3The deregulation of the industry forced the top-management to realize that BPCL had to becustomer focused, its decision making process had to be faster which would be possible only by de-layering the hierarchical organization and by empowering its staff. Two of the senior managers pointedout:
"Most employees do not understand the nature of the business, what we are doing. Our corecompetence is not refining crude oil but selling products. This is where the market will be after deregulation. The aim of redesign was to be ready for change. This meant changing ourselves tobe tuned to the external changes. Our national competitors are Reliance and MRPL (a Joint Venture by the Birla Group of Companies) and foreign competitors will be Castrol, TotalElfFina, British Petroleum, Mobile as was witnessed with the deregulation of the Lubricants "
Organization redesign started in 1998 with the help of consultant Arthur D. Little and its group of consultants. They formed a Project Group with over 30 people drawn from different functions and regionswith a General Manager as their leader. It was called Project CUSECS meaning customer satisfaction.Their main thrust areas were better customer service, profitability, creation of strategic business units(SBUs) and dividing the organization into regions.The redesign of BPCL saw the change of the organization structure from a functional to adivisional enterprise with strategic business units (see
). The six SBUs spreadover four geographical regions (North, South, East & West) are refinery, retail, industrial / commercial,lubes, LPG and aviation. The entities that support the strategic business units (SBUs) are HumanResource Services (HRS), Human Resource Development (HRD), Finance, Planning, Brands, Audit,Vigilance, Corporate Affairs (Legal, PR, Health, Safety, Environment), Strategy, IS and Project Entrance.HRM (both HRS and HRD) played a critical role in the redesign process. As one of the member of the board of directors pointed out:
"BPCL has undergone a very interesting HRD-powered transformation process […] It wasorchestrated by Arun Maria and his team from Arthur D. Little. […]Instead of providing Bharat Petroleum with a package of vision, strategy, structure, processes […] he asked the management to carry through a very broad envisioning exercise. Some 2500 managers participated. It resulted not only in a clear corporate vision, identification of shareholders, and statement
of core values,but visions were collectively evolved by each function, department, branch and section. Thisenvisioning and agenda setting was facilitated by trained individuals, many of them volunteers from functions other than HRM"
The main theme of the vision is
“Business partner first, business partner last.
” The themes varyfor each SBU. For example, the theme of HRM department is
“It is a great place to be”
, for the Lubes it
is "Survive today, to be there in the future"
while for the retail SBU it is
"People above oil; We care for you; We exist because of you"
to view the corporate vision of BPCL).The necessity and the competencies required for the redesign was summed up by a senior manager:"
It is because we have to compete! Competition is with both national and multinational companies.The key to compete is to deliver quality product at cheaper price, cut costs and keep costs in control.There should be a concern for financials by all the stakeholders with a profit building motive and sustaining the bottom line.The required functional competency is in selling required is selling and distributing products.Customers, both internal and external, should be satisfied. The situation to manage is very fluid. Thechallenge is to manage this situation with effective leadership at all levels."
The functional structure of the organization consisting of functions of sales & distribution, IS,Marketing and HRM, was dismantled to form the following SBU structure: (a) The Refinery SBU (b) TheRetail SBU (c) The Lubricant SBU (d) The LPG SBU (e) The Aviation SBU. The structure before the