MBA Programme
Postgraduate Institute of Agriculture
University of Peradeniya
Organizational Behavior and Analysis: BM 5101
Management Report
Final Exam – Part I
Name: Sachini Sandeepani Jayasha Gedarawatta
Registration Number: 20218
Date of submission: 18.09.2021
Student Declaration
This is to certify that in the following submission...
i. …it is my work alone and has not been plagiarized
ii. …when ideas have been burrowed the source has been clearly credited.\
I am aware that if evidence to the contrary is found I may receive a failing
grade.
……………………………………………………………..
Signature
Date: 18.09.2021
Hayleys Management Philosophy
As shown in Figure 1, Hayleys PLC did not change or alter their vision or mission statements due to the pandemic. Nor did they
compromise on their core values. This figure clearly depicts their unchanging philosophies on the matter with a side-by-side
comparison of the views stated in their annual reports on both the 2019/ 2020 and 2020/ 2021 releases. On having read both their
annual reports published during the pandemic (i.e. 2019/2020 & 2020/2021 issues), it is evident that Hayleys is extremely
adaptive and resilient towards sudden or unexpected changes. This could perhaps be a result of their 143 years of experience in
running a company that underwent multiple mergers and acquisitions that gave rise to one of the most diverse portfolios a
company could have in Sri Lanka.
According to Henri Fayol, there are 14 management philosophies (see Figure 2 for definitions). And it is evident through Hayleys
vision, mission and value statements (VMV) (see Figure 1) that they have stayed true to most of these (Fayol H., 1949, P.20,21).
Albeit we cannot judge some of these factors without proper internal staff’s input, the information in Figure 1 corroborates that
Hayleys clearly demonstrates these aspects of the 14 management philosophies through their VMV statements : ‘division of
work, authority, discipline, scalar chain, unity of command and unity of direction’. This is because of their priorities being given
to teamwork, accountability and performance which is a direct result of the philosophies chosen above. Without having proper,
equal and fair division of work, the manager cannot get his employees to respect teamwork or abide by it as accomplish such
large project as Hayleys does. Without good understanding of their objectives or stern discipline/ work-ethic, one cannot respect
authority and follow. Nor would they take accountability seriously. Subordinates tend to lead by example; thus, it is important
for managers to abide by, in the least, some of the 14 management philosophies in order to achieve their vision.
Figure 1: Comparison of vision, mission and value statements in the Annual Reports of 2019/2020
and 2020/2021
Figure 2: Henri Fayol's 14 Management
Philosophies with definitions
Ethical and Social Responsibility Standpoint
Hayleys’ ethical and social responsibility is clearly depicted in their VMV statement as shown in Figure 1. According to Daft’s
book on Management, “corporate social responsibility (CSR) refers to the obligation of organizational managers to make choices
and take actions that will enhance the welfare and interests of society, as well as the organization” and ethics is the “code of
moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong” (Daft, R.
2016. P.152,162). And Hayleys does this in several ways. Their CSR is divided into 3 main sections that are namely
Environmental, Social and Governance which is specially noted in a dedicated part in their official website. These sections are
further divided into 4 subsections each as depicted in Table 1. Even in the past, Hayleys has been deemed to be one of the few
companies showcasing organizational virtuousness. Organizational virtuousness is when “an organization pursues a positive
human impact, moral goodness, and unconditional society betterment for its own sake”. This is considered a discretionary
responsibility which means that it is “purely voluntary and is guided by a company’s desire to make social contributions not
mandated by economics, law, or ethics” (Daft, R. 2016. P.168). For example, they provide all employees free meals,
transportation, medical care/ allowances and many other added benefits. Amongst these are also gifts on special occasions such
as birthdays and care packages with dry rations or medicinal packages during trying times such as the Covid-19 pandemic.
Table 1: Hayleys Sustainability and Environmental, Social, Governance (ESG) Framework
Environmental Social Governance
Energy & Emissions Work force & Diversity Structure & Oversight
Water utilisation Health, Safety & Well-being Codes & Values
Waste & Chemicals Supplier & Customer relationships Transparency & Accurate reporting
Primary resource utilisation Community relationship Organisation risk management
As their main aspiration is to be the leading corporate inspiration in Sri
Lanka, they regard transparency highly and dedicate a large portion of
their annual report to sustainability and governance which are topics
directly reported by their chairman and CEO. This also reflects on the
stance ethical leadership plays ” (Daft, R. 2016. P.169). in their
organizational culture where their vision is led by example. Ethical
leadership means that “managers are honest and trustworthy, fair in their
dealings with employees and customers, and behave ethically in both
their personal and professional livesIt is clear that this is very important
to them as “Honesty and Integrity- ethical and transparent in all our
dealing” is the very first value listed in their annual value statement
(Figure 1) which is also a part of the definition of an ethical leader (see
Figure 2). When reading Hayleys’ annual report and website, some of
their major, large scale events such as their 6 hydropower plants (first in
Radella), wind power plant in Kalpitiya and solar powerplant in
Welikanda (Jayasekera, W. & De Zilva, R. 2021). These are extremely
huge, capital-heavy projects that they’ve consciously invested in to
diversify their portfolio.
There are several ways in which outsiders, such as us, may judge a
corporation’s level of ethical and social responsibility without actually doing
an audit. Figure 3 illustrates this evaluation criteria by sectioning the different
areas in CSR which are: discretionary responsibility, ethical responsibility,
legal responsibility and economic responsibility. The pandemic posed the
biggest risk to this framework. However, Hayleys was quick to do a thorough
risk assessment on all these sectors and take both mitigative and precautionary
measures to prevent them as mentioned in their annual report (P. 85-95). For
example, when one sector took a hard-economical hit, they opened applications
to all employees in
another acquired
company. Similarly, they
verbatim did “aggressive
Figure 2: Characteristics of an Ethical Manager/ Leader
Figure 3: Criteria of Corporate Social Performance and
Framework for evaluating Corporate Social
Responsibility
client acquisition in export markets, increased focus on strengthening presence in export markets and diversification of export
markets all at the same time to keep the demand coming. All this while also continuing to do “PCR testing with over 13,000 PCR
tests done in financial year 2020/21” (Hayleys PLC Annual Report, 2020/2021, P.90). These actions actively prevented their
employees from being victims of the world economic crisis risen due to the pandemic. Their continuous care and communication
of ethical standards towards their staff also engraved an unwavering trust in them that is sure to reap fruit post-pandemic as they
will be able to retain highly qualified employees even in an open job market.
On analyzing Hayleys’ actions during the pandemic, it is evident that they are an extremely principled-based organization in
their code of ethics which, in other words, means they are at the “post-conventional” moral development stage according to Daft.
This means that they work from an internalized set of values and principles where principle-based statements are common and
that they are “designed to affect corporate culture; they define fundamental values and contain general language about company
responsibilities, quality of products, and treatment of employees”. Post-conventional means that Hayleys is “guided by an internal
set of values based on universal principles of justice and will even disobey rules or laws that violate these principles. Internal
values become more important than the expectations of significant others”. Part of this includes promotion of acts such as
whistleblowing where employees are prompted to disclose of illegal, unethical, or illegitimate practices on the employer’s part
which Hayleys has listed as a mitigating activity to legal risks in their annual report: “establishment of whistle blowing policies
and grievance mechanisms for all employees of the group”. (Daft, R. 2016. P.160,170, 172; Hayleys PLC Annual Report,
2020/2021, P. 94).
Therefore, based on all the above observations, it is evident that Hayleys has a combination of a
utilitarian and practical approach. Utilitarian approach refers to ethical decision making where the
ethical choice is the one that produces the greatest good for the greatest number of people while
the practical approach means to sidestep debates about what is right, good, or just, and bases
decisions on prevailing standards of the profession and the larger society, taking the interests of
all stakeholders into account (Daft, R. 2016. P.159). Though these two approaches might seem
entirely different to each other as one focuses more on employees while the other on stakeholders,
Hayleys tends to create a great balance of the two. This balance is what kept them afloat during
the pandemic economic crisis. They made employees work on shifts or work from home which
might’ve disrupted their work routine for the greater good of all those employees who had to
come to work by reducing the people they encounter; most meetings were reduced to virtual ones.
Even so, they didn’t forget to think of their stakeholders and take practical decisions. Hayleys
earned a 660 mn rupees which equivalent to 115% profit after tax of which 12% went to
stakeholders as ROE (Return of Investments) which was way more than the previous year even
during the pandemic (see Figure 4). (Hayleys PLC Annual Report, 2020/2021, P. 90, 102)
Finally, we can see through analysis that Hayleys regards ethical and social responsibility in the
highest and actively participates in any chance they get to be an inspiration to other organizations,
not just within Sri Lanka, but also globally.
Figure 4: HAYLEYS PLC
Annual Report 2020/2021-
Stakeholder Value Creation
Corporate culture in sustaining business relationships with the global environment
Corporate culture refers to the culture which “is created, acquired and/or learned, developed, and passed on by a group of people,
consciously or unconsciously, to subsequent generations. It includes everything that a group thinks, says, does, and makes—its
customs, ideas, morals, habits, traditions, language, and shared systems of attitudes and feelings—that help to create standards
for people to coexist” (Rijamampianina, R. & Carmichael, T., 2005, P.95). This culture is affected by organizational environment
which consists “of both task and general environments, includes all elements existing outside the boundary of the organization
that have the potential to affect the organization” (Daft, R. 2016. P.79). There are 2 main parts of this environment: Internal and
External. The “internal environment includes elements within the organization’s boundaries, such as employees, management,
and corporate culture” while the external refers to everything outside that such as global economy, customers and markets. Like
in any organization, even in Hayleys there are visible and invisible aspects of viewing organizational culture as shown in Figure
5. Though we won’t be looking at all parts, we will focus on a few aspects of the visible and invisible aspects of the culture and
internal environment of Hayleys that helps it sustain business relationships with the global environment as shown in their annual
reports. The breakdown of any organization’s internal environment is illustrated in Figure 6 below.
Figure 5: Levels of Corporate Culture by Daft,Richard L. (2016). P.90.
Hayleys marks its global presence through major acquisitions and joint ventures (Daft, R. 2016. P.88). In the past they have done
huge joint ventures with a German company called Martin Bauer Group to introduce a global tea beverage. Similarly, they
worked on multiple acquisitions during the pandemic as well. Their annual report mentions the acquisition of South Asia Textiles
Ltd., for Rs.3.9 bn in April of 2021 as an indication of their future plans for the textile sector which has remained resilient in an
extremely challenging year (i.e. referring to the pandemic). They have also quoted the following “Unisyst Engineering PLC
management was assigned to this sector. International Operations performed well with Maldives operation recording a
noteworthy performance and Myanmar, Indonesia, India and Bangladesh all turning around, through acquisition of new
businesses and focused growth with existing clients”. With this information, we can deduce that even under stressful situations
such as the pandemic, Hayleys does not follow a consistency culture (refer to Table 2 below for definitions and Figure 7). They
never did and doesn’t seem to ever desire the need for
a stable environment. Their employees seem trained,
and versatile in fast-paced environments that are
constantly changing so facing a high-risk, high
economic-casualty situation wouldn’t have been as
difficult for Hayleys as it was for other corporations.
Hayleys typically tries to acquire multiple small
entrepreneurial companies that are controlled through a
centralized system from within their Group. Such joint
ventures and acquisitions not only globalize their
portfolio but also keeps all the employees on their toes.
Though previously (i.e. before the pandemic), Hayleys
PLC was achievement driven, they have moved to a
mix of adaptability and involvement culture. According
to Daft, adaptability “emerges in an environment that
requires fast response and high-risk decision making”
whereas involvement refers to the “internal focus on the
participation of employees to adapt rapidly to changing
needs from the environment” which are both requirements in order to successfully face this pandemic (Daft, R. 2016. P.95,96).
Therefore, it is clear that they have done this successfully through their annual profit listings.
Figure 6: Breakdown of any organization’s internal and external
environments
Figure 7: The 4 types of Organizational Cultures extracted from Daft, Richard
L., 2016, P.94.
Table 2: Definitions of the 4 types of Cultures as in Daft, Richard L., 2016, P. 96
Adaptability culture The adaptability culture is characterized by values that
support the company’s ability to interpret and translate
signals from the environment into new behavior responses.
Achievement culture An achievement culture is a results-oriented culture
that values competitiveness, personal initiative, and
achievement.
Involvement culture A culture that places high value on meeting the needs
of employees and values cooperation and equality is an
involvement culture.
Consistency culture A consistency culture values and rewards a methodical,
rational, orderly way of doing things.
They have not only sustained business, it’s relationships nationally, but
also globally with these acquisitions. They have definitely set a
precedent and let their competitors know of their presence even during
a global pandemic/ global economic dilemma. Hayleys and this
culturally “generative and global mindset”, that they have cultivated
over a period of 143 years since it started, sets them apart from other
multinational companies. One of the main ways to withstand the
pressures resulting from the pandemic was to focus on building the
halted supply chain and logistics work. Therefore, a new vision and
expansion of their global mindset was a requirement. Figure 8
highlights the three dimensions of this mindset (meaning “the ability to
appreciate and influence individuals, groups, organizations, and
systems that represent different social, cultural, political, institutional,
intellectual, and psychological characteristics” according to Daft,
Richard L. [P.116]). While “globalization refers to the extent to which
trade and investments, information, ideas, and political cooperation flow between countries” it is essential to understand the
impacts of it on a company’s finances when done during a crisis situation. However, Hayleys’ strategic decisions have managed
to gain a profit despite that due to the good management of their “international environment” and related aspects as shown in
Figure 9. Their recent acquisitions, as mentioned earlier, proved just that. However, despite their global goals, they have not
forgotten their social dimensions (sociocultural values) that constantly keep them in the limelight internationally. Their “serving
the bottom of the pyramid” concept during crisis where they did community service, PCRs for all employees, opened applications
(refer to ethical and social responsibility standpoint topic above) all hint at their concern for their employees with lower incomes.
Such acts promote their brand name giving them added advantages during trades or exportations and gaining them international
recognition.
Figure 9: Factors in the International Environment by Daft, Richard L., P.128.
Figure 8: Dimensions of Global Mindset by Daft, Richard L.,
P.115.
Impact of COVID-19 pandemic in the group operations
Negative impacts of Covid-19 has gone hand-in-hand with the opportunities gained through it in the case of Hayleys PLC. Below
is a list of the impacts, both positive and negative, posed by the pandemic for all 12 of their business sectors as a whole. These
were taken directly from the annual report of Hayleys PLC from the 2020/ 2021 issue. As denoted in the report, following the
outbreak of COVID-19, their immediate priority was ensuring the health and safety of their employees. Despite significant stress
on their performance, a Group-wide decision was made to try and minimize the impacts of the negatives through strategic
direction which will be focused on in the next section and to harness the opportunities (positives) listed below. (Hayleys PLC
Annual Report, 2020/ 2021, P. 56-69).
Table 3: Positives and Negatives of the pandemic on Group Operations
Risks Opportunities
Raw material shortages in coconut fibre and timber
Exchange rate volatility
Fluctuations in agricultural output and raw material prices
Labour shortages
Water scarcity
Implications of climate change
Cancellation of orders post-COVID19 (e.g. in medical
gloves)
Changing customer preferences
Exposure to fluctuations in yarn prices
Subdued demand from domestic market
Escalating cost of production
Fluctuations in tea and rubber prices
Plantation wage increase demands
Adverse weather conditions
Labour shortages
Policy instability
Slowdown in consumer spending
Import restrictions imposed by government
Border closures and travel restrictions
Safety of travel
Impact of social distancing measures on banquets and events
Import restrictions
Exposure to weather patterns
Slowdown in global trade
Volatility in freight rates
Volatile global oil prices
Slowdown in Construction sector
Liquidity crunch in construction industry
Intensifying competition
Deferment of all employee engagement and training activities
in the short-term
Freeze new recruitments
Emerging opportunities in growing media
Regional expansion of manufacturing footprint
Rising demand for synthetic latex-based gloves
Increased demand for medical gloves
New market opportunities in personal protective equipment
Growth opportunities in regional markets
Increasing focus on sustainability considerations
Growth opportunities in export markets
Reduction in global metal prices
Increasing customer prevalence towards healthy beverages
Buyers’ emphasis on sustainability considerations
Opportunities for regional expansion
Climate smart agriculture
Increased demand for laptops/smart phones due to virtual
learning
Increasing customer sophistication
Low penetration of consumer durables
Pent-up demand in the domestic market
Increasing focus on sustainable tourism
Global drive towards renewable energy
Overseas expansion opportunities
Opportunities in technologically advanced logistics
Regional growth
BPO: Entry into new markets
Winning employee trust thru retaining all employees and
maintaining full remuneration when other companies fired
staff
Facilitate technology to enable remote working and work-
from-home as far as possible which opened new technological
avenues
Merging job functions to optimise workforce
Cross-utilise employees across sectors wherever possible
meaning more over-time
Some of changes in strategic direction in response to COVID-19 pandemic highlighting planning,
decision making, innovation and adaptation to regain profitability at a time of a great crisis situation
Strategic decision making comes
with its fair share of risks,
uncertainty and ambiguity.
However, it is a manager’s job to
do so. After Hayleys’ Group-
wide discussion, they created a
risk and opportunity chart (also
known as the risk assessment
plan- Figure 10) for the annual
year which we have previously
discussed. The previous impacts
listed are a result of the
assessment. And based on their
observations, Hayleys planned
and carried-out their vision.
Following Figures 11 to 15 are
all elaborate decisions Hayleys
has made in their organization to
adapt to change and gain a
competitive advantage over their competitors through innovation.
This means that they have had to evolve from a more classical perspective style of management to an amalgamation of both
scientific and theory X & Y managements of the human resources perspective. Scientific management is a subfield of the classical
perspective that emphasizes scientifically determined changes in management practices as the solution to improving labor
productivity while the humanistic perspective emphasizes understanding human behavior, needs, and attitudes in the workplace.
Hayleys tries to work with a scientific approach while also taking a humanistic approach to issues.
Though the strategic responses are clearly mentioned below, I want to give one great example of strategic focus and direction
Hayleys took to increase profitability. E.g. When industries such as tourism and travel took a big hit due to the pandemic and
travel restrictions, Hayleys saw growth opportunities in hand protection. They put most of their resources into making
technological advances in their glove manufacturing company DPL to widen their portfolio. This is one of the prime examples
of their planning and operational excellence.
Figure 10: Example of their Risk Assessment
Figure 11
Figure 12
References
2019-2020. Hayleys PLC Annual Report: Our Vision, Mission, Values. P.4 & 5.
2020-2021. Hayleys PLC Annual Report: Vision, Mission, Values. P.8 & 9.
Fayol, H. (1949). General and Industrial Management (C. Storrs, Trans.). London: Sir Isaac Pitman & Sons. P. 20
& 21.
Daft, Richard L. (2016). Management. 12th Edition. Chapter 5: Managing Ethics and Social Responsibility. P. 150-
173.
Jayasekera, W. & De Zilva, R. (2021). Power and Energy: To be the leading renewable energy solutions provider in
Sri Lanka [Website]. https://www.hayleys.com/power-energy/.
2020-2021. Hayleys PLC Annual Report: Risks and Opportunities. P. 85-95.
2020-2021. Hayleys PLC Annual Report: Sector Review- Eco Solutions (Stakeholder value creation). P.102.
Rijamampianina, R. & Carmichael, T. (2005). A Framework for Effective Cross-Cultural Co-opetition between
Organizations [PDF]. P. 95.
Hayleys PLC Annual Report. (2020/ 2021). Risks and Opportunities & Impacts. P. 56-69
Daft, Richard L. (2016). Management. 12th Edition. Chapter 3: The Environment and Corporate Culture. P. 75-101.
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