering the foods business was itself a strategic decision for ITC. While ITC’s core business,
tobacco, was under pressure owing to several factors like government bans on advertising and on
smoking in public places, hikes in the excise duty for cigarettes, and anti tobacco campaigns,
ITC planned to deploy its surplus in the packaged food business where it saw huge business
potential. Following are some of the strategies that ITC adopted to make its food business a
success:
Entering into less competitive or unexplored markets (Ready to eat, Staples,
Wafers): When ITC entered into the foods business in 2001, it focused on unleashing the
areas where the competition is very less or there is no competition. It started with
packaged ready to eat food and later extended that to Aashirvaad brand of edible salt and
Atta. Recently ITC has announced its desire to forge in the frozen foods category in the
domestic market. Players in this category are limited and ITC hope to exploit this fact.
Also, in Bingo, although the competition is tough but there is only one player with whom
ITC has to compete i.e. Frito Lay. This strategy has helped ITC to quickly establish itself
in the above mentioned businesses.
Distribution Network: ITC already had a huge distribution network due to its tobacco
business. ITC used this network to distribute their biscuits and wafers. This not only
provided a good launch to their products but also helped in boosting sales. Today, ITC’s
Bingo and Sunfeast are available at nearly 1.8 million outlets whereas Parle is available
at only 1.5 million outlets.
Market differentiation (Ready to eat, Biscuits): ITC started packaged foods business
with the KoI brand of ready-to cook products. They were positioned as premium products
with target groups including tourists, NRIs, etc. In Biscuits also, ITC launched
differentiated products in each and every segment. For e.g. it introduced an Orange
Marie, a butterscotch cream biscuit, chilli flakes in a biscuit and even honey flavor under
the Sunfeast brand.
In March 2005, ITC Foods launched Sunfeast Pasta, a whole wheat based product
targeted at children. It was expected to compete with products like Nestle’s Maggie
noodles. With this strategy ITC built for itself new markets.
Cost control strategy (all products): When ITC started the foods division, its main
challenge was to compete with the players who were already there. To overcome this
challenge, ITC realized that they have to offer products at a price which is either equal or
less than what the competitors are offering. To do this, they planned to capitalize by
leveraging the strength of the group’s other businesses. ITC’s printing and packaging
business provided high-quality, cost-effective, and innovative packaging. ITC also
enjoyed cost advantages over its competitors owing to its electronic procurement system
called e-Choupal. This helped ITC to compete with the best.
Diversification of products (Biscuits, Wafers, and Ready to Eat): One of the ITC’s
successful strategies has been the method of diversifications among its various products.
If we talk just about Bingo, ITC has come up with 16 flavors in comparison to its
competitor ‘Lays’ of ‘Frito Lay’ which has only 4 major flavors. Same is the case with
Ready to Eat food category and Biscuits.
This strategy has helped ITC to attract a wide range of market.
Extensive advertising (Biscuit, confectionary, wafers): Just like a Bollywood movie
needs good publicity to be a super hit, every new product launched in the market needs to
be known to the consumers before it is launched. Advertising is where ITC made the
difference in comparison to its competitors. They hired the best professionals and the best
ambassadors in the country to make their products famous. This is evident form the
award winning marketing campaign for Bingo and Minto Fresh. The tagline "Jab Laila ko
karna tha impress to majnu ne khayi mint o fresh" has stood the test of times and is still
widely known and remembered. Hiring the best people from the film industry and sports
(Sharukh Khan and Sachin Tendulkar for Biscuits, Rakhi Sawant for Minto Fresh)
showed ITC’s urge to be the best.
On television, the company booked 10 to 15 spots per channel per day on youth channels
such as MTV and Star World, mass Hindi channels like Zee and Star TV, and news
channels. It also had around 20 spots on a variety of radio channels and advertised in
most leading national dailies. In the top-30 cities, over 1,000 outdoor hoardings
advertised the product. According to industry estimates, ITC spent close to Rs 100 crore
on marketing.
This kind of promotion of products helped ITC to make its products known to everyone
and now it was not difficult to attract consumers.
Regular introduction of new products (all products): Having acquired reasonable
scale in a relatively short span of time, ITC realized that, to remain in the competition it
had to introduce new products regularly. ITC has been expanding its distribution network
aggressively and also their product range. In biscuits and wafers range, it is launching
new products or flavors week after week. Same is the case with Ready to Eat and Kitchen
of India.
Innovation (all products): When the need to introduce new products arrived, ITC
shifted its focus on to the innovation. Also, ITC was innovative in identifying the market
or niche for all its products.
Maintenance of freshness and hygiene (all products): ITC positioned its wheat flour
on the health & hygiene and value for money terms. Success in the staples business,
especially in the branded and packaged wheat flour business, depended on two factors –
an effective distribution network and the quality of the product. Therefore, ITC attempted
to ensure that the supply chain was responsive, and laid emphasis on making accurate
sales forecasts using inputs from distributors, sales personnel and a well-managed MIS
system. To maintain freshness of the product, the company strove to minimize the transit
time by regulating the shippers to maintain company-specific transit norms. The physical
aspects of the supply chain like warehouses and trucks were closely monitored to
maintain cleanliness.
From Analyzers to Prospectors (Biscuits): When ITC entered the biscuits market with
Sunfeast in 2003, with three varieties of biscuits - glucose, marie, and cream, they did
what any new player in the market does, imitating and emulating the leader that was
Britannia. Their strategy was to manufacture those products which are already a success
in the market. But, as ITC got hold of the market, it started to manufacture flavors which
were never heard of. This was the result of ITC’s desire to exploit new product and
market opportunities.
All the above strategies and with the help of launch of Bingo in 2007, ITC finally tasted success
in its food business in 2008 when it became a profitable business for the first time since its
launch in 2001
Structure
ITC has a three-tier management structure.
At the top are Chairman and Board of Directors, who are responsible for the strategic supervision
of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries. The ITC board is a
balanced board comprising Executive and Non-Executive Directors. The Board ensures that the
Company has clear goals relating to shareholder value and its growth. It sets strategic goals and
seeks accountability for their fulfillment. There are four board committees, namely, the Audit
Committee, the Nominations Committee, the Compensation Committee and the Investor
Services Committee.
At the second level is the Corporate Management Committee, which is responsible for the
strategic management of the company's businesses within Board-approved direction/framework.
It comprises all the Executive Directors and three or four key senior members of management.
Third level consists of divisional CEOs of each business assisted by their own
divisional management committees. Corporate Functions of the Executive Management Team
includes Planning and Treasury, Accounting, Legal, Secretarial, Human Resources,
Communications, Internal Audit and Information Technology.
The company’s organizational structure and governance processes are designed to support
effective management of multiple businesses while retaining focus on each of them." This three-
tier governance structure ensures that:
For and on behalf of the shareholders the company believes in incorporating strategic
governance in its work culture so as to ensure that despite being free from involvement in the
task of strategic management of the Company, it can be conducted by the Board with objectivity,
thereby sharpening and ensuring accountability of management;
With mundane tasks of everyday executive management being delegated the management
remains focused on issues of immediate importance;
The Executive management of the individual businesses that are free of handling strategic
management responsibilities of ITC as a whole is then able to channelize their energies and time
in enhancing the effectiveness and overall growth of their individual units.
Corporate Governance as defined by ITC is a systemic process by which
companies are directed and controlled to enhance their wealth-generating capacity. A company
employs vast sums of societal resources during this process of wealth generation. ITC is of the
firm belief that the governance process being followed should ensure that these resources are
used optimally to meet the aspirations of its stakeholders and society. This is further reflected in
the deep commitment of the company to contribute to the ‘Triple Bottom Line’, which is the
development of the nation’s economic, ecological and social resources.
The company believes in empowering the executive management. But corporate
governance ensures a system of checks and balances to ensure that these powers that are
bestowed upon the executive management are used in a responsible manner so as to meet
shareholder and societal expectations. The core strengths of ITC's governance philosophy are
trusteeship, transparency, empowerment and accountability, control and ethical corporate
citizenship. The practice of each of these creates the right corporate culture that fulfils the true
purpose of Corporate Governance.
Overall, the structure of ITC has high complexity because of horizontal differentiation
within the organization. The most visible evidence is that of specialization and departmentation.
Complexity also increases because of spatial differentiation.
The ITC Code of Conduct, as adopted by the Board of Directors, is applicable to all
Directors, senior management and employees of the Company. This Code is derived from three
interlinked fundamental principles, viz. good corporate governance, good corporate citizenship
and exemplary personal conduct. The Code covers ITC's commitment to sustainable
development, concern for occupational health, safety and environment, a gender friendly
workplace, transparency and auditability, legal compliance, and the philosophy of leading by
personal example. Since non-adherence to the code is brought to the attention of the immediate
reporting authority, formalization is also there in ITC. Decision-making is decentralized, as the
company believes in giving executive freedom to the management to drive the enterprise forward
without undue restraints but this freedom of management should be exercised within a
framework of effective accountability.
CULTURE
ITC's Vision
Sustain ITC's position as one of India's most valuable corporations through world-class
performance.
Create growing value for the Indian economy and the Company's stakeholders.
ITC's Mission
To enhance the wealth generating capability of the enterprise in a globalizing
environment
Deliver superior and sustainable stakeholder value.
ITC's Core Values
The company’s Core Values are aimed at developing a performance-oriented organization that is
highly customer focused and also creates value for those holding stake in it. It fully understands
that it has a commitment to its stakeholders to act as a guardian of the company from
stakeholder’s point of view and deliver results in a manner that actualizes stakeholder’s interest
on a long-term basis.
It also delivers on the commitment to its customers by consistently addressing their needs on
product quality, value and overall satisfaction. It respects the values of people and also
encourages individuals to pursue their dreams, values their differences and helps them to
experiment in the pursuit of various opportunities.
ITC firmly believes in the concept of Excellence with their mantra being, “we do what is right,
do it well and win. We will strive for excellence in whatever we do”. It is constantly in the
pursuit of better and newer products, processes, services and management practices. Apart from
the interest of shareholders they also address their commitment to the nation to generate
economic value, at the same time ensuring that in achieving these goals no compromises are
made whatsoever in complying with rules and regulations as specified by law.
ITC’s Philosophy
ITC believes in practicing ethical behavior among the corporate citizen. The company follows an
HR policy that is regulated by Teamwork, Trust, Collaboration, Mutuality,
Meritocracy, Objectivity, Collaboration, Self-respect and Human-dignity. It is also deeply
committed to make the company a gender friendly place for each individual while also ensuring
enhancement of equal opportunities for men and women, preventing sexual harassment of any
form and the adherence to good employment practices. It is ensured that the interest of the
company is foremost and in this context acceptance of any kind of gifts or payments from
suppliers or customers is viewed as a serious breach of company discipline. And such acts are
also considered as damaging to the reputation of the company.
High standards of house keeping and hygiene are followed to ensure excellent physical working
conditions. It is understood that all the directors, senior management and employees shall
conduct themselves in an honest manner and avoid any conflict of interest.
The top officials and employees of ITC believe that ITC provides them freedom at work and
resources to experiment. Employees take pride in working for ITC for its work culture,
environment, and the way people are treated. They are consulted before a new project\system is
introduced and their concerns and suggestions addressed. ITC also gives a lot of input to develop
their skill and career. They give utmost importance to equal opportunities, better work
environment.
DESIGN
Looking at the structure and culture of ITC, we can say that its design is based more or less on
the Divisional Structure. ITC has a diversified presence in different industries and each of its
businesses act as an autonomous unit which are coordinated by the top level, i.e. the board and
corporate management committee. The divisional managers are responsible for performance and
hold complete strategic and operating decision-making authority. The top management provides
support services to the divisions. It acts as an external overseer, evaluating and controlling
performance. Hence the top management is free from being concerned with the day-to-day
operating details so they can pay attention to the long term. Big picture, strategic decision
making is done at the top level
Bibliography:
www.itcportal.com www.wikipedia.org
www.moneycontrol.com www.economictimes.indiatimes.com www.moneycontrol.com www.bseindia.com www.perfettivanmelle.in www.cadburyindia.com www.nestle.in