Organizational Redesign at BPCL THE TASK of Privatization

The assignment focuses on the outcomes of the study of the module-Organizational Behaviour which deals with the importance of the organizational guidelines in any company associated with its success in long haul. I have centered myself to review the situation of BHARAT PETROLEUM COMPANY Small in reference to change of company structure attracting success.

Though the aim of the study is to analyse the company in the context of dynamics of change impacting its very functioning with admiration of organizational issues, the restriction of the analysis is inability to take up all issues considering company behaviour.

In 1952 two different companies Shell Petroleum Company and Burmah Engine oil Company, UK authorized an agreement with the Indian Government to prepare a new refinery in Mumbai and the name of the refinery was Burmah Engine oil Refineries Ltd. In 1957 it started out and worked well in an effective movement, In 1976 Indian Administration changed their insurance plan and nationalized the petroleum industry. Indian Federal government acquired the complete equity in Burmah Olive oil Refineries Ltd and changed from Burmah Engine oil Refineries Ltd to Bharat Refineries Ltd. In 1977 the Indian Federal government again improved its name to Bharat Petroleum Corporation Ltd. (BPCL).

Industry Environment

Indian governments purchased BPCL in 1970 in the work of nationalisation design of Indian government's. In 1991 It was supervised and under the supervision of government till economical reorganizations. Government watched the all the expenditures, raw materials and the finish products purchase and value, manufacture capacity, uses of the raw materials, circulation, and what is the return on investment were watched by the federal government. Three main put together marketing and purifying companies have there been in those days and many small and self-employed companies were providing their product to these businesses. Government improved upon their strategy for work and enlarged the distribution network in every over the country, like set up new retail outlets to reduce the competition with their competitor.

Privatization

As an integral part of the ongoing financial reforms the federal government was actively going after privatization of the public sector companies.

A couple of senior professionals' state "Privatization is hook that may happen. One can't trouble too much about the near future without knowing what is going to happen. It is inevitable and we can't do about it. "

"We don't really know what may happen to BPCL and us. Tomorrow we may not exist as BPCL. We may become a part of Shell or Reliance or some other organization. " The impeding competition as well as the doubt of existence in the present form created anxiety in the organization across all levels. Some considered it to be a chance where as others considered it as a disappointed by the federal government and the business. The business initiated numerous changes to be able to transform itself to handle the near future competition.

Initiation of the Restructuring Process

The initiation for restructuring the organization was by the non-public initiative of the CMD Mr. U Sundararajan. He previously earlier been appointed by the government to study the petroleum industry far away as a preamble for deregulation. He had formed a combination well-designed team for studying the effectiveness of the models followed by different countries. Mr.

Sundararajan and the team researched more than two hundred books and numerous articles on deregulation, essential oil industry and best practices. Mr. Sundararajan became aware the shortcoming of his company to contend with MNCs with deregulation. He started out the reorganization process through discussions with the very best management, the table and the government

The journey which BPCL LTD choose to face your competition and initiatives used terms of organizational Behaviour has been evaluated in this assignment.

For the goal of analyzing the focus was laid down on key areas of organization behavior which are organizational structure, change of team and organizational culture and weather in conditions of Coaches of Organizational Learning that can be correlated to the situation.

Coaches of Organizational Learning

Consultants from Technology Affiliates (a subsidiary of ADL) initially trained several trainer in systems idea and organizational education. A team of around thirty full time coaches and even more than sixty in your free time coaches were trained in convert by these. These mentors conducted two programs particularly 'Visionary Management Planning' (VLP) and 'Foundations of Organisational Learning' (FOL). A lot more than six hundred professionals have been through VLP and more than five thousand management and non-management personnel have been through FOL. VLP program was created to help groups clarify and understand reasons for their unique presence, co-create team dreams, realistically examine current reality and formulate a Strategy to hide the gap. The clubs identify High Leverage Results they may be passionate about and assign responsibilities to a few members with the whole team agreeing to support the procedure. FOL program is designed to produce a common terms of learning in organizations. The mentors were instrumental in making a non-threatening atmosphere for change and also in providing the inputs on systems thinking and learning organization, enabling success of the various task pushes empowered for quick effect changes.

One of the trainer states

"We've applied for trainer education with skeptism. We later understood the value of systems ideas and organizational education. The first program was a brain beginning experience. The inputs on useful silos reflected our organization. Now we live hardcore enthusiasts of systems ideas".

Communication

Communication performed a important role during out the change process. A bulletin was promoted that provided normal updates to the complete company about the visioning exercise, the analysis of current reality, status of the magic pill opportunities and the new framework. In every level the respite through teams possessed a high level of interaction with the worried divisions. The informal route of communication was also looked after by including community from all natural constituencies in the change & break in the action through teams. A high down approach was used to speak the change plan with help from the rest through team members.

One CUSECS member reiterates

"Communication played a fundamental role in CUSECS task. The common changes through the newsletter and informal communication through the participants to their mother or father departments was useful in updating the whole business quickly. We determined enablers in each office, individuals who are thoughts and opinions shapers and we especially embattled them. We convinced them first and then asked those to speak to others about the change"

Top Management Involvement

The CMD was occupied throughout the reorganization process. He communicated his carry to the change activities by personal engagement, and regular appreciation to the change management team and the particular task causes. He played the role of your mentor to the associates. He also interacted with a large range of employees through the visioning, evaluation and completing point levels. Young professionals recount testimonies of his support to the change team, where he provided total freedom to create strategies and safe guarded them from backlashes from well-known constituencies.

Mr. Sundararajan recalls

"In the leading period I talked to a lot of group of people regarding the need for reorganization. The leader has to 'take action' not only 'discuss'. Lip service will not be employed by long. If individual says one will take of attention of the subordinates then one has to when something happens"

Change Opportunities for Quick Results

During the evaluation process, the break through teams discovered many opportunities where small changes were likely to produce most important results. Special process forces for working on the recognized opportunities were created and started out working in comparative. The job forces were given enough training and were in continuous communication with the chance through groups. At one point of your time there have been more than 1000 task makes working over the organization on a large number of opportunities determined in the change plan. Market analysis, brand building, product packaging, operational efficiency of crops, correct amount and quality of products, cash collections, and basic safety are some areas where activity forces worked to create quick results.

Creating a Shared Vision

The visioning exercise was conducted to develop quality and common understanding about the probable of the connection. The visioning work out started out with the panel. The exercise was expanded over the company in a escalation approach flowing from the very best management to the junior management facilitated by inside experts trained particularly for the same.

The center of the eyesight as articulated by the organizational people across the firm is listed below.

Be the BEST Establish first class brands and Make the work area exciting commercial image Improve boundary management Excellent customer care and service Fulfill public responsibilities, to Choose excellent performance and ethical operational efficiency Apply the best technology. Make people a way to obtain improvement Make systems strong and strong.

Below amount elaborates the nine wide-ranging designs in the distributed eyesight of BPCL. The visioning exercise provided an opportunity for articulation of the aspirations of folks. The process helped bring the whole organization out of lethargy, and increased the energy levels and objectives on persons, clubs and the business. Since the eye-sight was iterated throughout the business, there was better buy in for the change.

One of the professionals states

"We were all surprised that the eye-sight was much in unison over the organization. It clearly stated that individuals had great aspirations but never expressed them. This exercise made us realize the options for the future of BPCL".

Change Plan

Based on the inputs from the shared eyesight and current certainty, a workshop was conducted to develop an alteration plan. The change plan came to six amounts with over one thousand and 1000 pages.

The change plan included the

Organizational assessment

Well defined corporate values

Vision articulated in terms of critical business techniques, and

Areas of change to attain the vision

Organizational Evaluation - Current Reality

Based on the initial medical diagnosis by the CUSECS team and the visioning workshop for top management, it was made a decision that an corporation wide evaluation exercise would be conducted together with the shared visioning exercise.

Six 'break through' clubs were created. The groups were in charge of assessing the organizational certainty in terms of Marketing, Lubricants and Refining Support services and management Logistics functions LPG.

The marketing team viewed the customer management functions, product management techniques and execution management procedures.

The refining team compared the potency of the refinery; lube oil handling and LPG crops with the best international players considering the machinery age group and technology employed. Various performance variables like crude acquisition, energy intake, and capital expenses were assessed.

The logistics team also viewed the prevailing logistics infrastructure, economics of supply and circulation, opportunities for cost reduction, supply things vs. utilization centers, impact of fees and work, and comparability with benchmarks and competitors.

The LPG team compared the LPG marketing get back of the international and local rivals. The customer bottom, pricing policies, user interface between your customer and marketing and future strategies were critically assessed.

The lubricants team analyzed the organizational competitive position in comparison to the competition. It also viewed the packaging, rates, branding, trade channels, the existing joint venture preparations, and future programs. The team in charge of support services and management functions evaluated the human being resource routines (for example work culture, HR operations, training and development, and appraisal and compensation), the info systems (for example use of different software packages, integration and use than it), and accounting techniques in conditions of clarity, acceleration and cost.

The respite through groups also assessed the organizational framework in conditions of jobs and tasks, levels and accountability, real human tool development in terms of training, appraisal and payment. Each team interacted with all the stakeholders concerned like the unions, suppliers, marketers, customers, financial institutes, local neighborhoods, government officials, etc. Assessment was completed in a non- intimidating manner, with constant and wealthy communication of the activities carried out by the period of time through clubs.

The assessment exercise created an interior environment for change. The organizational evaluation exercise found the following

Collective dissatisfaction with the position quo

Low customer emphasis and customer orientation

Huge gap between the vision and capacities to accomplish it, and

Many opportunities for quick improvement

Change Team

A change team was developed with twenty-two managers nominated from various functions across levels. The team size grew to thirty as the job progressed. The team members had assorted performance documents, educational skills and experience. The CMD did not believe in offering importance to those with higher diplomas over others. His philosophy was to offer an possibility to average people within an empowered and enabled environment to accomplish great results.

Mr. Sundararajan says

"Initially whenever we developed the change team I asked for nominations from various departments plus they nominated a myriad of people. I did not nominate the best mangers in BPCL because I've observed many times in my profession, if people receive the right environment and opportunities they might rise to it. And my beliefs had not been misplaced. These children did a wonderful job. "

The change task was titled CUSECS for CUSTOMER SUPPORT & Customer Satisfaction. The consultant ADL trained the CUSECS team. Working out included matters like negotiations, interpersonal performance, presentations, systems thinking, and guidelines. The CUSECS team was provided with everything and support necessary to develop skills in identification, change strategy formulation, company design, and implementation. Those who cannot take the huge workload and stress were wanted to leave and become a member of their father or mother departments. The team conducted a short prognosis of the organizational issues with facilitation by consultants and made presentations to the top management.

One of the CUSECS team members state:

"We were primarily frustrated and struggling to understand why ADL needed us to think through everything ourselves, rather than sharing with us what is best. Later, we valued their methodology in enabling us to believe and choose for ourselves what is best for the business. We were trained exhaustively beginning with display skills, negotiation skills to systems pondering and so forth".

Designing the brand new Structure

There was a clear consensus among the change management team, top management team and the consultants that the functional structure would not have the ability to sustain initiatives taken to create the customer centric organization. The apparent solution was to create customer centric tactical sections (SBUs). The change management team with assistance of the consultants considered various options. The redesign process required in regards to a month. The CMD was privately involved in this. To prevent any disturbance from day to day activities he officially took leave and was present as a learning resource person. The change team discussed the various selections in structure with all the stakeholders. There have been apprehensions among older managers regarding the new structure and no consensus surfaced on the new structure. Politicking and vitality plays were detected, with each function seeking to wthhold the existing position in terms of electricity and control. Finally the CMD in person called for a meeting of the efficient mind and other senior managers. Requesting the group to go over, negotiate and come with a concrete solution suitable to everyone, he locked the area and waited outside. Finally a design was approved that was appropriate to all. The final structure had not been the optimum framework as envisioned by the change team but one appropriate to all the associates of the very best management team.

Implementation

The new framework was rolled out in phased manner to ensure effective execution. The new composition was first put in place in the LPG SBU. Based on the knowledge, the new design was applied across the company with necessary improvements. Further, in each one of the proposed SBUs specific regions were recognized and the new structure was carried out to validate the smooth functioning before full implementation.

Organizational Structure

The older composition was functionally planned. There were mainly four functions (refineries, marketing, fund and workers) each headed by an professional director reporting to the (CMD). Other support departments like corporate and business affairs, legal, audit, vigilance, coordination and company secretary were immediately under the CMD.

The Director refinery was in charge of refinery, corporate and business planning, JV refineries and special assignments. Other than corporate and business money and marketing funding EDP was also under the Director funding. In marketing, there were different departments for retail, industry, LPG, lubricants and aviation segments. Corporate communication was also under Director getting together with.

The whole of India was split into four regions and further into 22 divisions. Each region was headed by the Regional Manager who was in charge of all activities within the region and reported to the Director marketing. Each region had a manager in charge of each of local personnel, regional engineering, regional commercial customers, local retail, and local fund. Regional LPG was under local professional customers. The division was the duty of the Divisional Administrator confirming to the Regional Director. He had a manager each for sales, businesses and engineering. Each one of these was responsible for sales, depots and anatomist respectively for all the customer sections.

Across the marketing function, aside from the organization departments (LPG, industrial customer, etc. ) specifically looking after a customer segment, every individual and role is focused on multiple customer segments. For example any strategy dealing with the industrial customers originates from the Corporate Division (Commercial Customer), should go via the Director Marketing, Regional Director, Divisional Administrator to the Sales Official. All are accountable for multiple customer sections like retail, LPG, industrial, etc. and deal with different classes of customers. Hence there is suprisingly low customer recognition in conditions of the unique needs of the several customer segments, with no single individual at the functional level having clarity on any solo customer segment. In addition, the marketing strategy was produced by people who had been far from the client with very low understanding of the customer they were concentrating on. The implementers were in charge of diverse customers with a low understanding of the logic of these strategies meant for every customer portion. Thus the old framework got created a bottleneck between your strategy formulators and implementers in conditions of the local structure, and between your field staff and the corporate offices and refinery.

Activities of your business process are spread out across different functions and levels of hierarchy, engaging a lot of people. There was an extended chain of non-value adding linkages between any two activities focusing on a company / customer. For example, when an industrial customer provides special order of lubes to the sales official, the corporate lubes purchases the bottom oil, plant blends it, S&D packages it and the sales officer sells it. The Sales Officer would converse the order to the Divisional Director, who goes by it to the Regional Manager. Then the order would be routed to the organization Lubes for processing. Everyone involved in the activities of the process participate in different functions and hierarchy levels. This long chain of communication had led to a lack of customer orientation, low knowing of customer needs and goals and slow response.

The New SBU Structure

The new framework was focused on the business processes and the customer.

The new framework at the very top management level is the same. Five SBUs - Retail, Lubes, Industry/Commercial, LPG and Aviation are customer focused SBUs and come under the director (marketing). The 6th SBU, Refinery along with two new departments IT & Source Chain and R&D are under the director (refineries). Each SBU would have its own HR, IS, money, logistics, sales, engineering, etc. The number of layers in the organization was reduced to four from six or seven.

The major change is the introduction of the territories covering an inferior physical area and focusing on specific customer segments. In retail SBU the new framework acquired 669 territories reporting to the four local offices, where as in the earlier structure there have been only 22 divisions which catered to all or any segments. In other SBUs the local office was removed and territories were made to directly are accountable to the SBU minds. Each territory team leader was accountable for sales in the territory only for a particular product. The place structure was made to enable the field personnel to concentrate on specific customer sections. Expert was also delegated down the hierarchy and decision making forced to the lowest possible levels. Decisions before considered at the regional level were used now at the place level. Further authority was delegated to the role rather than the hierarchy level. Administrative office buildings have been transferred to provide locations that consist of 125 terminals for main fuels and 35 LPG bottling ones. In LPG SBU head office there are only nine staff and across the territories even professionals at mature positions have been compelled to get business. The new design designed recalibration of assignments and responsibilities and redeployment of more than two thousand people (around one fifth of total staff strength) over the firm. It created new roles at the front effectively using redundant manpower to increase customer program and discussion.

Since the organization and support functions are actually located within the SBUs the new design included lateral linkage mechanisms (see Appendix C). Governance Councils, Process Councils, and Process forces (to address specific organizational issues) were the mechanisms for integrating the various parts of the business.

Some Salient Top features of New Structure were

Highly empowered work force

Decentralized decision making

De-linking of authority from hierarchical levels

Orientation towards internal and exterior customers

Regular market research and customer surveys

Conscious brand building efforts

Organizational Structure before redesign

Organizational Framework after redesign

Conclusion

Bharat Petroleum realises that, over time, success can only come with a total reorientation and change in approach with the customer as the center point. Today, Bharat Petroleum is restructured into a Corporate and business Centre, Strategic SECTIONS (SBUs) and Shared Services and Entities.

From the last many years Bharat Petroleum remains face many obstacles of the fast changing environment. Bharat petroleum make move forward and changes their products and services in line with the changing environment. In day by day changing in bharat petroleum only 1 factor has remained unchanged this is Bharat Petroleum's employees which are the source of strength and motivation of Bharat Petroleum's in their future enhancements. Bharat Petroleum desires their employees to understand the complexness of the marketplace, customer's requirements, and provide the ground breaking products to matches the customers' requirements.

For Bharat Petroleum, guarantee by its staffs is a critical resource. BPCL think that only a cheerful worker will place his best consequence and a good marriage with the customs, Bharat Petroleum deployed and will plan to put into action several making the organisation a great place to work or worker get best company environment. Hewitt Associates conducted a survey for Business Today newspaper in the January 2001 issue to identify the best employers, and in this survey Bharat Petroleum was one of top employers in India. The main motive of the study was to discover out which companies got really incurred the expressive and intellectual energy of their employees. The companies who were in the top list were Hughes, ICICI, P and G, Asian Paints, Hewlett-Packard, HLL, Infosys, LG and Compaq.

Bharat Petroleum adopts significant value-based HR options for growth of individuals and their organisational skills with a evaluation to supply them with a competitive edge and to realise their private eye-sight in tandem with the commercial eyesight.

Bharat Petroleum has been conferred the National HRD Award - 2000 by Country wide HRD Network for making Fantastic Contribution to HRD.

At the Country wide Petroleum Management Programme (NPMP) on Quality in Creativity and Technology (1999-2000), Bharat Petroleum employees bagged all the three awards in the individual category, along with four certificates of acknowledgement in the team category.

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