Hindustan Petroleum Case Analysis

Hindustan Petroleum Case Analysis

Case Reflection

Hindustan Petroleum Corporation Ltd’s success story presents a perfect case study for leaders not just in the oil industry but also across different sectors. Notably, the company, in various aspects, provides an essential lesson on the efficiency spectrum of multiple elements of leadership, management, change, communication, and human capital management. A careful review of the company reveals vital strategies that, if well-executed, may translate to brilliant results for an organization.

On the communication aspect, it is evident that the company’s two-way communication strategy guarantees immense success for an organization. In principle, the two-way communication methodology encourages communication flow from; the top management executive to the lower segment of the organization and communication from the lowest level of junior employees to the senior management executives. As a result, this ensures that all segments of employees in the management hierarchy are actively engaged and participate in the company’s decision-making process. The element of participatory forms of communication and leadership create a hegemony of ideas and vision. Decisions reflect transparency and a shared vision and mission. More so, to the employees, the level of cultural representation incorporated in the decision-making process helps to ensure that they feel valued and part of the whole decision-making process.

To adapt to the highly competitive nature of the oil sector, after the privatization of the industry in the early 2000s, Hindustan adopted an aggressive restructuring and marketing strategy that mainly depended on existing infrastructure after a year of dominating the market to transform itself into a new outfit. Project ACE (Achievement Continuous Excellence), though complex and highly inclusive of the cultural diversity of the country, sparked a new desire and roadmap for change. The result was magnificent. The company adopted the two-way communication strategy amid other changes that propelled its success in the Indian market.

In the view of our group, the collaborative approach and interactive philosophy of management were inspirational because it developed a sense of ownership among all the employees.; not just for the decision that they made, but also for the vision and mission of the company. However, the intranet-blog system of communication was ineffective because it alienated the customers, who are also an essential part of the organization and the investors. To some, this may have led to a sense of entitlement among employees with retrogressive outcomes therein. In sum, the company’s roadmap and the strategies applied along with account for the great success that the company achieved. More importantly, it is a learning experience for all the group members, as the discussions below will show.

src=”https://peachyessay.com/wp-content/uploads/2020/01/Hindustan-Petroleum-Case-Analysis.jpg” alt=”Hindustan Petroleum Case Analysis” width=”587″ height=”498″ /> Hindustan Petroleum Case Analysis

Analysis of Underlying Issues/Challenges

HPLCs growth patterns from a small entity in 1952, into nationalization in the 1970s and then the public-private partnership in the late 20th century and the early 21st century posed tremendous issues to the company. At some point, it threatened to affect the company’s success and the organizational cultural fabrics that held together with its shared vision and mission to become a leading petroleum company within and outside. While also other issues affected the company, the most notable ones, as identified through a careful review of the case study, including the transition from being a fully public entity to one privately owned and managed. More so, after the development, the new owners proposed changes that substantially threatened to split the company. Be though, as it may, the transformation project- Project ACE, took a prolonged period to implement further threatening to drive the company further into a state of disintegration.

For this research, the paper will explore these three aspects of change that faced the company. Notable to note, is that while these may have at the time of their occurrence threatened the very existence of the company and management systems, in later years, it became apparent they played a prominent role in the way that the organization evolved into becoming one of the largest Fortune 500 companies in the world (Ahmad, Alam, & Yameen, 2019). To this end, the evolution of the company during these crucial stages in the company’s growth and success also became their turning point. It is a paradox and a slightly strange observation that the biggest challenges that the company faced precipitated into some of the most potent drivers of its structural changes that led to its success and later the very reason that pioneered its transformation from a middle-size corporation in the early 1990s into a multinational in the 21st century.

  1. The transformation from Public to Private Ownership 

Change in an imminent part of growth and development. However, according to different theories of organizational change, it is one of the most fundamental issues that threaten an organization’s success and growth. Cutcher (2019) assets that while some of the scholars attest to the potential positive impact for growth, the majority assert that there is always an element of resistance and divergent opinion on the best strategies to achieve the desired change within an organization. Hindustan Petroleum Corporation Ltd, in the 1990s during the strong wave of socio-cultural change in the 1990s became one of the organizations affected by the de-nationalization sentiments sweeping across Asia and other parts of the region as globalization started taking shape. Most of the citizens believed, as a way of making the Indian competitive to the changes going on around the world, it was necessary for the privatization of different entities that were wholly owned by the government as part of the larger revolution change (Krejčík, 2016). Of importance to note is that the growth and development of the industry was not majorly affected as at the time of this new wave of change, the sate enjoyed full monopoly in the oil business in India. Therefore, coupled with the company’s structural efficiency and effective management system, its performance per se, was quite well.

Some of the researchers indicated that the debates of the nationalization and those against the move greatly affected the performance of the entity. In 1995, when the government sold off a partial stake of the company to private investors, it triggered widespread panic among the HPLC workers because it meant a new paradigm shift in terms of operations and management. However, it was not until the early 21st century when the government sold off its majority shareholder stake that the company’s significant changes in the management spectrum began. The successful implementation of the process instigated this change, and HPLC became one of the biggest challenges for the organization. Initially, the company leadership philosophy mainly adopted a transactional leadership style that primarily correlated with the government’s approach to handling the affairs of a specific region. HPLC’s organizational culture borrowed a great deal on a hierarchical system of management.

According to Baliga & Santalainen, (2006), significant point of conflict between the  public system of management and organizational culture was that while the older system favored a more bureaucratic approach, the privatized system of management encouraged that the leaders to adopt a more visionary approach to leadership. From a socio-cultural point of view, the majority of the employee deemed the old system as more defined, and communication was effective and transparent. The new proposed system changed did not take into account different aspects of the organizational principles as this was new and, to them, a different approach to doing things. By the day, things became more apparent that the implementation of these changes towards a new transformational type of leadership and management would be a hard sell for the existing crop of leaders (Baliga & Santalainen, 2006). However, to reach a compromise, the new private group ensured that the incorporation of the view of every was integral to ensure the successful transformation of the entity.

  1. Implementation of HPLCs transformational project ACE (Achievement Continuous Excellence)

As aforementioned, it became evident that the input of all stakeholders was essential to ensure that the new framework captured the interest of the involved stakeholders. As such, it was important for the project to encourage the participation of all the stakeholders. However, being a former national company and large, it had so many stakeholders, and the collective views, in their divergent form could pose a massive challenge for the organization. The personnel did not in any way participate in the previous decision-making processes as the decisions were mostly made through a centralized system with those at the highest level of management charged with the task of making key decisions.

The new system was very confusing, and to some extent, did pose a considerable challenge to the company under a new vision of seeing things. As a result, it becomes time-consuming, expensive, and uncommonly involving for the parties involved. More so, the divergent views of the entity and the best ways to harmonize it became essentially at a time that slowed down the success of the organization. The new vision informed by a common desire for all the involved parties to make such decisions that not only advanced the growth of the entity but also propelled it to one of the success stories of the 21st century. However, the time factor, based on the fact that it was essential to harmonize all the views of involved parties at some point, become an issue and almost threatened to split the company into various factions. The strict company laws and rigid regulatory framework of India made almost made such an eventuality impossible, and therefore the companies devised ways to increase the efficiency of the project.

            III. Extended Period of Implementation of the Project 

The total time taken to implement the project successfully became a significant hurdle for the company. It was almost impossible for the organization to meet the deadline. However, the communication strategies that the company intended to put in place as a way of ensuring that the company was highly efficient and successful. For almost seven years, the company struggled to provide all the inputs and views of the employee, and other relevant stakeholders were incorporated into the whole plan. According to Amado & Amato (2018), organizational change, during the implementation of a project, all other factors considered constant, required that the active participation of various stakeholders was essential to ensure that during the implementation phase, resistance remains acutely minimal. More so, ensure all involved stakeholder felt as being part of the new change

Theoretical Perspectives Towards Understanding These Issues

For the majority of the issues mentioned above, the shifts that these changes brought about only covered one aspect of the organization. In essence, although the significant issues that affected the organization were the new changes that were being proposed to shift the ownership status from a public-owned system to one that was privatized, it became evident it only represented a small part of the broader issues. In essence, most of the problems that affected Hindustan Petroleum Corporation Ltd were mainly on internal specific issues that the privatization of these entities meant for the employees of the company. First, there was a shift from the initial product-based approach to one that was customer-centered. The privatized model of management and leadership mainly focus on the needs of the customer rather than the products thereby building high performance-oriented culture (Warrick, Milliman, & Ferguson, 2016). Precisely, the customer’s needs, preference, and taste on oil products become of primary importance while the product was secondary. That is, the nature and the specifications of the product match the needs of the customer. Customer-centered approaches played became one of the major factors that propelled the success of the company.

Also, leadership styles became one of the central issues that HPLC contended with during the transition process from the public to private-based management. More so, during the implementation and collection of the views and opinions of employees, the new systems of communication and leaders at all levels needed to uphold this philosophical point of view. Transformational leadership styles are a very effective way of ensuring that the leadership of all employees of an organization reflects a shared vision (Sadler-Smith & Burke-Smalley, 2015). The new forms of leadership were instrumental in redefining HPLCs leadership mantra. However, the new paradigm of leadership conflicted at various points with the pre-existing philosophy. However, after the collection of the views of the employee, it became evident that it was necessary to ensure that a balance of sorts was achieved and each of the stakeholder’s views was represented. As a result, HPLC adopted a new strategic approach that integrated both transactional and transformational styles of leadership. They presented a form of conflict within the group. The shift from a purely transactional system to one that incorporated both transformational and transactional, becomes an extreme point of conflict, especially at junior level leadership (Brand, Croonen, & Welsh, 2016). Fundamentally, while the former represented strict adherence to rules and regulations, the latter allowed for more innovation of thought and delegation of duties towards finding solutions to the day to day problems.

The other conceptual issues that emerged as a result of the privatization of HPCL that, in their different ways, led to new transformational systems of communication included the various means of communication. Communication, as one of the fundamental factors of the growth of an organization, is a huge factor in the new paradigm of change (Alvesson & Blom, 2019). The two-way communication strategy greatly depended on the way that an individual perceived and reacted to different aspects of communication. At the center of this change was technology because it enhances one’s ability to communicate in real-time with segments of communication.

Also, leaders and the supervisory staff was required to actively engage with the employee in a free and transparent manner. Initially, employees and senior management staff maintained a safe distance to ensure exclusivity and mutually respectful relationship. However, the new paradigm ensured that all forms of communication were both formal and non-formal. More so, the two-way communication methodology was an essential step towards ensuring that sentiments of trust and mutual respect became a defining factor of the new 21st century HPLC that grew to becomes the largest oil company in the Indian subcontinent.

Significance of the HPLCs Conceptual Ideas Towards Understanding Organizational Behavior

The conceptual ideas of HPLC’s new communication strategy provide valuable lessons towards understanding human behavior in an organizational setup. Most importantly, create an understanding of the importance of the actual ways that an organization may react to the different aspects of HPLCs forms of communication. To begin with, the one on one interaction between employees at varying levels of management effectively enhances internal communication. Taking a transformational ideological approach, it also helps to boost the morale of employee because it eliminates all the barriers of communication (Taddei-Allen, 2018). The vision workshops are a significant lesson because of the role that played towards rallying the employees towards a common goal.

Notwithstanding the positive forms of growth, it becomes evident for the leaders at different positions that it is virtually impossible to realize transformational change without developing and embracing a vision. Brand, Croonen, & Welsh (2016), avows that it sets every employee on a clear path of progress and change, without compromising any aspect of growth and development from the organization. Be that as it may, HPLC’s case study creates a new dimension the path of an organization, though may face several challenges along the way, with a clear vision and goal, it becomes almost impossible to compromise on their way of doing things and achieving the desired goals and objectives.

Leadership Lessons and Way Forward

HPLC’s case study, from a scholarly and business point of view, offers great lessons on the potential of different aspects of the organization to build and develop themselves through rapid and carefully thought out strategies. Notably, it provides excellent leadership lessons on different leadership styles that an organization may use as a way of fostering growth and development within the organization. In the view of the group, HPLC’s story is not only an inspiration to the entire group but also is one that sets an excellent example for other companies to follow across the globe. The roadmap and different key points that helped to make the whole idea a success strongly borrow from the specific strategies used to ingrain the vision of HPLC, not in its then-current state but where it would be in the days to come.

As the discussions above have shown, the two-way communication strategies used by the organization became one of the significant points of strength for the organization. In essence, the leadership after the 2003 ACE transformation began, the company adopted communication strategies that transformed the whole management approaches used by the company at the time. However, in as much as change is an integral part of growth and development, it is also very critical to ensure that its implementation is gradual and does not interfere with the normal of established systems of management especially those that relate to technology (Yeo & Marquardt, 2015).The desire to pursue and realize change should be an essential aspect in the day to day operations of an organization. Essentially, it is an essential way of embracing the vision and mission of an organization.

In 1995, after the initial sale of a partial stake of the government’s holding in the company, the journey towards a new transformed and re-designed HPLC began, first, as an essential step towards the future and then later as part of its own unique identity. The element of persistent is an essential factor in the pursuit of change. According to Brand, Croonen, & Welsh (2016), the most potent aspect of change is the desire that drives the passion for achieving that change. In retrospect, it is one of the ways that significantly affect the way that people connect to that idea of change and make it one worth pursuing. It is, therefore, relatively integral that the company embraced this new ideology as it prepared to make the changes it so much. However, it is crucial that the persistence, as an individual concept becomes weak if active engagement with employees does not become part and parcel of the whole framework for change.

HPLC, after the launch of its vision, understood the value of employee engagement, and therefore, as a result of this active engagement, it was able to rally the support of the employees once it began to implement these changes. Alvesson & Blom (2019) notes that the best ways to ensure that the changes in a particular organization become a reality are dependent on the level of employee engagement during the process. Notably, if the employees own and agree to support the vision strategy paper fully, then it becomes one of the best strategies that ensure the successful implementation of the vision (Alvesson & Blom, 2019). Many theorists argue that the dominant role of employee engagement programs because it is also an essential ingredient of developing trust and transparency between employees. In essence, employee engagement holds the key to the success of a particular strategy (Yeo, Gold, & Marquardt, 2015). Thus, as the evidence shows in the case of Hindustan Petroleum Corporation Ltd., incorporating the employees, as one of the most critical stakeholders on the organizational framework, guarantee the successful implementation of a new strategic plan.

  • Lessons for Organization in Change Management 

First, after a careful analysis of the case study, organizations can pick several lessons. First, the complexity and turbulence of a situation do not determine the actual outcome. On the contrary, if effective communication strategies are put in place, it may lead to several change results that may transform the organization’s performance matrix. Despite the challenges of extended implementation of project ACE, the organization did not bow to these pressures and instead turned it into an opportunity by establishing an effective communication channel within the organization.

Other vital lessons from this case study include the effective potential for entities to become successful through embracing leadership philosophies that transform them into better and more efficient forms. Most importantly, management and leadership aspects of an organization form the very fundamental tenets required for change and transformation for an organization. When the government issued the last sale of its controlling stake in the company, it became apparent for the organization and other stakeholders that employee buy-in would be an essential strategy towards ensuring that they formed part of the desired change that the company so much desired. However, it was also a vital power strategy to ensure that detailed planning involving all aspects of the organization formed part of the procedural framework for change.

  • Recommendation for Possible strategies 

The paper proposes the following strategy as plausible options to deal with the various issues and challenges outlined in the above sections.

  1.        Inclination towards advanced customer approaches- The shifts towards a more customer-centered approach will be essential as a way of ensuring progress and prosperity for the client. In the 21st century, customer-centered strategies are crucial towards ensuring an increase in the way that an organization operates and functions. This recommendation correlates with that of the Hamara initiative that proposed the importance of advancing these shifts because of the value created within the organization. 
  2.      Balanced internal and external-based communication methodological approaches- The overdependence of the organization’s internal intranet-blog systems has created a state of imbalance and a monotonous communication system. Therefore, adopting external based communication approaches will significantly propel the organization’s ability to transform its communication efficiency spectrum. More so, it will help to incorporate the views of other external stakeholders, such as the customer and shareholders who are not part of the current internal based system.
  3.    Increase Competitor’s market research – One of the most critical aspects of the whole project ACE was to advance the company’s ability to carve a unique niche in the oil sector. However, it overlooked one of the most critical aspects of curving that niche-competitors market research. Consequentially, this has significantly affected its ability to compete, and therefore, into the future, the company needs to consider increasing competitor research as a strategy to further improve performance.

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