The International Journal o f Accounting and Business Society
Appendix 1: The Rothmans organization
P T Ro t h m a n s o f Pa l l M all In d o n e s i a is a p ar t c f t h e Pa c i H c Re g i o n o f o n e o f e w o r l d 's m aj o r i n t er n at i o n al t o b a o c o y r o .i p s o M h e Ro t h m a n s In t er n at i o n al Gr o u p . Ro t h m a n s In t e r n a t i o n a l G r o L p n as b e e n p r o d j c m g a n d se ll in g c i g a r e t t e s f o r o v e r 1 0 0 y e a r s a n d
o v e r t h o s e p ast 1 0 0 year s, t o ? c o m p a n y h as g ra w n o u t t o b e a m u i t i n at io n a ' o r g a n i s a t i o n t h e 4 lh l ar g est t o b a c c o se ll er c l t h e w o rid T f eir p r o d u ct s a r e so :d in o v e r 2 0 0 c o u n t r i e s an d m v o lv e w o r l d w i d e p e r a n n u T salec. of Ap p iO'< im at e y 2Q0 b I io n c i g a r e t t e s . So m e 8 0
f act o* i< !S a r o u n d :h e g l o b e ar e c o n s t an t l y i n v o l v ed i ' p r o d u c i n g 'h i s d e m a n d
T h e Ro t h m a n s i n t er n a- io Ji al G r o u p p r o d u c e s m ai n l y w h it e, n o n - k r e t ec 7 c i g a r c t t e b u t it is al s o a l e a d i n g w o rid s u p p l i e r o f c i g ar s , f in e- cu t an d p ip e t o b a c c o s T h e m aj o r t r a d e m a r k s of (h e Ro t h m a n s i n t e r n a t i o n al Gr o u p a r e Ro t h m a n s . D u n hill a n d Pe t e r St j y v e s a n : , w h i c h
a r e a m o n g t h e t o p 15 i n t er n a t io n al c i g a r e t t e t r a d e m a r k s o f h e w o r l d . A p a r t f r o m t h at t h e y p r o d u c e a b r o ad r a n g e of l o cal c i g a r e t t e s an d t o b a c c o b r an d s e x p e n d i n g o n e a c h g l o b a l Mtd!K^
To c o m p e t e in t h e g l o b al m ar k et , Ro t h m a n s In t er n at i o n al G r o u o is o r g a n i z e d in g e o g r a p h i c a l r e g i o n s an d d if f er en t Ro t h m a n s H o l d in g s Lt d . Ro t h m a n s o f Pa l l M all A u s t r a l i a Lt d . is a p u b l ic c o m p a n y t h at is o w n e d f o r 5 0 % b y t h e Ro t h m a n s In t e r n a t i o n al Gr o u p It is r e s p o n s i b l e f o r t h e A s i a Pa c i f i c c i g ar e t t e r e g io n c o v e r i n g
Au st r ali a, Fij i, In d o n e s i a , Pa p u a N e w G u i n e a . N e w Z e a l a n d a n d t h e Ph i l i p p i n e s Fi g u r e 6 s h o w s h o w ‘ h e A s i a Pa c i f i c r e g io n is o r g an iz ed .
n— :z=r
n w ' . i K h » U V L R V T F W O F R O T H M A N S ' i Sl A PA< .U* 1 C'
fUCWtX1- ri^ri investigation]
PT Rotfimans of Pall Mall Indonesia ir )9 3 1 N V T a b a c o t m a Bo l g i u n e s t a b l i s h e d a f act o r y in M a l a n g In M a r c h 1 9 8 6 t h e t a t f u r v w a s t r a n s f e r r e d t o Ro t h i r a n s o f Pa l l M a l l A u s t r a l ia Lt d T h e y r e n a m e d it t o Pt
K c t h m a n s of Pa l l M a l l In d o n e s i a a n d w a s o f f icial ly r e o p e n e d u n d e* its n e w n a m e o n t h e 1 ~11' of Se p t e m b e r 1 9 8 7 .
T h e c o m p a n y is o n e o f t h e l ar g est w h i t e c i g a r e t t e m a n u f a c t u r e r s m In d o n e s i a T h e c o m p a n y p r o d u c e s d o m e s t i c b r an d an d i n t er n at io n al b r an d s of white cigarettes. The p r o d u c t s t h at Ro t h m a n s o f Pa l l 'M a l l In d o n e s i a t r a d u c e s a r e D u n h i l l a n d M a r s Br a n d f or t h e In t e r n a t i o n a l m a r k e t a n d K a n s a s , W h i t e H o r s e a n d Gl u e Ri b b o n f or '.he d o m e s t i c
n 'H 'V e t T h e s e b r a n d s a r e a v a i l a b :e in d if f er en t s i z e s p a c k a g e ?, an d m er .t h o l v e r s i o n s
T Ve n e a d o f f i c e of Ro t h m a n s o f Pa l l M all In d o n e s i a is si t u a t ed in Ja k a r t a . T h e p r o d u ct io n j n.n b t o r ag e f or r a w m a t e r i a l s a n d f in i s h e d g o o d s i n v en t o r y ar e m a i n l i n e d in t h e f act o r y
fi Wdiang
M c t e k c i g a r e t t e s c e r t a i n b 0 % t o b a c c o a n d & 3 °C k r M e k i h ^ f i l : c r o f t h e c i g a r e n e 'f . < ■* '■# « t : .n a glccose layer
Vo l. 12, No . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t in g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un iver sit \
How Fast Tobacco Can Be:
Tim IvgKiiiciit pr'DCCSS Of Xpfhrnnn*. nf P a HM b IS ZnritTDiflS'd
Appendix 2: Kind o f organization according to HoijnsdijkF
T o g et a g o od im p r essio n o f Ro t h m an s an d to k n o w in w h at k in d o f d ir ect io n s t h e chancie- ac> i:ity t an g et s ar e going to be Ro t h m an s w a s ch ar act er i z ed acco r d in g t o
H eij n sd ij k -
Qu anti ties
Organization As set s of Ro t h m an 5: If w e t ak e a look at t h e f ix ed as s e t s of Ro t h m an s w e can s e e t h e f o llo w in g t r en d s.
• T h e f ix ed an d cu r r en t as s e t s ar e r esp ect ively d ivid ed int o 47% / 5 3 %. s e e A p p en d ix
T h e p ack ag in g an d st ick - m ak in g m ach in es ar e c a s e sen sit i ve. T h e o t h er m ach in es can b e u sed f or all k in d s o f t o b acco .
• T h e d iv isron liab ilit ies t equ it y i3 1 4 % / 8 6 %. s e e also A p p en d ix ^ O.
Be c a u s e o f t h e hig h level of eq u it y Rothrr> ans c an in vest an d c h an g e r at h er f lex ib le T h e t ech n ical lay out o f t h e f act o r y al lo w s, ap ar t f rom p ack ag in g an d st ick - m ak ing , p r o d uct io n o f d if f er en t k in d s o f t o b acco .
OmanizaXianal culture
• T h e o r g an iz at i o n is h ier ar ch ies, s e a t h e Ro t h m an s o r g an iz at io n ch ar t on p ag e 9. »
f h e t ask , r esp o n sib ilit ies «^nd al lo w an ces ar e s t n d l y d ivid ed h ier ar ch ical ly «
T h er e ar e no c ar e er o p p o r t u n t ies for t n c lo w er lev els •
T h e a v e r a g e ag e of a p r od uct io n w o r k er is 41 •
T h e co r e- p h ilo so p h y of Ro t h m a r s is to m ak e of q u alit y o f cig ar et t es. TTiis p h il o so p h y m ig h t n ot t o b e feH wit hin t h e f act or y.
« T h er e ar e b r o ad p lan n in g and cont rolling sy st em Po li ce o f f icer s ar e f o u n d to co n t r o l t h e f act o r y.
Fr o m t h e ab o v e w e c a r co n cl u d e t h at t he cult u r e o f Ro t h m an s is f o r m al, st if f an d st ro ng . Ch a n g e s in t h e can '.p an y w I h- ?ve d iff icu lt ies to g ain f oo t hold . Ch an g e s h ave to be
■ nt roduced in a s r c n g . y h ier ar ch ical m an n er
8 0 0 e m p l o y e e s a^ e in vo lved in Ro t h m an s. 3 6 3 o f t h em at t h e f act o r y in M alan g . 4D in Ja k a r t a an d t h e r est so r ead all e v e r In d o n esia f o r k i n g at d ep o t s o f Ro t h m an s. Ir gr k - <1 r iver s e t c )
Persons
T h e r e is a g r eat d i f f er en ce b et w een t h e m an ag em en t an d t h e o t h er em p lo y ee s . T h e top- m an ag er s a r e m ain ly Eu r o p e an an d A u st r ali an p eo p le (sit u at ed in Jak ar t a), t h e m id d le m an ag er s ar e In d o n esian p eo p le g r ad u at in g f rom o v e r s e a s u n iver sit y an d t h e o p er at i o n level ar e lov/ ly- f iducat ed In d o n esian s.
• All t h e p r o b lem s ar e h rst ly d i scu ssed w it h t h e first We st e r n p er so n in t h e h ier ar c h ic al line, n o t d ep en d i n g or. t h e f u n ct ion of t h e p er so n In d o n esian s h a v e d if f icu lt ies w it h
t h is p o licy.
V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un iv er si t y
45 The International Journal of Accounting and Business Society
1 nwe;?
r*%Vwr«sm it fvarf i7x>firii»w?
T h e p eo p le r eal'y w an t to co r p o r at e w<th e ac h ot her . •
The- p o w er of t h e o r g an iz at io n lies o n t h e top m an ag em en t . T h er e ar e no in t er n al co ali t i o n s w r .Nr i t h e f act o r y
Environment
To d c sc n b e t h e en vir o n m en t of Ro t h m an s. so m e d ivisio n s h a v e to b e m ad a. T h e 'o llo w in g d ivi sio n s ar e acco r d in g to Hej j n sd ij k 'sr co n cer n in g wit h o r g an iz at i o n d iag r am ;
M arket
• T r an sp ar en t , an eq u al am o u n t of co m p et it o r s w it hou t n ew p l ay er s A l w a y s t h e sa m e b r an da. t he cu st o m er s- b eh avi o r d o esn 't ch an g e •
St at ic. Pr o b ab l y t h er e will b e no n ew co m p et it o r s in the- cig ar et t es- m a.^ et A l so to
b ring a n e w p r od uct on t h e m ar k et is not ex p ect ed . Th e In d o n esian c o n su m er h as a co n st an t sm o k e- f cvh avo r
cl t h e t a m e b rand. T h e p r ice an d t he avai lab il it y ar e t h e m ost im p o r t an t m ar k et in g - inst r u m en t s •
T h e m ar k et is h ig h ly co m p et it ive btr, t r an sp ar en t •
T h e sm o k er is lov^ l to his brand »
T h er e ar e no ex t er n al coalit ion s «
T i e co m p et it io n is f air an d o p en
Suppliers
• Ro t h m an s h a s f ix ed su p p li er s of r aw m at er ials. T h e s e su p p lier s d ep en d o n t h e q u alit y of t h e t o b act o - h ar v est an d h av e to b e ar r an g ed e v e r y y e a ' d if f eren t ly
• Ro t h m a n s In t er n at i o n al for t h e m t am at io n al t o b acco co o r d in at es t h e p u r ch asin g . T h e d o m est ic t o b acco is p u r ch ased b y a i In d o n esian b r ok e'• (p o licy of t he In d o n esian g i j 'j er n T ien t }
G overnm ent
» T h e g o ver n m en t m ak es ever yt h r n g co m p licat ed . Po l ic y an d r u les ar e not al w ay s co m p let el y clear
• C a r b e d y n am i c d ep en d s on p ay m en t {b r ib es} •
Ro t h m an s h as to f o llo w t he r u les o f t h e g o ver n m en t , o t h er w ise a tot o f p r o b lem s an d b iy san ct io n s will b e f r eed.
The va ria b le s He- jiisdiik,. h as t h r ee su b ch ap t er s of h o w t o d eal wit h t his k ind of in f o r m at ion
St r a t e g i c v a r i a b l e s H o w d o es Ro t h m a n s deals, wit h t he d escr i b ed su r r o u n d in g ’?
Ro t h m an s o n ly p r o d u ces f o r t h o In d o n esian t ax - m ark et s. {Tax - f r ee sel ler s a r e su p p li ed b y Ro t h m a n s Si n g ap o r e). Ro t h m an s eef ls 5 b r and s: Du n h ill in hig h level c l as s f or golt- o layer s an d Ch i n e s e . K a n s a s in m id d le class for f act o r y- w o rk er s, Bl u e Rib b o n an d Wh i t e H o r se as b o t t om c las s, esp eci all y c h eap an d M ar s as t h e c h e ap e s t al t er n at i ve to sm o k e
T> ie m ost im p o r t an t s a l e s st r at eg ies ar e t h e p r ices o f t ha cig ar et t es. T h i s is for t h e w h o le In d o n esian cig ar et t es m ar k et t h e sam e. T h e seco n d point is t h e availab ilit y o ‘ t he
p r o d u ct s Bcc au .s e o f t h e siz e of In d o n esia, alm o st t he sam e s v e a s w h o le E'j r o p e ; ‘ he- re h a v e to b o d iff icult lo g ist ical st r at eg i es t o co m p et e t h e w h o le co u nt r y. T h at is w h y
Vo l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t in g and M an ag em en t Resear ch Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
How Fast Tobacco Can Be:
_____________ ___________________________ T)> l kwtefctil fiiucvsx <>i K ftr.'m w rtf >-*aiY Matt {tx}(W/°$i#
Ro d m a n s d o a s n l d eli ver t o all islan d s, {e q u al t o h er co m p et i t o r s) T h e co m p et it io n b e t w ee n t h e cig ar et t es- co m p an ies is fair an d o p en . Th e m o st im p o r t an t t h ing is t o d eal
w it h t h e b est m ar k et in g - m ix in st r u m en t s. D e s i g n v a r Ja b l & s
* T h e y h av e a st rict f un ct ion - d escr ip t ion. Ever y b o d y h as h is o w n jo b an d t ask s *
T h e o r g an i z at i o n h as a f u n ct ion al st ru ct u r e. *
Ro t h m a n s is st ro n g ly h o r iz o n t ally cen t raliz ed . »
T h er e a r c n o m an y t ask s d eleg at io n St e e r v a r i a b l e s
* T h e r elat i o n s in Ro t h m an s ar e m o st of t h em f o r m al and ar e alm o st lik e in t h e o o lo n ist 'p er io d . In p / incioal t h ey t ry t o st an d ar d iz e t h e j o b s an d t ask s, b u t t h e cr eat iv e so u l of t h e In d o n esian s h ave m ost of t h e t im e m o r e su ccessf u l.
* T h e r e ar e h ier ar c h ies an d h ig h - h and ed p ower- ship . *
T h e r e ar e f e w in t er n al ed u cat io n p r o g r am s. *
T h e p lan n in g an d co n t ro lling sy st em s are st ro n g ly h o r iz o n t ally cen t r aliz ed an d f o r m al. *
Ev e r y d e l e g a t e d t as k is f r o m t h e t o p t o t h e b o t t o m . M a n a g e m e n t f ilt e r
T h e r e is o n ly o n e o o ssib ’ lity in t h e ^ c t o r y of M alan g to ad ap t to t h e c h a n g e s in t h e su r r o u n d in g an d evei y t h m g t hat ’fi d eleg at ed . In Ja k a r t a t h ey h a v e al so p r o b lem s wit h t his m at t er b e c a u s e t h ey h a v e to f o llow th e lin es an d r eg u lat io n s of Ro t h m an s In t er n at io n al.
Su m m ar y.
* T h e st r at eg ic v ar i ab l e s ar e p oint ed out in tt>e m ar k et to co n vi n c e t h e q u alit y of t h e p r o d u ct .
* T h e d esig n v a r i ab le s ar e cen t r aliz ed an d t h e f act o r y is ar r an g ed f u n ct io n ally *
T h e st eer v ar i ab le s ar e f o r m ally an d st an d ar d iz ed , w h ich ar e d el e g at e d f r om t h e t op of t h e m an ag em er .t .
* T h e en vir o n m en t is st ab l e an d t r an sp ar en t *
T h e o r g an iz at io n is built t op - d own *
T h e in d ivid u als ar e lo w ly ed u cat ed , not c o n cer n ed t h e co m p an y tand doc/ lc. *
Be c a u s e o f h ier ar ch ical d if f icu lt ies (M alan g - Ja k a r t a - A u st r ali a) t h e m an ag em en t fit t er is t hick .
So w e can co n cl u d e t h at Ro t h m an s acco r d in g to Heij n sd ij k f is m os t likely a b u r eau cr at i c o r g an iz at io n
V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
47 The International Journal of Accounting and Business Society
__________________ ___________________ _ _______ The tog&ttcal )> t\ icvss at Rotbmaox Pv!> Mart fncku'Ptio
Appendix 3: The m o c te / o f *Werken met Logistiek'\ according io V fs s e r/ V. G oorK
Th is m o d el c o v er s t h e 7 m ajo r p ar t s of b u sin ess logistrcs:
Production, planning and controlling
Purchasing
T h e m o st im po/ t anC r aw m at er ial s (t o b acco ) ar e m aij ily p u r c h ased b y Ro t h m a n s In t er n at io n al. Th e p u r ch asin g of p ap er , glue, filt er et c is ar r an g ed b y e m p lo y ees of t h e
p u r ch asin g d ep ar t m en t in Malan g .
Inventory m anagem en t
T h e ar e a lot of in ven t o r i es in t h y p r od uct ion p r o cess. T h e level an d d u r at io n of t h e in ven t o ry ar e b as ed c n t h e q u alit y of t h e p rod uct . M easu r in g t h e q u alit y o f t h e t o b a c c o is o n Jy f o r so ec i al i s t s not for t his in vest ig at ion . Th is q u af it y m easu r em en t is esp eci all y
n t er cst in g for t h e long t im e st o r ag e. Th e t o b acco h as ;o b e st or ed t h er o for at least h alf a y e ar Thif> is an m cn ed ible bfcj in vest m en t
M aterials handling
T h e in t er n al t r an sp o r t at io n is m ain iy t r uck - d nvm g f rom an d t o t h e lon g t im e st o r ag e d ep o t s in t h e r est of t h e f act o r y ar e t h e d ep ar t m en t s c lo s e to e3 cJi o t h er T h a t m ean s t h at t h e o ut p u t of o r e
d ir ect ly t h e in ven t o r y o f t h e n e r i st ep . Fr o m t h e i w e n t o r y t o t h e nex t st ep is m ain ly h u m an en er g y
inventory controf finished goods
t > ip in ven t o r y o f f in'&hed g o o d s rs also a cr i(j cal part o f (t ie in vest ig at io n . T h e cig ar et t es h av e to b e st o r ed in t his h a'I for at laa&t 7 d ays, o t h er w ise t h e p r o d u ct s d o n o t h a v e g o o d q u alit y
Depots and inventory
li h e d ep o t s an d in ven t o r y o u t sid e t he f act o r y of M ala n g is o r g an iz ed b y t h e m an ag em en t in Jak ar t a.
Transportation decisions
The d el iv er ie s to t h e d ep o t s an d d ist r ib u t o r s ar e o r g an iz ed b y t h e m an ag e m e n t in
Jakarta.
V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f or In d o n esian A cco u n t i n g an d M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
48 How Fast Tobacco Can Be:
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Appendix 4: Material flow
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The International Journal of Accounting and Business Society
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Fi l t e r p a p e r g l u e , i n k
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Fi n i s h e d g c o d i n v e r t o r y
V o l . 12, N o . 1 Ju l y 2 0 0 4 © Cen t r e f o r In d o n esi an A c c o u n t i n g an d M an ag em e n t Re se ar ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a U n i v e r s i t y
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V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
The International Journal of Accounting and Business Society A p p e n d ix e s
I he lo g is tic a l p ro c e s s a t R o th m a n s o f P a ll M a lt In d o n e s ia
Packaging Machine Sslesvolume iHumen {Nature
0 Starting/stop Jtng 0 Remarks Klngsi;e HP
81% 11 8VJ
jCaptut
Efficiency surplus
Smitl atop
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Malfunction of process
0 .1 S u p e « - t 'i C ! H P
0 0.2 7 3 2 7 r n * c h ir > e s 0 1 0 0 1 0 .5 i machine 10 6 N o n fin**'
SP 16% 215%I Svjpe'Jize ST 2.5%
0 2*Vt j
SfiCKS 1 .1 2 4 SOCKS
Total 100% j
0.1 Average 40 11 7 % ! 1.811 I 22HV. 1.3 5 l'C k » 1 4 0 2
N a t u r e (m a t e r i a l ) R e s o u r c e * CepitJl {machine) Resource
n t u m t d by the produciton o o c*
d t > v ^ e p ro d u cti o n p r o c e ss
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Average (without storage) 0 NyfT***- 0« 14TMI9
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Tkt>* k>«i d u e lo w i t n g T im e tc* i to m fcjco d e d u c t i o n s p e e d
Starting/stopping
p r v c v u (In th o u sa n d s)
Vo l . 12. No . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
How Fast Tobacco Can Be:
A p p en d ixes The logistical process a t Ro thm an s o f P a ll M a ll Indonesia
A p p e n d ix 9: A c c u ra c y o f th e p la n n in g
Average demand and standard deviation: 0 9 - Fe b
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Differences greater tan 100 % are rated also 0
make something not on sheduie
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scneduie something and not produced
V o l . 12, No . 1 Ju l y 2 0 0 4 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a U n i v e r si t y
The International Journal of Accounting and Business Society
T h e logistical process a t Ro thm an s o f P a li M a li Indonesia Appendixes
A p p e n d ix 10: A s s e ts o f R o th m a n s Fixed vs current assets
Liability vs equity
D e s c rip tio n
F ixed a s s ets
C u rre n t a s s ets
T otal
D e s c rip tio n
L ia b ilitie s
E q uity
Trade receivables
A f f i liat es/ p ar en t c o m p an y
Re c e i v a b l e f r om af f iliat es
Other payables
Other receivebles
Accrued expenses
Pr e p a y m e n t s
104296244000 Bu i l d i n g s
Sh a r e s
1951987794 M a c h i n e r y & Eq u ip m en t
Motor vehicles
V o l . 12, N o . 1 Ju l y 2 0 0 4 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a U n i v e r si t y
How Fast Tobacco Can Be:
The journal o( Indonesia today
Cigarette prices set to rise again
JA K A R TA (JP): A n a n - - - - - - - - - - - - - - - - - - - - 1 V irginia S i m n ^ it a fte r I rea d B en d u n gan H ilir in C en tr al T h e In d o n esia n W om en rea ch in g .or h is u su a l b ran d o f
th e n e w s in a new spap er," sa id Jaka rta. E a c h ca rto n c o n ta in s A g a in st T ob acco (WTTT) sa w
th e de c re e is e x p e cted to m di- n a r a n n h e sita ted
c ig arettes at a k io sk on J I M
In tan, an em p lo y ee at a pr iv ate 10 p a c k e ts o f c ig arettes.
T h a ts L . . . . . . . . . . . . . . . . . . . . . . . . 1 b an k . “1 th in k I sh ou ld b u y S o m e p e o p le, u su a lly th o se r ec tlv h e lp its c a u se to protect unpossiD ie, 1 p a id R p 1,80(1 ye s-
m ore, or 1 w ill h ave to pay c o u - w ith le ss m o n ey to b u m , h a v e w o m e n a n d te e n a g e rs a g a in st lerc a y a m n o w it s R p 2,5 0 0 ,'’ j p c h i n g to c h eap er b ran d s,
b le th e u sual p n ce," sa id I n ta a kick ed th e h a b it a l tog ether, th e “ills" of tob acco.
h { S a id
JW e’r e v e iv h a p p y b e c a u se it H e h a n d ed b a c k th e p a c k e t sa id h e h a d sw itch ed from a f e id e d u n iv e r s ity .
k u n a w a n , a b a n k w ork er, w h o took u p sm o k in g w h e n sh e w h ile oth ers a rt c u ttin g do w n .'
M am an , a f n a t se ller in w ill m a k e m ore w o p le sto p S a m p o ern a A M id a n r M arlb oro to S a m p o em a -
SuT-c'm ng b rand s h a s its o w n B en d u n g a n H ilir m ark et, h a d sm o k in g ,” sa id E n n y S u k a m to
w a lk e d aw ay . ^ b eca u se th e fo r m a b r a n d h a d prob lem s. D avid , a u n iv ersity q u it a s so o n a s h e le a rn ed th a t K s h w a t , W TIT's
d epu ty u g a r e tt f p r ic es alr ead y b eco m e b o th h arder to find , a n d stu d en t, sa id h e h a d be^n h is b r a n d h a d in crease d by R p c h a ir w o m a n
J icreased a m on th a g o , b u t bey o n d h is m ean s. c ou gh in g all n ig h t afte r sw itc h - i .s i o per p a d th is m a t h . W ITT is a ffilia ted w ith th e sm okers w ill b e r ea c h in g ev en
M arlboro can stiD b e W a t in g to a local, ch e a p e r b rand .
T d rath er b u y fo o d for m y U n ite d S ta te s-b a se d In ter
deeper in to th eir p o c k e ts w h e n som e street stalls but at an u nbe-
i l l h ave to lo o k for a n o th er c h ild ren th a n p a y th a t m u ch," n a tio n a l N etw o rk for W om en
a go vern m en t de c re e raisin g liev ab le R p 5,000 for a tw enty- bran d again ," h e sa id .
sa id M am an , w h o u sed to A g a in st T ob acco
retail p n c e s of all b r a n d s of cig - pack in stead of th e usua l R p P n c e s o f lo c a l fcre«k (d o v e - sm o k e tw o p a c k s of M arlb oro
O nce a sm oker h e s e lf. top
a r e t e b y b e tw e e n 60 p ercen t 2,200, sa id G u n a w a n w h o h a s b le n d e d cig arette) b ran d s h a v e L ig h ts a day. m odel Enny k n o w lo o w ell the and '. 20 p ercen t com es in to sm ok ed sin ce junior h $ scho ol a lso soared b efo re th e decree
H e sa id g iv in g it u p w a s n o t od d s of ta d o n g th e hab it. “O ne
easy. “M y m o u th fee ls drv a n d sh ou ld have strong w illp ow er The g o v ern m en t, p ressed for
e ffeci W ed n esd a y an d h a s no in tention to q m t
b e c o m e s e le c tiv e .
P opu lar brand s h a v e a lr ead y
G u d a n g G ar am a n d D ja ru m bitter, b u t I c h e w m in t c a n d ies an d support f r a n o t a to stop
cash in t h t e o f an e co n o m ic d isap p eared fro m s u p e r s e t Su per,
n orm ally
c o stin g to r e n o w th e taste."
sm ok in g A nd on ce you stop nev-
cns'i.'-isr-p unish in g sm o k ers as sh elv e s.T y p ic a lly ,su p e rm a rk et R p l,4 0 0 a p a c k ,n o w s e llf o r u p
t a a r e t t o s e w h o c h e e r t h e e r t n ' it again," sa id E n n v w ho
w ell as d n n k er s b y h ik in g their ch eck ou t cou n ters o n ly h ave to R p 2,0 00, w h ile D jie S a m g o v e rn m e n ts d ecre e.
u sed ’to sm ok e tw o pack s a day
c u ties to b olste r its reven u es, tw o or th ree o f th e le sser S o e , p reviously R p 2 ^ 0 0 a pa c k , “ I c a n s a v e a b o u t R p 1 5 ,d a
S h e q u it se v en ye a rs a go after
G iven th e a d d ic tiv e n a tu re o f po p ular n am es. se lls f o r u p to R p 3,000 a p ack, m on th fro m m y fa m ily b u d g e t sh e disco v ered th a t c ig arettes cig arette few p e o p le are
“I'm sorry, b u t w e a o lo nger ffig h p n c e s are far from g o o d as m y h u sb a n d h a s q u it sm o k -
made
h er sk in drv, h er h air
e x p ected to q u it sm o k in g ju st h a v e
M i," sa id a cash ie r at n e w s for c igarette v end ors,
H ero su perm aricet m P la z a
‘ 1 se ll few er th a n 10 p a c k s b an d is a tailor.
now . I used to se ll fou r c arton s
A n ti-sm o k in g ca m p a ig n ers co m m ercia l for a b o d y lo tio n ,
a d ju sting in d ifferen t w a y s, lik e “1 b o u g h t th ree ca rto n s of a day," said A h m a d , a v end or in also la u d th e m ove. Jobs-Page 2
V o l . 12, N o . 1 Ju l y 2004 Cen t r e f o r In d o n esian A cco u n t i n g and Management Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a U n i v e r s i t y
55 The International Journal of Accounting and Business Society
The House of Dunhill
If Ri ch ard Du n hi ll didn't exist, his com pany would probably invent him. No casting ag cn cy could have selected a man so p erf ect ly t ailored for his role as Chairm an o f the Board. Wit h his aristocrat ic head o f
silver hair, sculpt ured grey beard and urbane manner, he looks like an elder statesman; he epitom izes the qualities which his firm represents, and to which its customers d evout ly aspire, elegance, refinem ent and class.
Mr. Du nhill bears a st riking resem blance to his grandfather Alf red who founded the firm , even to the pipe
he puffs Wh ile w e t alk in his London of fice, the t obacco which he m ix es for him self from 16 ex otic blends perfumes t he st ately room with a sweet yet masculine aroma that suggest after- dinner port taken in the lib rary Such is his air o f understatement that even his solid gold laticed wat chband seems to peer d iscreet ly from inside the im m aculately stitched sleeve o f his classic grey suit.
The man whom st af f called & q u o t ,Mr . Richard &q uot ; has an avuncular t wink le in his eye but wisps o f gentle m ock ey curl about the of fice along wit h the smoke Richard Dunhill's st yle d isplays nothing so blatant as charism a, and his well- bred distance owes m ore to reticence than remoteness. Finesse restrains
him from claim ing any personal credit for the com pany's achievements He rccoils visib ly when confronted wit h personal quest ions and ascribes the firm's success to team effort.
Alt hough Du n h ill becam e a public com pany in 1923, Richard is the t hird generation Du n hill to be its chairm an & q u o t ,lt is desirable for the head o f the com pany to be identified with its products,< fequol; he
says &q u ot ;Th e tradition which m y grandfather started has been maint ained because the f am ily was more conscious o f his standards than other would have been. This gives cont inuit y to the com p any and conf idence to the cust om ers." ;
Each generation has made an outstanding contribution to the com pany. & q u o t ;Wh en m y grandfat her retired he was con vinced the com pany would collapse, but his brother Herbert, a financial wizard, ran it by remote control from Mont e Car lo !& q u o t , Mr . Dunhill chuckles. His Aunt Mar y w h o preceded him as Chairperson was a grandm other f igure who occasionally smoked a pipe. An astute businesswom an who ex panded and diversif ied the com p an y’s operations, she was so d ynam ic that on the day she died, at t he age o f 81, she was out inspecting new m erchandise!.
Richard Dunhill's identity is so t ight ly int erwoven wit h the firm that when asked about his own personal goals, he quips, & q u o t ;Well, they can't promote me any further! As Chairm an I've reached the end o f the
line, but what d rives me now is the challenge o f ensuring that this com pany continues to m ake profits and superbly craft ed products &qu ot ,
No w aged 62, Rich ar d Dun hill delights in having spent his entire w ork ing life in the service o f the same com pany. He has never wanted to do anyt hing else. & q u o t ,Evcr since I was at school, I assumed that i f I behaved m yself I would become a director. That has always been m y am bition " .
But t here was no nepotism at Du n hill after serving in the army, Alf red 's grandson had to learn the business from the bottom.
& q u o t ,lt taught me a great deal about the com pany. Besides, all I knew when I started was how to stick bayonets into people and how lo signal in morse code! I cert ainly wasn't spoilt. I learnt a lot about pipes and lighters wo r k ing in the repair d ivisio n! In the wholesale order department, they gave me a car, which I wouldn't had &q u ot . His desire to see the f am ily involvem ent in the firm cont inue w ill prob ab ly be realized s his son Sim on, 25, is curr ent ly m arketing m anager in the Sm oker's Division o f the com pany
As we t alk, a p ale A p r il sun slants t hrough the windows and illum inates an 18th Cent ur y painting depict ing a wom an sm ok ing a pipe - a self- portrait o f one o f the first w omen smokers, M m c Le Br u n , he ex plains. Beside it hang other paintings o f pipe smokers, part o f his grandfather's collect ion. The f am ily crest that hangs behind his desk, however, is a recent addition
V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
How Fast Tobacco Can Be:
The House of Dunhill
If Ri ch ard Du n hi ll didn't exist, his com pany would probably i nvent him. N o casting agency could have selected a m an so p erf ect ly t ailored for his role as Chairm an o f the Board. Wit h his aristocrat ic head o f
silver hair, sculpt ured grey beard and urbane manner, he looks like an elder statesman; he epitom izes the qualit ies wh ich his firm represents, and to wh ich its customers devout ly aspire: elegance, refinem ent and class.
Mr . Du n h ill bears a st rik ing »esem blancc to his grandfather Alf r ed who founded t he f irm , even to the pipe
he puffs Wh ile w e t alk in his London of fice, the t obacco which he mix es f or h im self from 16 ex ot ic blends perfum es the st at ely room wit h a sweet yet masculine aroma that suggest after- dinner port t aken in the library. Such is his air o f understatement that even his solid gold lat iced wat chband seems to peer d iscreet ly from inside the im m aculately stitchcd sleeve o f his classic grey suit.
Th e m an whom st af f called & q u o t ;M r. Rich ar d &q u ot ; has an avuncular t wink le in his eye but wisps o f gentle m ock ey curl about the of fice along wit h the sm oke . Richard Du nhill's st yle displays nothing so blatant as charism a, and his well- bred distance owes more to reticence than remoteness. Finesse restrains
him from claim ing an y personal credit f or the com pany's achievem ents. He recoils visib ly when confronted with personal quest ions and ascribes the f irm 's success to team effort.
Alt houg h Du n h ill becam e a p ublic com pany in 1923, Rich ar d is the third generation Du n hill to be its chairm an. & q u o t ;lt is desirable for the head o f the com pany to be identified wit h its p rod uct s," ; he says & q u ot ,Th e t radit ion wh ich m y grandfather started has been m aint ained because the f am ily was m ore conscious o f his standards than other would have been. This g ives cont inuit y t o the com p any and conf idence to t he cust om ers." ;
Each generation has m ade an outstanding contribution to the com pany. & q u o t ,Wh en m y grandfat her retired
he was convinced the com p any would collapse, but his brother Herbert, a financial wizard, ran it by remote cont rol from Mon t e Carlo l& q u o t ; Mr . Du nhill chuckles. His Aunt M ar y w h o preceded him as Chairperson was a grandm other f igure who o ccasionally smoked a pipe. An astute businesswom an who ex panded and
d iver sif ied the com p an y's operations, she was so dynam ic t hat on the day she died, at the age o f 81, she was out inspect ing n ew m erchandise!.
Rich ar d Dun hill's ident it y is so t ight ly int erwoven wit h the firm that when asked about his own personal goals, he quips, & q u o t ;Well , they can’t promote me any further! As Chairm an I’ve reached the end o f the line, but what d rives me now is the challenge o f ensuring that this com pany cont inues to m ake profits and superbly craft ed product s." ;
No w aged 62, Rich ar d Du n hill delights in having spent his entire w ork ing lif e in the service o f the same com pany. He has never wanted to do anyt hing else. & q u o t ;Ever since I was at school, 1 assumed t hat i f I behaved m yself I wou ld becom e a director. That has always been m y am bition." ;
Bu t t here was no nepotism at Du n h ill after serving in the arm y, Alf red 's grandson had to team the business from the bottom.
& q u o t ;lt taught m e a great deal about the com pany. Besides, all I k new when 1 started was how to stick bayonets into people and how to signal in morse code! I cert ainly wasn't spoilt. I leam t a lot about pipes and
lighters w or k ing in the repair d ivision ! In the wholesale order department, t hey gave me a car, wh ich I wouldn't h ad .&q uot . His desire to see the f am ily involvem ent in the firm cont inue w ill probably be realized s his son Sim on, 25, is curr ent ly m arketing m anager in the Sm ok er's Divisio n o f the com pany.
As we t alk, a pale Ap r il sun slants t hrough the wind ows and illum inates an 18th Cen t ur y painting depict ing a wom an sm ok ing a pipe - a self- portrait o f one o f the first wom en smokers, M m e Le Br u n, he ex plains. Beside it hang other paintings o f pipe smokers, part o f his grandfather's collect ion. The f am ily crest that hangs behind his desk, however, is a recent addition.
V o l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t i n g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
The International Journal of Accounting and Business Society
& q u o t ;I d esigned it t w o years ag o &q u o t ;, he says and point s to t he m ot to w i t h t he stem o f his pipe. & q u o t ,A ct ivit y, Int eg r it y and Ent husiasm That 's what I b elieve in & q u o t ; Th e em blem s on t he coat- of- arms are a horseshoe den ot ing his grandfat her's original business, t obacco leaves sym b olisin g the origins o f this com p an y, a torch sig n if yin g fire, and a clay pipe.
The D u n h ill em p ir e began in 1907 when Alf r ed Du n hill opened his t obacconist shop on the sam e site in Du k e St reet w h er e the o f f ice and shop stand t oday. Richar d Du n hill believes that his m ost valu ab le t rait is
ad ap t ab ilit y It was his grandfat her's strength too. An ent repreneur and invent or, Alf r ed started w o rk in his f at her’s sadd lery business. Sm ellin g a w h if f o f petrol in the wind s o f change, his f ather turned to p ro d u cing m ot or car accessories such as big m ittens foot warm ers and special hats. Th e D u n h ill talent for inven t ing ingenious gadgets soon m anifest ed it self wit h Alf r ed wind- resist ant p ip e whose t iny
w ind shield stopped the t obacco from b ecom ing an inferno as d rivers tore along the roads in t heir cars. The success o f this inven t ion prom pt ed him to open his own business, sp ecializ ing in sm ok er ’s requisites.
Alf r ed 's first cust om ers were spoilt young fops w it h silver- topped canes and am ber cigaret t e holders w h o revelled in the ind ulgen ce o f h avin g their personal blends m ix ed b y the o wner , recorded in his sp ecial book, and kept in a p r ivat e h um id or D u n h ill’s fam ous cedar- panelled Hu m id or Ro om , f illed wit h the Havan a cig ar s that connoisseurs dream about, is st ill located at the back o f the Du k e St reet shop.
Besid es dem onst rat ing a f lair f or creat ing a m yst ique around a com m onp lace act ivit y, Alf r ed was det erm ined to succeed b> p r ovid ing his custom ers with the best o f ever yt h ing and his p h ilo sop h y that his m erchandise must be usef ul, dependable, beaut if ul and the best o f its kind, has rem ained D u n hill's gu id ing p r incip le to this d ay.
As we sip Ear l Gr ey tea, m y gaze falls on a h igh ly polished cabinet wh ose shelves d isp lay m iniat ure scales, cont ainers o f t ob acco and rows o f pipes Rich ard Du n hill sm iles & q u o t ;Ou r d o- it - yourself t ob acco blending cab in et ,&q u o t , he says. & q u o t ;We h aven ’t made them for years. An ot her unusual item we used to m ak e was
a Leap year Pip e Case w h ich had a dif f er ent pipe for each day o f the year. It cont ained 366 pipes arranged in 12 d rawers, so that i f the o wn er took a vacat ion he could rem ove that m onth s sup p ly o f pipes and take it w ith h im 1 Su nd ay pipes had gold bands wit h a whit e gold em blem . Th ose wer e g im m ick s and alt hough not prof it able, t hey did creat e interest. Tod ay, our product range is m ore st ream lined.
Im ag in at ively designed, superbly craft ed products, som et im es w it h a w h im sical t ouch, h ave alw ays been Du n hill's t radem ark s, but over the decades t heir ingenuit y has been tested by the eccent r ic requests o f some o f t heir illust rious patrons
St alin ordered a pipe with a solid gold m out hpiece; a curious request for t he leader o f the w o r ld ’s work ers. Kin g Far ouk o f Eg yp t want ed sp ecially designed scissors to cut the hairs in his nose. On e Japanese cust om er requested a lacquer cigaret t e case shaped like a sand wich wit h the ham protruding. Most bizarre was a request for a light er covered with hum an skin. In the 1930s, an Indian Mahar aj ah ordered a t rick - opening box m ade o f 18ct gold and swore the m anager to secrecy about the w ay it opened. The f o llo w in g day, the Pr ince o f Wales’ eq uerry arrived at Duk e St reet wit h an urgent Ro yal Com m an d . His Ro yal Hig hness w as consum ed wit h im patient to learn how to open his t ant alizing gift !
1 he list o f D u n h ill's patrons reads lik e a who's who, not just o f En g lish ar ist ocr acy but all the r o yalt y o f Eu ro p e as w ell as the shakers, m overs and entertainers o f the world. Winst o n Ch u r ch ill m ade som e o f his most vit al d ecision s w h ile sm ok ing Du n h ill cigars, as did Joh n F. Ken n ed y. Over the years clien t s b rowsing
in the House o f D u n h ill rubbed shoulders with An n a Pavlo va, Som erset Mau g h am , Ru d olp h Valen t in o , the Marx Br ot h er s and f- rank Sinat ra In 1963 the f irm received the ult im ate stamp o f ap pr oval in the Ro yal Ap point m ent to the Queen
Alf r ed D u n hill's in ven t ive sm ok ing accessories h ave becom e collect ors' items. His m ost sp ect acular success was the & q u o t ;Un iq u e& q u o t ; light er in 1924 For the first tim e sm okers had a r eliab le light er w h ose horizont al f lyw h eel m echanism m ade it spark ever y time, and which they could hold and operate in one hand. Lu x u r y variant s o f the Un iq u e light er f ollowed , one with a built- in wat ch. A sports m od el f or open
cars feat ured a wind scr een around the flam e In 19JO a & q u o t ;Van il yA q u o t ; venion for women incorporat ed a p ow d er p uff and lipst ick . Alw ays ahead o f com pet it ors, D u n hill went on to prod uce giant
Vo l . 12, N o . 1 Ju l y 2004 © Cen t r e f o r In d o n esian A cco u n t in g and M an ag em en t Resear ch
Po st g r ad u at e Pr o g r am , Br a w i j a y a Un i v er si t y
How Fast Tobacco Can Be:
em p ire b u il t on sl aver y in its earl y years, D u n hi l l t oday p lays d own its associat ion w i t h t obacco. & q u o t ;Wc'r e a bit em barrassed about it ,&q uo t ; said M r D u n h ill, t hou g h t f ully p u f f in g on his pipe.
Beh in d t he count er in the D u n h ill showr oom , an assistant weighs out 50 gram s o f r ich At lan t a t ob acco f or a bowler- hat t ed cust om er. Its d elicio u sly intense arom a m ak es m y head sw im . Th e w al l is decorat ed wit h pipes, som e as g lossy as n ew ly opened chestnuts, others k nobb led w it h a shell f inish.
Each has t he d ist in ct ive D u n h ill m ark , a whit e dot. & q u o t ;O u r p ip es go t hrough 90 processes before t hey are read y, and the m ou t hp iece is hand cut , not
m o u ld ed .& q u o t ; Rich ar d D u n h ill ex plains. & q u o t ;Ou r ex pert at t he f act or y reject s 9 8 % o f all the pipes d ur ing som e st age o f t heir product ion because he finds crack s, sp lit s o r holes. It 's t rue that you can b u y a pipe f or 25 pounds w h ile ours cost from 70 pounds t o one hundred and f if t y pounds, but ours are p er f ect .&q u ot ;
D u r in g the last ten years, under Rich ar d Du n h ill's dir ect ion, m en's clot hin g has been int roduced. & q u o t ;lt has req uired a d r am at ic chan ge o f t hin k ing for us to produce t wo n ew collect io n s each year af ter p rod ucing m er chan d ise that n ever d at ed,&q u o t ; he said. Ap ar t from t heir classic blazers and f lann el slack s t his sum m er cust om ers w i l l also be able t o select clot hes from Du n h ill's curr ent Var si t y Co llect io n , wit h its nost algic evo cat ion o f langu id colleg e days.
& q u o t ;O u r biggest change r ecen t ly has been the int roduct ion o f st ron gly colo u r coor d inat ed clot h es,&q uo t ; said M r D u n h ill Th e Var sit y collect io n even Co- ordinat es belt and u m b rellas' Rich ar d D u n h ill is am azed by the success of t heir m enswear d ivision & q u o t ;!t has cer t ain ly been one o f our great est t rium phs, that after o nly 12 years we have becom e the largest supplier o f lux ur y t ies in the w o r l d !& q u o t ;
Th e success o f D u n h ill's ent erprise in Jap an is p rob ab ly unequalled b y an y ot her Br it ish com p an y. D u n h ill has 30 b out iques in Jap an ese depart m ent stores, each one an oasis o f underst at ed ind u lgence. Jap an n o w account s f or one t hird o f all its business.