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Transcript of Thesis -Ashis Sen Guide Dr. Sheetal Khanka...
265
Chapter 14
Category13: Achieving Sustainable and Superior Organizational Results:
14.1 Results on Retail Market Share
If strategy is defined as the patterns of choices made to achieve a sustainable competitive
advantage, then strategic leadership involves focusing on the choices that enhance the health
and well-being of an organization over the long term (Betty & Quinn, 2010).
The above quote is telling in its impact. Vision is important for results and co-created vision
generates choices that arise from people.
Achievement Orientation in people have a desire to achieve and set challenging goals. Market
Share increase especially for a large oil company is always difficult to achieve. Market share
increase indicates we are growing over others. In a growing market everybody may grow but
to increase market share is beating the competition by growing over others.
From the financial year 1998-1999 HPCL market share in Retail MS (Petrol) was slipping
and recorded a downfall in every year for the period1998-1999 to 2003-2004. In 2003-2004
Project Achieving Continuous Excellence ( ACE) commenced the intervention of co-created
vision along with other interventions like Balanced Scorecard, Competency mapping and
Competency Development as well as infrastructure building like network expansion,
modernization of outlets and capacity augmentation in our other facilities. As seen in the
earlier chapter people set and delivered on challenging goals.
Private players like Reliance and Essar operated only for a few years in the Retail Market and
thereafter either withdrew or had literally no presence. Even Shell has no significant market
share. Therefore, the market is divided between the three oil majors i.e. IOCL, HPCL and
BPCL.
Improved market share which was a dominant theme in the vision as people talked repeatedly
of higher sales growth than the competitors. This was a challenging and difficult goal
especially on a sustainable basis, given our track record of negative growth in market share
consistently over a period of fifteen years consecutively. Researcher requested Deputy
General Manager Highway Retail Mr. T Sundaraman who has spent almost three decades in
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HPCL Retail SBU to send researcher the market shares for analysis. He sent the market
shared for a period of 25 years comparative data.
His mail reads as under:
‘Last 25yrs MS/HSD performance after 2003 we have gained market share 9 consecutive
years for MS consecutively and 7 out of 9 in HSD’.
Figure 14.1
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14.1(a) Gasoline or Motor Spirit (Petrol) Market Share Improvement:
The table with the details is as under:
MS- Retail
Market-Share among Oil Marketing PSU Majors (In Percentage)
Year HPC BPC IOC IBP AOD IND.INC/DEC
HPC
1988-89 28.96 31.66 31.20 6.31 1.87 100
1989-90 28.39 31.30 31.91 6.53 1.87 100 -0.57
1990-91 28.10 30.99 32.52 6.69 1.70 100 -0.29
1991-92 27.99 30.78 32.64 7.00 1.59 100 -0.11
1992-93 27.86 30.43 32.83 7.32 1.55 100 -0.13
1993-94 27.53 30.78 32.53 7.75 1.42 100 -0.33
1994-95 27.00 31.14 32.71 7.74 1.40 100 -0.52
1995-96 27.05 30.93 32.95 7.71 1.36 100 0.05
1996-97 26.63 31.07 33.27 7.76 1.27 100 -0.42
1997-98 26.75 30.96 33.27 7.90 1.12 100 0.11
1998-99 26.23 31.37 33.37 7.93 1.10 100 -0.52
1999-00 25.90 31.68 33.33 8.00 1.09 100 -0.33
2000-01 25.51 31.81 33.83 7.78 1.07 100 -0.39
2001-02 25.29 31.69 34.37 7.58 1.06 100 -0.22
2002-03 26.16 32.05 34.21 7.45 1.14 100 -0.14
2003-04 25.03 31.59 34.02 8.24 1.11 100 -0.12
2004-05 25.22 30.43 35.44 8.91 0.00 100 0.19
2005-06 25.32 30.29 35.44 8.91 0.00 100 0.09
2006-07 25.35 30.22 44.28 0.00 0.00 100 0.03
2007-08 25.56 29.72 44.40 0.00 100 0.21
2008-09 25.68 29.09 44.88 0.00 100 0.13
2009-10 25.78 28.51 45.32 100 0.09
2010-11 26.1 28.28 45.28 100 0.33
2011-12 26.45 28.28 44.98 100 0.35
2012-13 26.47 28.81 44.64 100 0.02
Table 14.1: Market-Share -Oil Marketing PSU Majors in Motor Spirit (M S or Petrol)
Legends
HPC stands for Hindustan Petroleum Corporation Limited
BPC stands for Bharat Petroleum Corporation Limited
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IOC Stands of Indian Oil Corporation Limited
IBP stands for Indo Burma Petroleum Company
AOD stands for Assam Oil Division Limited
From 2004-2005 till 2012-2013 HPCL in the Govt. Oil Marketing Companies (IOCL, HPCL
and BPCL) continually registered increase in market share which has never been achieved by
any company after deregulation or dismantling of APM.
14.2 Market Share in HSD (Diesel)
Market-Share in HSD
Year HPC BPC IOC IBP AOD IND.INC(+)/DEC(-)
HPC
1988-89 24.27 25.71 38.83 9.62 1.46 100
1989-90 24.21 25.52 39.01 9.76 1.49 100 -0.16
1990-91 24.15 25.15 39.4 9.76 1.54 100 -0.06
1991-92 24.12 24.98 39.49 10.00 1.41 100 -0.03
1992-93 23.94 25.16 39.54 10.03 1.33 100 -0.19
1993-94 23.80 25.76 39.19 9.98 1.28 100 -0.14
1994-95 23.41 26.09 39.61 9.66 1.23 100 -0.39
1995-96 23.72 26.22 39.56 9.39 1.12 100 0.31
1996-97 23.45 26.42 39.63 9.43 1.07 100 -0.27
1997-98 23.92 26.46 39.31 9.38 0.93 100 0.47
1998-99 23.70 26.73 39.29 9.30 0.98 100 -0.22
1999-00 23.53 26.62 39.35 9.53 0.97 100 -0.17
2000-01 23.48 27.25 38.96 9.30 1.01 100 -0.05
2001-02 23.64 27.05 39.00 9.20 1.11 100 0.16
2002-03 23.52 27.58 38.72 9.02 1.16 100 -0.12
2003-04 23.00 27.89 37.97 9.93 1.22 100 -0.53
2004-05 23.20 27.00 39.06 10.74 0.00 100 0.20
2005-06 23.36 26.82 39.08 10.61 0.00 100 0.16
2006-07 22.95 27.74 49.02 0.00 0.00 100 -0.41
2007-08 23.30 27.86 48.43 0.00 100 0.35
2008-09 23.61 27.52 48.47 0.00 100 0.32
2009-10 23.57 27.00 48.97 100 -0.4
2010-11 24.05 27.44 48.15 100 0.47
2011-12 24.68 27.76 47.28 100 0.63
2012-13 24.85 28.55 46.53 100 0.17
Table 14.2: Market Share in HSDLegends
HPC stands for Hindustan Petroleum Corporation Limited
BPC stands for Bharat Petroleum Corporation Limited
269
IOC Stands of Indian Oil Corporation Limited
IBP stands for Indo Burma Petroleum Company
AOD stands for Assam Oil Division Limited
From the year 1988-89 to 2003-04 in a span of 15 years of comparison we had lost market
share in 14 years and gained only one year. From 2004-05 to 2012-13 we gained market
share in 7 out of the 9 years.
This is again indicative of sustainable market share gain over a period of 9 years after the
ACE process of co-creating vision, working with the balanced scorecard, building strategic
infrastructure, improving processes and customer centricity.
Profitability is the other hard number in results. Profits in Retail Business for Oil Marketing
companies have been impacted by government decisionsrepeatedly. Pricing of retail products
(Petrol and Diesel) is not under APM but the government has often intervened in public
interest. These interventions have led to large subsidies which have cost the oil marketing
companies. No meaningful co-relation of profits to market share enhancements can be
patterned. The issue of burden on oil companies has been well researched and well
documented and has also been often in the news. Two researches are referenced here (Misra,
Chawla, Shrivastava, & Pachauri, 2005) and the study ‘The Citizens Guide to Energy
Subsidies in India’ (IISD, 2012).
The Physical results in HPCL Retail in terms of the vision aspirations ‘increase in market
share’, ‘Highest Sales growth in Industry’ have been truly been vindicated in MS (Petrol)
market share and considerably in HSD (Diesel).
14.3 Results in Employee Productivity, Customer Service, Organizational Learning and
other areas.
But results are not only in Hard Metrics but also in the form of processes, customer
recognition and learning and growth. Soft metrics are also measured by recognitions which
form valid feedback and are counted as results. Records from Company Archives are shown
in the next pages.
271
Best Forecourt Service by Dealer-men and training of 46500 people by HR on ‘Sada Apke Liye’ (Always for the customer)
Figure 14.3
272
4
HPCL Process Improvement Results
Figure -14.4 (Improving Productivity at our Supply Locations)
273
Figure 14.5 (Projects taken up by HR for training LPG dealers and delivery men of gas cylinders for better customer experience)
274
Figure 14.6(Improving Productivity of about 32% by Participative management in Gas (LPG) filling of cylinders)
275
Significant process improvements have resulted by important people and system initiatives which have resulted in tank truck utilization
productivity, LPG (cooking gas) bottling productivity, improve LPG Dealers capability and training LPG Delivery men for better customer
service.
Table 14.3 (Some of the Important Awards and Recognitions received in the recent Past 2011-12-13)
Sr.No. Name of Award Awarded By In Recognition of Awarded on Received By Handed over By
1Readers Digest Trusted Brand AwardWon the award for 7th Year in a row
Readers Digest Brand Recognition 2013 Mr M S Damle ED Retail Readers Digest
2 BML Munjal Award Hero Corp GroupFor Excellence in CapabilityBuilding
2013Shri Roy ChoudhuryC&MD
His Excellency Minister ofHRD Shri Shashi Tharoor
3National Award for "SignificantAchievements in EmployeeRelations"
Employee Federationof India [EFI]
For excellence in IndustrialRelations thru' commitment &focused strategies
Oct.2011Shri Sandeep Joseph, GM- IR
Shri J.J. Irani, Ex-Director,Tata Sons Ltd.
4Golden Peacock Award for CSR for2012
GPNTA Training Feb 2013Shri Pushp Johsi DirectorHR and Shri Ashis SenDGM Capability Bldg.
Ex - Chief Justice of India
5GOLD Trophy Meritorious Awardfor CSR & Responsiveness for theyear 2009-10
SCOPE
Best Corporate SocialResponsibility andResponsiveness during 2009-10
Apr.2011
Shri S. Roy Choudhury,C&MD & Dr. V.Viziasaradhi, Director -HR
Her Excellency - President ofIndia, Smt. Pratibha DevisinghPatil
276
5 Excellence in Quality Award M/s. BOSCH"For supplies of Lubricants fortheir aftermarket sales"
Aug-11Shri Baldev Bhatia, Ch.Installation Manager -Mazagaon Terminal
Shri S. Muralidharan VP -Bosch
6 Bhima Shah AwardMP Govt. -Commercial Tax Dept
For Largest VAT TaxPayment in the State of MP
Jul. 2011Shri Kamal KumarChakravorty, Sr. Manager- Tax [wz]
Hon. Finance Minister - MPShri Raghavji Bhai
7
"Distinguished Fellow of Institute ofDirectors" * Golden PeacockExcellence Award for 2011" for BestHR practices
Institute of DirectorsFor significant contribution tobusiness and society
Aug. 2011Shri S. Roy Choudhury,C&MD
Shri P.N. Bhagwati - FormerChief Jutice - Govt. of India
8CIO 100 Award for the 5thConsecutive Year
IDG INDIA For B2B Integration Sept. 2011Shri S.T.Sathiawageeswaran - ED _IS
9INDIRA GANDHI RAJBHASHAPURASKAR for the year 2009-10 inPSU Category
Govt. of India - HomeMinisitry
Best usage of Hindi Sept.2011Shri S. Roy Choudhury,C&MD
Her Excellency - President ofIndia, Smt. Pratibha DevisinghPatil & Hon'ble Minister -Home, Shri P. Chidambaram
10NIPM - Runners up Award for BestPractices 2011
NIPM For Best Practices in HR Dec.2011Dr. v. Viziasaradhi,Director-HR
Shri Anil S. Khandelwal,Former C&MD - Bank ofBaroda
11Brand Leadership Award 2011 inService/Hospitality Industry
World BrandCongress 2011
For Brand Leadership Dec.2011Ms. Nishi Vasudeva,Director - Mktg.
Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011
277
12Top-25 Outstanding MarketingLeaders Award 2011
World BrandCongress 2011
For outstanding marketingleadership
Dec.2011Ms. Nishi Vasudeva,Director - Mktg.
Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011
13Brand Builder of the year Award2011
World BrandCongress 2011
For Brand Leadership Dec.2011Shri M.S. Damle, ED-Retail
Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011
14
CSR Award 2011 for :1] Support & Improvement inquality Education2] Concern for Health3] Community Development4] Best Environment Excellence
Subir Raha Centre forCorporateGovernance
For Corporate SocialResponsibility
Dec.2011Shri Alla Surya Rao, DGM- CSR
Dr. Saagarika Ghoshal, ChiefPeople Officer, Reliance BigEntertainment Pvt.Ltd.
15Forecourt Retailer of the Year Award2011
Star Retailer AwardsFor designing businessstrategies to maximise thepotential in forecourts
Dec.2011
Shri Anil Khurana, GM -Retail, NZ and Shri V.K.Yadav, CRM - DelhiRetail RO
Prof. P.K. Mishra, Director -Institute of Public Enterprises
278
14.4 Discussion on Results
HPCL in the learning and growth segment has been in the forefront bagging many awards
and recognitions. Articles on Hindustan Petroleum have been published in many top journals
including a case study in Harvard Business School on communication (Groysberg & Slind,
2011).
Organizational results as can be seen from the above has been recorded in Sales Growth of
Retail, Process Improvements, aspiration levels of people, HR Recognitions, Publications
which include Harvard case study on internal communication, ushered in the Hall of Fame by
Palladium on Balanced scorecard and strategy execution.
Results for sustainable results need to include physical parameters like growth in market
share but also must include measurements in process improvements, innovation, HR
practices. This chapter is integrates physical results, process results and people results.
The results of the process are an important category in theory building arising out of the
process which commenced with co-created visions. Results by themselves do not add to
existing theory but form the part of a theory where the processes in the earlier categories lead
to outstanding results.