Tao CorporationFinal PaperPresented to theDecision Sciences and Innovation DepartmentIn partial fulfillmentOf the course requirementsIn SYSTHEO Section M71SUBMITTED TO:Dr. Cristina LimSUBMITTED BY: GROUP 3Hernandez, Trisha
Lee, Gwan Woo
Park, HayeonJuly 14, 2015
a. Company Profile
Back in 1995, Julio O. Sy, Jr. decided to deviate from his familys commodity trading business and make something on his own. This desire took form in Tao Commodity Trader, Inc., which specialized in trading molasses. According to Mr. Sy, the business was very inconsistent in terms of profitability for quite some time, in that he says some years they would do well, some years they would do poorly. In fact, the company underwent (quoted from Mr. Sy) 2 crises that almost forced them to close the company. Mr. Sy then decided to invite a friend who happened to be the president of one of San Miguel Corporations largest subsidiaries to diagnosis his companys organizational behavior. After 3 months of observing and interviewing his employees, this friend invited him out for some drinks. As they were enjoying their beverages, he told Mr. Sy that the primary problem his company faced was that he was (quoted from Mr. Sy) a lousy manager.
He was told that he never trusted nor empower his employees, in that he did not involve them in important decision-making processes, nor did he offer them any sort of training. However, Mr. Sys employees did point out that he has very good (quoted from Mr. Sy) entrepreneurial tendencies because they often heard him speak of great ideas in this regard. What frustrated and upset him on the onset simply led to the realization that his gift was not in managing businesses, but in entrepreneurial ventures. This led to the decision to establish Tao Corporation and bring in Tao Commodity Trader, Inc. as one of its subsidiaries. Today, Tao Corporation has evolved to a holding company for a community of entrepreneurial subsidiaries and affiliates. These subsidiaries comprise of over 40 companies that delve into several industries, namely Healthy and Wellness, Distribution and Marketing, Resources, and Financial Services. In its short history, Tao Corporation has quickly risen to become one of the Top 100 Corporations in the Philippines (as mentioned earlier) that currently employs approximately 3,000 individuals. It is amazing how much one can achieve with some constructive criticism and humility, which is embedded in one of Tao Corporations core values.
For the operations within the Tao Corporation holding company, the daily regimen for every department is carrying out different tasks and deliverables in light of meetings that occur on different schedules. On a weekly basis, there are Working Management Committee Meetings, wherein the heads of the different departments or functional directors meet and discuss updates regarding the progress of deliverables, as well as issues and concerns that different departments face. On a monthly basis, there are Full Working Management Committee Meetings, wherein the department heads together with their subordinates meet and discuss similar matters. Also on a monthly basis are Consolidated Business Review Meetings, wherein the functional directors (and at times with next-level managers) meet with the Chairman of the Board and President of the company to discuss bring them up to date on such matters.
Regarding operations that involve subsidiaries and affiliates, the Finance Department of Tao Corporation meets with a representative of each subsidiary for one hour, once every month to discuss how they are doing financially, as well as factors that hinder certain partner companies from their goals. Basically, the primary purpose of the holding company is to monitor and evaluate the performance of its subsidiaries and affiliates and more importantly, assist them to achieve profitability. These meetings aim to give Tao Corporation the necessary information to perform its aforementioned purpose.
As a whole, these company functions aim to shape the construction of deliverables that will be set for the different departments of Tao Corporations to accomplish.b. Organizational Structure
The organizational chart of Tao Corporation is what the Corporate HROD Director Anna Asuncion termed as flat, perhaps due to the low height or number of hierarchical levels in an organization. There are 4 levels in the holdings company and given that there are only 50 employees, the span of control or the number of individuals a manager oversees is not very large. In terms of departmentalization or the process of grouping of human and other resources into units, there are 7 departments, namely Corporate Planning, Finance, Internal Auditing, Manufacturing and Operations, Legal Counsel, Human Resources and Organizational Development, and Strategic Business Development.The corporate hierarchy starts with the Chairman with his Board Members and the President in one level. Below them are the functional directors or the heads of the aforementioned 7 departments, which subsequently oversee middle managers and their associates. Tao Corporation is democratic. The company empowers their employees by involving them in decision-making processes. In constructing deliverables to be accomplished by the different departments, the company involves its functional directors by accepting their inputs. Although there are set deadlines, Tao Corporation also gives its employees the freedom as to how they plan to accomplish the said deliverables.
Brief Description/Functions of each department:
CORPLAN Corporate Planning
Implementation of a work-plan development, setting of appropriate performance and service standards and develop appropriate KPIs at the corporate and departmental levels to track key performance areas. Develop and implement relevant performance management and reporting systems and business analytics processes to track corporate performance and strategy implementation. Evaluate performance and highlight areas of attention to top management in a timely manner. Recommend and monitor appropriate remedial actions to ensure organizational performance standards and service quality are maintained.
CHIEF FINANCE OFFICER Finance
The Chief Finance Officer as well as the financial department for Tao Corporation is responsible for all the managing of the cash inflows and outflows as well as the bookkeeping and accounting of their data. Being a holding company, the finance department is crucial to the company in terms of its income and expenses.
INTERNAL AUDIT DIRECTOR Internal Audit
The role of internal audit is to provide independent assurance that an organization's risk management, governance and internal control processes are operating effectively.
MANUFACTURING AND OPERATIONS DIRECTOR Manufacturing and Operations
The roles of this department are separated into two. The initial manufacturing and operations, and security. The initial manufacturing and operations sector is responsible for the current business functions in Tao Corporation. Security is responsible for their keeping of data and information about the company and its processes. The managers in these departments report to the department head/director.
LEGAL COUNSEL Legal
The legal counsel is responsible for the companys legal processes and activities, as well as compliances with their policies, including government.
CORP HROD TEAM Corporate Human Resources and Organizational Development
The CORP HROD department is responsible for their human resources which includes recruitment, hiring, counselling, and so on. For the Organizational Development area, they are responsible for maintaining and improving the organizational relations and behaviors of the corporation.
STRAT. BUS. DEVT. HEAD Strategic Business Development
This department is responsible for the companies focuses on improving their operations and their processes. The main goal for this department is to assist the company in innovating for their growth.
c. Products and Services
The formula Mr. Sy has followed throughout the years is simple: to find entrepreneurial ventures with potential, equip these ventures with good leaders, and train these leaders to be further develop and hone their skills.As a result, the company has already accomplished a wide array of successful business ventures in its short history (evident from illustration above). In the Health and Wellness industry, Tao Corporation is the exclusive and authorized distributor of healthcare brands such as 3M, GE Vital Signs, Siemens, Philips, and many others through its HealthSolutions subsidiary. Total Nutrition Corporation is another notable venture, being the exclusive franchisee of General Nutrition Center (GNC Live Well) in the Philippines. It can be argued that the companys strong suit is in its Distribution and Marketing group of subsidiaries. Through JR&R Distributors Inc., Macro Distributors, Inc., and Oro Grande Distributors Inc., the company contributes 31% to total Proctor & Gamble business in Philippines, providing their goods in numerous provinces nationwide. This led to P&G recognizing them as Best in Class Distributors back in 2006. In addition, TriDharma Marketing Corporation is the exclusive national distributor food and drink brands such as Kopiko, Beng-beng, Energen, and many others. Tao Corporation also delves into electronics and communication technology products. Among these are Altus Communications and Open Communications, Inc., which are subsidiaries responsible for exclusively distributing Nokia and Lenovo mobile phones respectively in the Philippines.
Also, ThinkDharma Inc., is one of the companys newest and most prom