PADINI Holdings Berhad PDF

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EXECUTIVE SUMMARYPadini Holdings Berhad started as a Malaysia’s apparel industry, manufacturing, trading and supplying garments to order for retailers and distributors. However, Padini Holdings Berhad ventured into distribution and retail by creating its own brand catering to specific consumer niche...

Description

EXECUTIVE SUMMARY Padini Holdings Berhad started as a Malaysia’s apparel industry, manufacturing, trading and supplying garments to order for retailers and distributors. However, Padini Holdings Berhad ventured into distribution and retail by creating its own brand catering to specific consumer niches. Today, Padini Holdings Berhad has entered the new millennium as a major force in Malaysia’s multibillion textiles and garment industry, a brand leader involved in the distribution and retail of its own fashion label through 330 freestanding stores, franchised outlets and consignment counters in Malaysia and around the world. It labels proudly carried the Made in Malaysia stump abroad with its products export to Bahrain, Brunei, Cambodia, Egypt, Indonesia, Kuwait, Morocco, Myanmar and many others. The success of the company can be attributed to the foresight of its management and the dedication of its staff. Padini Holdings Berhad address fashion conscious consumers of both genders and all ages through their ten distinct brands: Padini, Padini Authentics, Seed, PDI, P&Co, Vincci, Vincci Accessories, Miki Kids, Tizio and Brands Outlet. Each of these labels represents a particular fashion philosophy and encompasses a comprehensive range of products that fit into their targeted consumer’s universe.

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INTRODUCTION Padini Holdings Berhad is a Malaysia based investment holding company. The company sells both men’s and ladies’ shoes and accessories, garments, ancillary products, children’s garments, maternity wear and accessories through various subsidiaries. Its most prominent brands are Padini and VINCCI. Its goods are exported to mainly The Middle East and Southeast Asian countries. Its products include clothing, shoes, bags, belts, sunglasses, leather goods, necklace and other fashion accessories. This goods are sold in retail flagship stores and concept stores. The Padini Concept Store is a concept which houses all Padini Holdings brands under one roof or “one-stop-shopping”. The first of such outlets was opened in Johor Bahru City Square, Johor Bahru, Malaysia in 1999. Padini Holdings Berhad focusses on fast retailing, where new products come online within weeks. Currently, its stores are scattered all around the country boasting store locations in Pavilion Kuala Lumpur and Mid Valley Megamall. Padini began operations as Hwayo Garments Manufactures Company in 1971, it was affiliatedin garment manufacturing and wholesaling. It entered the retail industry in 1975 with flagship brand Padini. VINCCI was established to market ladies shoes, bags, belts and other accessories in 1986. Many brands including MIKI, SEED, P&Co and Padini authentics labels were launched in the following decades. In 1991, Homes Store Sdn Bhd was launched to hold all the company involved in the groups retail, wholesale and manufacturing businesses. It was subsequently renamed to the present Padini Holdings a year later. In 1995, Padini Holdings Sdn Bhd was converted to a public company limited by shares and adopted the name, Padini Holdings Berhad and soon listed on the Second Board of the Kuala Lumpur Stock Exchange. The year 2000 witnessed the establishment of Padini Dot Com Sdn Bhd to provide electronic business services and solutions for the group. Padini Holdings was transferred to the Main Board of the KLCI Bursa Malaysia in 2005. Its major subsidiaries include Vincci Ladies’ Specialties Centre Sdn. Bhd., Padini Corporation Sdn. Bhd., Seed Corporation Sdn. Bhd., Mikihouse Children’s Wear Sdn. Bhd., Vincci Holdings Sdn. Bhd. and Padini Dot Com Sdn. Bhd.

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PLANNING The definition of planning is establishing an overall strategy for achieving goals and developing a comprehensive hierarchy of plans to integrate and coordinate activities. Every organization has its own purpose to make sure that their organization run smoothly and have its own mission statement, goals objectives and their operational planning. Same as Padini Holdings Berhad, they have their own achievement that they want to achieve and their own mission statement, goals, objectives and operational planning specifically single use plans. For Padini Holdings Berhad, its vision is “To Be The Best Fashion Company Ever”. They aspire to be a global leader in the fashion and retail industry with the highest standards in design, manufacturing, quality, customer service, branding and innovation. As a creatively driven and design oriented group, they want to create fashion consciousness that is stylish yet affordable within their brand niches. They believe that they have strong capabilities to become a leader that will lead the fashion industry and be the most favourable company among the customers. Correspondingly, their mission statement is to “Exceed The Customers’ Expectation and Our Brands’ Promise”. This is supported with their core value that is “Caring From The Heart”. Caring from the heart means every staff of company must treat customers from the heart, staff must care their customer by providing the best services. The vision and mission statements together with the core value are aim to achieve the Padini Holdings Berhad goals and meets the customer requirements. Customer is the most important factor in making the organization become more successful because without customer business cannot be run smoothly. This is why Padini Holdings Berhad cares about the quality of their products either from Padini, PDI, P&Co, MIKI, Vinnci and Seeds. Padini Holdings Berhad group will make sure that their companies gives a good services to their customers in order to make sure the successful of their vision and mission. This is the reason why Padini Group have their own PADINI’s 7 culture that are speed, simplicity, self-confidence, communication, team work, learning culture and consistency. Padini Holdings Berhad had listed 4 goals that they want to achieve in order to meet the satisfaction of the customers : I. II. III. IV.

To provide the highest quality products and accurate information about them, their specialty and benefits. To provide excellent customer service To ensure that they are having good relationships with other organizations and individuals who are like minded and involved in like pursuits To cultivate adaptability to change in economic, social and environmental conditions, to allowed the opportunity to survive long-term. 3|Page

Padini Holdings Berhad adheres to four broad objectives when it comes to carrying out their Corporate Social Responsibility and manage their organization. The first objective is to become the first ranked-Malaysian-based clothing retailer for ladies’, men and maternity wear that is under several brands. The second objective is to become a leading clothing retailer in under several brands. The third objective is to help in creating job opportunities. The last objective that Padini Holdings Berhad held to is to help Malaysia in changing their economy especially nowadays with the currency of Ringgit Malaysia that has fallen. So, by their main activities that are clothing accessories store and management of companies and enterprise can help Malaysia to increase their currency of Ringgit Malaysia. Padini Holdings Berhad has their own single use plan that consisted of programs, projects and budgets. Program is a comprehensive set off activities that are designed to accomplish a set of goals. While project is an effort of individuals toward achievement of goals and budget is a financial resource that should be allocated. Padini Holdings Berhad had chosen to focus their main thrust of CSR activities on the area of education and practical training. They wish to address, in part at least, the pressing issue of unemployable graduates, and on the other hand, they hope that by providing practical pre-job training, they can over time build up a labour resource from which they may select suitable candidates to fill executive-level vacancies available in Padini associated with their goals to create job opportunities. Brands Outlet Retail Programme and Concept Store Operations Trainee Programme is one of the programs that Padini Holdings Berhad did and it was classified as their single use plan. This programmes had initially targeted graduates interested in pursuing management career opportunities in retail apparel industry as well as undergraduates keen to obtain some practical working experience by serving as interns. Brands Outlet Retail Trainee Programme is opened to graduates. It was started in June of 2014 and was developed to impart skills needed to manage the frontline operations of a large-seized retail outlet. Conducted over a 3-months period, this programme comprised both classroom and on-the-job-training at Padini Brands Outlet stores and learning included managing staff, stocks, cashiering and customers. Upon completion of the programme, all trainees will be awarded a certificate of participation and an opportunity to join the Group. Alternatively, trainees who have completed the programme can also use the certificates earned to boost their employment chances at other retailers. Concept Store Operations Trainee Programme seems similar in nature, the exposure that trainees were given differed in the sense that for this programme, trainees did their on-the-job-training in the Group’s Padini Concept Stores. Unlike a Brands Outlet store, the Padini Concept Store is usually larger and while the former is characterized by the diversity of its merchandise, the latter houses a collection of brands, with each brand having its own specific brand identity and appeal.

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During the year under review a total of 4 programmes had already been conducted from the Padini Holdings Berhad, involving 27 participants and incurring an expenditure of RM148, 738. Out of the 27 participants who had participated, 9 were accepted into the Group’s employment.

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ORGANIZING Organizing is the process of determining the tasks to be done, who will do them and how those tasks will be managed and coordinated. There are a lot of importance of organizing such as we can identify company activities so that it meets with goalsplanning process, establish departmentalization of organizational activities, the top management can classify their authority so that the operation will run smoothly and the last importance of organizing is coordination between authority and responsibility. By this coordination staffs are aware about the position and relationship in that organization so they know from whom they should receive orders and report to. The first task a manager should do in term of organizing is to have a formal representation of working relationship that defies tasks by position and unit and indicates how they will be coordinated. It literally means to have a proper organizational structure or departmentalization. As for Padini Holdings Berhad, they use functional structure that consists of units or departmental groups identified by specialty such as financing, marketing, human resources and admin that are controlled from the top level of management. The functional structure was designed on the concept that high specialization and high control yields high efficiency and this type of department structure is suitable for Padini’s business. Below is the company’s corporate structure that could be obtained from their annual report.

CHIA SWEE YUEN Chairman

YONG PAN CHAUN Managing Director (CEO) YONG LAI WAH Director

CHONG CHIN LIN Director

FOO KEE FATT Director

LEE PENG KHOON Director

YEO SOK HIANG Director

ANDREW YONG TZE HOW Director

BENJAMIN YONG TZE Director

FIGURE 1 : ORGANIZATION CHART OF BOARD OF DIRECTOR

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Yong Pan Chaun Managing Director

Mohd Syukri bin Atan Finance Department Manager

Nur Syakilla binti Ahmad Marketing Departments

Muhd Fauzi bin Muhd Zain Admin Departments

Nur Arissa binti Akiff Human Resource Departments

FIGURE 2 : ORGANIZATION CHART OF DEPARTMENTALIZATION In Padini Holdings Berhad, the Chairman, Chia Swee Yuen leads the board and is responsible to promotes objectivity in board deliberations and oversees how the Board. He presides over Board meetings and encourages positive contributions of all Directors at Board meetings and promoting constructive relations between all Board members, executive and non-executive alike. He is primarily responsible for the orderly conduct and effective working of the Board, and acts as a liaison who maintain links between the Board and Management. Alongside the Chairman, stood the CEO and also called Managing Director who provides leadership use specifically to the managers responsible for performance and profits. Managing director of the Padini Holdings Berhad is Yong Paung Chan. He is also responsible to oversee the day-to day running of the Group’s activities. While all the Directors are primarily responsible for proposing the strategic direction that the Group could adopt. All the Directors have pertinent information about the Group’s business and the development taking place in the industry. While the Board retains full responsibility for guiding and monitoring the Group in discharging its responsibilities, it delegates the performance of certain of its functions to the Board Committees with recommendations and advice. Chairman, Chia Swee Yuen had delegate the authority to the Managing Director to manage all the Directors and Departments Managers. Managing Director had delegates the task specifically to the Departments based on their specialization such as sales assistant and promoter under Marketing Departments Manager. In addition, Padini Holdings Berhad also practices a clear chain of command. It has a clear and unbroken line of authority that extends from the lowest to the highest position in the organization. The solid lines in the organization chart above at Figure 1 and Figure 2 shows work departments and units in relation to each other. The Managing 7|Page

Director is in charge of all the Executive Directors and to the Finance, Marketing, Admin and Human Resource Departments. Based on the organization chart above, the Executive Director and all the Department’s Managers will report to the Managing Director. Same goes to the Managing Director will report afterwards to the Chairman. These solid lines are termed the chain of command or sometimes known as the scalar chain or the line of authority. Besides providing a clear responsibility of the Chairman, Group Managing Director and all the Directors they also have a clear guideline of the responsibility and roles of both The Board and the management unit. In Padini Holdings Berhad, they use wide span of control. Span of control is also known as span of management. Span of control can be defined as the number of subordinates or employees that is managed by a manager. A wide span of control requires a manager to supervise a larger group of employees compared to a narrow span of control. A wide span of control has their own advantage such as less overhead cost of supervision, prompt response from employees, better communication and coordination and suitable for repetitive job or tasks. A wide span of control will result in a flat organization structure as shown as the diagram above. Line and staff responsibility has two separate hierarchies that is the line hierarchy and the staff hierarchy. The line hierarchy in which the department is a revenue generator that is the manufacturing and selling and their managers are responsible for achieving the organization’s main objectives by executing the key functions such as policy making, target setting and decision making. For example, in Padini’s companies like Vincci, PDI, PADINI and Miki it has their own line hierarchy. For example, in selling and promoting their product they have promoter and sales assistant to do so. They have to achieve what the sales manager had set maybe in terms of market target. Sales manager is grouped as staff responsibilities. The staff hierarchy, in which the departments are revenue consumers, and their managers are responsible for activities that support line functions such as accounting, maintenance and personnel management. For example, the sales managers had to execute the key functions such as the policy making, target setting and decision making. The sales manager is responsible for activities that help the line functions. Padini Holdings Berhad practices centralization decision making in managing their Group. Centralization is the process of systematically maintain the power and authority in the hands of higher-level managers. In Padini Holdings Berhad, all the decision making is decided and approved by top management specifically is approved by Yong Pan Chaun as Chief of Executive Officer. Briefly, the Board of the Padini Holdings Berhad that has the overall responsibility of providing leadership for the Group in terms of strategic direction for the Group’s business, good corporate governance and guiding management in the achievement of business objectives. During one year financial year, Padini Holdings Berhad usually decide to have five meetings with the Board of Director. So, Board of the members are provided with information such as minutes of previous meetings, financial reports and board papers one week before a meeting so that each 8|Page

one of the meembers will have a sufficient time to review the information provided to facilitate decision-making at the meetings. Overall we could see that Padini Holdings Berhad practices a good organizing method. They have a clear departmentalization structure which is functional structure. It also practices a clear chain of command which consist unity of command as well as scalar relationship. In addition, in term of delegating work we could praise the way they handle it since they provide a clear line of authority and responsibility of every subordinates.

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MOTIVATION Motivation is a set of forces that causes people to behave in a certain ways. This is a psychological process that gives purpose and direction to behaviour. Motivation also can define as the management process of influencing people’s behaviour to behave in a way that ensures the accomplishment of some goals. Padini Holdings Berhad has involved Maslow’s Hierarchy of Need theory in order to motivate their employees or staff. In this theory, there are five fundamental needs such as physiological needs, security or safety needs, belongingness or social needs, self –esteem needs and self –actualization.

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Physiological Needs Physiological needs are the most basic needs that are necessary for our basic survival. Such as food, water and shelter. People needs all that to continue their live. The example in organization is wages and work environment. In Padini Holdings Berhad, during the 2016 financial year, the Group spent about RM128,741 on 98 sessions for inhouse education and training programmes for its employees. Training mostly covered job-specific topics as well as general matters such as effective communication, coaching skills, leadership, etc. A total of nearly RM13,197 was also spent on external training and certification. Over the year and across the Group, each eligible employee received an average of about 3.6 hours of training. As per Company’s practice, leaves were extended to those sitting for professional and other examinations. From time to time, staff from the Group’s Human Resource and Training Department was also given time off from work to attend job-related talks and seminars conducted by the Malaysian Federation of Employers.

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Security or Safety Needs This is the second level of needs. This needs deal with physical and psychological safety from external threats. In organization, employees will get some benefits from the company. As example in Padini Holdings Berhad, in their insurance & welfare: Their all full-time employees are provided at the Group’s costs, with Personal Accidents, Hospitalisation & Surgery, and Term Life insurance cover. The purpose of these insurance covers is to en...