The Restructuring of Bharat Petroleum Corporation Limited

Pages: 7 (1823 words) Published: August 24, 2013
Application Exercise
Strategic Management

Bharat Petroleum Corporation Limited (BPCL), where I am employed, is engaged and exploration, refining, distribution and marketing of petroleum product across the country. In downstream product marketing BPCL, has bouquet of products on offer, ranging from Petrol, Diesel, to Aviation Fuel, to Cooking Gas to Auto Lubricants. It is a global major and ranked 225th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.

The Change

Opening up of the Indian economy in the nineties brought with it more competition and challenges to BPCL, kindled by the phased dismantling of the Administered Pricing Mechanism (APM) on petroleum products and emergence of additional capacities in the region in refining and marketing.

Increasing globalisation, new products and services, and innovative marketing resulted in a very market savvy consumer. The production-based success philosophy of marketers was replaced by a customer-oriented philosophy. Bharat Petroleum took cognisance of this situation well in time and took radical steps to keep itself attuned to the changing times, realising that the future belongs to those who listen and adapt to their customers.

Application of 7-S Framwork

To assess the effectiveness of the implementation approach in BPCL in late 90s, I have applied below the 7-S Framework, which is based around seven key elements of any organisation, with the view that in order for it to operate successfully, all the elements in this model must align synergistically together.

The factors are split into two groups: hard or soft. The hard elements are those that can physically be seen when in place, whereas the soft are more intangible and cannot readily be seen.

Hard Elements| Soft Elements|
Strategy| Shared Values|
Structure| Skills|
Systems| Staff|
| Style|

Shared Values

Shared values are the pinnacle of the model and therefore in any organisation. They form the underpinning culture, strategy, effectiveness and performance, linking to every other element in this framework. They link all that is of the organisation: how people behave, the structure, its systems and so on. Getting this balance right means getting the culture right.

In 1996, Bharat Petroleum went through a process of visioning, involving people at all levels, which evolved a shared vision and a set of shared values. Visioning exercise started with the board, facilitated by external consultants. The exercise was extended across the organization in a snowball approach flowing from top management to the junior management, facilitated by the external experts, specifically trained for this purpose.

Thus emerged the core of the vision for BPCL which was owned by every management staff. The core of vision as articulated by the organisational members across the organization is given below –

Be the Best| Make the workplace exciting|
Improve boundary management| Fulfill social responsibilities, be ethical| Apply the best technology| Make systems strong and dynamic| Establish first-class brands and corp. image| Excellent customer care & service| Go for excellent performance and operational efficiency| Make people source of improvement|

The visioning exercise the provided for articulation and aspirations of the people. The process brought the whole organization out of lethargy, increased the energy levels and expectations on individuals, teams and the organizations. Since, the vision was iterated throughout the organization, there was greater buyin for the change.

Strategy

Bharat Petroleum recognised that all strategic initiatives must conform to the overall vision of the Corporation and improve the economic value.

Based on the assessment / visioning exercise carried out across the BPCL, following strategic gaps and opportunities emerged –

1. Collective dissatisfaction with status quo
2. Low customer...
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