Description
This is a presentation explains on the SAIL's journey through success and failures, its turnaround, internal and external factors which the management focused on to bring SAIL on path of success.
ORGANIZATIONAL ANALYSIS ON STEEL AUTHORITY OF Click to edit Master subtitle style INDIA
Group M1
2/14/13
About SAIL
2/14/13
? Incorporated ? Largest ? Public
on January 24, 1973
steel maker in India.
sector undertaking wholly owned by the Government. has more than 131,910 employees. current chairman –
? SAIL
? Company's
?
Mr. S.K. Roongta
? Major
plants – Bhilai, Bokaro, Rourkela etc
2/14/13
How it all started
? Formed
with the industrial policy of 1948 and 1956
? Reasons:
? ? ?
Self-reliant economy Rapid industrialization Attention to basic and heavy industry
? Traces
its origin to the Hindustan Steel Limited (HSU)
2/14/13
Continued …..
? HSU
- designed to manage only one plant (Rourkela) policy drafted by Ministry of Steel and Mines to:
? ?
? New
Managing industry Maintain the growing company
? Policy
led to creation of SAIL
2/14/13
What does SAIL do?
? Production ? Centre
?
of steel
for Engineering and Technology trade division
Technical and professional expertise
? International
?
Exports of quality steel products to 70 countries
? Chemicals
and fertilizers
2/14/13
Ups and Downs at SAIL
? Until ? Post
1985 – considered a sick unit
1985 – recovery to become one of the best managed public sector enterprises of India.
2/14/13
Causes for Failure
2/14/13
Factors leading to initial failure
? Made
losses since its inception. for losses:
? Reasons
?
Bureaucratic and excessively hierarchical
?led to complacency and indiscipline
?
Regulation of prices by government Tightening up of allocation procedures
2/14/13
?
Objectives of the new policy
? To
restructure the company for faster development and efficiency
? Objectives:
?
To plan, promote and organize an integrated and efficient development To co-ordinate the activity of the subsidiaries To act as an entrepreneur To formulate and recommend a national policy
2/14/13
?
?
?
Did SAIL succeed with the new policy?
? Poor
market condition on Iron and Steel distribution were allotted
? Control ? Quotas ?A
? ? ?
regime of rationing in a shortage situation
Organisation with no marketing skills and Little or no knowledge of where the steel went Or how it was used once it left the stockyard.
2/14/13
Continued …..
? Price ? Lack
control by government
of thinking and planning for future by management obsolescence
? Technological
?
Post 1970 oil shock - more fuel efficient machines by other companies
? Seen
?
as employment generator
2/14/13
not as a profit making organisation
Turnover of SAIL (1985 – 1995)
2/14/13
How did SAIL turnaround their fortunes?
? Turnaround
was divided into two phases:
?
pre liberalization period
?monopoly period ?No choices for customers
?
post liberalization period
?No choices for suppliers
? Change
in the top leadership V.K.Krishnamurthy
2/14/13
1985-89 - Consolidation phase
? Thrust
on – improving performance by fully exploiting the existing assets of focus
? Area
?
Organisation culture Resource generation Commitment of employees
2/14/13
?
?
Hindarances as seen by the new VP
?3
? ? ?
major roadblocks:
Production not up to maximum capacity High cost of production Lack of technological upgradation
? Lack
of freedom enjoyed by SAIL management Workforce
? Demoralized ? High
?
turnover at the top
7 Cabinet rank ministers, 7 ministers of state, 7 2/14/13 secretaries of steel,5 SAIL chief executives
Steps by Mr. Krishnamurthy
? Feedback
? ?
collected for 6 months –
From various section of the industry From personnel of SAIL
? Results
?
of feedback
Insufficient appreciation of the crisis at various level in the company Managers felt
?Lack of support ?lack of goal and role clarity at each level ?More attention was given to day to day problem
2/14/13
?
Priority areas for immediate action
? Improving ? Making
work culture
optimum use of installed capacity productivity profit through cost control
? Increase
? Generating ? Providing
better customer service
Also 2 important aspects were: 2/14/13 ? Vision for the company was becoming clear
Other changes made
? 1986
?
- corporate planning department was created
?
New direction was given in terms of scope and activities To take into account market situation or the profitability of the companies
? 1987
?
– formulation of a corporate plan till year 2000
People at different level of the company were involved
? Corporate
?
mission –
2/14/13
Continued …..
? SAIL
? ?
insisted on a MOU – lead to clear understanding of
accountability and expectation the government had from SAIL
? Human
? ?
resource group of SAIL
Need to improve the quality of their service Contribute in the area of commitments of the employees, motivation and communication
2/14/13
Performance from 1985 96
? Production
? ?
Consistent buildup on capacity utilization Saleable steel production – moved from 5.5 MT (1985) to 7 MT (1990)
? Profit
? ?
?
1985 onwards – profits made every year 1984-85 : meagre profit of Rs 40 million on Rs 47.5 billion of capital employed 1989 – Profit is Rs 3.5 billion. All previous losses cleared.
2/14/13
Summary of factors focused on
Internal External factors Factors
? Redefining? Modernization roles ? Team
of plants
Work ? Improve communication ? Planning & Monitoring down the line ? Decentralization of decision ? Interface between government making and SAIL ? Organizational structure ? Improvement of work culture ? Increase in production ? Cost Control ? HRD ? Aggressive marketing 2/14/13 ? Safe work environment
Learnings
2/14/13
What has SAIL taught us?
? Change
is the key to success
? Lessons:
?
Appointment of strong leader is a prerequisite High level of commitment by top management Leadership must be prepared to take unpopular decisions. Involvement of people improves their accountability
?
?
?
2/14/13
? More
Lessons:
?
Change process must be the customer at the centre. HRD has a crucial role Do not sacrifice the future for short term convenience. Periodic review of progress and follow-up actions are critical
2/14/13
?
?
?
2/14/13
1985 onwards to
2/14/13 1999
? SAIL ’s
?
journey –
?
?
Story of challenges faced and of periodic ups and downs Story of commendable success in fulfilling various assignments and targets set before it. Evolution of a large and well knit workforce
? Story
of SAIL serves as a tutorial for other organizations is the key to success for an organization
? Change
2/14/13
2/14/13
doc_154531531.pptx
This is a presentation explains on the SAIL's journey through success and failures, its turnaround, internal and external factors which the management focused on to bring SAIL on path of success.
ORGANIZATIONAL ANALYSIS ON STEEL AUTHORITY OF Click to edit Master subtitle style INDIA
Group M1
2/14/13
About SAIL
2/14/13
? Incorporated ? Largest ? Public
on January 24, 1973
steel maker in India.
sector undertaking wholly owned by the Government. has more than 131,910 employees. current chairman –
? SAIL
? Company's
?
Mr. S.K. Roongta
? Major
plants – Bhilai, Bokaro, Rourkela etc
2/14/13
How it all started
? Formed
with the industrial policy of 1948 and 1956
? Reasons:
? ? ?
Self-reliant economy Rapid industrialization Attention to basic and heavy industry
? Traces
its origin to the Hindustan Steel Limited (HSU)
2/14/13
Continued …..
? HSU
- designed to manage only one plant (Rourkela) policy drafted by Ministry of Steel and Mines to:
? ?
? New
Managing industry Maintain the growing company
? Policy
led to creation of SAIL
2/14/13
What does SAIL do?
? Production ? Centre
?
of steel
for Engineering and Technology trade division
Technical and professional expertise
? International
?
Exports of quality steel products to 70 countries
? Chemicals
and fertilizers
2/14/13
Ups and Downs at SAIL
? Until ? Post
1985 – considered a sick unit
1985 – recovery to become one of the best managed public sector enterprises of India.
2/14/13
Causes for Failure
2/14/13
Factors leading to initial failure
? Made
losses since its inception. for losses:
? Reasons
?
Bureaucratic and excessively hierarchical
?led to complacency and indiscipline
?
Regulation of prices by government Tightening up of allocation procedures
2/14/13
?
Objectives of the new policy
? To
restructure the company for faster development and efficiency
? Objectives:
?
To plan, promote and organize an integrated and efficient development To co-ordinate the activity of the subsidiaries To act as an entrepreneur To formulate and recommend a national policy
2/14/13
?
?
?
Did SAIL succeed with the new policy?
? Poor
market condition on Iron and Steel distribution were allotted
? Control ? Quotas ?A
? ? ?
regime of rationing in a shortage situation
Organisation with no marketing skills and Little or no knowledge of where the steel went Or how it was used once it left the stockyard.
2/14/13
Continued …..
? Price ? Lack
control by government
of thinking and planning for future by management obsolescence
? Technological
?
Post 1970 oil shock - more fuel efficient machines by other companies
? Seen
?
as employment generator
2/14/13
not as a profit making organisation
Turnover of SAIL (1985 – 1995)
2/14/13
How did SAIL turnaround their fortunes?
? Turnaround
was divided into two phases:
?
pre liberalization period
?monopoly period ?No choices for customers
?
post liberalization period
?No choices for suppliers
? Change
in the top leadership V.K.Krishnamurthy
2/14/13
1985-89 - Consolidation phase
? Thrust
on – improving performance by fully exploiting the existing assets of focus
? Area
?
Organisation culture Resource generation Commitment of employees
2/14/13
?
?
Hindarances as seen by the new VP
?3
? ? ?
major roadblocks:
Production not up to maximum capacity High cost of production Lack of technological upgradation
? Lack
of freedom enjoyed by SAIL management Workforce
? Demoralized ? High
?
turnover at the top
7 Cabinet rank ministers, 7 ministers of state, 7 2/14/13 secretaries of steel,5 SAIL chief executives
Steps by Mr. Krishnamurthy
? Feedback
? ?
collected for 6 months –
From various section of the industry From personnel of SAIL
? Results
?
of feedback
Insufficient appreciation of the crisis at various level in the company Managers felt
?Lack of support ?lack of goal and role clarity at each level ?More attention was given to day to day problem
2/14/13
?
Priority areas for immediate action
? Improving ? Making
work culture
optimum use of installed capacity productivity profit through cost control
? Increase
? Generating ? Providing
better customer service
Also 2 important aspects were: 2/14/13 ? Vision for the company was becoming clear
Other changes made
? 1986
?
- corporate planning department was created
?
New direction was given in terms of scope and activities To take into account market situation or the profitability of the companies
? 1987
?
– formulation of a corporate plan till year 2000
People at different level of the company were involved
? Corporate
?
mission –
2/14/13
Continued …..
? SAIL
? ?
insisted on a MOU – lead to clear understanding of
accountability and expectation the government had from SAIL
? Human
? ?
resource group of SAIL
Need to improve the quality of their service Contribute in the area of commitments of the employees, motivation and communication
2/14/13
Performance from 1985 96
? Production
? ?
Consistent buildup on capacity utilization Saleable steel production – moved from 5.5 MT (1985) to 7 MT (1990)
? Profit
? ?
?
1985 onwards – profits made every year 1984-85 : meagre profit of Rs 40 million on Rs 47.5 billion of capital employed 1989 – Profit is Rs 3.5 billion. All previous losses cleared.
2/14/13
Summary of factors focused on
Internal External factors Factors
? Redefining? Modernization roles ? Team
of plants
Work ? Improve communication ? Planning & Monitoring down the line ? Decentralization of decision ? Interface between government making and SAIL ? Organizational structure ? Improvement of work culture ? Increase in production ? Cost Control ? HRD ? Aggressive marketing 2/14/13 ? Safe work environment
Learnings
2/14/13
What has SAIL taught us?
? Change
is the key to success
? Lessons:
?
Appointment of strong leader is a prerequisite High level of commitment by top management Leadership must be prepared to take unpopular decisions. Involvement of people improves their accountability
?
?
?
2/14/13
? More
Lessons:
?
Change process must be the customer at the centre. HRD has a crucial role Do not sacrifice the future for short term convenience. Periodic review of progress and follow-up actions are critical
2/14/13
?
?
?
2/14/13
1985 onwards to
2/14/13 1999
? SAIL ’s
?
journey –
?
?
Story of challenges faced and of periodic ups and downs Story of commendable success in fulfilling various assignments and targets set before it. Evolution of a large and well knit workforce
? Story
of SAIL serves as a tutorial for other organizations is the key to success for an organization
? Change
2/14/13
2/14/13
doc_154531531.pptx