Castrol Case
MANAGEMENT CASE describes a real-life situation faced, a decision or action taken by an individual manager or by an organization at the strategic, functional or operational levels
Castrol India Limited: Managing in Challenging Times
Manoj Anand
Executive Summary
ifficult times have their own merits. This is as much true for an individual as it is for an organization. These are the times when the entire organization gets an opportunity to display its resilience through its innovative skills and creative abilities. Naveen K Kshatriya, Chief Executive and Managing Director of Castrol India Limited (CIL), echoed similar thoughts while reflecting on his company in October 2002. After the liberalization of the Indian economy in 1991 and the opening up of the oil sector, CIL focused on volume growth and achieved a market share of 20 per cent. In the growth phase, cost efficiency and cost effectiveness of the operational aspects were ignored. In the late 1990s, due to increased competition and acquisition of CIL by British Petroleum, the focus shifted from high growth to efficient supply chain management. This brought about a sea change in the cost and performance management systems at CIL. It required a cultural change — from chasing production volume targets to developing competitiveness through total quality management, business process reengineering, activity-based cost management system, and change in mindset. The focus of performance contract changed from a few financial measures to a broad set of perspectives to achieve the company’s corporate mission. Kshatriya wondered which path the company should traverse that would take it to a sustainable, prosperous future.
D
Adversity has the effect of eliciting talents which in prosperous circumstances would have lain dormant. — Horace (65-68 BC)
INDIAN LUBE INDUSTRY
KEY WORDS Corporate Strategy Liberalization Performance Management Castrol India Indian Lube Industry
The lubricant industry in general
Castrol India Limited: Managing in Challenging Times
Manoj Anand
Executive Summary
ifficult times have their own merits. This is as much true for an individual as it is for an organization. These are the times when the entire organization gets an opportunity to display its resilience through its innovative skills and creative abilities. Naveen K Kshatriya, Chief Executive and Managing Director of Castrol India Limited (CIL), echoed similar thoughts while reflecting on his company in October 2002. After the liberalization of the Indian economy in 1991 and the opening up of the oil sector, CIL focused on volume growth and achieved a market share of 20 per cent. In the growth phase, cost efficiency and cost effectiveness of the operational aspects were ignored. In the late 1990s, due to increased competition and acquisition of CIL by British Petroleum, the focus shifted from high growth to efficient supply chain management. This brought about a sea change in the cost and performance management systems at CIL. It required a cultural change — from chasing production volume targets to developing competitiveness through total quality management, business process reengineering, activity-based cost management system, and change in mindset. The focus of performance contract changed from a few financial measures to a broad set of perspectives to achieve the company’s corporate mission. Kshatriya wondered which path the company should traverse that would take it to a sustainable, prosperous future.
D
Adversity has the effect of eliciting talents which in prosperous circumstances would have lain dormant. — Horace (65-68 BC)
INDIAN LUBE INDUSTRY
KEY WORDS Corporate Strategy Liberalization Performance Management Castrol India Indian Lube Industry
The lubricant industry in general