Community Relations of MAS holdings

In any company, the greatest challenge is managing the business. To support this end, a companys relationship with the community plays a pivotal role. In terms of corporate social responsibility MAS Holdings has done a considerable amount of work towards uplifting Sri Lankans in a social context. It has also worked to retain customer attraction through achieving their targets and maintaining customer compliance standards by ensuring the employees work in a safe working environment. This report illustrates MAS Holdings’ relationship with the community and provides recommendations for improving community group relationships for business well-being.

Company Background

MAS Holdings is a company, which has focused on the apparel manufacturing business for the last 20 years. It has great success to date with a consolidated turnover of approximately more than 400 million USD and has a massive growth in operations. The majority of the success has been achieved within the US market, which accounts for almost 60% of sales. Europe and UK provides the majority of the balance. In terms of customer focus, the company gains 50-55% of turnover from Victoria Secret, 14% from Gap & another 10% from Marks & Spencer. In terms of global presence, the company is present in more than 5 locations globally, including China, Vietnam, Indonesia, Mexico, India, Hong Kong, United Kingdom, Maldives and US. The company is made of multiple investments mostly in the form of joint ventures in Intimate Apparel Manufacturing, Elastic Manufacturing, Knit Fabrics, Lace, Bra Accessories and recently Design & Development.

Key stakeholders and their level of influence and impact on the company

2a). Benefits of stakeholders analysis for MAS Holdings

• Undertaking a taking stakeholder analysis benefits the company as follows,
• Opportunity to identify the interest of the all stakeholders on the company
• Recognizing the groups that affect or affected by the company
• The power level of each stakeholder and ways to reduce negative impact on the company
• Identifying the stakeholders who have decrease association with MAS and getting them involved in company events at particular stages
• Identify potential issues that might disrupt the company
• It also helps to visualize the risk factors and plan strategic responses

2b). Key community groups and their impact on the company

• Stakeholder mapping provides insight in to which parties have the most impact on the company (See appendix 2). Described below is the influence and impact of each stakeholder.
• CEO and The Board of Directors (High Interest + High Power)

This includes company’s major players and potential stakeholders. In it consists of the chairperson, Mahesh Amalean and the board of directors which includes the other two Amalean brothers and 7 directors. (Refer appendix 2 figure)

From the beginning MAS was a benchmark for being a superior employer. All the main key players of the company are responsible for sustainability in community development. By looking at the significant steps that have been taken by them to develop the community and their employees it is clear that they have made a big difference. As per Ajay Amalean ‘it was the right thing to do. We had absolutely no idea that 20 years down the road, the things we were doing would be called CSR’.

Venture Capital and Customers of (High Interest + High Power)

According to the power interest mix (Refer appendix 2 – Figure 2) there is a clear indication that this is a category with high interest and power. Without these key individuals or groups, such as joint ventures, with Speedo and strategic partners such as Nike, Makes & Spencer, Victoria’s Secret and Gap MAS Holdings’ part of the business operations would not have its current success.

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When M&S selected MAS for their green manufacturing plant project (As mentioned in appendix 2 page ii) it demonstrated their recognition as a global customer that MAS is an organization that is conscious of environmental and social sustainability. This recognition will results in better relationship with world’s leading brands that are under pressure to maintain sustainability and it will help to maximize the profit of the company by attracting new customers and through customer retention.

Employees (High Interest + Low Power)

The higher management at MAS Holdings has set its employee objectives which are called as KPI’s (Key performance indicators). However the drivers of these main KPI’s are the employees themselves. It is noticeable in the Mendelow’s matrix (Refer appendix 2 – Figure 2) this category holds high interest and low power on decision making. This group includes the executives and the machine operators of the company.

In MAS, 92% of the employees are women. Focusing the women in the company MAS has launched an empowering program which is called ‘Women Go Beyond’ (Refer appendix 2 – page v). The men, who are working at MAS, enjoy the same benefits as women. These activities result in company growth through employee attraction and retention. Thus recruiting process is easier and the annual labor turnover is much less. As mentioned in appendix 2 these activities also results in higher productivity of operations, which is a one of the main achievements of a manufacturing plant.

Community ( Low Interest + Low Power )

As mentioned in the mendelow’s matrix this category has a low interest and a power, but the company point of view it’s important to have a close relationship with the communities MAS operators. Hence they need more man power for their operations and it’s a great advantage when having a close relationship with the community specially in recruiting people and also in retaining them which will be discussed future in the report.

How MAS use relationship marketing and approach the community through its concept

3a). Relationship marketing

‘Relationship marketing refers to all marketing activities directed towards establishing, developing and maintaining successful relational exchanges’

Morgan & hunt 1994

It is important to understand the benefits of maintaining good relationships with the community groups. Not only in FMCG companies but also within business to business companies, manufacturing plants benefit by having close relationships with the community groups that are relevant to them through the practice of sustainability within these communities. Though it doesn’t have a direct impact on the company with regards to profits, sustainability, helps to increase the company standards, reputation and profits in a way that is mutually beneficial to the community and the company. By developing such enduring relationships the company can gain trust within the community, build employee commitment and loyalty towards the company. These things give long lasting benefits to the company. MAS Holdings is a company that gets these positive results out of such community relationships.

3b). What MAS Holdings does to attract their community groups and reach their hearts

When building a relationship it should be done from a combination of Trust, commitment and cooperation.

Trust

According to Morgan & hunt trust is defined as ‘confidence in an exchange partner’s reliability and integrity’

Trust can be seen as a long term investment for the business. It works as glue in building business relationships with all stakeholders. Building trust among the customers and suppliers of will allow the MAS business to gain the upper hand to improve business with the US and European countries.

In the same way MAS holding’s most important resource is labor. As mentioned before 92% of the employees are women. Sri Lankan women are very particular in selecting the working place. Considering the culture, tradition of Sri Lanka, it’s important for women to have a safe working environment in manufacturing plants which will enhance their trust and the trust of the community. For an instance when started first EPZ in Katunayake and the country is declared as a free trade area most of investors started garment factories in those areas. 90% of the works become women, most or 18 – 25 of age and they came from rural area of the country, lived in boarding houses near the factory. In this period most of the employees suffered from sexual harassment and assault. They also had long working hours even without prior notice. Breaking through these grey clouds MAS become one of the best employer’s in Sri Lanka by creating a safe working environment. In addition the Amalean brothers made sure that their work force worked in an air conditioned environment, had free meals, and were given transportation to and from the factory.

Commitment

This is one the most important element which strengthens relationship marketing. As per Morgan and hunt, ‘commitment is an enduring desire to maintain a valued relationship’ (Morgan and Hunt 1994, 23) Commitment could be considered in different ways, 1.Commitment towards the organization by the employees, commitment towards the brand or the product also the commitment towards the community etc.

In order to foster this commitment MAS Holdings, created incentives based on service period giving gold coins to employees that had completed 5 years of service, providing increments each year so that an employee knew that if they stayed one more year their salary would increase and giving bonuses based on performance which encouraged the employees to be committed to continuous improvement.

Co-operation with community groups

In order for a business to operate in a geographic location it is important that the people living there are ready to accept the presence of this business. As MAS Holdings has many plants in many locations it has found it useful to co-operate with various community groups in order to establish their presence.

For example through the Shadeline factory in the remote area of Mahiyanganaya, various projects were undertaken. These included assistance in building houses funding for primary education and assistance in social welfare. Some of the community assistance was provided through the Buddhist temple in the area which provided access to large portions of the community. Further to that association with the local police and welfare societies provided inroads to the lives of the people.

The Level of influence and impact applied by pressure groups on MAS Holdings

4a. Pressure groups

Pressure groups are organizations that seek to influence government the public and private business or advance a cause. Often they advance a political or ideological goal. These groups can be placed in to two main categories.

Sectional Pressure groups

Causal Pressure groups

4b. Sectional Pressure groups

Sectional pressure groups represent a section of society. The pressure cause by these groups is often directly beneficial to the members.

Religious groups (High impact) -Often in the rural areas of Sri Lanka where several of the MAS Factories are situated the Buddhist temple in that area is the central meeting place and many decisions are made there. MAS as an organization is encouraged to follow the local customs and cultural habits.

The Employers Federation (High impact) -is a legal organization that MAS is part of. Adhering to the guidelines set by this organization is beneficial for MAS Holdings’ goal of ethical hiring and employment

4c. Causal Pressure groups

Causal Pressure groups are associated with a set of ideas rather than people. The agendas they pursue may not be directly beneficial to their members.

As a member of certain key groups MAS must adhere to standards they set. Some of these are listed below:

The Joint Apparel Association Forum (JAAF) (Low impact) – is the leading umbrella organization concerning the apparel industry in Sri Lanka. Making Sri Lanka the number one ethical destination for garment manufacturing (the “Garments without Guilt” initiative) is one of its chief objectives. MAS Holdings is a special invitee to this Forum and is expected to conform to the directives set by this forum.

Several sub organizations are part of the JAAF.

FAAMA Fabric Apparel Accessory Manufacturers’ Association

FTZMA – Free Trade Zone Manufacturers’ Association

NAEA – Apparel Exporters’ Association

SLAEA – Sri Lanka Apparel Exporters’ Association

SLCGE – Sri Lanka Chamber of Garment Exporters

SLGBOA – Sri Lanka Garment Buying Offices Association

Various SBU’s of MAS Holdings are involved in many of these sub organizations as well.

Worldwide Responsible Accredited Production (WRAP) (High impact) -MAS Holdings is a member of and must adhere to their standards as well.

The Board of Investment of Sri Lanka (Low impact) – As a member MAS must adhere to certain standards.

While these organizations are quite influential in Sri Lanka, MAS has lead the way in Ethical and Responsible employment therefore it is MAS that often sets the standards for these organizations.

New communities that MAS can expand their services fro the betterment of the society

In the tradition of MAS to lead in the area of CSR in Sri Lanka and sometimes the world, this could be taken for further by analyzing new community groups will always give the opportunity to connect to the community.

It’s proven that MAS is one of the fast growing companies in the world. It’s very important to have a good relationship with the local government, society that they operators since it need more man power and carry out their operations in the respective communities.

MAS has been doing all community projects targeting the employees and society such as women go beyond and other CSR activities (Refer appendix 2, page v & vi). It needs to look in to future prospect in terms of building a close relationship and the target audiences of the new community groups are,

Skilled future generation for Srilanka

Target Group -School leavers of MAS employees

Providing educational opportunities to the community in areas of English language education and IT

Let’s learn the importance of environmental sustainability

Target Group -Schools (Students)

Achieving sustainability Practicing and teaching Environmental sustainability

4 a) Why MAS should choose these two community groups

Since MAS is targeting on the community itself it gives greater results to the company and the country when considering future leaders, minds in the country. By providing education which is required in the current business world it helps the young generation to foundation their career paths. By creating a strong and stable generation, it will eventually strengthen the communities of Srilanka, starting from the area that, MAS manufacturing plants operators. This will also benefit the country. When looking company point of view this program will not directly impact, but this will increase imagine and the good will of MAS among the communities which will help the company in recruitments and also in retaining employees.

As per the 2nd community group, by helping the schools and spreading the massage about the importance of environmental sustainability by teaching them from their small ages it will give a give impact in their personal life’s as well as the country, environment. Also as mentioned before by establishing the name of MAS in their hearts by doing a worthwhile project to their life’s and the community MAS always be company that is socially responsible. Hence most of the MAS customers are particular on the CRS projects that MAS does, these kinds of projects gives positive marks and will strength the relationship with the customers as one of the responsible suppliers in the world which will attract more customers around the world.

4b – Skilled Future generation for Srilanka

Providing educational opportunities to the community in areas of English language education and IT

MAS competes in the global market and deals mainly with the US and Europe. In order to communicate with its customers the most relevant language is English. No business that is global can survive without information. MAS recognized this need early in the game and is dependent on Information Technology for all information needs both internal and external. While there have been government initiatives to foster the teaching of English and IT these have often failed due to a lack of funding or will power. Having a community that is fluent in English and adept in IT provides MAS with a greater pool of individuals to select from for employment.

Before looking at the all the school leavers MAS could target on the family members of employees at MAS. The selection criteria of this could a relative of a employee at MAS, who is 18 -27 age and has completed G.C.E advance level 2 passes and unemployed. While providing primary education to these communities can be carried out by supporting the government initiatives, family members of employees can be chosen out of the community to provide scholarships for further education. In this way MAS can give back to those who support the business while building trust, commitment and sustainability in the community.

4c – Let’s learn the importance of Environmental sustainability

Achieving sustainability Practicing and teaching Environmental sustainability

MAS’ was the first company to recognize the need for Environmental sustainability as a key global concept and put this knowledge into action by creating the first “green plant” in Sri Lanka. In order to take this message to the community in general MAS will have to create awareness and provide education. Currently there is no provision in the Sri Lankan school curriculum to teach environmental sustainability.

Target group could be taken as 15-18 year old students hence it is the best age group that can be thought the importance of environmental sustainability and make it their way of life. To communicate this massage to the selected audience would be schools which are located in the areas that MAS manufacturing plants. As this area of education is most relevant to the future generation it is important that this area of study be included in the School’s curriculum. It is possible that MAS can team up with experts in the field from the United Nations Environment Program (UNEP) to get government approval and support to introduce this vital area of education. By conducting this program in schools, MAS is creating educated youth to the community and also who will be a example to the society and a person who carries a massage on how important sustainable development. These will also benefits MAS indirectly by establish a reputation among the community which the plant operates.

Coordinated Communications mix for new community groups & projects

In order to have success in these two ventures it will be necessary to have a coordinated communication plan. The communications mix must target all the relevant stakeholders. As these are non-profit initiatives the communications mix must be adapted to suit the situation

Internal stakeholders – Management, Employees

External stakeholders- Community, Government, Partners, Customers

5a. Internal stakeholders

Management

In order for both these initiatives to be successful the management must be aware of them and back them. As most of the decisions for funding will come from this group of individuals it is recommended that direct contact is made (personal selling) and the use of presentations would be advisable.

An e-newsletter sent directly to their e-mail account and linked to a website with Links on Facebook and Twitter will provide them with any additional information they need and provide regular updates on the status of these projects.

Management can also form a committee or working group to oversee and monitor the process of teaching and the progress of these initiatives. This group will report back to the management.

Employees

The employees too can receive the same newsletter and management can communicate the needs and progress to the employees at meetings. Making it possible for the employees to get involved in the teaching programs and funding is also recommended so that there is a greater employee ownership for these initiatives.

5b. External stakeholders

Community

By far the most effort and resources must go to making the community aware of these initiatives and the benefit thereof. While the employees in the community will take part of the message by word of mouth assuring that the correct communication is conveyed will require further effort on the part of MAS Holdings.

At the inception of these initiatives the best option would be to start with a public relations campaign which includes press conferences, announcements at town meetings and branding. Having a Brand ambassador (such as one of the members of the Sri Lankan cricket team that work for MAS and are highly regarded by both urban and rural communities)would give a face to these initiatives.

The most important part of these communities are the individuals that will receive the benefits of these programs. The teachers and students will receive their curriculum via an approved government syllabus. But programs and workshops can be organized (personal selling) to assure that quality information is available to theses two groups. Having exams to measure English and IT competency and contests to select the best idea for environmental friendliness with prizes awarded t best student or best idea will assure the students interest in these subjects (promotions).

Government

The shareholders of MAS have demonstrated their goodwill and capability they will not find it difficult to obtain government approval for these initiatives. Recently the government too took the stand that the way forward is through English education and IT. Furthermore if it is demonstrated to them that environmental sustainability is the way forward they too will join the process of becoming green direct selling is the most efficient method of communication here.

Partners

A great strength of MAS in carrying out a project is working together with partners who have the expertise. Involving The British Council for English education, Microsoft’s teaching services for fundamental IT education would provide a first step in these areas. For environmental sustainability United Nations Environment Program (UNEP), the Consumer Citizenship Network’s (CCN) and the Looking for Likely Alternatives (LOLA) toolkit provide information and know-how. Having “joint ventures” with the above organizations would be beneficial to MAS and will lean credibility to the efforts.

Customers

Many customers are interested in the CSR projects undertaken by MAS. In MAS communiqués it is possible to include the websites and social networking sites so that the customers can access more information about these projects. Allowing the customers to get involved through sponsorship will afford them an opportunity to pass on to their customers or the end customer the knowledge that they are not only receiving guilt free environmentally friendly products but also [part of the purchase is going towards community building and the education of the less fortunate. The garments could carry labels such as “produced in eco-friendly factories”, or “your purchase provides for the education of a child in Sri Lanka.”

Measuring the success of the communications mix for both new community relationships

In order to measure the success of the communications mix the standard evaluation criteria must be adapted to reflect the non-profit nature of this venture.

Quantitative Measures

Management’s and employee’s contribution both financially and through time allocation can be easily quantified. That can then be used as an indicator of the success of the marketing communications.

In the long run the number of individuals that are retained by MAS that have attended these programs can be counted and both the success of the internal communication strategy and the success of the programs can be evaluated.

Community awareness can be measured by the number of individuals attending the programs. Also the exams that are held for the individuals and the response to the contests will give an indication of the success of the community communication strategy. Using benchmarking tools that the partners have developed over the years it may be possible to measure the success of the communications that have been carried out.

For Government, Partners and Customers the main indication of the success of the communication strategy will be their financial participation. Targets must be set for the anticipated contribution and measuring the success of achieving these targets will give a clear indication of the said success.

Hits on the website can also be used to quantify interest and communication success.

Qualitative Measures

Feedback can be obtained from Management and Employees as to their perception of the programs through an e-mail survey.

Feedback can also be obtained from the students to ascertain their perceptions and attitudes towards the program. Furthermore community inquiries regarding the program can be accumulated and categorized to measure and determine the success of the communications mix.

Conversations with the partners and customers can indicate their observations and thoughts on the endeavor. All this information can be used to measure the success of the marketing mix.

Recommendation

Continue doing community projects more which will support to sustain the relationship with the community and will also visualize the organization as a good responsible citizen

Internally set key performance indicators to measure the amount of CSR projects completed and the quality of the program and the no.of impacts in order to understand value of the programs and can forecast the type programs should given to the community

Conduct programs for male members in the company while carrying out ‘women go beyond’ for the female team members to all employees motivated

Manage communication campaigns to the new community groups in a strategic way to attract them to the projects conducted and built trustworthiness among the company

Prepare booklets, including CSR projects that has made a difference in the community and also use modern technology to spread the good will of MAS holdings and attract customers

Always keep the employees informed on the CRS projects that are done by the company and make feel them that they work for a socially responsible organization

Implement a system to collect feedback from all the participants of the CSR projects. Also for new ideas for new projects from employees as well as external groups

Conclusion

It’s very important to maintain a mutually beneficial relationship all the stakeholders since each of them are directly or indirectly involve with the company. MAS has become one of the best multinational companies in terms of business also in community relationships they have maintained. By establishing a good reputation among the communities they operators, local government, customers also the pressure groups it has been easy to execute their business activities anywhere in the country and the world.

References

Appendix 1

Company Background

It was in 1987 when the three brothers, Mahesh, Sherad and Ajay Amalean’s took their first step to begin as a small entrepreneurial and to make it one of the largest south Asian intimate apparel manufacture and a competitive sportswear provider in the region. Now a company, with an annual turnover of USD 700 million. MAS Holdings which operates globally includes design studios, and 28 world class manufacturing plants. Thus giving career opportunities for over 45000 people to, excel through their talents and capabilities. MAS Holdings consists of four main divisions namely Intimates, Active, Fabrics, and Investment which are overseen by Corporate Solutions which centralizes the operation in all four strategic business units. Furthermore MAS Holdings has taken a step forward by launching its own lingerie brand ‘Amante’ in fall 2007 and have made it their strategy to be the premium lingerie brand in Asian region.

Vision and the Mission of

Vision

No.1 preferred partner of the world is leading brands of Intimates & Sportswear with a turnover of USD 1Bn by 2010

Mission

We provide the world’s leading brands of Intimates & Sportswear with reliable & innovative design to deliver solutions.

Strategic partners and customer portfolio

MAS has become one of the strategic vendor for some of the best brands in the world such as Victoria’s Secret, Nike and Marks & Spencer also it services other global brands as Adidas, Reebok, Columbia, Lulu lemon, Banana Republic, Ann Taylor, Lane Bryant, Soma Intimates, GAP and Speedo and much more. Victoria’s Secret Stores and Nike selected MAS as Vendor Partner of the Year 2006.

One of the key factors of MAS success is the ability to forge partnerships with the leaders if the industry such as The Limited Inc, Triumph International, Speedo International, Stretchline UK, Noyon Dentelles, Prym Intimates Group, Dogi International, Textprint SA and Brandot International.

Product range portfolio

MAS’ products can be categorized as below.

Competitors of and the market position

As a large manufacturing company MAS has international and local competitors. Internationally competitors would be Ace which is a large intimate manufactures in Hong Kong, Clover, Luen Thai which operates in several countries and Tefrone the main competitor in the seamless market and Brandix apparel which is the local rival.

Victoria secret positions MAS as their main preferred vendor and the company is regarded as one of the the top 10 intimate manufactures in the world.

Analyzing all the information motioned above its clear that MAS holding is a successfully driven family owned company. The brothers decided to stick to their joint venture criteria of choosing partners who brought in technology expertise, marketing knowledge or access to certain markets.

Background for Best Ethical practices

MAS’ holdings as a history of ethical business practices that predate the concept of CSR. In addition, it ensures a healthy and safe work place, which regarded as a good business practice. However, the ethical approach to manufacturing is setting the organization apart from the competitive apparel sector. To support the vision of itself developed their own CSR strategy called ‘MAS Go beyond’, this program empower the organization’s 92% of the female workforce also develop a sustainability-mined n youth, future employees and leaders of the organization.

Source – Company website, Researches on the web, Company Magazines