WAC Report

On
HPCL: Driving Change through Internal Communication

SUBMITTED BY:

RISHABH SHARMA

IMG13 Section-E

Roll No-133096
SITUATION ANALYSIS
Company History

 In 1974, two nationalized establishments, ESSO of India and Lube India, were combined
by the government of India to create Hindustan Petroleum Company Limited (HPCL)
 In 1995, the government sold 49% of the company shares of HPCL to private investors
which led to partial privatization of HPCL and the other two state owned petroleum
companies. (IOC and BPC). However, energy being a core sector, the decision of
complete privatization was blocked by the government
 In 2003, the organizational transformation process was initiated and Project ACE was at
the centre of it all. Vision workshops were a part of Project ACE
 From 2003 to 2008, action plans were developed after aligning the vision of the
organization with that of the employees. In 2004, HPCL opened outlets in rural areas
after taking into consideration the feedback provided by members of cross functional
teams
 In 2008, in order to facilitate two way communication across all levels in the
organization, the intranet portal was put to use. Programs like ICS and “Coin Your Idea”
used the intranet to promote employee communication
 In 2009, a nationwide strike by the salaried officers of the oil-industry took place but
HPCL did not face work stoppage as a result of this strike the organization managed to
keep all the officers on the job

Current Scenario

 The current share price of HPCL is Rs. 248, BPCL is Rs. 346.30 and IOCL is Rs. 131.10
 The company is aiming to revise and define a new vision for change
 HPCL has failed to attain the leadership status in the Energy sector even after going
through an organizational transformation
PROBLEM IDENTIFICATION
 The share prices of HPCL have fell from Rs. 482 in September 2017 to Rs. 248 currently
 There has been no significant improvement in the market share of HPCL in the recent
years. Even if there has been improvement, it is not significant enough to help them
attain leadership status in the Energy sector in the near future
 There must be vision/communication fatigue setting in within the organization
 High cost of operations and logistics
 Employees were reluctant to use the intranet portal/digital platform of the organization
as they preferred face to face communication
 There was a lack of competitiveness among the current players in the private sector
with growing market pressurefollowing a ban on the proposition to privatize the
industry

PROBLEM ANALYSIS
 The market was dynamic and the vision of HPCL did not align with the transformation
happening in the market
 There was an imbalance between the external and internal communication in the
organization
 There was a high chance of vision fatigue setting in due to repeated redefining of vision
SWOT ANALYSIS
STRENGTHS
 Established market share
 Alignment of organizational goals
with the personal goals of
employees
 Effective internal communication at
all levels
 No “public system mentality” –
Customer orientation
 Integrity among employees
OPPORTUNITIES
 Establish its position in the market
as an energy company and not just
a petroleum company
 Gauge the increasing demand for
crude oil and fulfill the expected
demand
 Improve growth and market share
to achieve the aim of becoming the
number one organization in the
Energy sector
 Invest more towards CSR and
renewable energy resources in
order to be more efficient
WEAKNESSES
 Falling share price (as discussed
above)
 Less market share as compared to
that of BPCL and IOCL
 Vision fatigue due to continuous
redefining of vision
 Lack of external communication
THREATS
 Risk of unionization of employees
 Threat posed by new entrants in
the market. Eg, private players such
as RIL
 The need to switch to electric cars
to conserve perishable resources
such as petroleum
 Government regulation that might
go against the interests of the
organization
 Economic instability
GENERATING ALTERNATIVES
 HPCL needs to invest towards technological developments and innovation to innovate
renewable energy resources
 HPCL can hire an external team that can help the company achieve it vision
 HPCL need to focus more on improving external communication
 Improve market share and brand image by use of marketing strategies

EVALUATING ALTERNATIVES
 Instead of myopically focusing on just internal communication among the employees,
HPCL also needs to channelize its efforts towards external communication by being
more customer centric and by reaching out to the untapped segments of the market
(rural areas)
 Emphasize more on Corporate Social Responsibility so that people can relate with the
vision and mission of the organization
 HPCL can hire an external team/consultants to assist in formulating strategies and
solving organizational problems that the internal team are not capable of solving
efficiently
 Shift its focus on alternate sources of energy (renewable sources) which might come of
use in the future considering the scarcity of resources like petroleum. It can do so by
diversifying its operations and not just come across as a Petroleum company but as an
Energy company
 HPCL can improve their market share and their brand presence in the market by
collaborating with automobile manufacturers that the consumers place their trust on.

SOLUTION
The gap between the external customers and the employees of the company needs to be
reduced by shifting the focus from internal to external communication. Also, rather than
focusing on being a petroleum company, organization also needs to assume corporate social
responsibility and extend its focus towards renewable resources that might be of more use for
the customers in the future.
IMPLEMENTATION PLAN
 The gap between the customers and the employees can be reduced once a simple
message is embedded in the minds of the employees that an employee is benefited
when the company is performing well and the company will only perform well when its
customers are satisfied
 HPCL needs to make the most of the subsidies provided by government on the import of
crude oil and fulfill the increasing demand for the same to maximize revenue and
growth
 In order to increase its market share and come across as an Energy company, HPCL
needs to start investing towards technological development and innovation in order to
focus more on resources other than petroleum

CASE SYNOPSIS
In 1952, HPCL was established as a Public Sector Undertaking by the government of India. A
merger of ESSO of India and Lube India led to the creation of HPCL. In 1990, the company faced
divestment and was responsible for generating ownership and generating revenue. The
organization went through a transformation in 2003 after an initiative called Project ACE was
launched wherein the organization focused on internal communication among the employees
in order to kick out the ‘public system mentality’. This meant that the employees had to go to
the customer now instead of the other way round. After a successful transformation and
alignment of vision of the company across all stakeholders, HPCL now face the dilemma on how
to internally develop with external growth.

REFERENCES
https://www.moneycontrol.com/india/stockpricequote/refineries/hindustanpetroleumcorporation/HPC