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Principles of Management Soni George

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Principles of Management: Soni George Indian Oil 2 Index (1) About Indian Oil (2) Indian Oil Information (3) Company Mission and Vision (4) The Ideas of Various Management Thinkers (5) How it all Works… (6) Meeting Employee Needs © 2005 .

Indian Oil accounts for 56% petroleum products market share among PSU companies.8 billion) and profits of Rs. with a sales turnover of Rs.30. 7. mainly in linear integration & diversification projects. As India's flagship national oil company.1 in petroleum trading among the national oil companies in the Asia-Pacific region To maintain its strategic edge in the market place. It is also the 19th largest petroleum company in the world.400 crore during the X Plan period (2002-07). Beginning in 1959 as Indian Oil Company Ltd.603 million) for the financial year 2003-04.1 Company in Fortune's prestigious listing of the world's 500 largest corporations. Sustaining Superior Performance & Fair Competitiveness As a major diversified. Indian Oil plays a national role in oil security& public distribution. product quality up gradation and retail operations. ranked 189 for the year 2004 based on fiscal 2003 performance.203 crore (US$ 29. Indian Oil Corporation Ltd. 1. transnational. 1958). besides refining and pipeline capacity expansions. with national leadership and a strong environment conscience. was formed in 1964 with the merger of Indian Refineries Ltd. (Estd. the awareness of what the competitor is doing and the feedback given by clients and co workers are the chief reasons for sustaining a superior performance along with fair competitiveness.005 crore (US$ 1. Corporate Indian Oil is the country's largest commercial enterprise. © 2005 . 24.. furthers the idea of open discussions of companies’ contracts and projects as well a strategic service available to customers.Principles of Management: Soni George Indian Oil 3 About Indian Oil Indian Oil is India’s No. Indian Oil has also been adjudged No. 42% national refining capacity and 69% downstream pipeline throughput capacity. Indian Oil has planned investments to the tune of Rs. integrated energy company.

20 million metric tonnes per annum (MMTPA) or one million barrels per day (bpd). with a combined capacity of 56. These include two refineries of subsidiary Chennai Petroleum Corporation Ltd and one of Bongaigaon Refinery and Petrochemicals Limited.85 MMTPA.000 km. Indian Oil owns and operates the country’s largest network of cross-country crude oil and product pipelines of nearly 8.Principles of Management: Soni George Indian Oil The Indian Oil group of companies owns and operates 10 of India's 18 refineries with a current combined rated capacity of 54. 4 © 2005 .

is a stand-alone marketing company with a © 2005 . Panipat.000 km. Indian Oil also operates two Single Buoy Mooring systems in the high seas off Vadinar coast in the Gulf of Kutch for receipt of crude oil.Principles of Management: Soni George Indian Oil 5 Indian Oil Information About the Company. Ltd. 94 aviation fuel stations and 87 LPG bottling plants. installations and depots.at Digboi. Chennai. Narimanam and Bongaigaon .000 retail sales points is backed for supplies by its extensive. Haldia. with a combined capacity of 56. IBP Co. Guwahati. Mathura. Brands… Refining Indian Oil controls 10 of India's 18 refineries . Statistics. Koyali. Marketing Indian Oil's countrywide network of over 22.20 million metric tonnes per annum (MMTPA) or one million barrels per day (bpd).85 MMTPA. Pipelines Indian Oil owns and operates India's largest network of cross-country crude oil and product pipelines of nearly 8. Its subsidiary. Barauni. well spread out marketing infrastructure comprising 162 bulk storage terminals.with a current combined rated capacity of 54.

Research & Development Indian Oil's world-class R&D Centre has won recognition for its pioneering work in lubricants formulation. Indian Oil reaches Indane cooking gas to the doorsteps of 40 million households in over 2. the leader in the aviation fuels business in the country. with 67% market share. With sales of 48. Our marketing share is 56% among oil public sector undertakings in India. pipeline transportation and bio-fuels. the refueling never stops and neither does our customer service.61 MMT of petroleum products in fiscal 2003. Indian Oil Aviation Service.with equal zeal and care. 6 Indian Oil touches every customer's heart by keeping the vital oil supply line operating relentlessly in every nook and corner of India.300 distributors. Indian Oil serves millions of customers everyday . besides a countrywide network of bazaar traders. Between one sunrise and the next.100 markets through the country's largest network of over 4. Defense Services and private aircraft operators.100 retail outlets. which is acknowledged as one of the leading supplier of aviation fuels in the world. with focus on upgrading petrol and diesel stations to international standards by providing additional facilities and value-added services.Principles of Management: Soni George Indian Oil nationwide retail network of over 3000 sales points. The country's leading SERVO brand lubricants from Indian Oil.com will help customers to log on and do business from anywhere in the world. Indian Oil's ISO-9002 certified Aviation Service. has launched a unique initiative for customers on the Internet. is reaching out to customers at their workplace.000 sales points ensures that essential petroleum products reach the customer at the "right place and the right time". An interactive website ioclebiz. Indian Oil Aviation Service. With this initiative. refinery processes. Indian Oil refuels over 900 aircrafts. It has developed over 2.100 formulations of SERVO brand lubricants and greases for virtually © 2005 . with over 42% market share and 450 grades are sold through over 9. meets the fuel and lubricants needs of domestic and international flag carriers.big or small -. In fact. Indian Oil's vast distribution network of over 22. which is round the clock.

Lubrizol. SERVO lubricants are being marketed © 2005 . the R&D Centre is currently the nodal agency of the hydrocarbon sector in India for ushering in Hydrogen fuel in the country. Spreading Wings Indian Oil is also strengthening its existing overseas marketing ventures and simultaneously scouting new opportunities for marketing and export of petroleum products to new energy markets in Asia and Africa.Principles of Management: Soni George Indian Oil all conceivable applications – automotive. (IOML). Two wholly-owned subsidiaries are already operational in Sri Lanka and Mauritius. transnational energy behemoth. Nyco SA. The Corporation has launched 11 joint ventures in partnership with some of the most respected corporates from India and abroad -. Expanding Horizons Indian Oil is currently metamorphosing from a pure sectoral company with dominance in downstream in India to a vertically integrated. The Centre has to its credit over 140 national and international patents. and Marubeni to name a few. Petronas. with a target to take it to about 40% in the near future. Within a year of incorporation. railroad. Lanka IOC Pvt. industrial and marine – meeting stringent international standards and bearing the stamp of approval of all major original 7 equipment manufacturers. Oiltanking GmbH. Indian Oil is investing US$ 18 million in Mauritius through its subsidiary. The Corporation is implementing a master plan to emerge as a major player in petrochemicals by integrating its core refining business with petrochemical activities. Apart from leadership in development and commercialization of bio-fuels. besides making large investments in E&P and import/marketing ventures for oil and gas in India and abroad. (LIOC) has captured a 25% market share in Sri Lanka. Indian Oil Mauritius Ltd. to set up a range of marketing infrastructure there. Ltd. and a regional office at Dubai is coordinating expansion of business activities in Middle East region.

Under the 3rd round of NELP. trans-national energy corporate. under the operatorship of BP. has been formed for participation in Kuwait bidding round. etc. The ONGC-Videsh-IOC-OIL consortium has been awarded Farsi exploration block in Iran under Service Contract. Indian Oil's sincere commitment to Quality. Safety. Bhutan. Indian Oil. Linear Integration E&P: Indian Oil is focusing on acquiring equity oil & gas in India and abroad. Under the 2nd round of NELP. was awarded eight exploration blocks. Tanzania. The 19th largest petroleum company in the world. transportation. Indian Oil was awarded two exploration blocks under NELP-I (New Exploration Licencing Policy of the Government of India) in partnership with ONGC (Oil & Natural Gas Corporation Ltd). HOEC and OIL have a 25% and 10% participating interest in this block. training and research & development. Malaysia and Zambia. Bhutan. marketing. Algeria.Principles of Management: Soni George Indian Oil in Dubai. Nepal. GSPC and OIL. Kyrgyzstan. Bahrain. GAIL. in consortium with ONGC. Malaysia. is well on its way to becoming an integrated. Sri Lanka. Iraq. Health and Environment is 8 reflected in the series of national and international certifications and awards (current ones listed separately) earned over the years. Kuwait. Indian Oil -ONGC combine has also been awarded two blocks in the first round of bidding for exploration of Coal Bed Methane (CBM). Kuwait. © 2005 . Mauritius. A consortium of BP-Occidental-IOCONGC. Bangladesh. Nigeria. Bahrain. was awarded one exploration block in Mizoram. IOC-ONGC combine was also qualified by KOC/KPC as non-operators for the development of Northern oil fields of Kuwait. Indian Oil has been lending its expertise for nearly two decades to various countries in several areas of refining. in consortium with ONGC. Maldives. Indonesia. Ethiopia. Indian Oil. IOC has acquired a 27% participating interest in the block AAP-ON-94/1 from HOEC. which is operated by Premier Oil with 38% a participating interest. Nepal. Indian Oil. These include Sri Lanka. Abu Dhabi.

a dedicated high-density polyethylene (HDPE) unit. Haryana Sheet Glass. Petrochemicals: Indian Oil has developed a master plan to emerge as a major player in petrochemicals. Towards this. Hindustan National Glass Industries Ltd.000 metric tonnes per annum of ethylene production and associated units including hydrogenation. Ecological parks developed at the refineries provide sanctuary for populations of migratory birds. a polypropylene unit and a monoethyl glycol (MEG) unit. this will be the third mega petrochemicals project floated by Indian Oil. As part of this. Major customers who have signed up with Indian Oil for gas supplies include Essar Steel. mainly through vertical integration with its core refining business and using the existing refinery streams. Its seven refineries. All major installations are surrounded by green belts to serve as pollution sinks. the company is setting up a naphtha cracker complex at Panipat in Haryana based on surplus naphtha that would be available from its refineries at Panipat. 2004 and commercial supplies to customers commenced from April 2004 onwards.300 crore.Principles of Management: Soni George Indian Oil LNG: As co-promoter of Petronet LNG Limited (PLL). Corporate Initiatives Health. butadiene and benzene extraction besides downstream polymer units like a swing unit (LLDPE/HDPE). PLL's Dahej terminal received its first parcel of LNG by January-end. and Surya Roshni Ltd.52 MMSCMD of LNG allotted to it through strategic gas sales 9 agreements with key customers.000 crore. would involve a naphtha cracker with 80. © 2005 . Mathura and Koyali. Gujarat State Petroleum Corporation.000-30. R&D Centre and select retail outlets have earned ISO-14001 certification for Environment Management Systems. to be made in phases by 2011-12. Following the LAB (linear alkyl benzene) project at Gujarat refinery and the PX/PTA (paraxylene/purified terephthalic acid) plant coming up at Panipat. four pipeline systems. it has planned huge investments entailing an investment of Rs 25. Indian Oil has tied up the complete sale of 2. estimated to cost Rs 6. Safety & Environment: Indian Oil's business plans always have an underlying concern for the community and the environment. The project.

conducts advanced management development programs in collaboration with reputed institutes. management and medicine. Indian Oil Institute of Petroleum Management. and the Indian Oil Management Academy at Haldia -. the local community benefits by way of substantive improvements in the quality of life.Principles of Management: Soni George Indian Oil A Learning Organization 10 We believe that to learn is to grow.that's the focus at Indian Oil. innovation and cross-functional exposure—exploring every dimension of the learning process to open new professional and personal growth avenues for every team member and building competency. health care. Select Add-On packages are also being customized to work in tandem with the ERP solution with an integrated approach for optimization. Among these. which includes an Enterprise Resource planning (ERP) package which will standardize and integrate the Corporation's business on a common IT platform through a robust hybrid wide area network with appropriate hardware. Beyond learning. Indian Oil operates 17 training centers throughout India for up-skilling.the Indian Oil Institute of Petroleum Management at Gurgaon. IT Vision: Indian Oil aims at maintaining its leadership in the Indian hydrocarbon sector by continuous assimilation of emerging Information Technology and web-enabled solutions for integrating and optimizing the Corporation's hydrocarbon value chain. education. It’s a challenging task that calls for non-stop learning and constant upgrading of skills. © 2005 . in provision of safe drinking water. Indian Oil stimulates individual growth through a culture of participation. re-skilling and multi-skilling of employees in pursuit of corporate excellence.have emerged as world-class training and management academies. the Corporation's apex centre of learning. Continuous growth . etc… Indian Oil scholarships help students pursue higher education in engineering. Community Development Wherever Indian Oil builds capacity. confidence and capability to face the challenges of the market place. the Indian Oil Management Centre for Learning at Mumbai. It has recently implemented an IT re-engineering project titled Manthan. the foremost learning centers -.

© 2005 . and cost reduction. To attain leadership in developing. To maximize creation of wealth. Mission To achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through value of products and services. value and satisfaction for the stakeholders. adopting and assimilating state-of. To provide technology and services through sustained Research and Development.the-art technology for competitive advantage. integrated energy company.Principles of Management: Soni George Indian Oil 11 Mission and Vision Vision To be a major diversified. with national leadership and a strong environment conscience. To foster a culture of participation and innovation for employee growth and contribution. transnational. playing a national role in oil security& public distribution. To help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience. To cultivate high standards of business ethics and Total Quality Management for a strong corporate identity and brand equity.

or PDSA cycle is a continuous quality improvement model consisting out of a logical sequence of four repetitive steps for continuous improvement and learning: Plan. and (c) a Core Competency should be difficult for competitors to imitate. (2) Core competencies of C.Principles of Management: Soni George Indian Oil 12 The Ideas of Thinkers We also researched as a part of this project. Deming modified the SHEWART cycle as: PLAN. The late Total Quality Management (TQM) guru and renowned statistician Edward W. and their business plans and strategies… Some of the thinkers used are: (1) Joseph Juran’s Total Quality Management (TQM) policies developed along with Edward Deming’s policy of innovation: The Deming cycle. Prahalad. Shewart. The corporate center should not be just another layer of accounting. © 2005 . Do. the various Management Thinkers that the Company (Indian Oil) perhaps used in their creation of their Mission and Vision. Study (Check) and Act. the Deming wheel of continuous improvement spiral. (b) should make a significant contribution to the perceived customer benefits of the end product(s). DO and SEE. He introduced the concept of PLAN. Walter A. The PDCA cycle is also known as the Deming Cycle. Three tests to identifying a Core Competency are: (a) provides potential access to a wide variety of markets. Business units should use and help to further develop the Core Competencies. DO. in the 1920’s. and ACT. but must add value by enunciating the strategic architecture that guides the competence acquisition process. Its origin can be traced back to the eminent statistics expert Mr. STUDY.K.

industrial and marine meeting stringent international standards and bearing the stamp of approval of all major original equipment manufacturers. which has over 140 national and international patents to its credit.automotive. Regional training centers are also functional in the © 2005 . Hand on training is given to the staff locally. Employee Training and Motivation Indian Oil training provides training to other organizations as well. refinery processes. the R&D Centre is currently the nodal agency of the hydrocarbon sector in India for ushering in Hydrogen fuel in the country. A wholly-owned subsidiary company. pipeline transportation and alternative fuels. Indian Oil's world-class R&D Centre has won recognition for its pioneering work in lubricants formulation. Apart from leadership in development and commercialization of bio-fuels. It has developed over 2. is commercializing the innovations and technologies of the Centre. Indian Oil's world-class R&D Center has won recognition for its pioneering work in lubricants formulation. Indian Oil Technologies Ltd. They also have on campus recruitment in top universities across India. refinery processes..100 formulations of SERVO brand lubricants and greases for virtually all conceivable applications . However the tenure of service may change from post to post. However there are various MBA programs in the Management Development Institute (MDI) wherein it is necessary to clear IIM level papers for specific posts. railroad. Recruitment & Promotion Recruitment is only on advertising and first come basis. Minimum norms require meeting the qualifications for the post is a suitable grade and a service of a minimum of three years at most levels. Promotion is done on grading system in the month of February.Principles of Management: Soni George Indian Oil 13 How it all Works… R&D Pioneering R&D is the key factor of success to this company since years. pipeline transportation and alternative fuels. Promotion strategy consists of incremental wages. It is purely technical and consists of 400 brands of lubricants.

Conflict resolution also takes part in these meetings. In these Programs employees are to voice their opinions and give solutions to problems thus tackling the situation in a creative manner. different people handling the same job.e. Development skills up gradation courses are a must for the employees of this company. Knowledge Management System 2. Communication System State heads hold a meeting every month. Community of Practices (COP) 14 The above team building Programs consist of team exercises and the top talent of the company i.Principles of Management: Soni George Indian Oil north. 1. All executive directors and executives have separate monthly meetings where they share company information across the different branches in the country. east and west. Inter Division Management Communication (IDMC) is a monthly meeting programmed at the chairman level of all the units of different regions. © 2005 . behavioral and core programmers provide stimulus for growth and career development. A good blend of skill development. south. Technology Management System 3. Leadership Programs 4.

etc. etc. suggestions scheme. The experience and the knowledge gained by its people in building this mammoth organization is now sought after by other developing countries.418 women employees (including 754 in the officer cadre). lab officers. Apart from fully equipped hospitals at refinery townships. openness and a commitment to creativity and consultation. scientists.263 in the officer cadre. Career growth opportunities are based on the individual's performance and contribution to the common goal of sustained growth. Entrepreneurial Culture Indian Oil encourages employee participation in management and suitably rewards innovative suggestions. Indian Oil's unique work culture is based on trust. enrich its work culture. The medical facilities extended to the employees are rated amongst the best in the country. First division professional degree holders and post-graduates from relevant disciplines are recruited as management / engineer trainees. Job rotation and inter-location transfers throughout the country facilitate planned development of careers and broaden outlook. The organization identifies each and every one of its employees as an achiever who will make a difference. quality circles. There are 2.500. Indian Oil today has one of the best records in the industry for accident-free man-hours. including 10. Career Growth Opportunities Indian Oil inducts officers at the junior-most level of the management hierarchy. systems officers.68% of the total manpower. Indian Oil's top executives have grown from within -. the Corporation also has nominated hospitals at © 2005 .a testimony to the unlimited opportunities for growth available to the meritorious. Participative forums in the form of joint management councils. medical officers. 2003 was 31. constituting 7. Indian Oil provides its employees many facilities and welfare measures which are continuously upgraded. Welfare of Employees Apart from attractive scales and perks.Principles of Management: Soni George Indian Oil Employees 15 The Corporation's employee strength as on March 31. communications officers. accounts officers.

Principles of Management: Soni George Indian Oil 16 various locations to meet employee needs. Initially starting with Indian Oil’s own employees in 1996-97. Ljubljana and University of Ljubljana. post-experience International MBA Programme with specialization in Petroleum Management in collaboration with the International Centre for Promotion of Enterprises. Holiday homes at select locations throughout the country help employees and their families unwind. Vigilance Indian Oil’s Vigilance Department started functioning as an independent unit from April 1. IIPM offers a one-year. and a countrywide marketing and distribution network. The Indian Oil Institute of Petroleum Management (IIPM) at Gurgaon conducts round-the-year Management Development Programs on organizational goals and strategies. From the concept of Vigilance as an investigative agency for punitive action. has its main Vigilance Department at © 2005 . which is now more proactive than ever. Slovenia. it has been a long journey to today's concept of “Vigilance for Corporate Growth". with ten operating refineries. 1970 with Mr. diversification and globalization plans. It has also provided specialized training to employees of other international oil companies having strategic alliances with Indian Oil. the Department has come a long way to the expanded set-up that it is today. Its areas of activity have broadened considerably as also its approach. Training & Development Indian Oil conducts structured training programs for its employees both in general management and functional management disciplines. The emphasis too has shifted from “punitive vigilance” to “preventive and proactive vigilance. It also provides them opportunities to avail of membership of professional bodies. the Institute has now extended this facility to other companies in India and abroad. Monetary incentives are also available for those acquiring additional qualifications. besides consultancy services in the area of petroleum management. Gurdas Mal as the first Chief Vigilance Officer at the Corporate Office along with 4 posts of Vigilance Officers in the Marketing Division.” Indian Oil. over 7000 km of pipelines network. From this humble beginning.

supervision and control of all the Vigilance functionaries of the Corporation. etc. Chief Manager or Senior Managers who report to the Vigilance Department at Corporate Office. Shankar Aggarwal. The Vigilance Department at the Corporate Office provides guidance. coordination with Central Bureau of Investigation (CBI). State Police. etc. The Vigilance executives function under the direct control and overall guidance of CVO. etc. Nineteen field locations. CRPF. PMO. regular surveillance/scrutiny of procurement and contract files. Central Vigilance Commission (CVC). The CVO provides advice to the Chairman and acts as a link between the Corporation and outside agencies like MOP&NG. PMO. CVC. function in seven operating 17 refineries. Its major work area comprises handling and investigation of complaints received from individuals. on vigilance matters. preventive vigilance like surprise inspections. These vigilance units are headed by officers of the level of Deputy General Manager. BSF. standing instructions of CVO. etc. called Vigilance units. and other norms of statutory bodies like CBI. refinery project site at Paradip. Marketing Head Office and Regions. Chief Technical Examiner (CTE). Mumbai (a subsidiary of Indian Oil). and other sources. © 2005 . The Vigilance Department is headed by the Chief Vigilance Officer. R&D Centre at Faridabad and IOBL. CBI. The officers working in the Vigilance Department are drawn from Indian Oil as well as other Government departments like Railways. Ministry of Petroleum & Natural Gas. CISF. CTE instructions.Principles of Management: Soni George Indian Oil the Corporate Office in New Delhi. Ministry of Petroleum & Natural Gas (MOP&NG) and regular investigations. scrutiny of property returns of employees. CVC. Mr. Indian Oil Management. The unit Vigilance functionaries also provide assistance to the unit heads in respect of interpretation of CVC. joint surprise inspections. IAS.. Pipelines Head Office and Regions.

Satwant Singh.Principles of Management: Soni George Indian Oil 18 Acknowledgements Our thanks to Mr. GM-Branding. Indian Oil © 2005 .