Case Analysis: WAC Report (HPCL-Driving Change Through Internal Communication)

Case Analysis: WAC Report
(HPCL-Driving Change through Internal

Communication)
MANYA JUNEJA
IMG-13, SEC- E
133083
CASE SYNOPSIS
Hindustan Petroleum Corporation Limited in 2003, launched a major organizational
transformation, because of the extensive competitive pressures in the Indian oil industry. The
company which followed a top-down approach had to now adopt a bottom up approach of
participative management. A great effort was made to close the gap between the leaders and
the employees. This was primarily done through the ‘vision workshops’, which aimed to
create a sync between the personal and organizational vision. Digital platforms were
developed, with programs like: ‘ICS’ and ‘Coin Your Idea’ which were made to emphasize
on the concept of transformational communication. The HPCL site further improved its
interactive capability by offering the feature of blogs, which gave a free platform to
employees to share their views. Along with this, tremendous importance was given to
individual, one-to-one conversation to ensure that employees have an outlet, where they can
express themselves. The positive outcome of this increased stress on improving internal
communication was seen during the huge strike in 2009, where HPCL alone among the major
state-owned oil companies, kept all its officers on the job. The question that HPCL leaders
now face is, of how they should pave a path for themselves, to become the number 1, in the
Indian retail petroleum sector, and whether the internal communication channel, they have
developed, is viable with the rapid expansion.
SITUATION ANLAYSIS –
 HPCL is a state-owned company that works in the field of refining of crude oil and
marketing of oil products.
 HPCL was created in 1974 by government of India when two newly nationalized
entities, ESSO of India and Lube India were merged.
 In 1995 the government has sold 49% of HPCL to private investors. Similar steps
were taken with respect to other two state owned petroleum companies, Bharat
Petroleum and Indian Oil.
 The government paired back more and more of regulatory structure that had limited
competition among those three companies, and it began to allow wholly private
concerns to enter the market.
 Then in 2003, a court decision blocked that move, thereby forestalling complete
privatisation of HPCL.
 Nonetheless, before and after that court decision, executives at HPCL understood that
they had to adapt to a fundamentally altered environment.
 The company believed, in order to compete with the private sector, they had to change
the public system mentality and make the company more customer centric.
 Thus, the goal of the company was getting close to the customer.
 Perseverance was at the centre of vision through ACE (Achieving Continuous
Excellence) Project by implementing workshops
 Workshops coaches managed conversation in a manner designed to produce clear
outcome i.e. a shared vision for their department, for their business unit and for the
company as a whole.
PROBLEM IDENTIFICATION AND PROBLEM STATEMENT –
The key problems faced by HPCL were –

 Narrowing the distance between the HPCL and its customers -The dilemma faced by
the company was how should it reduce the gap? Should it focus on its external or
internal customers (employees)?
 Changing the public system mentality i.e. public organisations do not focus on
customers -The issue company faced was what practises can make the organisation
more oriented towards the customers. Till 2003, customers came to the company but
now the company had to go to the customers.
The sub problems faced by HPCL were –
 The share price fell from Rs 499 to Rs 272 per share
 There was a hike in the cost of operations and logistics
 There was lack of clarity on vision
 Lack of external communication in marketing efforts
 Low tech ways of communication were preferred
ANALYSIS OF THE PROBLEM & SWOT ANALYSIS -

The main cause of the problem the company faced was Competition.
 With Globalisation and privatisation in the energy sector, HPCL faced external
pressures to maintain its share.
 SWOT Analysis:
Strengths: Customer orientation.
Established Market share.
Work culture of internal communication.
Employee driven logistics.
Weakness: Less market share compared to other giants.

More focus on internal customers ie. employees than external
customers.
Continuous redefining of vision implies confusion
Threats: Continuous falling of share prices.

Geopolitics within the organization
Emerging of other private players
Unionization and union intervention
Electric cars launched by other big players
Opportunities: Improve growth and market share.
Define company as energy competition.
Invest in renewable sources of energy.
CSR efforts can be done.
ALTERNATIVES-
 Improving internal communication by continuous interaction among employees can
ensure efficiency and increased productivity
 Corporate vision practise should be encouraged making it more relatable for the
employees
 The executives should share the company target – online vision workshop.
 One-way, Two-way, New Way of Communication Channels i.e. making the
environment more participative
EVALUATION OF ALTERNATIVES –
 Better communication procedures that would be followed in the organisation will
ensure consistent results and better quality and productivity
 Efficiency would increase through proper internal communication.
 Positive impact on sales and worker productivity could be noted
 The abstract skills of the employees will be honed by vision workshops
 Certain factors impacting the growth in the industry could be as follows
(PESTLE ANALYSIS) –
 Political- Geopolitical factors
 Economic- OPEC that is the regulatory body for demand and supply
 Social- Consumer preferences, Purchasing parity, Developing markets
 Technological- Refineries where oil is store and refined
 Environmental- Renewable Nuclear energy
 Legal- Statutory Compliance
PLAN OF IMPLEMENTATION-
 The employees developed an understanding of the customer viewpoints by having one

to one interaction with the customers.
 Employees from different fields led to understanding customers from all aspects
 Washrooms were constructed for men and women on highways as per an employee’s
suggestion that provided a huge competitive advantage
 Signs, symbols and structure were improved for a better physical presence
 The team developed the plan for installing outlets along secondary highways and near
the villages where rural customers lived
 The team installed the customized outlets called “Hamara Pumps” where the cost of
installing was less compared to urban pumps which would not only boost sales but
would increase brand value among rural people
CONTINGENCY PLAN
 The company can direct its focus towards the renewable resources which is the future
of Indian transportation market
 The company can also merge with one of its competitors such as Indian Oil and can
make a new company thereafter
 The other B-plan which company can adopt is to try acquire a small company of the
same domain so as to gain market share and increase the share prices

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Case Analysis: WAC Report

(HPCL-Driving Change through Internal

PROBLEM IDENTIFICATION AND PROBLEM STATEMENT –

The key problems faced by HPCL were –

ANALYSIS OF THE PROBLEM & SWOT ANALYSIS -

Weakness: Less market share compared to other giants.

Threats: Continuous falling of share prices.

 The employees developed an understanding of the customer viewpoints by having one

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